Saturday, February 23, 2008

Glenbrook covers the launch of the Visa Mobile Platform initiative

Visa's Mobile Platform Initiative

First announced in January at the Consumer Electronics Show, the Visa Mobile Platform initiative, developed by Visa International's Strategic Partnerships and Innovation group, has the ambitious objective of laying "the foundation for the commercial availability of mobile payments and services to millions of mobile users around the world."

What Visa's been doing is working with selected mobile and related-technology vendors to define a core set of building blocks - a mobile platform - that allows Visa member banks to begin the process of taking mobile payments trials to market.

Today, a bank wanting to trial mobile services with a group of its customers would have to spend a lot of time sorting through the various vendor offerings in the mobile space to select and then integrate the best-of-breed components to build a mobile payments service suitable for conducting a consumer trial. With its Mobile Platform, Visa has short-circuited that process on behalf of its member banks - enabling them to get into the market with mobile services trials much faster. The end objective in this initial phase is to support a much more rapid learning from actual consumer trial experiences as to what features are really most important to consumers in a mobile payments service.

To help simplify the myriad choices among the various technologies and providers, Visa has made some simplifying assumptions in assembling the Mobile Platform. One example is limiting the market opportunity for trial of contactless payments to only new handsets containing the necessary NFC and other technologies required to support secure mobile payments for contactless POS applications. By not attempting to support the thousands of existing handset models - which simply can't support contactless - Visa clarifies how the contactless use case has to be supported for any trial - thereby avoiding all of the hassles of trying to layer on mobile payments onto today's mobile installed base. Visa is promising to add other mobile payment service use cases (remote commerce, person-to-person payments, etc.) over time to the Mobile Platform. Some of those services may end up being capable of supporting a subset of existing handsets.

It appears the most significant trial announced by Visa to date is the one announced on February 8 by SK Telecom and Visa for Korea. Visa had worked together with SK Telecom several years ago in deploying infrared-based POS technologies for local payments using mobile phones. The new trial, built upon components of the new Visa Mobile Platform, is focused on enabling mobile handsets provided by SK Telecom to be personalized with payment card information over the air from the consumer's financial institution. Once personalized over the air in the fashion, the handset is fully capable of functioning as a contactless payment "card" for local POS purchase transactions.

Glenbrook believes one potential concern for Visa could be the seeming acceleration in decisions being made by larger banks in the US to deploy mobile banking capabilities in 2007. Several large banks have announced mobile banking initiatives with more decisions expected soon. Once a few of the majors move, the rest of the industry seems compelled to respond. However, currently Visa's Mobile Platform focuses primarily on the "hard problems" of mobile payments, not directly on the much easier requirements for supporting mobile banking. Even though it integrates some mobile banking functionality, Visa's Mobile Platform could run the risk of being somewhat less relevant to US banks in the near term as they jockey for position in supporting their near-term competitive needs to offer basic mobile banking functionality.

At Glenbrook, we'll be continuing to watch Visa's announcements regarding additional trials of Mobile Platform and look forward to hearing from Visa, in due course, about some of the learnings based upon actual consumer trial experiences conducted by its member banks.

Amazon DevPay has introduced another new web services offering - this one called DevPay. "This new service allows entrepreneurial developers to wrap their own business models around Amazon S3 and Amazon EC2, taking advantage of Amazon's existing customer base and billing infrastructure. With DevPay, developers can focus on being creative and innovative while dispatching the less-than-glamorous aspects of dealing with bank accounts, credit cards, and so forth to us."

Apple has filed a iPhone Wireless payment patent

Apple files iPhone wireless buying patent

Apple has filed a new patent for a wireless transaction system that looks like it will be used in the iPhone and allow users to order products and pay for them instantly. Apple's patent details their merchant-client wireless system which will work with cellular, WiFi, WiMAX or Bluetooth networks. Among the areas covered by the patent are the ability to access restaurant menus on the go. The system would allow merchants to be able to push their new ads to devices that are tuned into this new web service, and hence would require local merchants to be on board with the initiative. The system also includes a mechanism for for merchants to report a stolen iPod/iPhone if the owner has properly reported that information to Apple in a timely manner. Apple states that in some cases "whenever a wireless media player comes within range of the wireless data network, the wireless media player can be (unbeknownst to the user) directed to send a wireless media player identifier that uniquely identifies the particular wireless media player to the wireless data network. The wireless media player identifier can be used to track lost or stolen media players when the rightful owner has placed the wireless media player identifier in a central database of lost or stolen media players. In this way, if a lost or stolen media player is tracked, any number of subsequent actions can be taken such as notifying the authorities, disabling the wireless media player, displaying a notice to return the wireless media player, etc. thereby providing a strong disincentive for stealing the player."

In one example a user instruction directs the wireless media player to open a graphical user interface (GUI) on a display that includes a list of items previously purchased from the merchant stored in the memory. However, in some cases it may be desirable to store customer information (such as the list of previously purchased items) on either or both the local server or the central server. In this way, even in those cases where a user purchases a new item or is using a different media player than would otherwise be used that does not have a current, or accurate, customer preference file for that particular user, the local server or remote server can be used to update, or synchronize, the local memory.

APACS - Payment Myths

APACS, the UK payments association, has published a new report titled "Payment Myths" icon_PDF_small.gif that it says "uncovers the facts behind payment trends in Britain." According to APACS, the booklet uses statistical evidence to help consumers better understand the payment options available to them and offers advice on the best ways to manage their finances; no matter what payment method they use. The report uses APACS statistics to show examples of the way we use cash, our susceptibility to fraud and the new demographic make up of online bankers – to name but a few.

KPMG's report on Mobile Payments in Asia

Get the full report here.

Payoneer on Prepaid Devit Cards on E-Commerce Times

Payoneer: Taking Prepaid Debit Cards to the Next Level

Some customers see the approach to Web payout options that Payoneer provides as better than cash. In's case, Payoneer's prepaid debit card, which carries the 2CO logo, lets that company pay its vendors by depositing the money due directly to the account of the person issued the card. "The challenge we had was how could we do this internationally," said oDesk CEO Gary Swort.

Payoneer is a startup firm that is pushing this concept of prepaid debit cards to leverage more Web payout services through the use of reloadable debit cards. Its CEO sees a strong demand for a new approach to handling business transactions over the Internet.

Some industry watchers predict that online payment options such as debit cards will take off this year. For example, analyst firm Celent predicts alternative payment methods such as debit cards will more than double by the end of 2008. These new transactions, known as Web payouts, now comprise 26 percent of all transaction volumes, while credit card volumes decline.

"A real need exists for a low-cost, worldwide payment solution with responsive customer support tailored for online businesses," Yuval Tal, CEO of Payoneer, told the E-Commerce Times. "The payment process from Internet companies to individual payees is unique and requires many adjustments compared to the typical check-cutting process."

Tal started Payoneer to provide a new type of payment channel for e-commerce companies and workers. His goal is to solve problems in other payment methods, such as checks and wire transfers for international payroll.

The Need

More traditional payment methods for online transactions and remote per-project workers are costly and cumbersome.

"Paper checks get lost or stolen overseas often, and banks overseas can hold funds for up to 30 days and charge high foreign currency exchange rates," Tal said, adding that wire transfers are costly and lock recipients into costly bank fees.

Traditional money transactions through PayPal often are cumbersome for obtaining cash abroad, or they require a minimum three-day hold, he explained.

The Problem

Take the case of, a reseller for thousands of online businesses. That company was drawn to Payoneer's debit card solution to better navigate international banking barriers.

"We are a worldwide company, so some banking services are not easy to work with. We found a huge difference [with Payoneer] to using PayPal," Geno Arce, business development specialist for, told the E-Commerce Times.

oDesk, which runs an on-demand global workforce, faced similar payroll issues with its international clients. The company enables buyers of services to hire, manage and pay technology service providers from around the world. oDesk serves as the management arm for hiring remote workers registered in its database on a per-project basis and handles all billing and payment services for firms using its manpower.

"Making payments to our customers in 60 countries, we struggled to pay the workers in their own locales. It was expensive to wire money and use different banks worldwide," Gary Swort, CEO of oDesk, told the E-Commerce Times.

The Solution

Payoneer provides prepaid Visa and MasterCard accounts to its affiliates that choose them. Also, Payoneer handles payment processing/clearance services. The company lets card holders view account balances and transaction histories.

Some customers see the approach to Web payout options that Payoneer provides as better than cash. In's case, Payoneer's prepaid debit card, which carries the 2CO logo, lets that company pay its vendors by depositing the money due directly to the account of the person issued the card.

"The challenge we had was how could we do this internationally. We haven't found any company to do this at this price," Swort said about oDesk's experience with Payoneer. "It's very cost-effective. We don't want a lot of fees."

The Product

Payoneer's approach to solving the Web payout dilemma involves an option to pay revenue shares to their partners by giving them a reloadable prepaid debit card from a major credit card bank instead of sending a paper check or wire transfer handled through existing online payment services from PayPal, Google (Nasdaq: GOOG) and others. The new payment methods also make doing recurring business online and paying remote workers more convenient, Tal explained.

Companies can upload payments securely and swiftly. The prepaid cards make funds available to affiliates anywhere in the world that the Debit Visa or MasterCard is accepted. The money is available to the payee in U.S. dollars or is converted to the local money standard using the credit card company's exchange rate. Transactions under US$10,000 are almost always far more favorable than the foreign exchange rates of a bank, according to Payoneer.

Once cards are mailed to affiliates, funds can be accessible within two hours after a quick online verification. Payoneer also has an arrangement with MasterCard so with MC approval, a company can place its logo on the physical plastic Debit MasterCard cards that the affiliate sends to its employees and partners.

The New Challenge

Using debit cards to pay instead of writing checks is nothing new. Neither is the idea of using prepaid cards for transactions in stores and online.

However, the idea of using reloadable branded debit cards as a payment option is. So is the notion of handling recurring employee incentives and payment to international workers by debit card.

Several large credit card vendors are offering similar services. So are a number of Internet banking firms.

"There is definitely competition developing in this space domestically," Tal said. "Developing a market for prepaid debit cards was definitely a strategic move by Visa and MasterCard. It was one of their top five things to do."

High Hurdles

Early on, Tal had to solve regulatory and compliance issues that government banking agencies put in place to prevent abuses in handling online money transactions.

"The prepaid space is very new with e-commerce," he said.

Within the e-commerce industry the goal is to replace the use of paper checks, according to Tim Sloane, director of Mercator Advisory Group's Debit and Prepaid Advisory Service.

"There is multiple opportunity in this space. Online payments in 2006 was $11.6 billion, so it is a well-established segment. It is still growing at 60 percent a year, but I expect it to grow faster now," Sloane told the E-Commerce Times.

New Goals

Now that Payoneer's concept of reloadable prepaid payment cards is established, Tal's next goal is to expand this service internationally. He plans to begin this phase in the second quarter of this year.

"The real challenge we face now is moving into the international payment space," he said. "Educating foreigners is a big task."

U.S. workers and businesses have already carried the use of multiple credit cards and debit cards to the extreme, but for workers in other countries, it is common for many to not have a single card, Tal explained.

"For many, this is the first deal. It is a big deal to get a card," he said.

Monday, February 18, 2008

Mobile Wallets developments on 160 Characters

m-Payment: Mobile Wallets Set For Lift Off

Submitted by Mike Grenville on Mon, 18 Feb 2008 11:33

The GSMA says that 2008 will be a seminal year for convergence of mobile and financial services with money transfer and mobile wallet projects taking off. The GSMA has called on government regulation to support these initiatives that can benefit millions of unbanked.

The convergence of mobile communications and financial services will see more than 1.4 billion people worldwide benefiting from mobile financial services by 2015, according to new research by Edgar Dunn, a specialist mobile banking and payments consultancy firm, in partnership with the GSMA, the global trade association for the mobile industry. By 2015, Edgar Dunn envisages that 1.4 billion people could be using mobile wallets – software that enables consumers to manage their money, including making and receiving payments, using their mobile phone - from about 10 million at the end of 2007.

The GSMA has been working for the past year to help catalyse this market with two major initiatives – Mobile Money Transfer focused on international remittances and remote banking/payments and Pay-Buy-Mobile focused on transactions at point of sale. Following an agreement with the GSMA, Western Union has reached agreements to deploy mobile money transfer services with Bharti Airtel in India and Globe and Smart in the Philippines.

To help the take-up of mobile wallets, the GSMA is working with Accenture and Fundamo, a supplier of mobile banking and payments solutions, to establish a hosted mobile wallet platform that will enable mobile operators to pilot financial services rapidly and at low cost.

“Momentum is building behind mobile financial services and we believe 2008 will be a seminal year for this exciting new sector,” said Rob Conway, CEO and member of the board of the GSMA. “With the help of governments, mobile networks have the potential to bring the many social and economic benefits of financial services to hundreds of millions of people who live beyond the reach of the conventional banking network.”

Money Transfer Not Wallets

However not every one is so taken with mobile wallets. Jote Bassi, VP of Global Sales & Marketing at Anam agreed that "Money transfer and mobile commerce is a killer application - much more than mobile advertsing". But he is not so enthusiastic with mobile wallets. "A mobile wallet is all very well but essentially it means the operator becomes a bank and so it is much more dificult to launch a wallet than money transfer. At the back end is an instruction to the existimng banking structre rather than storing money on the phone" said Bassi.

Changes Needed To Government Regulation

The Edgar Dunn research also found that the number one barrier to successful deployment of mobile wallets was government regulation. The GSMA is calling on governments to ensure that regulation governing the deployment and usage of mobile financial services is proportionate to the risks involved.

Balanced regulation can help increase access to financial services for poor people and is one way to fight poverty, according to a new report on regulating mobile banking from CGAP (Consultative Group to Assist the Poor), a global resource center for microfinance. “Mobile telephony promises to radically transform the way people use financial services in rich countries and in poor ones,” said Elizabeth Littlefield, CEO of CGAP. “Wireless may also allow us to reach people conventional business models never could reach, bringing them for the first time the ability to manage their own household finances, safely storing cash, moving it, spending it or investing it when needs or opportunities arise."

“For regulators, it’s not viable to simply do nothing. Current regulation tends to be both over- and under- protective,” says Tim Lyman, CGAP’s Senior Policy Adviser and co-author of the Focus Note. “Being too restrictive can mean fewer people in the formal financial system, and higher costs to access services. But policy makers also need to be aware of potential protection gaps.”

Related Info:

Mobile Money Summit 2008 14-15 May Cairo, Egypt–