Sunday, November 30, 2003
Tank cards under fire
Posted by Simon on 2:55 PM | link
Saturday, November 29, 2003
Chip under the skin: prediction becomes reality
Posted by Simon on 5:52 PM | link
Friday, November 28, 2003
Chipcard for public transport
- this letter,
- this research report on cost/benefits.
What is quite noteworthy is that Minister Karla Peys used to be the member of Euro-parlement claiming free cross-border credit-transfers from banks. Now she writes, in a letter to the Consumer Union, that is undoable to provide the public transport chipcard for free. She also explained this position by referring to the bank practice (charging for cards) as a benchmark.
Interestingly, the state will sponsor the new payment instrument with an amount of 160 million euro. There has been no discussion in parliament on the question if this support is in line with the EU-guidelines for state-support to private enterprises. Also, the actual calculations on costs and benefits (which took a while to be finalised) weren't part of a major discussion.
Despite these discussions, it appears that the position of the public transport sector in the social debate on payments is still underestimated. With 1,5 to 2 billion transactions per year, the public transport e-money system will be a major payment issuer in the Netherlands; yet, no mention is made of participation of representatives of Trans Link Systems in the Social Platform on Payment Systems. So I would suggest they'd be invited (either as themselves or as a delegate of the representative organisations for e-money issuers).
Posted by Simon on 2:52 PM | link
Thursday, November 27, 2003
NMa introduces financial monitor and finds not enough competition in banking
The monitor itself unfortunately draws heavy on research that is not sufficiently specific to support its conclusions. Also once again, there is a call for number portability in banking. Which should remind me to write an article on estethic policy thinking and policy making (where esthetic and impossible practicle solutions keep on entering the mind of regulators, meanwhile blurring the analytical difference between policy goals, policy alternatives and policy implementation).
Posted by Simon on 11:30 AM | link
Tuesday, November 25, 2003
Korea's LG Card: case of the monetary relevance of the creditcard
The Korean government wanted to eliminate the grey market in the retail sector and wanted to give a boost to consumer spending as well. So it decided to stimulate te use of the credit-card by fiscal measures. This worked fine: the economy grew 6,3 % in 2002.
The downside however, was that Korean customer did not really have the money. So as the customers faced problems in paying back the credit-card company, LG Card started getting into trouble with an outstanding sum of more than one billion millions dollars. In order to save its daughter company, the Korean Exchange Bank last week notified the public that it would take over LG Card. And it went on to restructure the debt.
The restructuring of the debt took a while, so last friday, credit-card users could not get any money from the ATM. The operators had shut down the usage due the debt position of LG Card.
Yesterday it was announced that -again under strong pressure of Korean government- Woori Finance en seven other banks provide a loan to LG Card of 2000 billion won (which is 1,4 billion euro), to be paid back within the year.
Given that the loan is not backed by securities or assets (so actually it was really forced upon the banks), the stock market reacted. The Korean banks saw their share prices falling with 2,5 to 5 % taking along the South Korean Stock Market Index. And with it the the currency exchange rate for the Won.
One of the primary lessons we can draw from this case, is that money is not only a means of exchange, but also a store of value. What we see in this example is that the government uses the monetary functions of payment instruments as means of monetary policy. Formally, monetary policy is of course the remit of central banks, but the Korean government has indeed found an interesting way of bypassing central bankers.
We can rest assured that this case will be studied in more detail by central bankers all over the world. Their conclusion will be: leave monetary policy to the central bank and be careful not to jeopardize the financial sector of a country for the cause of short term-politics.
Posted by Simon on 12:39 PM | link
Monday, November 24, 2003
Whereto with the E-money directive?
The Electronic Money Directive: Recapitulation and outlook, a working paper made for the GTIAD-meeting of November 27, 2003.
The main thesis in the paper is:
The European E-money Directive is the codification of a number of expectations with respect to the future role of both market players and regulators. These essential expectations are:
1- electronic money" is monetary value as represented by a claim on the issuer which is: (i) stored on an electronic device; (ii) issued on receipt of funds of an amount not less in value than the monetary value issued; (iii) accepted as means of payment by undertakings other than the issuer.
2- e-money is subject to regulation with a regulatory regime similar to that of banks, but specifically designed for e-money institutions,
3- all e-money issuers will be treated equal, the goal of the directive is to ensure a level playing field
4- the rules of the directive apply, regardless of the specific technology used.
One may assume that all European citizens, civil servants, institutions and enterprises adhere to the European principles and the democratic and institutional arrangement that they are subject to. Therefore, it is justified to expect that all market players and regulators will live up to the essential expectations mentioned above.
If however, it turns out that these expectations will not be met, due to decisions or actions by market players or regulatory bodies, this not only damages the level playing field for e-money products but also damages all the European Union stands for.
See for more info: www.11a2.nl
Posted by Simon on 8:28 PM | link
New legal payment framework for Europe
- shortening the time periode for cross border payments to 3 days,
- realising quick dispute resolution.
The document should be sent out today.
Posted by Simon on 10:35 AM | link
Network365 and iPIN merge to become a global player in payments technology
Network365 and iPIN announced that they have agreed to combine their businesses in a merger to create the global leader in payments technology. The merger, approved by the boards of both companies, is expected to be completed by January 2004. The name of the new company will be Valista.
Network365 develops software that enables wireless operators, banks and enterprises to deploy mobile data solutions with mzone(R), a comprehensive payments, multi-channel top-up and service delivery suite. Its award-winning mzone technology has been deployed in 18 countries and in multiple languages by key customers including NTT DoCoMo, 3, Hong Kong CSL, O2 ,Taito Corporation and TODO1 in the Americas. Network365 has offices in Ireland, Asia, Europe and the Americas.
iPINs Enterprise Payment Platform (EPP) is a single, multi-operator, interoperable, end-to-end platform that powers a variety of payment applications deployed by both operators and enterprise clients in the US and Europe. iPINs customers and partners include Vodafone UK, France Telecoms w-HA, Orange and Wanadoo, T-Online and Tiscali in France, General Motors, Accenture, Cap Gemini Ernst and Young, Convergys and Gemplus.
Posted by Simon on 10:25 AM | link
Thursday, November 20, 2003
Account number portability does not make sense.. European Commission agrees
Thus, the chances that any legally prescribed account number 'portability' will ever be introduced have reduced considerably.
Posted by Simon on 12:15 PM | link
Telco's are e-money institutions... but when will they really be?
In practice, the consequences need some time to sink in. So at the end of the month another GTIAD meeting will take place in Brussel to further discuss implementation issues of the e-money directive. This article in Mobile Today hints at this meeting (although in the legal sense of the word it should be noted that the directive is already implemented and the issue is more about compliance than anything else) and suggest that compliance activities for mobile operators will be further postponed.
Posted by Simon on 11:20 AM | link
Tuesday, November 18, 2003
Microsoft is moving in on banks..
Last month Microsoft has launched a new software solution that runs on its BizTalk 2004 integration server, supports all Swift messages and also includes a toolkit to help banks provide payment services that are closely aligned with corporate supply chains.
Microsoft has also announced it is participating in the RosettaNet Payment Milestone Programme, an initiative designed to drive the automation of payments from RosettaNet business processes. To back up its participation in the programme it has launched RosettaNet Payments Toolkit. The toolkit aims to provide a cost-effective way for firms to integrate the payment process quickly and easily into existing IT systems.
Furthermore, E-payment news reports that Bank One and Microsoft are to offer a cash management service, which will allow business owners to integrate their existing processes for managing payables and receivables with their banking services. The new service, known as Instant Cash Management Solutions, utilises the Great Plains software from Microsoft to connect Bank One customers internally and standardises the transmission of accounting information. The service also includes a positive-pay service to detect check fraud, as well as automated lockbox reporting for payments.
Finally, something that occured a little earlier: Microsoft has appointed Koen Van den Brande to the newly created role of retail banking strategist at its EMEA financial services division.
Posted by Simon on 5:59 PM | link
Consumer Union sees card trouble
The Consumer Union wants bank cards to be replaced without charges in those cases where the customer sends in a nice and clean card. More news is to be found in the december 2003 issue of their Money-Magazine.
Posted by Simon on 1:45 PM | link
InterFaktuur : another EBPP
Meanwhile Postal Services in the US drops its 4-year-old electronic bill-payment service operated through CheckFree Corp (see this article).
Posted by Simon on 12:09 PM | link
Friday, November 14, 2003
Minister of Finance visits Wallie-card
In this weeks weblog he notes that he visited the Distri-Group on monday, November 10, to become familiar with their role as a distributor of pre-paid phone cards and as the issuer of pre-paid payment product: the Wallie-card.
Both products by the way need to comply with identification and suspicious reporting requirements, but I'm pretty sure that that has not been a part of the discussion during the visit.
Posted by Simon on 4:10 PM | link
Thursday, November 13, 2003
ABN AMRO helps retailers with eurochecker
Posted by Simon on 6:58 PM | link
Wednesday, November 12, 2003
Paying digital content by billing the subscriber: Planet Internet / OD2
- play a track on the site (1 credit).
- download a track to the harddisk (10 credits),
- burn the track on a CD (99-189 credits).
Now does this make Planet an e-money issuer...? That wholly depends on the question if the credits are merely credits at OD2 (in which case we have a prepayment for services, with Planet acting as the payment agent) or if the credits are those of Planet. In that case it all depends on how to interpret 'receipt of funds' in terms of the E-money directive. But pending my entrance in the PlanetMusic club I cannot give further specifics.
Posted by Simon on 5:04 PM | link
European Card Review interviews Stolwijk
Mr Stolwijk explains that the next ten years will see a slow move towards more unified infrastructure. Still even aligning Belgium and the Netherlands is already a difficult job, he says. Also he suggests that the current PIN-brand might not survive in this future:
In the Netherlands, the PIN brand might not survive – it might become Maestro or whatever.
Posted by Simon on 3:04 PM | link
Possible boycot of 100-euro note by retailers
Posted by Simon on 9:39 AM | link
Saturday, November 08, 2003
Süddeutsche looks at draft paper on legal framework for single payment area
The consumer protection goes to the extend that payment institutions may even become liable in those cases where the seller of goods and services does not deliver properly or delivers faulty goods/services (something currently the case the UK, Sweden and Finland). Also, the paper praises the Dutch situation in which a central clearing house is helping consumers with the changeover to another bank (a service not yet operational by the way).
The newspaper describes that the wording of the Commission Consultation document is still quite open, allowing for comments by banks and users after the official publication next week. But the article in the newspaper suggest that the EU-employees already have a more detailed vision on the actual texts of a draft directive.
Posted by Simon on 1:01 PM | link
Friday, November 07, 2003
Reinventing Money ?
Posted by Simon on 12:39 PM | link
Thursday, November 06, 2003
Payment Systems Oversight / Supervision
1-solution by market players themselves
2-liquidity support by central bank (only possible with on basis of securities),
3-government guarantee or recapitalisation by Ministry of Finance
Posted by Simon on 3:11 PM | link
ABN AMRO sets up Group Shared Services
Group Shared Services will be established to create cost savings through consolidation and standardisation. Furthermore, GSS will focus on further exploiting new market solutions for support services with the aim to achieve better products and services for our clients at lower costs.
After having co-led the successful restructuring of Wholesale Clients, which is now largely complete, Hugh Scott-Barrett will be appointed Chief Operating Officer (COO) in the Managing Board, responsible for GSS.
Posted by Simon on 3:04 PM | link
Worldpay battling online attack
Worldpays website is too slow to open at this moment. Yet at another website we learn that WorldPay says it hopes to restore services to near-normality by the close of business today. Also, Worldpay, part of Royal Bank of Scotland group, stresses that no consumer information has leaked.
Posted by Simon on 11:55 AM | link
First excercise on cross border credit transfers
One of the conclusions is that the Regulation should have been fully implemented in the Netherlands, but that its not. I'm quite curious about that. Having sent and received a number of cross-border payments I noticed that the Regulation is implemented quite well. The BEUC-observation though that Postbank has not adapted its online banking for IBAN (awarding them a prize for the worst technical problem) is hard to deny of course.
The one payment that backfired (with a charge of 25 euro) did so because the IBAN that I entered was incorrrect. And for another payment, filling in the IBAN in the Internet-banking environment of RABO, immediately led to automatic fill in of the address details of the bank of the beneficiary.
So much for my excercise. Needless to say that it would be a good thing to actually do a full scale professional test. All research so far has been anecdotal, while it would be a very good thing to use representative data. We would be happy to execute such a test.
Posted by Simon on 9:08 AM | link
Just a quote....
"My shareholders are my commissioners and they are my customers. I wish that for nobody. And I dare say this because I'm leaving at the end of this year."
Mr Stolwijk, CEO of Interpay made the statement during a conference on iT&Banking in Amsterdam.
Posted by Simon on 8:50 AM | link
Wednesday, November 05, 2003
Government to finance e-purse for public transport
A research study shows that the overall-benefits to society may be in between € 400 - € 1500 million and that without government funding the project will most likely not be realised (as some individual players are to lose money due to the migration to the new system). Other highlights:
- the new system will cost € 160-170 million compared to current cost of € 120 million,
- the largest net benefits will be € 570-710 million, due to better product conditions, shorter queues and increased social security,
- 13 million travelers will pay € 1,5 to € 2,5 for the contactless OV-chipcard.
It's interesting to note that there is a very brief reference to the need to discuss with the central bank the payment elements of the chipcard. There is also a generic reference to rules and regulations that need to be complied with, yet a reference to e-money regulation is not being made. Which, given the pre-paid nature of the product, is quite interesting an omission.
The full study about costs and benefits is not being published as there is still some discussion about who pays for placing the toll gates at the train stations. It is expected that this does not change the overall picture however.
Posted by Simon on 2:57 PM | link
Tuesday, November 04, 2003
Pilot to reduce 1 and 2 eurocent in circulation
The initiative for the pilot has been discussed in the Social Platform on Payments, a forum of interest groups and regulators, that regularly discuss developments in retail payments.
Posted by Simon on 9:37 AM | link
Way2Pay to mail 1,5 million Postbank customers
Way2Pay manager Peekel explained to Planet that some thousands transactions are done each month, notably in the webshopping segment. P2P payments hardly occur. Of the 450 shops contracted, some 150 are actually operational. Soon, a feature will be available, where a transaction in the Way2Pay-account leads to a notitification in MSN Messenger.
With the promotion campaign, Way2Pay may just be one step ahead of Rabobank, which - according to their earlier announcements - should also be introducing their payment service shortly now.
Posted by Simon on 8:55 AM | link
Saturday, November 01, 2003
KBC to bring domestic payment processing to Finforce
An interesting observation in the press release is that, according to KBC, the current international banking markt appears to be insufficiently ready to outsource payments processing to a specialised third party processor. KBC also 'invites' other players to bring their payments processing to Finforce (and become shareholder as well).
These are interesting times. The next 10 years we'll all be slowly moving to European scale processing but nobody really knows the exact end result....
Posted by Simon on 4:20 PM | link
IMF will investigate supervision in the Dutch financial sector
Posted by Simon on 1:14 PM | link
Current weblog List of publications
Retail payments are still very much influenced by local conventions, regulations etc.....
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