ONLINE PAYMENTS

Amazon.com woos online merchants

Internet retail giant Amazon.com is set to notch-up competition in
the online consumer payment space with the launch of two services,
Checkout by Amazon and Amazon Simple Pay

Key to both services is simplicity of
implementation for merchants on their websites and familiarity with
Amazon’s own online payment service used by its 76 million active
account holders.

A feature of both new services is that
customers use information from their Amazon.com account and other
websites powered by Amazon to complete purchases without having to
re-enter shipping address or payment information.

Amazon Simple Pay is a payments-only service,
while specific to Checkout by Amazon is a complete range of
merchant services including tools to manage shipping charges, sales
tax, promotions and post-sale activities including refunds,
cancellations, and chargebacks. Merchants using Checkout by Amazon
can also opt to use the Fulfillment by Amazon service in which they
outsource the selection, packing and shipping of goods to
Amazon.

There are no start-up or monthly charges for
either service. For transactions of less than $10 merchants are
charged 5.0 percent of the value plus $0.05 per transaction while
for transactions of $10 or more the fee is 2.9 percent plus $0.30
per transaction. Volume discounts apply on a sliding scale.

MOBILE PAYMENTS

Western Union goes mobile

Announced in October 2007, remittance service provider Western
Union’s Mobile Money Transfer Service, a key part of mobile phone
industry body the GSM Association’s (GSMA) mobile phone-based
payments initiative, has entered commercial services for the first
time. Partnering with Western Union is Philippine
telecommunications company Globe Telecom in a service that enables
consumers in Hawaii to transfer money to Globe subscribers in the
Philippines.

The service enables up to $100 to be sent from
Hawaii to Globe’s GCASH subscribers for a fee of $4.50. Launched in
October 2004, GCASH enables its 1.5 million users to send and
receive cash, make purchases and bill payments via a short message
service.

The ultimate goal of the Western Union/GSMA
initiative is to connect mobile service providers with Western
Union’s existing global money transfer system, which processes
about 17 percent of the world’s remittance volume.

At present 35 GSMA members with customers in
more than 100 countries are participating in the GSMA
initiative.

REMITTANCES

HSBC enters Mexican remittance market

The $24 billion-a-year US-Mexico remittance market has gained a new
player: HSBC Credit Center (HCC), a unit of the North American
division of UK bank HSBC. Partnering with HSBC in the service is
Nexxo Financial Corporation, a remittance specialist focused on the
US Hispanic community, as is HCC.

For the service 19 HCC branches in Texas and
California have been equipped with Nexxo’s patent-pending self
service remittance kiosks which will enable customers to remit
money to over 21,000 collection points and banking locations in
Latin America, including HSBC Mexico’s 1,400 branches.

To use the kiosks, which are similar to an ATM,
customers either swipe their Nexxo card or enter their telephone
number, insert the cash to be remitted and retrieve a
receipt.

Nexxo’s money remittance service is also
available at more than 100 of its own financial kiosks, or Cajeros,
which are primarily located in California, and, via an alliance
with self-service financial kiosk specialist TIO Networks, are
offered at a growing number of convenience stores.

Before the end of 2008, Nexxo kiosks will be
available at more than 2,000 locations in California, Arizona and
Texas.

ONLINE PAYMENTS

Fiserv expands AT&T e-billing reach

In a move aimed at encouraging more of its customers to receive and
pay their bills electronically, US telecommunications company
AT&T has enlisted the services of financial services technology
developer Fiserv to make its AT&T eBill service available on
the websites of more than 3,000 financial institutions.

Among its features, the AT&T eBill service
lets customers access their current statements online, customise
payment options and view archived service account histories.

“Customers today are demanding choice and
convenience in how they view and pay their bills online,” said
AT&T Mobility director Brian Daly. “They enjoy the simplicity
of being able to manage their bills at their individual banking
service provider, so they can consolidate their finances in one
central location online.”

Already a well-entrenched payment method among
AT&T customers, its AT&T eBill service was used to pay 92
million bills online in 2007, an increase of 8.2 percent compared
with 2006.

REGULATION

No place to hide for US merchants

US President George W Bush has signed into law the American Housing
Rescue and Foreclosure Prevention Act which, though ostensibly
aimed at relieving problems in the US housing market, contains a
controversial section impacting electronic payments. The section
was on page 615 of the 631-page bill.

In essence, the payments section of the act
takes effect on 31 December 2010 and deals with payment card
information reporting.

According to the Electronic Transactions
Association, one of the strongest opponents of the section,
acquirers must report annually to the Internal Revenue Service the
aggregate dollar amounts of credit and debit card transactions for
each merchant that has more than $20,000 in transactions and more
than 200 transactions per year.

The same requirement applies to third-party
network transactions, such as those via PayPal, Amazon.com or
Google Checkout, which do not involve payment cards.

Reporting will have to be done by taxpayer
identification number, a requirement that has called into question
the increased risk of identity theft because many small businesses
use their Social Security number for tax identification.

The payments section of the act is anticipated
to yield an additional $9.8 billion in tax revenue from merchants
over a ten-year period.

MOBILE BANKING

CASHplus goes mobile on Firethorn platform

Fundtech is to take its CASHplus corporate cash management solution
mobile. The move will provide business users with instant access to
their time-critical banking information and services, the US
banking software and service vendor’s executive vice-president,
global products, Brian Jou said.

The task of taking the highly successful
internet based CASHplus mobile has been assigned to Firethorn, the
mobile banking unit of US wireless technology developer
Qualcomm.

Running on Firethorn’s mobile commerce
platform, CASHplus users will be able to view account details,
transfer funds and initiate bill payments via a mobile
device.

Transaction security includes PIN
authorisation, data encryption and two-factor authentication. In
addition a mobile phone can be disabled if it is lost or
stolen.

Another deciding factor in selecting Firethorn
was its wide distribution among mobile operators which ensured
access to the largest number of business users, commented
Jou.

ATMs

Diebold trims its sails

As part of a rationalisation programme, US ATM manufacturer Diebold
has announced plans to close two units, one each in the US and
Germany. The rationalisation forms part of Diebold’s strategy to
eliminate $100 million in total costs by the end of 2008 and a
further $70 million in costs by mid-2010.

To be axed in the US is Diebold’s Newark plant
with its production shifting to Diebold’s Lexington plant. In turn
most of Lexington’s Opteva ATM production lines will be moved to
existing plants in China and Hungary.

In Germany Diebold is to terminate its sales
and service support unit which employs about 50 people. As a reason
for its exit the company cited a lack of profitable growth
opportunities in an overcrowded market.

In addition to planned unit closures, Diebold
has completed rationalisation of its Opteva ATM range in North
America. This has entailed significantly reducing the number of
unique product configurations as part of the company’s goal to
transition from a built to order manufacturing model to what it
termed a ‘just-in-time’ model with a global capability for
post-production customisation. 

MERGERS AND ACQUISITIONS

MoneyGram bolsters its position in Spain

With financial difficulties behind it, US remittance service
provider MoneyGram is on the expansion trail. For an undisclosed
sum MoneyGram has acquired money transfer companies MoneyCard World
Express and Cambios Sol, two money transfer companies affiliated
with its network in Spain.
Through the transactions MoneyGram has acquired about 500 agent
locations and a money transfer licence in Spain. According to
MoneyGram chief operating officer Tony Ryan the acquisitions are in
line with the company’s strategic priority to strengthen and
diversify its agent network globally.

In March this year MoneyGram completed a $760
million equity and $750 million debt re-capitalisation which left
investment bank Goldman Sachs and private equity firm Thomas H Lee
Partners effectively holding a 79 percent stake in
MoneyGram. 

SECURITY

Commerce Media tackles online security

UK information security company Commerce Media has launched a two
factor authentication solution, Celo, which it claims is one of the
most cost effective available and addresses the demand for more
robust online security measures.

Providing credence to the claim, the British
Ministry of Defence’s Disposal Services Authority, which sells
surplus military equipment, has become the first user of
Celo.

Unlike many alternative two-factor solutions no
additional user hardware is required with the Celo solution. During
the login process the Celo user is automatically sent a one-time
user password (OTP) to their mobile phone, email account, or via
instant message.

When prompted by the web application, the OTP
is entered by the user. The user decides the length and complexity
of the password and its validation period, which could be a few
minutes, hours or days.

“Dispatching OTPs via text messaging or e-mail
offers many key benefits including a reduced cost of implementation
as no special devices need to be distributed to users, user
familiarity with the technology, and, with the public’s general
reliance on their mobile phones, the continual availability of this
interface,” said Commerce Media managing director, and creator of
Celo, Michael Robertson.

ENVIRONMENTAL  ISSUES

UK business urged to think green

Businesses intent on environmental responsibility can go a lot
further than shutting down computers at night and using more
carbon-efficient modes of transport, stressed Michael Chambers, MD
of UK payments processor Bacs Payment Schemes.

One simple step he advises is for businesses to
convert from cheque payments to automated debits, a view backed by
a study undertaken by Bacs in conjunction with consultancy Carbon
Footprint.

According the consultancy if one paper cheque
payment is made each month for a year the total amount of carbon
dioxide (CO2) emitted would be 591.36g. Using paper direct debits
in the same scenario would generate a total of 73.61g of CO2, eight
times less than paper cheques. Even more environmentally friendly
are paperless direct debits which would generate a total of 35.51g
of CO2, 16 times less than paper cheques. 

PAYMENTS PROCESSING

Global Payments and HSBC strengthen ties

An already strong alliance between UK bank HSBC and US payment
processor Global Payments has been strengthened with the sale of
HSBC’s merchant acquiring business unit in the Philippines to their
joint venture (JV) Global Payments Asia-Pacific (GPA).

Under the terms of the agreement, which valued
HSBC’ Philippines at $20 million.

Global Payments’ cash obligation for the
acquisition equates to its 56 percent ownership interest in the JV,
or $11 million.

The Philippines unit is to be expanded to
provide payment processing services to merchants in the Philippines
and will also be included in the current ten-year marketing
alliance agreement, in which HSBC refers new merchant customers
exclusively to GPA for payment processing services.

The transaction increases the number of
countries served by GPA to 11. Formed in July 2006 GPA’s existing
operations are in Brunei, Hong Kong, India, Macau, China, Malaysia,
Maldives, Singapore, Sri Lanka and Taiwan.

The Philippines deal follows the sale of a 51
percent stake in HSBC’s UK merchant acquiring business to Global
Payments in June this year for $439 million in cash. 

TRANSACTION PROCESSING

New player enters China’s online market

A Canadian company which has transformed itself from an internet
gaming software solutions developer into an online and prepaid card
payments specialist, Oxford Investments Holdings, has launched a
transaction processing service in China.

Oxford has had a presence in China since
late-2006 in a joint venture with the Ko Ho Group, a Hong
Kong-based merger and acquisition specialist.

The focus of Oxford’s online transaction
processing business in China is its range of proprietary prepaid
cards branded as FocusKard.

Products include re-loadable payroll and debit
cards and single-use cash and gift cards.

For online transactions Oxford card users have
access to what the company terms an ‘online eWallet’.

According to Oxford, users can deposit funds to
their eWallet account, transfer funds to and from eWallet
accredited merchants and other eWallet holders and withdraw funds
from their eWallet account.