MOBILE PAYMENTS
Mobile phone messages used to spur on forgetful
debtors
Go deeper with GlobalData
Extracting payments from consumers has become a daunting task for
many credit providers. Facing a particularly tough task is Consumer
Portfolio Services (CPS), a US company providing vehicle financing
to subprime borrowers which saw its bad debt write-offs soar by
almost 50 percent in 2008.
Western Union and communications technology specialist VeriSign’s
Messaging and Mobile Media Division have come to CPS’ assistance
with a solution that enables CPS customers to trigger their monthly
car payment directly from their mobile phone.
To use the service, CPS customers enrol online or by phone and
provide their CPS account number, mobile phone number and debit
account information. Once enrolled, monthly text alerts are sent to
the customer’s mobile phone by VeriSign detailing the payment
amount due.
The customer submits payment approval by texting “YESCPS”,
initiating a Western Union Speedpay transaction payment which is
credited to the customer’s CPS account.
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By GlobalDataMOBILE PAYMENTS
Smart Communications takes top honours
Smart Communications, the mobile network unit of the Philippine
Long Distance Telephone Company, has been recognised as the world’s
leading vendor of mobile person-to-person payments technology by US
research firm ABI Research. Ranked second was South African-based
Fundamo, while in third place was US-based Obopay.
“The common thread among the top three companies is a proven track
record,” said ABI senior analyst Mark Beccue.
“Smart Communications earns our top ranking for two reasons: the
solution it developed, which is in place in the Philippines, is one
of the most successful programmes in the world and the company has
solid and broad-reaching relationships with mobile network
operators.”
Beccue continued: “Second-ranked Fundamo has a proven track record
in South Africa and a working partnership with pan-African mobile
network operator MTN. This bodes well for the company because
Africa is the top market for mobile person-to-person
payments.
“Obopay has developed key partnerships with MasterCard and Citibank
and is focused on another key market, India.”
ONLINE PAYMENTS
First-quarter UK online spending forges
ahead
UK shoppers shunned the high street but continued to flock online
in the first quarter of 2009, reveals data from the Office of
National Statistics (ONS).
According to ONS, the average weekly value for all retail sales in
March stood at £5.03 billion ($7.5 billion), up 1.6 percent
compared with the March 2009 weekly average.
In comparison with this, the pace of online sales was robust,
increasing by an estimated 17.2 percent from an average of £147
million per week in March 2008 to an average of almost £172 million
per week in March 2009.
This ongoing shift from brick-and-mortar retailers to their online
counterparts increased online retailers’ share of total retail
spending from just under 3 percent in March 2008 to 3.4 percent in
March 2009, reported ONS.
ONS classifies its online spending data as being in a testing phase
primarily because its methods and data sources are still being
improved.
Notably, e-retailing organisation the Interactive Media in Retail
Group (IMRG) and consultancy Capgemini’s e-Retail Sales Index
reflects a 19 percent increase in UK online sales between March
2008 and March 2009.
“IMRG Capgemini’s March figures confirm our own experience at
PayPal,” commented PayPal general manager for UK merchant services
Cameron McLean. “Britain’s online retailers continue to enjoy
business success.”
ONLINE PAYMENTS
Moneybookers makes inroads into tourism
Continuing its inroad into the tourist industry, alternate online
payments service provider Moneybookers has added Direct Ferries,
Europe’s leading ferry ticket retailer, to its merchant
network.
Direct Ferries offers some 700 ferry routes from 51 ferry companies
covering Europe and North Africa and, according to online research
firm hitwise, its website has the highest number of unique users in
the ferry industry.
Other recent tourism industry merchant additions to Moneybookers
platform include Thomas Cook, with which it has launched a money
transfer service, Packholidays.com and lasthotelbeds.com.
Moneybookers’ payment system currently offers over 60 payment
options in more than 200 countries.
MOBILE PAYMENTS
MasterCard launches MoneySend in the US
Already in use in 17 countries in its Asia Pacific, Middle East and
Africa region, MasterCard’s MoneySend mobile phone-based payments
service becomes available to US consumers at the end of May.
Termed the “breakthrough consumer payment platform” by MasterCard,
the MoneySend service is delivered on US mobile payment technology
developer Obopay’s platform which enables access via all mobile
devices and all mobile carrier networks.
The service, which enables consumers to send and receive funds via
short message service (SMS), mobile internet browser, a
downloadable application or a personal computer, is initially
limited to consumers using MasterCard prepaid cards issued by
Bancorp Bank.
MasterCard intends bringing additional issuers onto the platform
and extending the service to current accounts and MasterCard debit,
credit and prepaid cards.
According to MasterCard, to use the service senders initiate
transfers to any domestic mobile phone number via a SMS message or
the internet. Upon initiation of the transfer, the sender approves
the request by entering a PIN.
The recipient, if a registered user, receives a text message
confirming the transfer. Yet-to-be registered users receive a
transfer pending message. The funds can then be accessed by the
recipient through an account designated during the registration
process.
SECURITY
PwC confirms Quova’s geolocation claims
With its ability to check for mismatches between an online
customer’s credit card billing address information and internet
protocol (IP) address, geolocation is being recognised as a
valuable means of combating online fraud. However, geolocation data
is only as good as the accuracy of the solution.
This has prompted US-based geolocation specialist Quova to submit
itself to an annual audit by professional service firm
PricewaterhouseCoopers (PwC), the fourth of which it has again
passed with flying colours.
PwC certified Quova’s accuracy at the country level at 99.9
percent, a level it has maintained since PwC’s first audit in 2004.
At the US state level the accuracy was 98.2 percent, up from 94
percent in 2004. Location down to a city level is also often
possible, noted Quova.
According to Quova it is the only IP geolocation vendor that
annually submits its data collection processes for benchmarking by
one of the big-four auditing firms.
Quova boasts a number of prominent users of its solution including
US bank Wells Fargo, UK bank Alliance & Leicester, Spanish bank
Bankinter and European payments processors GlobalCollect, Computop,
ClickandBuy and Wirecard.
CONTACTLESS PAYMENTS
Oberthur joins the contactless sticker race
As a means of fast-tracking adoption of contactless payments
stickers incorporating radio frequency identification technology
has a seen a recent spate of product launches, the latest of which
is by French technology developer Oberthur Technologies.
Branded the FlyBuy Sticker, Oberthur’s offering was developed in
cooperation with MasterCard using the latter’s PayPass technology
and can be attached to any surface including a mobile phone or key
ring.
Oberthur noted that its FlyBuy Sticker has already been deployed by
three financial institutions internationally, including one of the
largest card issuers in the US.
The only FlyBuy deployer so far named is Aduno-Gruppe a Swiss
payment card issuer owned by a consortium of European banks.
Aduno-Gruppe has some 1 million credit and prepaid cards in
issue.
MERGERS AND ACQUISITIONS
Western Union looks for growth in SME market with Custom
House buy
On the hunt for diversification and new growth markets, Western
Union is to acquire Custom House, a Canadian-based
business-to-business payments service provider focused on small and
medium enterprises. The $370 million cash deal is expected to close
in the third quarter of 2009.
Founded in 1992, Custom House has an international client base of
nearly 40,000 customers and multi-channel payment solutions
including an online platform which provides payment capabilities to
over 120 countries.
However, the bulk of Custom House’s business is derived from
senders in Canada, the US, the UK, Italy, Australia, Singapore and
New Zealand. The average principal per transaction is about
$25,000.
Western Union president and CEO Christina Gold said: “Custom House
is a dynamic business and has a significant customer base in the
cross-border payments market, which generates strong margins and
cash flow. Western Union intends to grow this business by
attracting new customers and entering new geographies.”
According to Western Union, Custom House has grown revenue at a 20
percent CAGR over the past three years and is currently on target
to achieve annualised revenue of $100 million.
ONLINE PAYMENTS
ClickandBuy looks to Brazil for super-growth
UK-based online payments service provider ClickandBuy has entered
the Brazilian market, a move furthering its ambitious expansion
drive which this year includes doubling the €900 million ($1.2
billion) transaction volume it achieved in 2008.
“This expansion into South America will allow us to tap into one of
the largest and fastest-growing consumer markets in the world,”
said ClickandBuy’s CEO Charles Fraenkl.
ClickandBuy current figures, suggest Brazil’s online retail market
is growing at 40 percent annually.
For its Brazilian online service targeting the country’s 14,000
online merchants, ClickandBuy has adopted the country’s
fast-growing, cash-based Boleto Bancário system which accounts for
20 percent of online payments made in Brazil.
In essence, Boleto Bancário produces a bank slip when a purchase is
made online.
The customer then takes the slip to their bank and pays for the
purchase in cash. ClickandBuy is then informed, allowing the
transaction to be completed.
ClickandBuy’s move into Brazil comes hard on the heels of its entry
into the US market in April in partnership with alternate payments
service provider, CardinalCommerce.
ATMs
Egg ups the cost of cash
Customers of UK online bank Egg are in for a shock when they use
their credit cards to make an ATM cash withdrawal.
According to financial services comparative specialist uSwitch, Egg
has from 28 May upped its minimum fee to £3 ($4.50) or 3 percent of
the transaction, whichever is the greater, to £5 or 3 percent of
the transaction, whichever is the greater.
Egg’s move, explained uSwitch, is designed to deter customers from
making small cash withdrawals as this is often a sign of financial
difficulty.
Egg’s announcement followed that of rival UK online bank, Smile
which is to increase its minimum credit card cash withdrawal fee
from 2.5 percent to 3 percent as from 1 July.
uSwitch noted that 7.3 million credit card customers use their
cards about five times a year for cash withdrawals of just under
£100 each time.
SECURITY
Rivals join forces in quest for POS security
Three competitors in the POS equipment market – US-based VeriFone
and Hypercom and French-based Ingenico – have collaborated to
establish the Secure POS Vendor Alliance (SPVA), an association
which will focus on implementing common security standards among
vendors of POS devices.
Initially, the SPVA will create technical working groups covering
topics such as:
• Standardised implementation of existing security standards;
• Security of the payment device lifecycle;
• End-to-end encryption to create recommended guidelines for
cardholder data encryption; and
• Security threat analysis and intelligence.
SPVA membership is open to all payment industry players with
general membership encouraged among vendors that develop secure POS
payment systems, and associate membership among organisations who
sell or utilise products or solutions that interact with secure POS
payment devices.
These include retailers, acquirers, software vendors, electronic
cash register vendors, banks and other standard-setting
associations.
INDUSTRY TRENDS
China’s payment card holders remain
confident
With economic woes eroding consumer confidence in almost every
country, there is some good news out of China where a measure of
consumer confidence published for the first time, the Bankcard
Consumer Confidence Index (BCCI), reflects remarkable
resilience.
Compiled by China’s only card organisation, China UnionPay (CUP)
and the official national news agency Xinhua, the BCCI stood at
86.95 in the first quarter of this year, up from 86.88 in the
fourth quarter of 2008 and 83.62 in the first quarter of
2008.
“The fact the consumer confidence index has increased compared with
the last quarter and the same period last year indicates that the
global financial crisis does not have a large impact on Chinese
consumers,” said China UnionPay president Xu Luode.
SECURITY
MasterCard imposes strict security rules for
smartcard
In a major recognition of its work in the field of cryptographic
security US-based Cryptography Research (CR) has been appointed by
MasterCard to license smartcards and other cryptographic products
that utilise differential power analysis (DPA) countermeasures for
use on MasterCard’s payment networks.
Discovered by researchers at CR, DPA is described by CR as a
powerful tool that allows cryptanalysts to use statistical
techniques to extract keys from smartcards and other cryptographic
devices by analysing their power consumption. A variation of DPA is
simple power analysis (SPA), a simpler form of the attack involving
direct observation of power consumption measurements.
CR noted that DPA and SPA attacks are non-invasive,
easily-automated, and can be mounted without knowing the design of
the target device. CR has developed patented solutions for securing
devices against DPA and SPA attacks.
Cryptography Research recently announced licenses with
semiconductor manufacturers Infineon (Germany), Renesas (Japan),
and NXP (Netherlands) for their smart card semiconductor
products.
REGULATION
Tougher Canadian regulation on the cards
Regulation of Canada’s payments market could be heading for a major
overhaul following a joint decision by the House of Commons
Standing Committee on Industry, Science and Technology and the
Senate Committee on Banking to proceed with an investigation of the
country’s credit and debit card system.
The move by the two parliamentary committees follows intensive
lobbying by the StopStickingItToUs Coalition, a body formed by
merchant groups representing a total of more than 200,000 merchants
across Canada.
Explaining the objective of merchant groups a member of the
coalition the Retail Council of Canada (RPC) issued a statement
stating that at the centre of the inquiry are fee practices of
Canada’s two major credit card companies, Visa and
MasterCard.
“Merchants have asked Parliament to examine the uncontrolled
escalation in credit card fees as well as the imminent destruction
of Canada’s low-cost and efficient debit [card] system as Visa and
MasterCard prepare to enter the Canadian market with their own
debit products,” said the RPC.
At present Canada’s debit card market is dominated by Interac
Association, a not-for-profit organisation with a membership that
includes banks, credit unions and merchants. Interac currently
charges it members a fee of C$0.0083 ($0.0072) per
transaction.
COMPANIES
ANZ Bank invests big money on Asian
infrastructure
Moving to strengthen its infrastructure in the Asia Pacific region
Australia and New Zealand Banking Group (ANZ), Australia’s fourth
largest bank, has awarded a contract worth A$500 million ($385
million) over five years to Singapore telecommunications company
SingTel.
Under the contract SingTel will provide managed network services to
ANZ in Australia and 30 countries in the region, including ANZ’s
technology and operations centre in India to support what ANZ terms
its “super regional strategy”.
As part of the contract SingTel and its Optus Networks unit will
transform ANZ’s network infrastructure to support enhanced global
communication, providing a single platform for delivery of voice,
data and managed services to over 34,000 staff. This will include
the deployment of over 20,000 internet-based telephones across the
region.
In Australia, Optus will also manage the installation of a new data
network to some 850 ANZ retail branches and end-to-end management
of call centre infrastructure.
ALTERNATIVE PAYMENTS
Oman to add e-purse to identity cards
Network for Electronic Transfers Singapore’s Astute Technology unit
and Dutch digital security specialist Gemalto have been appointed
by Oman’s Information Technology Authority to implement the
sultanate’s first national electronic purse solution, the first
phase of which is due for launch in July.
To be incorporated in Oman’s 3.2 million national identity and
resident cards the solution will enable cardholders to pay
government departments as well as serve as an alternative to credit
and debit cards.
During the first phase which is being undertaken in conjunction
with Oman’s largest bank, Bank Muscat, it will become mandatory for
citizens and residents to use the cards to pay fines due to the
Royal Oman Police.
Second phase of the project will be rolled out during 2010 and will
encompass all Omani banks, government agencies and retailers.
MOBILE BANKING
SwissPost launches mobile transfer service
PostFinance, the financial services unit of Switzerland’s postal
service SwissPost, has launched a basic mobile phone payments
service that enables customers to transfer funds from one postal
account to another using a text message.
The service enables a maximum of CHF100 ($90) per recipient account
per day to be transferred and is free of charge for both the sender
and the recipient, except for the text message charge.
The amount is credited to the recipient’s account just a few
minutes later.
The new service is the second mobile payments offering by
PostFinance which in August 2007 launched a service enabling orders
for products and services placed via text message with registered
merchants to be debited directly from a postal account.
Far from a roaring success this service has, according to
PostFinance, attracted a mere 4,500 customers and 35 merchants. In
comparison, PostFinance’s internet banking service reached the one
millionth customer mark in April 2009.
PAYMENTS PROCESSING
TSYS links up with Carrefour in Brazil
US payments processor has TSYS has been awarded a multi-year
contract by Carrefour, the world’s second largest retailer by
sales, to process hybrid and private label cards issued in Brazil
by their unit Banco Carrefour.
In the first phase of the contract TSYS will begin process a
MasterCard hybrid card to be launched in June.
The hybrid card will act as a private label card when used within
the Carrefour stores and as a general purpose credit card when used
outside of Carrefour stores.
“This is a true milestone for TSYS,” said Gaylon Jowers president
of TSYS International.
“We are committed to the Brazilian market as it is forecast to grow
and become the fourth largest by cards issued and the second
largest by card transactions by 2011.”
Carrefour ranks as Brazil’s largest hypermarket chain and top mass
retailer in the food market in terms of sales. At the end of 2008
Carrefour had 527 stores including 150 hypermarkets in Brazil.
