The Mobile Payments Café

Mobile Payments review on Fast Company

2010-03-09T13:28:00.000Z

Mobile Payments Are Taking Off. But Which One to Use?

BY Chris DannenTue Sep 1, 2009

Mobile payments system Boku just announced that it will work with a bevy of social networks and gaming sites. But competitor Zong, was recently chosen to pilot Facebook's virtual currency, called Credits. Both sites will face considerable opposition from Obopay, a seasoned startup that recently earned the backing of mobile phone giant Nokia for its Nokia Money payment system. Mobile payments are convenient, fast and easy--but which service should you use?

That depends on what you want to do. Mobile payments services work in two ways: some allow you to buy stuff from online retailers using your phone, while others allow you to send money to your friends. A couple of services do both. Here's the rundown.

If you're a worldwide user, it's hard to beat Boku's dead-simple setup and its 56-country availability. When you buy things online with Boku, you simply navigate to a participating site and punch in your cell phone number. You get a confirmation text, to which you reply "Y" to say yes to the charges. The sum then shows up on your cell phone bill. That's great for in-game purchases or retail items, but it doesn't let you send money to your peers.

Zong works similarly. The company got its start doing TV-based voting (think American Idol) in Europe, and then leveraged its carrier relationships to start the payments division. While Zong is only available in 19 countries, the company's been around for almost 10 years, which should be long enough to comfort any nervous adopters. Punch in your mobile number, confirm, and the charge appears on your bill. Again, this is only for paying for things online--not for spotting your friend a few bucks.

Obopay is more sophisticated, because it lets you actually send money to other individuals--not just online businesses. But that also means you need to create an account and charge it up with money, something that's not necessary on Zong or Boku. You can also use Obopay online, without a phone, and since it has partnered with Nokia, it'll have extensive worldwide availability before too long.

Not one to be left out, PayPal also has its own mobile payment system, and an iPhone app to boot. PayPal lets you send money either using a text message or its iPhone app, and in either case it will call you back after you enter your transaction so that you can confirm by entering your pin. Since PayPal is renowned for its aggressive security measures, there's no doubt that it is the most trustworthy of the bunch, but also the most subject to the hassles that come with high security. PayPal's fees are also among the more substantial, depending on how big an amount you're sending.

Amazon's Payments system also has a mobile iteration called Amazon TextPayMe, which allows Amazon members to pay (or request payment) using their Amazon accounts. Just like Zong and Boku, the whole process requires just a few text messages. The same system allows you to search and buy Amazon products with a feature called TextBuyIt, and like Obopay, there's a Web-based equivalent if you don't feel like messing with your phone to send someone money. You can also send someone a gift card using a text message, if you're of the ilk that likes to micromanage your recipient's spending. Overall Amazon's system is likely the best for most purposes: simple, secure and flexible, and with about as much simplicity as can be expected from something so capable. And chances are you have an Amazon account anyway

One of the downsides of all these services is that you need to memorize text-message shorthand for each one. Most of the commands are simple, but with Amazon, for instance, things get a little complex when you're trying to request a payment from someone.

Impossible? No. But if you still haven't figured out that ALT + F4 closes windows on your PC, then you might want to stick with PayPal's user friendly iPhone app.

Time to get back up to date

2010-02-24T20:55:00.003Z

After a very long hiatus, I'm going to brush the dust off this blog and get myself back up date on what has been going on in Mobile Payments world lately.

An excellent place to start is Wired magazine's recent article on the Future of Money:

The New Ways
to Pay

The credit card is in decline. Here are a few hints of what might replace it. — D.R.

Twitpay

Type a friend’s Twitter handle, a dollar amount, and twitpay to transfer funds to their PayPal account.

Zong

Instead of entering credit card information anew for every online purchase, users fill in their phone number and the charge shows up on their monthly bill.

Square

The latest from Twitter cofounder Jack Dorsey, this 3/4-inch cube turns any iPhone into a credit card reader.

GetGiving

This mobile app uses PayPal to enable charities to accept small donations without the usual exorbitant credit card transaction fees.

Hub Culture

Travelers can avoid the hassle and fees of swapping dollars for euros by transacting in virtual currency in this international network of workstations.

MMA Publishes Mobile Banking Overview - 160 Characters

2009-02-17T22:11:00.000Z

http://www.160characters.org/news.php?action=view&nid=2762

Submitted by Mike Grenville on Thu, 05 Feb 2009 10:58

A free overview of the marketing opportunities represented by the mobile channel for the financial sector has been published by the Mobile Marketing Association.

The Mobile Marketing Association (MMA) has published a Mobile Banking Overview; an educational resource designed to provide analysis of the marketing opportunities and attributes that the mobile channel represents for the financial sector.

Subjects include market size, consumer-focused mobile banking products and services, and the mobile media channels available to banks and other financial institutions. It also provides considerations for optimizing mobile banking communications and campaign effectiveness within each channel.

“As mobile commerce becomes more secure, we will see a paradigm shift in the way people do their banking,” said Sean Moshir, CEO of CellTrust and Mobile Banking Sub-Committee Co-Chair at the MMA. “We believe that mobile banking will parallel the Internet era in many aspects, leading consumers and financial institutions alike to become more comfortable with mobile transactions. ”

The overview is the result of ongoing member collaboration with the MMA North America Mobile Banking Sub-Committee of the MMA Global Mobile Commerce Committee. The Mobile Banking Overview includes participation from the following MMA Mobile Banking sub-Committee member companies: Acuity Mobile, AT&T Mobility, CellTrust Corporation, Fidelity Investments, Silverback Media, Sprint, VeriSign, Inc., Verizon Wireless, Virgin Mobile, USA and Washington State Employees Credit Union.

“The improved user experience across handsets and networks and better browsing capabilities associated with the mobile web have resulted in significant growth in the mobile banking market over the past several years,” said new MMA President and CEO Mike Wehrs. “Many financial institutions already offer some form of mobile services for their customers, and the MMA is seeing mobile usage rise for personal banking. The Mobile Banking Overview is an important step towards the formulation of guidelines around the service, and a great addition to existing MMA educational resources.”

Mobile is at around the point that internet banking is when it took off around 1998, and is set for rapid take up according to the report. 30% of US households will bank using their mobile in 2010 according to Celent.

In spite of the character limitation, SMS is seen by the report as a key tool to drive the take up of mobile financial services. Benefits of SMS noted by the report include that it works across all networks, is easy to use by consumers, can be used straight away without needing a special phone or installing software, and enables the bank to provide real time financial information to customers.

The report also considers the issues around secure SMS when it is combined with a handset client. While noting that this can increase not only security but the amount of information that can be provided to the customer, the number of handsets able to take advantage becomes severly restricted and there is likely to be an increase in suctomer service and support issues.

For a bank in particular there are security issues to consider and the report touches on some of the strengths and vulnerabilities of SMS and the GSM network for transmission of confidential data.

The free 13 page MMA Mobile Banking Overview can be downloaded from
www.mmaglobal.com/mbankingoverview.pdf

Beem from Mobile Sense makes no sense whatsoever

2008-11-26T19:36:00.000Z

Does no-one remember the hard-learned lessons of LUUP in the UK? I can't believe that someone else is giving the exact same model a go, especially as nothing in particular has changed in the consumer-need profile or technology maturity profile....

Hope they have the same millions that LUUP's backers do...

m-Payment: Beem Money In The UK

Submitted by Mike Grenville on Mon, 17 Nov 2008 13:31

A new mobile cash transfer and payment system using SMS has been lanched in the UK.

Mobile Sense has launched a mobile cash and payments system called Beem that via text messaging. Using SMS, it can be used by anyone, on any mobile handset, across any network, and is not tied to any bank.

Users load up their Beem account and 'beem' it to pay for goods and services as well as send money to friends and family. All cash transfers take immediate effect and users can have access to their Beem account 24 hours a day, seven days a week, irrespective of location.

Simple SMS Sign Up

Signing up for the service is as simple as sending an SMS. New subscribers simply text 'hello' to Beem 07781 484668 and once they receive a response text back they can choose a password of between 4 and 8 characters to continue. Sign up is free online or just the cost of a text through a mobile phone and once registered users can load up their cash via their debit card and also beem any cash they receive back to their bank.

The only charges for using the service are the costs of sending the texts which are covered by a user's network operator price plan. The service is totally secure and subscribers' details are all kept completely private. Users can even protect their debit card details with a second password.

Kerl Haslam, Beem founder and CEO, said: "Users can even use our 'bank it' facility to text money back to a bank account. If you now forget your cash card or money, there is no need to go via an ATM to get cash, with Beem you can load cash into your account through a simple and secure text message and have access to cash within seconds."

Short Merchant List

The company makes money by charging a small commission fee to the providers of goods and services, similar to how credit card companies charge. It also charges a fixed fee of 75 pence for users to transfer money from a mobile wallet to a bank account.

Businesses that sign up as a Beem merchant will be able to accept secure payments from customers via text either in store or remotely. The service requires no additional hardware or software. Beem also provides merchants with SMS text, opt-in, opt-out, marketing opportunities. Merchants on board so far with Beem in the UK include several pizza chains, taxis firms and University students unions at Brunel and Hertfordshire. However this short list is not going to generate mass adoption and for it to become "real mobile money" as it claims it will need a wide range of merchants or a cluster for a particular market niche.

The company is in discussions with the London Organising Committee of the Olympic Games for a cashless payment solution for tickets, travel and merchandise in 2012.

Strong Competitors

It has some strong competitors already who, although they have made progress, are still not yet mainstream. For example in the UK PayPal launched mobile in 2006 and started with over 10 million subscribers with 164 million accounts worldwide, though how many use PayPal Mobile is not known. There is also the TextPayMe service that is now powered by Amazon Payments and Luup and Anam Mobile to name a few.

In addition to pushing into the UK market, Mobile Sense has an ambitious aim to be a global company with at least one branch on each continent in the next three years with a global franchising programme through 2009 to cover Brazil, Israel, Africa, Russia, and China.

While in theory mobile payments is a good idea, for it to really take off it has to meet a real consumer need and remove a pain point that they experience. While in some parts of the world such as Kenya, where a large portion of the population are unbanked this has happened, to become widespread in the UK Beem will struggle to find a way to capture both merchants and consumers imagination.

NBAD launches mobile payments in Abu Dhabi - 160 Characters

2008-11-26T19:35:00.000Z

m-Payment: SMS Bank Payments In Abu Dhabi

Submitted by Mike Grenville on Mon, 17 Nov 2008 15:20

The National Bank of Abu Dhabi (NBAD) has rolled out an SMS based payment service that allows customers to access their bank accounts via mobile phones to pay, send, and receive money.

With the NBAD Arrow service, account holders can make a range of payments and money transfers instantly and securely from their mobile phones. This is the first in an 18-month roll-out plan agreed between NBAD and Luup which will extend to remittances, salary payouts, merchant payments and bill payments.

In the first stage of the roll-out, users can make transfers from their NBAD bank account to anyone in the UAE using their mobile phones. If the receiver is also an NBAD Arrow service user, the money goes straight into their bank account, otherwise the amount can be withdrawn from any NBAD ATM within 24 hours by using a code received via SMS.

To send money, users send PAY, the recipient's mobile phone number, the amount and the secure ID token code to 2666. So for example SMS: Pay 0519123456 300 123456 This will send 300 dirham to the person with mobile number 0519123456 with the example secure token code 123456.

In addition, users can pay utility bills as well as donate to charities like the UAE Red Crescent.

Mobile penetration rates outstrip Internet penetration rates by far in the Middle East region and in the UAE it is over 100 percent.

Awards

“NBAD is a pioneer in the m-payments space because the bank’s senior management realized early on that the existing payment systems lag behind the available technology. NBAD has received many prestigious awards for its innovative products and services. Last month, the bank won ACN Arab Technology Award for Banking & Finance project implementation and CIO of the year and one of the systems the jury especially lauded was our ‘SMS Money Transfer’ service,” said Mr. Ahmed Al-Naqbi, Senior Manager, Channels and Electronic Banking Services at NBAD.

During the launch promotional period, all Arrow services will be FREE until 9th January 2009. Afterwards sending money to anyone in the UAE wil cost 3 AED (0.54 GBP) and paying a bill or donating to a charity will be 1 AED (0.18 GBP) + 2% of transaction value.

Paybox expands its mobile payment service - 160 Characters

2008-11-26T19:33:00.000Z

m-Payment: Sybase 365 Partners With Paybox

Submitted by Mike Grenville on Tue, 18 Nov 2008 10:51

The partnership agreement between Sybase 365 and mobile payment solutions paybox will extend mobile payments and mobile money services to customers worldwide.

Financial institutions, mobile operators and merchants will now be able to offer their customers various mobile payment services such as payments for goods and services, money transfer and mobile airtime top-up more easily.

Sybase 365 already offers mobile payments via premium SMS billed and mobile banking services. With this agreement financial institutions, mobile operators and merchants will be able to offer their customers mobile payment services including payments for goods and services, money transfer and mobile airtime top-up.

“paybox and Sybase 365 will offer solutions for mobile payments and person-to-person money transfer targeted at both emerging and developed markets” said Matthew Talbot, vice president, mCommerce, Sybase 365

Eckhard Ortwein, CEO paybox said that “This agreement is a natural progression of where the market is headed and what customers are demanding from their mobile phones. By combining mobile messaging and mobile payments offerings, Sybase 365 and paybox are establishing a global standard for mobile commerce services” he said.

An officially certified GSMA Mobile Money Vendor, paybox covers the entire value proposition for emerging markets where mPayment, mBanking and mCommerce solutions create low cost banking services for the unbanked. paybox is behind the mpass SMS payments with O2 and Vodafone recently launched in Germany and has been selected as a finalist for the ‘CHANGING LIVES AWARD’ at AfricaCom.

New E-Monday rules coming out of Brussels - reported on the Register

2008-10-14T15:34:00.000+01:00

Brussels bemoans low take-up of electronic cash

It's as if the people don't trust the financial system

By Joe Fay •

Posted in Government, 14th October 2008 12:28 GMT

The European Commission has launched a new legal framework to boost the use of "electronic money" within the EU, even as we all realise we had even less real money than we thought.

The Eurocrats have admitted that earlier utopian predictions that we’d all be loading cash on our mobile phones, travel cards or internet accounts have proved to be somewhat overblown. In part, it is blaming itself, saying current rules “have hindered the takeup of the electronic money market, hampering technological innovation”.

Translated, this means the foolish peasants (the rest of us) have refused to stop keeping anachronistic wads of notes and piles of coins in stupid places like pockets, in wallets, under mattresses, that sort of thing, when what they really should be doing is paying smart young things to take their money and convert it into cyber cash, loaded on trustworthy items like phones, Oyster cards, servers and deelie boppers.

So, in the interests of keeping the dream alive, Brussels has proposed a new framework for “issuing electronic money”. This will include a “technologically neutral and simpler definition”, ie that electronic money is “monetary value stored electronically on receipt of funds and which is used for making payment transactions". This will include e-cash stored on devices in the holders' possession or “remotely at a server.”

Brussels also promises a “new prudential regime”, which it promises will ensure “greater consistency between prudential requirements of electronic money institutions and payment institutions under the Payment Services Directive”.

This will include an initial capital of €125,000 “enabling market entrance for smaller players and a new formula to determine ongoing capital”.

If this sounds like a recipe for small fly-by-night operators to barge into the cyber economy, let’s just consider what a mess the old established financial players have made of the real economy over the last few months.

The Commission reckons these changes will give the market a shot in the arm, and “estimates show that this industry could reach a volume up to €10bn by 2012”.

The only thing missing? A reason why consumers – as opposed to financial institutions and other corporations - would actually want to move to electronic versions of cash. See if you can find one in the Commission’s working document here. ®

Stats & Research: Mobile Banking Becoming A Reality

2008-10-13T18:50:00.000+01:00

Posted on 160 Characters Association

Submitted by Mike Grenville on Mon, 06 Oct 2008 12:47

A study earlier this year suggests that mobile banking is becoming more of a reality and that while consumer education remains key to widespread adoption there are a number of outdated misconceptions that the study by Sybase 365 tries to change.

The results of a survey completed in February 2008 (“Mobile Banking: The Second Wave. Global Mobile Banking Survey 2008”) commissioned by Sybase 365 showed that some 34% of banks offer mobile services to customers and an additional 32% plan to offer mobile services in the next 12-24 months.

Although there have been many attempts to bring the benefits of mobile to consumers, the response from the market so far has been measured at best. However the research conducted among 32 European banks, 30 US banks and 30 banks from the Asia-Pacific region concludes that the next two years will see a second wave of mobile banking provision and adoption taking the lead from early adopters in Europe and Asia.

Banks To Double

According to the survey, the number of banks offering mobile banking is set to double in the next two years and the number of customers using mobile banking services is also expected to increase significantly from existing levels. If respondent intentions play out, the number of banks that do not offer mobile banking will be in the minority by 2010, rather than the majority, as is the case today. “The potential of mobile banking has been discussed for quite some time,” said Matthew Talbot, vice president, mCommerce of Sybase 365. “While it has been slower to emerge in North America than elsewhere in the world, mobile banking is becoming more of a reality each day. This is largely due to technical issues around standards and interoperability being resolved and the availability of more robust technology platforms such as Sybase mBanking 365."

Dispelling The Myths

There are some myths around mobile banking that the report hopes to dispel. Some of these are:

Mobile banking is not secure. Misconceptions around security stem from consumers’ lack of experience and geographical penetration of mobile banking services. The 2007 survey (Sybase 365, commissioned Consumer study: “Nano-economics: Mobile Opportunities for the Financial Sector”) revealed that 63% of European respondents; 83% of Australian respondents, and more than half of respondents from the Americas who use mobile banking services, state that mobile banking is secure or very secure.
Clearly, a vital step in dispelling this myth lies in education, availability and usage. The 2008 survey found that 71% of banks are doing just that by using mobile alerts to help boost consumer confidence in mobile banking services. Customers’ mobiles devices can actually help improve security because they can be used as an alternative to PIN tokens for identification. Mobile alerts can also be set up to notify customers of fraudulent activity on an account, enabling a rapid response leading to increased confidence for mobile services.
Little consumer demand for mobile banking solutions. In fact, one in three mobile users said they would like to be able to deal with their finances ‘on the move’. Almost one-quarter of consumers surveyed said they would consider switching banks if they were offered mobile banking services.
Additional Charges. Some believe that mobile banking is just another way to charge customers for additional services. However some 87% of respondents to the 2008 survey cited the reason their bank implemented mobile banking services was to improve the overall customer experience.
For financial institutions, mobile banking is only about cost savings. Certainly mobile banking can lead to cost savings. The 2008 survey revealed 65% of financial institutions who focus on growth from existing customers have introduced mobile banking services to reduce customer service costs. However many financial institutions are using mobile solutions as a way to extend customer services such as PIN reminders or dispute resolution and are recognizing mobile as a new channel to reach customers with marketing, promotions and related offers.
It only means Balance Checks. It is another myth that when financial institutions talk about mobile banking they’re referring to the ability to check an account balance or stock prices via a mobile device. While that is a goo dplace to start, financial institutions are increasingly offering a wide-range of mobile services. In fact, nearly three-quarters of 2008 survey respondents said they provide customers with the ability to do money transfers and nearly 30% allow customers to do bill payment via a mobile device.

Untapped Potential

There is a great deal of potential ways that mobile can be used in the banking world. For example many bank customer call centers are burdened with rudimentary account enquiries that can easily be alleviated with SMS-based services. However the study only found that 15% of banks sent a statement by SMS following a telephone enquiry.

With those financial institutions currently offering mobile banking services seen as somewhat ahead of the curve in terms of provision, it is unfortunate that 58% of them agree that the CRM potential created by mobile data is not best utilized at present.

The report concludes that while the first wave of mobile banking services was a steep learning curve, the second wave is comprised of a more informed provider community and a more enthusiastic customer base, both of which suggest a promising two years ahead.

Download a free copy of the Sybase 365 mBanking Study here.

Grameen Bank & Obopay Partner - Portfolio.com

2008-08-08T11:01:00.000+01:00

Aug 5 2008 6:48AM EDT

Mobile Banking for the Poor

At a press conference this morning in Mumbai, mobile-banking company Obopay announced an alliance with Grameen Solutions -- an alliance with an extraordinarily ambitious goal. In ten years' time, the companies said, they would like to see 1 billion of the world's poor -- people living on less than $2 a day -- receiving banking services via their mobile phones. It probably won't happen, but it would be amazing if it did.

Mobile banking is not new, of course, although it is still young. What sets this particular initiative apart are three things: its global ambition, its emphasis on the poor, and the central role of microfinance institutions (MFIs).

Mobile banking is of course banking, and banking is regulated nationally, not globally. As a result, it's hard to scale mobile banking across borders -- but that's precisely what Obopay and Grameen are trying to do. They're starting in India and Bangladesh, with a small core team of engineers looking carefully at what works and what doesn't in the real world. They will then offer that expertise to anybody in the world who wants it, and plan to entrench themselves as a "center of excellence". If MFIs in Congo or Nicaragua want to team up formally with Grameen and Obopay, that's fine; if they just want to talk to them to get advice on how to proceed on their own, that's fine too.

In any event, the system being set up by Grameen and Obopay is designed from the beginning to be able to handle payments and remittances not only nationally but also internationally. The problem of domestic remittances is often overlooked: large cities like Dhaka are home to millions of migrants who would love to send money back to their families elsewhere in the country but who are unbanked and have no real means of doing so. The ability to remit money domestically with little more than a text message could be revolutionary.

Then, of course, there's international remittances -- which already account for an enormous part of the annual capital inflows into many countries around the world, especially in Central America. Compared to Western Union or banks, the ability to send money directly from mobile phone to mobile phone is orders of magnitude easier and cheaper.

Then there's the emphasis on the poor. Although the poor are more likely to be unbanked and therefore in need of mobile banking services, they haven't been directly targeted by many of the first wave of mobile banking providers. As Gautam Ivatury and Ignacio Mas write in their excellent overview of the situation as it stands today,

Providers experimenting with a new technology or business model typically seek to reduce risk by focusing on known markets (avoiding the "double gamble" of new business model and new customer segments), and within those on likely "early adopter" subsegments (i.e., those more naturally predisposed to try the new offering).

The poor, of course, are both a new customer segment and generally the very last adopters of any new technology. It's hard to sell banking services to someone who neither knows nor understands what a bank is.

So that's where MFIs come in: they can play a crucial role in reaching out to, and educating, potential customers among the world's poorest people.

Grameen Solutions' CEO, Kazi Islam, told me that I shouldn't try to extrapolate forwards from where mobile banking stands today, but rather work backwards from the needs and capabilities of the world's poor. MFIs have been reasonably good at extending credit to such people, but they've found it much harder to offer savings accounts, since banking licenses are hard to come by.

Other financial services, like microinsurance -- especially crop insurance for people working small plots of land -- have barely gotten started: insurance "doesn't make sense if it costs 20 rupees to collect 25 rupees," said Islam at the press conference. "It's all about reach, and cost and operational reasons make it difficult to reach these people."

With mobile banking, reach is effortlessly expanded, piggybacking on the massive investments made by mobile-phone companies. Meanwhile, costs are tiny: in the US, Obopay's money-transfer fee is a flat 25 cents for any amount up to $1,000.

All the same, the goal advanced at the press conference this morning is so ambitious that I give it only a small chance of success. One big reason is China: without access to China's rural poor it's going to be almost impossible to reach the 1 billion goal. And while China's rural poor are getting cellphones at an astonishing pace, the chances that they'll be able to plug them in to a global -- or even national -- payments system still seem remote. On the other hand, no one imagined ten years ago the progress that China has made to date; if you extrapolate that rate of change, anything is possible.

Another risk is that the goal will be reached but in name only: people might have mobile-banking accounts, and might even automatically get such an account when they get their phone. But the accounts might not be used, and insofar as they are used, they might be used only for payments and not for real banking services. It's relatively easy to see a world where mobile phones are used as mobile wallets, containing roughly as much money as one might have in a real-world wallet. It's harder to see a world where mobile phones are used as mobile bank accounts, home to individuals' life savings.

There's also the effect which mobile banking might have on repayment rates at MFIs: experience in Kenya suggests that letting people make their loan payments via mobile phone rather than in person at a group meeting results in higher delinquency rates.

And insofar as mobile banking does take off, it will inevitably and necessarily do so primarily via the mobile phone providers themselves. Depositing money into one's mobile bank account must never be harder than buying extra airtime for one's phone; ultimately there's no reason why airtime charges can't come straight out of the bank account, combining the two accounts into one. What's more, mobile operators already have a network of agents licensed to accept cash on their behalf; it seems silly to try to build a parallel bank-agent network from scratch.

It's a great idea for banks and MFIs and mobile phone companies all to pull together in the same direction, resulting in a global open system which benefits from massive network effects. But with a couple of big exceptions like Grameen, and possibly not even there, the MFIs will always be dwarfed in size, reach, and importance by the mobile-phone operators. The MFIs risk being marginalized, to the point at which the poor get forgotten in the drive towards broader mobile-banking adoption. And without MFIs to help guide the way, the chances are that the poor won't embrace mobile banking of their own accord.

Obopay CEO Carol Realini understands this. "The carriers could be the MFIs, but you don't want to take away from the MFIs," she told me. "They serve the customers, and they're part of the last mile to the customer. They offer services beyond transactions. They're underwriting loans and coaching customers. Having the MFI play an active role with the poorest people is great, because they're not comfortable with credit and savings. The MFIs make the approach to the poorest people that much better, and it helps them understand how to use this powerful new tool."

The promise of mobile banking for the poor is that mobile phone providers have managed to get a degree of penetration among the world's poor that MFIs can only dream of. But that's also the peril. The mobile phone providers are likely to continue in the direction they're headed in at the moment: staying away from banking regulation, confining themselves largely to payments rather than fully-fledged banking, and targeting their entire customer base without any particular emphasis on the bottom of the pyramid. The MFIs, by contrast, are going to want something which is both narrower and more ambitious. Will the mobile phone companies sign on, even if they see lots of regulatory headaches and very few profits by doing so? The answer to that question could be the answer also to whether Obopay and Grameen Services will come close to achieving their 10-year goal.

Glenbrook covers the launch of the Visa Mobile Platform initiative

2008-02-23T15:25:00.000Z

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

2008-02-23T15:24:00.000Z

Amazon.com 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

2008-02-23T15:20:00.000Z

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

2008-02-23T15:12:00.000Z

APACS, the UK payments association, has published a new report titled "Payment Myths" 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

2008-02-23T14:32:00.000Z

Get the full report here.

Payoneer on Prepaid Devit Cards on E-Commerce Times

2008-02-23T14:27:00.000Z

Payoneer: Taking Prepaid Debit Cards to the Next Level

By Jack M. Germain
E-Commerce Times
Part of the ECT News Network
01/16/08 4:00 AM PT

Some customers see the approach to Web payout options that Payoneer provides as better than cash. In 2CheckOut.com'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 2Checkout.com, 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 2Checkout.com, 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.

"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.

Mobile Wallets developments on 160 Characters

2008-02-18T13:52:00.000Z

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:

www.gsmworld.com/mmt

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

Great synopsis of Mobile Banking Biz Cases - BAI

2008-01-11T17:30:00.000Z

Mobile Banking: Where's the Business Case?

BY KAREN EPPER HOFFMAN

Even as cell phone banking takes off, banks still face the question: How can we make money on this?

| SYNOPSIS | At mid-2007, at least nine U.S. banks had begun to develop or had rolled out a mobile banking service to their customers, either through a proprietary mobile Internet banking site or via an application embedded into the handset. Proponents believe cell phone banking will grow quickly based on ubiquitous cell phone usage and consumers' growing expectation of anywhere/anytime access. Yet, with banks providing the service to customers for free and carriers clamoring for a piece of the action, a business case remains elusive. Banks say they will justify the investment based on strengthening customer relationships, lowering delivery channel costs and paving the way for more sophisticated mobile financial services in future years.

This year, several major institutions began offering their customers the ability to use their cell phones to check account balances, transfer funds and pay bills.

As was the case with online banking, these mobile banking services are being given away to seed the market. Yet "as banks experiment with some of these pilots, they're starting to look more into the business case," says Bob Egan, chief analyst for Needham, Mass.-based TowerGroup Inc.

In a recent survey by Boston-based Aite Group of 22 of the top 100 U.S. financial institutions, 55% identified the lack of a clear business case as an important or very important impediment to adoption of mobile banking (see chart "Security Biggest Impediment"). With direct revenue nonexistent, banks face the issue of justifying their investment, which includes bearing at least some of the cost to create and support the mobile channel. Also, in situations where they are actively working with carriers directly or through an outside vendor, banks pay a fee to the carriers.

Interviews with bankers underscore the uncertainty of this business case. Repeatedly, the similarity with online banking comes to the fore, as many executives say they expect the primary value of mobile banking will come in building stickier relationships with customers. Enhancing customer convenience was the highest ranked motivation for financial institutions responding to Aite Group's March 2007 survey (see chart "Customer Convenience Key Driver").

Other executives theorize that cell phone banking will help move some transactions to the mobile channel, balance inquiries particularly, which will lower usage of more costly channels, such as the branch and call center. Others say the real value comes when mobile users undertake more advanced tasks, such as making expedited payments or remittances, for which the banks can then collect incremental revenues.

And finally, some bankers say they need mobile services for competitive reasons. According to this view, mobile banking will become "table stakes" in the industry, something you've just got to have, similar to online banking.

Mobile Banking 2.0
Mobile banking went through its first iteration in the late 1990s and early 2000s. At that time, Bank of America Corp., Wells Fargo & Co., Citigroup Inc. and Bank of Montreal's U.S. subsidiary, Harris Bank, all launched mobile services. Most ultimately sputtered out in the face of tepid customer acceptance. Now, supporters say, the market has matured enough to support another run at the concept.

"The handsets are far more data-capable, networks are up to speed and there's a user propensity to play with data applications," says Nick Holland, senior analyst for Aite Group.

BancorpSouth, Tupelo, Miss., Bank of America and Wachovia Corp., both of Charlotte, N.C., New York City-based Citigroup and Broadway Bank, San Antonio, Tex., all began offering pilot mobile banking services to retail customers in late 2006. In May, San Francisco-based Wells Fargo took things a step farther by offering a mobile service to its business customers (see sidebar "Mobile Starts Taking Care of Business,"). By mid-year, at least three more institutions-SunTrust Banks Inc., Regions Financial Corp. and Synovus Financial Corp.-had joined the fray.

To be sure, the number of actual customers remains minute. TowerGroup estimates that only 400,000 out of almost 240 million U.S. mobile phone subscribers are conducting banking business over their cell phones. But analyst Egan predicts eight of the country's top 10 banks will offer mobile banking and bill payment by the end of this year and that within five years, a quarter of today's existing Internet banking customers will choose to bank by cell phone. Boston-based Celent LLC forecasts that by 2010 more than one-third of U.S. online banking customers will use mobile banking, up from less than 1% today.

To build some momentum behind the service, banks are offering cell phone banking to their customers for free-at least initially. The rationale behind this strategy is the same as for online banking, i.e., to strengthen relationships with highly desirable customers. Bank of America, for example, markets its mobile service through its Web site specifically to its existing base of 22 million online banking customers.

"Clearly, these people [who bank online] also have a propensity to use their cell phones," says Gayle Wellborn, Bank of America's senior vice president of online products and services. "So it's the online customers we're targeting. The mobile device just takes it to the next level."

Wellborn adds that, for Bank of America, giving away mobile banking service is "very consistent" with the bank's online banking strategy, which is based on the belief that customers "will recognize the value and we will gain their loyalty." Bank of America was one of the first banks in the industry to begin offering its online banking services for free, in 1996, and subsequently bill payment as well.

Tom Llewellyn, chief information officer of $1.7 billion-asset Broadway Bank, notes that 43% of his company's overall customer base banks online, with online banking penetration more than double that (88%) among customers of Broadway Bank's Eisenhower Bank subsidiary, which serves military personnel. Llewellyn says that Eisenhower's customers tend to be younger (18 to 35 of age) and move around frequently based on changes in where they are stationed or deployed. After a "real lightweight marketing effort," Llewellyn says Eisenhower was able to get 1% of its online banking customers to use mobile banking.

For young people in their 20s, "who are so fascinated by and attracted to mobility, having something mobile is compelling," says William McCracken, CEO of Atlanta-based Synergistics Research Corp.

Justifying the Investment
Yet bankers are also becoming aware that the mobile realm is a very different environment from the online space they have come to know so well. Perhaps the most significant difference is that the mobile universe is tightly controlled by a handful of major carriers, or telcos.

"The carriers got caught off-guard by the Internet and became all these big dumb pipes overnight," says Tripp Rackley, CEO of Atlanta-based Firethorn Holdings, LLC, a vendor of mobile banking applications."The carriers will never let that happen again."

Rackley asserts that the only way for banks to succeed in their mobile efforts is to work with the carriers through a middleman, such as his company, which collects from the bank either a per-user or per-transaction fee for the carrier. He adds that it's only fair that carriers should collect a toll since they have funded the development of the wireless networks and also subsidize and support the wireless phones that most customers use. Spencer White, director of mobile financial services for Atlanta, Ga.-based AT&T Wireless, affirms that carriers would be loathe to support applications and field customer questions for services for which they're not being paid.

Nonetheless, several prominent banks have introduced mobile services that circumvent the telcos (see "Web Browser or Carrier Connection?").

Regardless of how banks handle the carrier question, they still face the issue of justifying their investment in cell phone banking. It's largely an insider's debate because the banks are being tight-lipped about the extent of their investment. Both Synovus and BancorpSouth, for example, have agreed to a "per-user model" with partner Firethorn. But neither Garry Hedges, director of payment strategy for Synovus, nor Michael Lindsey, senior vice president and manager of electronic delivery services at BancorpSouth, will quantify the fee or discuss how it might be split between the vendor and the carriers with whom Firethorn partners.

Wachovia embraced a browser-based strategy when it initially launched its mobile offering in September 2006. But in March 2007, the bank announced a partnership with Firethorn. Ilieva Ageenko, senior vice president and director of emerging applications, declined to discuss the Firethorn fee. But she says her bank's upfront investment in its original mobile service was "less than six figures," since the mobile Web site was able to run through the same back-end technology as the bank's online service-and the same security technology as well.

TowerGroup's Egan says bank-to-carrier fees may go up or down based on how the market shakes out and as it becomes more apparent if having an application pre-loaded on the phone and having other support from the carriers will actually encourage greater customer adoption. Both banks and telcos, he adds, recognize that mobile banking per se won't bring in new customers right away.

Instead, the hope is that offering the service will create tighter bonds with existing customers and act as a stepping stone, so that these customers will graduate to using more advanced applications than simply checking account balances. BancorpSouth, for example, reported a substantial up-tick in bill payment activity by its mobile customers during its 2006 pilot.

Banks are also keen to alleviate the transaction burden on their more expensive branch and call center channels, which could be facilitated by increased cell phone banking usage. Celent estimates that by 2010, about 70% of bank call center volume will be coming from cell phones and about half of those calls will be simple balance inquiries.

Lindsey says mobile services enable an institution to "cut customer servicing costs and deliver service to customers when and how they want." Nearly half (49%) of the participants in BancorpSouth's mobile banking pilot reported in a survey that they would decrease the number of calls they made to the call center because of mobile access. Forty-two percent said they would visit the branch less often and 23% said mobile banking was their preferred means for communicating with the bank.

In the long term, supporters see these basic mobile ventures as laying the groundwork for more advanced mobile financial applications, such as expedited or person-to-person payments, international remittances and loyalty and coupon programs, for which banks might be able to collect incremental revenue. "Everyone just wants to get a foot in the door," says Holland of Aite.

Ms. Hoffman is a freelance writer based in Poulsbo, Wash.

Payforit update at NOC event - 160 Characters

2007-09-17T12:54:00.000+01:00

m-Payment: Payforit For Mobile Purchases

Submitted by Mike Grenville on Fri, 14 Sep 2007 17:02

In development for nearly two years and launched in the UK at the begining of September, the industry hopes that consumers will trust Payforit.

Mobile payment initiative, Payforit came into force across all mobile internet services and UK networks officially on September 1, 2007. The payment system was welcomed by the mobile industry; and now key operators, content providers and API's (Accredited Payment Intermediaries) believe the future success of the initiative will rely on the developments made over the coming months.

Dialogue Communications sponsored a NOC - The Future of Payforit seminar in London to look at what the future holds for this payment mechanism. Dialogue's MD, Guillaume Peersman was joined by Iain McCallum of O2, Jeremy Flynn of video to mobile specialists D2See, (formally of Vodafone,) and Phil Cooke of mobile games company I-Play, to discuss where Payforit is heading.

Positive Feedback

Since going live with Payforit in January 2007, Dialogue says the feedback has been positive, with statistics from content providers and API's demonstrating a clear increase in conversation rates. Dialogue has seen a rise of up to 27 per cent on conversion compared to premium SMS solutions for its connected customers and I-Play is now approaching a 15 per cent conversion rate for customers visiting its mobile site.

"Payforit was in development for nearly two years and I think that now we have created a clear user interface and single click payment method that will be a success and consumers will trust. I believe Payforit will dominate m-payments for some time to come, but it is by no means the finished product and further developments need to be made, which is something all operators and API's are working to achieve over the coming months," explains Guillaume Peersman.

Customer Experience Improvements

Price points have been one area of debate amongst the operators, with the consensus being that a £5 maximum purchase value is not enough to offer a broad range of content, and this rate should be increased to £10. Operators are already working on solutions to tackle this problem and in only a matter of months some may well raise the limits.

Iain McCallum, Head of Interactive Messaging Products at O2, echoes Guillaume's statements: "Improvements need to be made to the customer experience and that is the key issue that Payforit is trying to address. A lot of work and expense, by Accredited Payment Intermediaries and MNO's working together, has gone into optimising the PFI scheme rules to ensure that they are both robust enough to deliver the best possible subscriber experience and can be implemented by our partners with the minimum hassle and complexity. The next few months will, no doubt, throw up issues of concern and the MNO group will study these and fine-tune the scheme rules accordingly."

Consumer awareness is one of the key issues facing the brand. Simply, consumers are not being told what Payforit is and what its purpose is. Operators need to increase the promotion of the system before it can achieve its objectives.

Data Charge Shocks

Data charges involved in buying the content is another major concern for Payforit. Consumers don't know the final amount they will end up paying for a game or music download, as the purchase price does not include the data charges that come with downloading the content. Two solutions were discussed at the seminar including, listing the size of the download at the point of purchase, so the customer can work out how much extra it will cost to download. Secondly, some operators have introduced "all- you-can-eat" data tariffs that remove the worry of not knowing how much you are paying for a download, as all data downloads are included in the monthly line rental cost. This seems to be the way the industry is heading and would remove the barrier of unknown data charges.

On and Off Portal

"The next stage in the Payforit development process is to ensure that the standard is used not only in the off portal market but also on operator portals. For it to truly achieve its goal, the customer needs to see the standard payment screen wherever they buy content, be that on or off portal," said Jeremy Flynn, CEO of D2See.

Currently, on portal content purchases still make up around 25% of the market, therefore it is very much an active area in purchasing content and needs to incorporate the Payforit standard to ensure the user's buying experience is always the same.

Streamlined Subscription System

Subscription services have been available on mobile for many years but the trust in them has diminished over time as customers are unclear as to what they will be charged, when and how. Phil Cooke, CTO at I-Play explained how Payforit could lead to the revival of mobile subscriptions: "With Payforit taking over off portal buying, subscriptions are set for a rebirth as API's now ensure consumers receive all the payment terms, including details of how to unsubscribe and helpline information at the time of purchase. This will hopefully demonstrate to the customer that a streamlined system is behind the subscriptions and all previous problems have been resolved."

In terms of marketing, opt in boxes are currently left ticked on certain networks and unticked on others and there is a feeling amongst some operators that this is an issue that needs to be standardised across the whole industry. In addition to this, there is the matter of a merchant's memory of consumer choices. Put simply, should consumers have to re-tick a box every time they revisit the same merchant?

Payforit will come up against some tough competition over the coming year from systems such as Google Checkout and Paypal Mobile. However, by making some minor developments, this registration free payment tool, which is quick and easy to use, looks set to become the market leading initiative it has always looked likely to be.

PayPoint partners with Telrock - 160 Characters News

2007-09-17T12:46:00.000+01:00

m-Payment: Deal Opens Up SMS Utility Payments

Submitted by Mike Grenville on Thu, 06 Sep 2007 13:26

UK cash and internet payments company PayPoint has taken on Telrock to provide mobile payment and meter reading to its utility services customers and top up their mobile phones via text message.

Telrock will provide its mobile payments system textDebit to PayPoint under an exclusive revenue-sharing agreement. Technology provided by Telrock enables end users to make secure payments to clients of PayPoint using SMS.

PayPoint handles over £5 billion in over 400 million transactions annually for more than 5,000 clients and merchants in the UK and Ireland. It also has recently acquired a Romanian mobile top-up operator to which a bill payment service will be added, emulating the UK branded retail network. Dominic Taylor, Chief Executive of PayPoint, commented: "This partnership with Telrock will enable PayPoint to exploit the increasing popularity of mobile payments while broadening its proposition to existing and new clients and offering customers a further convenient way to pay bills and buy other services."

Founded in January 2002 by Russell Robinson and Tim Crowley, Chief Executive, Telrock specialises in the design, development and integration of solutions using mobile technology for payments, money transfers and other mobile-based transaction services such as fraud alerts and account information requests.

Already Popular With Consumers

To use the service consumers pre-register a debit, credit or pre-paid card which can then be used to pay a variety of bills such as energy, telecommunications or water, or top up a prepaid mobile phone. Telrock's mobile payment and customer account servicing platform is already being used by British Gas, Scottish and Southern Energy (SSE) and Royal Bank of Scotland (RBS) Group.

"It's a bridge between cash and Direct Debit payments" said Alistair Clare, COO at Telrock. "Since launching with their MINT card nine months ago, about 4,000 RBS customers can authorise payment of their credit card. Customers have been pleased with it and MINT are now starting to market the service more widely."

Its a service that is proving popular with consumers. SSE have been including SMS as one of the options in their welcome pack since February 2007 and about 10% send a text message with their opening meter reading. "In house surveys show customers are impressed with it" said Clare, " in fact 90% asked why hasn't SMS been used before."

Slow Education Process

"We are in discussion with some of Paypoint's early adopter clients such as Utility companies and second tier operators with 4-5 million customers" said Clare "and we expect to be able to make specific client announcements in the next few months" said Clare.

Telrock have been working with British Gas for several years already for customers to text in their meter reading. Clare said that Telrock is moving to the second stage with some clients with newer billing systems where users would be prompted by SMS to read the meter, a reply with the bill amount would come back by SMS and the customer would authorise payment.

Progress however has been slow with utilities. "There is a big education process to go through" said Clare. "There is a natural tendency among these organisations to be conservative towards new technology and innovations. We expect that our deal with Paypoint will help inspire confidence and grow the whole market."

Gpay - not a big surprise

2007-09-04T16:01:00.000+01:00

Now Google targets mobile payments

14:30, Sep 3rd 2007 by Tim Green

Blimey, Google has filed a patent for a mobile payment system being dubbed Gpay.

The patent, filed last year but has only just published, describes how a text message could trigger a “computer-implemented method of effectuating an electronic on-line payment”. That sounds like reverse-billed SMS to us, but no doubt Google will do things differently.

The Gpay patent filing describes a system where a user sends a text message to Google that gives details of a payment to a specified payee. GPay would debit the user’s bank account and credit the payee.

Of course, Google already has its own online payments system called Checkout. It’s a little like PayPal, and was soft launched for mobile earlier this summer.

M-Pesa adds US $8 m to Safaricom's bottom line in first e months!

2007-08-20T10:50:00.000+01:00

Is the Future of Mobile Banking and Payments in Kenya?

from Mobile Money and Banking by Eric Mattson

One of the neat things about innovation in the mobile space is that it is a far more global trend than the previous rounds of PC-based technological advances. Asia, Europe, and the United States are all playing large roles, but even Africa is taking part.

One recent example comes from Kenya, where Safaricom, the country's leading mobile provider is making waves with its cash transfer service M-Pesa. The popular p2p money-transfer service added almost USD$8 million to the company's bottom line in its first three months of operations.

M-Pesa's sights are now set on becoming the commerce platform of choice in a country where credit cards have struggled to reach the mostly "unbanked" population. The potential stakes are huge for the various players and will be exciting to watch.

Danal gets investment

2007-07-30T20:00:00.000+01:00

Sth Korean Payments Company Danal Gets $6 Million Investment, Enters US

By James Quintana Pearce - Thu 21 Jun 2007 01:11 AM PST

South Korean company Danal has convinced investment firm Morgenthaler Ventures to invest $6 million in its U.S. subsidiary, which will mark the entry of the mobile payments company into the US. Morgenthaler holds a minority stake, and Danal has invested $3.5 million in the US subsidiary reports the Wall Street Journal. Danal’s service lets people charge digital items and tangible goods to their mobile phone bills using an authentication code on their PC—they receive the code as an SMS when they want to buy something. It’s targeted at young people without credit cards and is quite a simple service (no special mobile software needed)—but the mobile payments market is getting pretty crowded so it will have its work cut out for it. “One hurdle may be lining up enough online merchants to participate, says Aaron McPherson, a research director at Financial Insights, a Framingham, Mass., research firm that is part of IDC. US merchants will have to give up a small percentage of every online sale to let their customers use Danal’s service. (That fee will be split between Danal and the cellphone carriers.) The fee for credit cards is about 3 percent, but the fee for Danal-brokered transactions will likely be higher, though less than 10 percent. So “cost-wise, it doesn’t really work for the merchant,” says Mr. McPherson. Danal’s Mr. Kim points out that around 16,000 merchants are already working with Danal in Korea.”

PayPal widget on Facebook

2007-07-12T09:27:00.000+01:00

PayPal Really Launches on Facebook

By Jim Bruene on July 9, 2007 10:25 AM

Two weeks ago I heard from PayPal corp communications who felt that my "PayPal launches on Facebook" title was misleading. They had a point. As I explained in the post, the new Facebook app was PayPal-powered but developed by Australia's Yellow Media. The title could have been better.

However, that's moot now since PayPal has now launched its own app on Facebook (here). It appears to have been posted on July 3 and has 218 users as of this morning. The application provides a simple interface to request and track money requests from Facebook friends (see inset above). Additional functionality is said to be on the way.

Cellular News on Mobile Banking

2007-06-13T21:51:00.000+01:00

Success or Failure for the Re-Launch of Mobile Banking

A series of new mobile reports from Javelin Strategy & Research has uncovers significant product marketing requirements for building banks' consumer usage of mobile services. While consumers are better primed for mobile banking now than they were in 2000, financial institutions (FIs) should not consider the mere availability of mobile banking a guarantee of success. FIs should prepare for measured, rather than widespread and immediate, adoption, even though consumers, handsets and mobile networks have made tremendous advancements.

As Javelin's research shows, mobile banking and payments will grow as banks design products based on consumers' mobile needs for simplicity and immediacy while educating end users to curtail perceived risk factors.

Early adopters are projected to be current mobile Internet users (MIUs), who represent 12% of US adults who own cell phones (approximately 27.8 million people). In order to appeal to this sizeable market, FIs will need to focus on the mobile preferences of this population first. These individuals require unique product design strategies, due to a distinct preference for how and why they log on.

Institutions must evaluate the tradeoffs of multiple platforms (downloadable app, SMS, browser-based app) in order to garner adoption beyond the mobile Internet users and reach other segments, such as Gen Y, risk-averse and higher-income consumers, who each have their distinct motivations for using mobile banking. According to President and Founder of Javelin Strategy & Research, James Van Dyke, "If 'anywhere, anytime' banking is the benefit of mobile banking, then providing all platforms satisfies the most fundamental consumer preference for 'anywhere.' By taking a targeted product and audience approach, banks and payments firms can finally increase the near-term return on mobile product and marketing investments."

On the other side of this mobile banking adoption equation are the perceived security vulnerabilities. According to the study of over 2,200 online consumers, one in two people (49%) perceives mobile banking to be unsafe, yet analytical review shows that this channel offers important security advantages and minimized risks compared to online banking. Institutions must proactively address the perceived security flaws while unflinchingly touting the relative safety advantages. Resulting from these survey findings is Javelin's call to the industry for an open forum collaboration for security requirements among carriers like AT&T, Cingular, Sprint, T-Mobile, Verizon, etc.; financial institutions; as well as leading vendors like ClairMail, Firethorn, Fronde, mFoundry, MShift, and M-Com.

Post Office launch mobile payment service

2007-06-12T11:12:00.001+01:00

Post Office launch mobile payment service

from SMS Text News by Alex

Link: Post Office delivers handset payments

Here’s the second story on barcode usage in the UK that I’ve blogged about today. Hopefully with the power of the Post Office behind this one it’ll turn into a popular method for companies to send cash to consumers.

A METHOD of paying out cash by sending barcodes to mobile phones has been launched by the UK’s Post Office. Known as Payout it is now available from any of the Post Office’s 14,000 UK branches. The system will handle amounts up to £100 and is an ideal way of sending small amounts of cash or providing refunds to people who don’t have bank accounts.

There’s no costs mentioned in the article, but one of the trialists - consumer giant Unilever - are quoted as saying ‘raising a cheque is 600 per cent more expensive than using the Post Office payout service’.

Now if the Post Office offer it as a consumer to consumer service, we will be cooking on gas..

Safaricom & M Pesa in Kenya - SMS Text News

2007-06-12T10:34:00.000+01:00

Safaricom launches Africa’s first mobile money service

June 11, 2007 at 12:47 pm · Filed under Mobile Services, Operators, Mobile Commerce

Link: IOL Technology - Kenya pioneers ‘mobile money’ in African first

More than 60 percent of Kenyans have access to banks or microfinance institutions, but a staggering 38 percent - mostly living in rural areas - are entirely unbanked, according to data collected by Financial Sector Deepening Kenya (FSDK).

However, more than half the population either owns or has access to a cellphone, generating a new means by which banking and financial services could be provided, according to Safaricom’s Chief Financial Officer Les Baillie.

Now this is cool - especially given the figures above about how many Kenyans don’t have bank accounts but do have access to a mobile phone.

M-Pesa users can send up to 35 000 Kenyan Shillings (about R3 800) per transaction and keep up to 50 000 Kenyan Shillings in a “virtual account” for later use.

To use the service, senders hand over funds to a Safaricom shop to be converted into “mobile money” that is “transferred” by text to the recipient, who then withdraws it as cash at another Safaricom shop.

The fees for sending and withdrawing run up to 170 shillings, a mere fraction of the cost charged by other money transfer agencies, which ask for up to 10 percent of the amount being sent.

Although you’ve still got to make the trip to pick up the money, it’s a lot more convenient (and cheaper) than the old methods, like Western Union. (Thanks to SMS Text News reader Malcolm for the tip!)

Permalink

PayPal introduces Mobile Checkout

2007-06-12T10:13:00.001+01:00

from Payments News - from Glenbrook Partners by Scott Loftesness

PayPal today introduced PayPal Mobile Checkout - it gives merchants a way to support mobile checkout on their existing web sites by providing PayPal users a way to easily activate and enroll to make online purchases from their mobile phones. Details here.

IP Commerce and PayPal Partner

2007-05-30T14:46:00.000+01:00

IP Commerce, PayPal Partner

IP Commerce has announced that it will offer payment services powered by PayPal including an email invoicing solution in PASS Commerce Center and a Sales Ticker, as part of the PASS Gadget which can be placed in the Windows Vista sidebar. According to the companies, "small businesses using PASS Commerce Center and services will benefit from improved cash flow, visibility into their financial standing, best practice security measures that reduce fraud and identity theft, and the ability to extend greater flexibility of payment options to their customers."

The new services for small businesses are now available in PASS™ (Payments as a Secure Service™) Commerce Center. The solutions leverage IP Commerce’s IP Payments Framework™, a single platform that provides the framework to enable disparate applications and services to communicate. PayPal’s technology allows small businesses to create and send their customers payment-enabled invoices over email using the PASS Email Invoicing service. The invoices include an encrypted payment button that is embedded into the invoice, allowing small businesses to accept payment through their PayPal accounts. The Sales Ticker allows PayPal small business users to add an active desktop icon that receives and alerts them to incoming PayPal payments in real-time, without the need to login to their PayPal accounts.
“With the help of firms like IP Commerce, small businesses are able to integrate PayPal in new ways to streamline their accounting processes,” said Gene Alston, business development director at PayPal. “We are excited about being part of this powerful team of industry leaders that is educating the market about the benefits of an open payments marketplace.”
“PayPal is a recognized and respected leader in the payments industry and a valued member of the PASS Consortium,” said Chip Kahn, CEO, IP Commerce. “The consortium has been working closely as a team with Microsoft to ensure that we achieve our common goal of developing a truly open network of payment applications that enables small businesses to be more efficient and more aware of all aspects of their business.”
The PASS Consortium, developed by IP Commerce, is a group of leading financial institutions and payment service providers working together to promote secure and efficient open financial transactions within the Windows Vista™ Business operating system. As part of the PASS Consortium’s quest to promote an open payments network, the member organizations’ services are now available via PASS Commerce Center, a comprehensive financial management solution designed to help small businesses using Windows Vista Business succeed. In addition to PayPal, PASS Consortium members include AmbironTrustWave, BankServ, Chase Paymentech, CIT Group, Inc., and Internet Commerce Corporation.

Contactless Technology in the US - Card Technology

2007-05-30T14:27:00.000+01:00

Contactless In America: Some Banks Have Yet To Climb Aboard

By Dan Balaban

While the buzz around contactless payment in the United States continues, not everyone is convinced the concept will take off anytime soon, especially when it comes to consumers tapping to pay with their mobile phones.

Among the more skeptical voices is that of John Suchanec, senior vice president of payment technology for giant card issuer Bank of America. The bank’s recent trial of contactless payment using mobile phones that support Near Field Communication failed to inspire, he said. And while the bank plans another NFC trial this summer, Suchanec said he isn’t yet sold on the technology or–for that matter–on contactless payment from other “devices,” including cards and key fobs.

“You’ve really got to provide a place where people will (be able to) pull out a device and use it everyday,” he told Card Technology. You really have to generate a business case to justify it (added cost).”

With rules adopted by the payment card organizations allowing U.S. consumers to make low-value purchases without signing receipts, tapping cards or other tokens to pay is not appreciably faster or more convenient than swiping the cards at the point of sale, said Suchanec. He also spoke last week at the CardTechSecurTech conference in San Francisco.

Bank of America is perhaps the largest but not the only big issuer still sitting on the sidelines when it comes to rolling out contactless cards or tokens. Citibank has largely dabbled in the technology, and Capital One hasn’t taken the plunge. Of the largest banks, only JPMorgan Chase has begun a significant rollout, although it has only put contactless chips on part of its portfolio.

Without more big issuers moving boldly forward on contactless–and none putting chips on all new and replacement cards–vendors predict they will ship only about 25 million contactless cards or fobs this year. That’s up modestly from the roughly 20 million contactless cards or tokens vendors sold in 2006. Contactless backers are targeting the cash-heavy market for purchases of $25 or less.

Bank of America does have some contactless cards on issue, by virtue of its acquisition completed in early 2006 of credit card giant MBNA, which has suited up for contactless payment mainly at American sports stadiums.

On the merchant side, 40,000 or 45,000 locations accept contactless payment in the United States, a growing yet still small percentage of all merchant locations that take card payment.

Some small or mid-tier U.S. banks, such as KeyBank, SunTrust and Wells Fargo, among others, are issuing contactless cards, as is HSBC on a regional basis. The 25 million contactless cards and fobs likely to be issued this year compares with the roughly 300 million credit, debit and prepaid cards U.S. financial institutions will roll out in 2007, nearly all of them simple magnetic-stripe cards. These cost a small fraction of the price of contactless cards, which run about $1.50 apiece in the United States. Issuers in Europe and Asia that have adopted more secure EMV technology for their payment cards would pay at least two to three times more to go contactless because their cards would require dual-interface chips. Relatively few contactless EMV cards are on issue.

Brian Triplett, senior vice president for emerging product development at Visa USA, said five of the top 10 Visa issuers in the United States have introduced contactless and momentum is growing.

He confirmed Visa plans to launch a national advertising campaign in the United States around its new Visa payWave contactless program. The campaign is expected to begin this summer and will try to give consumers a better grasp on contactless payment.

“This is consistent across Visa worldwide. We will continue to work with our issuers and merchants to sell that consistent story,” he said.

While Visa said it has been waiting until there are a sufficient number of contactless cards in circulation and merchants accepting them before launching a consumer advertising campaign, observers note Visa is playing catch-up with MasterCard Worldwide, which has heavily promoted its PayPass contactless brand in the United States. The belated Visa ad campaign is seen by the observers as an attempt to slow MasterCard’s momentum while boosting awareness among consumers and retail clerks, many of whom are completely clueless about contactless.

U.S. banks and payment card organizations that have launched contactless report impressive gains in use of contactless payment by consumers, with more transactions and higher spending per card or token. But these banks and card organizations haven’t yet released actual transaction figures.

For Suchanec, a major obstacle to getting more consumers to tap when they pay is persuading more merchants to accept the new form of payment.

Such big merchants as McDonald’s restaurants and 7-Eleven convenience stores take contactless at their thousands of locations across the country, and some sizable retail pharmacy, cinema and gasoline chains, also have signed on. But overall acceptance of contactless represents less than 5% of card-welcoming merchant locations.

“There are 6 million places where you can use your credit card, 45,000 (contactless acceptance locations) doesn’t excite me,” Suchanec said.

To encourage more U.S. merchants to move on contactless, he agreed the major card organizations might have to lower interchange, the major determinant of the fees merchants pay to banks on card transactions. “I think you have to bite the bullet,” he told Card Technology. “You’ve got to recognize cash transactions are different.”

As Card Technology recently reported, Visa Europe has agreed to lower interchange in the United Kingdom to try to attract more merchants for the planned launch of contactless payment in London this fall. MasterCard is expected to do the same.

Visa, MasterCard and American Express all told Card Technology, however, they have no plans to lower fees in the United States. They’ve subsidized the cost of terminals and readers for some merchants in the past. But they say the increasing card use by consumers and lower cash-handling costs will justify the investment by merchants in contactless.

“We do not intend to lower our discount rate,” Leigh Malnati, vice president for contactless payments at American Express told Card Technology. But he added during a presentation at the CTST conference in San Francisco that he sees the need for more places for consumers to tap their cards or tokens. “Until you have a better merchant coverage, there’s clearly a problem. It’s coming along. We would just like to see it come at a faster pace.”

Suchanec expresses even more doubts that contactless payment using NFC phones will take off anytime soon.

Interest continues to grow around the world in NFC, which embeds contactless chips and short-range antennas into phones and other devices, allowing them to emulate contactless payment, transit or building access cards; or act as contactless readers.

The relatively small but growing base of merchants in the United States that accept contactless would provide a ready infrastructure of readers for new mobile-payment services using the specially equipped phones, say backers. This would enable issuers to deliver their applications over the mobile network to handsets already in consumers’ pockets. They also could tie in electronic couponing and other support services to the payment applications, which their customers could access via colorful menus on their handsets.

Such large issuers as Citibank, Chase, HSBC and retailer 7-Eleven have launched NFC pilots in the United States, mostly involving consumers.

Bank of America began its own, low-profile, NFC trial late last year as part of a larger 5,000-employee pilot held at one of its corporate campuses, in Delaware, home of its MBNA division.

But the NFC portion of the trial flopped for a variety of reasons, says Suchanec, including an undesirable phone model and problems downloading the payment application to the handsets.

The bank gave employees a choice of the contactless form factors they could use and employees chose key fobs to phones by a six-to-one ratio, Suchanec said. The application available for download to the phones was PayPass from MasterCard.

“Active fob users averaged three times more transactions than phone users,” he said. “One of the problems they had with the phone, you can’t do more than one thing at a time; you can’t talk and pay.”

Users didn’t like the Nokia 3220 phone used in the trial, which wrapped up around March of this year. Employees even asked if the bank could download PayPass to their own handsets. The 3220 has been the workhorse of dozens of public and private NFC trials held around the world over the past two years. It has been one of the few NFC models available, after Nokia retrofitted the 3220 with a contactless chip and short-range antenna. But the model offers few other features subscribers would want.

There were other problems besides the unattractive phone. Users had trouble downloading the application. Bank of America’s technical staff had to help debug the code of the over-the-air platform from the beginning, Suchanec said. And the downloading process was confusing for consumers and took a long time–on average about 5 minutes for each download. Some of the delays or unsuccessful downloads were caused by a failure of the phones to receive the SMS messages sent via the OTA platform vendor, he said.

The bank used a platform developed by Germany-based Giesecke & Devrient, which transferred it to NFC platform vendor Venyon, a joint venture G&D formed with handset maker Nokia.

Venyon executives said they are unable to talk in detail about a specific customer project, including any reports of missed messages or time-consuming downloads. But they point out there are typically “issues” that crop up during trials. That’s especially true of trials involving a number of parties and new technologies, they say.

“This is especially important for NFC, as it consolidates a number of different elements, like the NFC mobile phone, secure element, applications, user interface, service provider system, mobile network, over-the-air platform and, of course, the actual contactless infrastructure,” said Venyon CEO Lauri Pesonen in a statement. “Venyon has certainly learned a lot in these trials.”

The Bank of America trial started late last year, just as Giesecke & Devrient was preparing to hand off the OTA platform to Venyon. Venyon senior vice president Andreas Schauer said it was one of the first trials of any kind downloading a bank-issued payment application. G&D had earlier downloaded a PayPass application as part of a trial in Dallas that officially launched in November.

In the Dallas trial, consumers had some problems downloading the applications, but MasterCard attributed them, for the most part, to spotty network coverage and unfamiliarity among most consumers with how to download programs or content to mobile phones.

A survey Bank of America conducted during or after its contactless payment trial showed participants rated the NFC phone as among the most negative part of their experience in the trial.

“You need to only have one bad experience throughout this whole process for people to abandon what they are doing,” said Suchanec.

The bank hasn’t given up on NFC or contactless, however. Suchanec says it plans a new NFC trial this summer among employees, using Nokia’s new 6131 NFC phone and another platform for downloading payment applications. The latter would allow users to make a phone call to request the application, reducing reliance on text messaging. Besides payment, the trial would include an application letting users tap contactless tags in posters to download discount coupons.

Overall, however, Suchanec said he believes it could take years before NFC is ready for roll out, at least in conjunction with contactless payment in the United States. “We’re a long way away from putting phones in the hands of consumers.”

Others might disagree, but what seems clear is it will be some time to come before contactless captures a sizable share of purchases now conducted by American consumers in cash. (2007-05-25)

Nonbanks in the Payments System - Conference Papers

2007-05-22T18:40:00.000+01:00



Conference papers are best viewed with Adobe Acrobat Reader. You may download a free version of the reader from the Adobe Acrobat website.
Nonbanks are becoming increasingly prominent in payments systems around the world. What are the implications of this heightened presence for innovation, competition, and risk? This international conference brought together three principal audiences – industry participants, academics, and public authorities – for an exchange of views and thoughts. The following issues were addressed: What activities do banks and nonbanks perform in payments? How has rising nonbank participation affected product innovation and market competition in the payments industry? Do banks and nonbanks compete on a level playing field? Is the current supervisory framework over bank and nonbank payment service providers adequate to control risk? What role should public authorities play in overseeing retail payments in light of changing technologies and changing industrial structures? The conference was held at the La Fonda Hotel, May 2-4, 2007, in Santa Fe, New Mexico. Preliminary papers for viewing are available below.


wednesday, may 2


Reception and Dinner

Welcome and Opening Remarks

	Thomas M. Hoenig
	President & Chief Executive Officer, Federal Reserve Bank of Kansas City



thursday, may 3


Session 1:	Nonbank Payment Activities: An Overview

Authors:	Simonetta Rosati
	Senior Market Infrastructure Expert, European Central Bank

	Stuart E. Weiner
	Vice President & Director of Payments System Research, Federal Reserve Bank of Kansas City

Paper:	Nonbanks in the Payments System: European and U.S. Perspectives

Handout:	Nonbanks in the Payments System: European and U.S. PerspectiveS


Session 2:	Innovation

Author:	Bronwyn Hall
	Professor, University of California, Berkeley

Paper:	Innovation in Nonbank Payment Systems

Moderator:	Lee Manfred
	Partner, First Annapolis

Handout:	NonBanks in the Payment System: Innovation – Commentary and Questions

Panelists:	Benjamin Ling
	Group Product Manager, Google

	Rene Pelegero
	Senior Director of Industry Relations, Strategy & Compliance, PayPal

Handout:	Innovation in Nonbank Payment Systems

	Margaret Weichert
	Senior Vice President, Payments & Strategy, Bank of America

Handout:	Payments: An Opportunity for Innovation


Luncheon Address: Modernizing Payments: No Pain, No Gain

	Gertrude Tumpel-Gugerell
	Member of the Executive Board, European Central Bank

Remarks:	ModerniZing payments: no pain, no gain


Session 3:	Competition: Vertical Integration

Author:	Nicholas Economides
	Professor, New York University

Handout:	Nonbanks in the Payments System: Vertical Integration

Moderator:	Kenneth Posner
	Managing Director, Morgan Stanley

Handout:	Representative Payment Industry Competitive Landscape

Panelists:	Michael Cook
	Vice President & Assistant Treasurer, Wal-Mart

Handout:	Nonbanks in the Payments System Competition: Vertical Integration

	Trey Jinks
	Senior Director, Corporate Strategy & Planning, TSYS

	Pam Joseph
	Vice Chair, U.S. Bancorp

Handout:	Vertical Integration


Session 4:	Competition: Horizontal Integration

Author:	Jean-Charles Rochet
	Professor, University of Toulouse

Paper:	Some Economics of Horizontal Integration in the Payments Industry

Moderator:	Ken Howes
	Director, Edgar Dunn & Company

Handout:	NonBanks In The Payments System: Innovation, Competition and Risk

Panelists:	Ben Haasdijk
	Chairman, Equens

Handout:	Consolidation & Integration

	Gerard Hartsink
	Chairman, European Payments Council

Handout:	Horizontal Integration in the Payments Industry

	David Yates
	President, First Data International EMEA



friday, may 4


Session 5:	Risk

Author:	Ross Anderson
	Professor, Cambridge University

Paper:	Closing the Phishing Hole – Fraud, Risk and Nonbanks

Handout:	Closing the Phishing Hole – Fraud, Risk and Nonbanks

Moderator:	Avivah Litan
	Vice President, Gartner Research

Handout:	Phishing Attacks Leapfrog Despite Attempts to Stop Them

Panelists:	Jean Bruesewitz
	Senior Vice President, Visa U.S.A.

	Roy DeCicco
	Senior Vice President, JPMorgan Chase

Handout:	Review and Commentary on Closing the Phishing Hole – Fraud, Risk and Nonbanks

	Richard Oliver
	Executive Vice President, Federal Reserve Bank of Atlanta

Handout:	Review and Commentary on Closing the Phishing Hole – Fraud, Risk and Nonbanks

	James Van Dyke
	President, Javelin Strategy & Research

Handout:	2007 Trends In Financial Risk & Fraud

Remarks:	What Rigorous Research Tells us about Risk in Payments and Financial Services


Session 6:	Central Bank Perspectives

Speakers:	Thomas M. Hoenig
	President & Chief Executive Officer, Federal Reserve Bank of Kansas City

	Philip Klopper
	Executive Director, De Nederlandsche Bank

Handout:	Nonbanks in the Dutch retail payments system: a central bank perspective

	Philip Lowe
	Assistant Governor, Reserve Bank of Australia

Remarks:	NONBANKS IN THE PAYMENTS SYSTEM: A CENTRAL BANK PERSPECTIVE

Mastercard + RBS + Paypass = Contactless Card

2007-05-22T18:37:00.000+01:00

MasterCard hoping to launch Oyster-style payment card in London this year

08-May-07

MasterCard is aiming to launch the first contactless payment system in London later this year. The payments giant plans to beat rivals Visa and Apex by launching credit and debit cards with Royal Bank of Scotland using its PayPass system in the autumn.

The new card will allow customers to pay for their goods without the need to swipe a card or sign a receipt, in a way similar to the Oyster card system operated by Transport for London (TfL).

The London MasterCard launch covers the London corridor – north and south of the Thames, running from Waterloo to Canary Wharf. The cards, which will retain the existing chip and pin and magnetic stripe functions, will be issued through RBS, NatWest, MINT and Ulster Bank.

TfL has already signed a deal with Barclaycard and Visa to launch a range of Oyster-branded credit and debit cards, which are also expected in the autumn.

The cards are suited to transactions at fast food restaurants, coffee shops, newsagents, off-licences, bars, pubs, parking facilities and vending machines.

MasterCard UK country manager John Bushby says that consumers will love the convenience, simplicity and security of contactless cards when paying for everyday things.

It has already launched Paypass in the US and it also launched the first scheme in Europe with fast food chain McDonald's last month (MW April 12).

UK banking industry body APACS today confirms cross-industry plans to roll out the technology from September. It says there will then be a national upgrade in 2008.

Business Week chimes in Mobile Payments & Banking

2007-05-22T18:29:00.000+01:00

Let the Phone Pick Up the Tab

Imagine having your very own mobile ATM—otherwise known as your cell phone—in the palm of your hand

by Olga Kharif

Cheryl Bussani's son was grown up enough to move out of their Daly City (Calif.) home into his own place. But he still needed the occasional quick infusion of cash, and his new home in Pacifica, Calif., was far enough away that it wasn't convenient for Bussani to just drive over and drop off a few dollars. "It wasn't worth the gas," she explains.

So Bussani makes loans to her son via cell phone. She uses a service provided by Obopay, in Redwood City, Calif., that lets her transfer funds by dialing a few numbers on her wireless handset. The professional housecleaner also collects her own payments and pays bills with the service.

Bussani is part of the vanguard of U.S. mobile-phone subscribers who are doing their banking with wireless handsets. The practice is expected to gain traction in a matter of months when the likes of bigger, more established companies including banking powerhouse Citigroup (C) and wireless behemoth AT&T (T) kick off ad campaigns extolling the low cost and high convenience of paying over a mobile phone.

Following the Money

They may have a point on price. EBay's (EBAY) PayPal Mobile, which lets people wire funds and donate to charity through a phone, is free for many transactions. Obopay charges 10¢ to send money (see BusinessWeek.com, 5/14/07, "Souping Up Your Cell Phone"); contrast that with Western Union (WU), which charges 11% for transfers within the U.S.

And there's reason to expect mobile-phone payments will become easier. While some early versions require a software download onto a phone, AT&T will begin including software on devices in the fourth quarter. Cell-phone makers like Nokia (NOK) and Kyocera, along with Visa and MasterCard (MA), are trialing phones with embedded chips that allow for contactless payments. Simply wave your phone in front of a reader to pay for purchases. That should cut checkout time by 50% to 70%, studies have found.

By 2012, 292 million phones sold worldwide will contain these so-called near-field communications chips, according to consultancy ABI Research. "Consumers tell us they are ready," says Pam Zuercher, vice-president of product innovation and coordination for Visa USA. The credit card association's March survey of 800 U.S. consumers showed that 57% would be interested in buying such a phone. And among 18- to 42-year-olds, 64% said they'd switch wireless carriers for it. "We believe mobile banking will be one of the bigger applications," says Greg Latour, senior vice-president of technology development at wireless carrier Cellular South, which, like carriers Amp'd Mobile and Helio, already offers Obopay.

Fee-for-All

If optimists like Latour are right—and considering the success of contactless payments in places such as Korea, there's reason to think they will be—the increased reliance on mobile payments is likely to have a ripple effect on financial services. Wireless service providers will demand their cut of financial transaction fees. Mobile payments are also expected to crimp demand for cash and checks, which still account for more than half of all consumer purchases.

At stake is $1.4 trillion in small payments of under $25 made in the U.S. each year. By 2010, about 10%, or $140 billion, of all payments under $25 will be made with contactless cards, estimates Dan Schatt, an analyst with consultancy Celent. Of those, 10% could be paid with mobile phones, he estimates.

Established players such as Visa, MasterCard, and First Data (FDC) will continue to angle for the business of processing payments and the right to collect the fees that amount to as much as 2% of purchases. But use of checks, printed by companies such as John H. Harland, could be affected. So could demand for ATMs, run by companies like First Data, recently purchased by an affiliate of private equity firm Kohlberg Kravis Roberts for $29 billion, Schatt says.

Plenty of Players

A number of upstarts stand to benefit. Schatt lists companies like Gemalto, which makes Smart Cards for contactless payments. Companies such as Atlanta-based Firethorn and Sausalito (Calif.)-based mFoundry, which power mobile banking and payments applications could profit from this move. So could outfits like ViVOtech, which sell related hardware such as in-store scanners. "We can get a bank up and running [on mobile phones] in six weeks," says Drew Sievers, co-founder and CEO of mFoundry.

Wireless service providers tend to keep tight reins on the applications they give users access to, and they will want a share of the transaction fees. Yet, unlike such carriers as Japan's NTT DoCoMo, U.S. wireless service providers are expected to stop short of offering financial services on their own. "We don't see any operators we deal with even considering this strategy," says Tripp Rackley, CEO of Firethorn.

And, of course, the service providers themselves could gain handsomely. Obopay is making a push with funding from investors like wireless powerhouse Qualcomm (QCOM). Web giants like Google (GOOG), already offering payment services online through Google Checkout, could potentially enter the fray. Cell-phone makers like Nokia could step into the market as well.

Spend-shifters

To prevent any business disruptions, processors have been among the first to jump into mobile payments. First Data doesn't see mobile payments as a threat: "We see it more as an extension of consumer choice," says Brian Friedman, vice-president of innovation for First Data financial institution services. It's not taking chances, though, and is ramping up mobile efforts. On May 2, First Data invested in ViVOtech and has committed to using the startup's hardware in offering contactless payments.

Visa and MasterCard are conducting near-field communications trials. Visa, for one, has developed its own mobile payments software. "Today, $17 of every $100 of spend is spent on a Visa card," says Visa USA's Zuercher. "We are looking at mobile as a way to shift [even more of this] spend." To that end, the company will be adding more capabilities, such as person-to-person money transfers and ticket purchases, later this year. Visa is also trying to address issues such as ease-of-use and security, which plague contactless payments in other countries (see BusinessWeek.com, 11/21/06, "Contactless Payment Comes to Cell Phones").

And banks aren't sitting still. Citibank, for instance, is piloting Obopay with select customers. It's also trialing near-field communications in New York with Nokia and Cingular/AT&T. And then there's Citi Mobile, launched in April in California and expected to roll out nationwide by the end of May. Based on software from mFoundry, the service lets users search for ATM and branch locations, reach customer service, and check balances. "The uptake is within our expectations," says Steve Keitz, Citi Mobile Director. "We think this is the next step."

Kharif is a reporter for BusinessWeek.com in Portland, Ore.

Mercator report on Micropayments

2007-05-22T17:22:00.001+01:00

Solving the Micropayment Problem: Online and at the POS

NEW RESEARCH REPORT BY MERCATOR ADVISORY GROUP

Mercator Advisory Group is pleased to announce that its review of its latest report, Solving the Micropayment Problem, Online and at the Point of Sale. The report reviews both the history and challenges of electronic micropayments and examines how the existing rails have evolved to address under $5 electronic payments at both the point of sale and for online transactions.

In particular, the report examines the evolution of multiple micropayment models and how they have shifted the economics of micropayments, especially online. The ad-supported revenue model, powered by Google AdWords and other sponsored advertising sources, has significantly altered the need for a ubiquitous online "coin purse" for digital products below $0.75 in value. At the point of sale, micropayments have been successfully addressed by lower interchange rates for selected merchant categories and, in some markets, by contactless payments.

The Solving the Micropayment Problem report includes a review of market participants including PayPal, BSG Clearing Group, ClickandBuy, PaymentOne, and Peppercoin/Chockstone.

Highlights of the report include:

Online micropayments has been an unkind market segment for payment processors aggregating multiple small transactions as a pureplay processing service.
The early Internet dream of nearly frictionless purchases of sub $0.75 content has been made irrelevant by free content and the ad-supported revenue growth that powers the best free content sites as well as the growth of search giant Google.
Online, it is per transaction charges, not interchange, that eats up excessive margin for sub $1.50 digital content.
Given lower interchange rates for low-risk, high volume merchant categories such as QSRs, transit, parking and others where micropayments are common, barriers have dropped for the electronification of under $5 payments.
The markets for micropayments at the POS overlap with those for contactless payments.

"Under $5 micropayments online have been a persistent source of pain for content creators and distributors," comments George Peabody, Director of Mercator Advisory Group's Emerging Technologies Advisory Service. "Evolution of payment models such as ad-supported content creation and distribution have largely erased that pain. Coupled with subscriptions and payment aggregation, the online picture is clearer but still requires better solutions. Ironically, electronic micropayments work better at the POS than they do online."

One of the seven Exhibits included in this report.

This report is 23 pages long and contains 7 exhibits, 5 tables and a Glossary of Terms.

Members of Mercator Advisory Group have access to this report as well as the upcoming research for the year ahead, presentations, analyst access, and other membership benefits. Please visit us online at www.mercatoradvisorygroup.com/.

For more information call Mercator Advisory Group's main line: 781-419-1700 or send email to info@mercatoradvisortygroup.com.

Javelin research on Mobile Banking

2007-05-22T17:19:00.000+01:00

Javelin Studies Product Marketing Requirements for Mobile Banking

Javelin Strategy & Research has announced new research that it says "uncovers significant product marketing requirements for building banks' consumer usage of mobile services. While consumers are better primed for mobile banking now than they were in 2000, financial institutions (FIs) should not consider the mere availability of mobile banking a guarantee of success. FIs should prepare for measured, rather than widespread and immediate, adoption, even though consumers, handsets and mobile networks have made tremendous advancements."

As Javelin's new research shows, mobile banking and payments will grow as banks design products based on consumers' mobile needs for simplicity and immediacy while educating end users to curtail perceived risk factors. Early adopters are projected to be current mobile Internet users (MIUs), who represent 12% of US adults who own cell phones (approximately 27.8 million people). In order to appeal to this sizeable market, FIs will need to focus on the mobile preferences of this population first. These individuals require unique product design strategies, due to a distinct preference for how and why they log on.
Institutions must evaluate the tradeoffs of multiple platforms (downloadable app, SMS, browser-based app) in order to garner adoption beyond the mobile Internet users and reach other segments, such as Gen Y, risk-averse and higher-income consumers, who each have their distinct motivations for using mobile banking. According to President and Founder of Javelin Strategy & Research, James Van Dyke, "If 'anywhere, anytime' banking is the benefit of mobile banking, then providing all platforms satisfies the most fundamental consumer preference for 'anywhere.' By taking a targeted product and audience approach, banks and payments firms can finally increase the near-term return on mobile product and marketing investments."
On the other side of this mobile banking adoption equation are the perceived security vulnerabilities. According to the study of over 2,200 online consumers, one in two people (49%) perceives mobile banking to be unsafe, yet analytical review shows that this channel offers important security advantages and minimized risks compared to online banking. Institutions must proactively address the perceived security flaws while unflinchingly touting the relative safety advantages. Resulting from these survey findings is Javelin's call to the industry for an open forum collaboration for security requirements among carriers like AT&T, Cingular, Sprint, T-Mobile, Verizon, etc.; financial institutions; as well as leading vendors like ClairMail, Firethorn, Fronde, mFoundry, MShift, and M-Com.
For additional information, all of Javelin's Mobile Banking research is available along with other similar Javelin reports and custom mobile research by visiting www.javelinstrategy.com/research or by calling (925) 225-9100 x 26.

Obopay partners with AIM

2007-05-22T14:52:00.000+01:00

Obopay Introduces Mobile Payments for AOL's AIM Users

from Payments News - from Glenbrook Partners by Scott Loftesness

Obopay has announced the availability of a new AIM Obopay plugin for users of AOL's AIM service, the largest instant messaging community in the U.S. According to the company, "this new plugin allows eligible AIM users to launch Obopay and use it to make payments directly from the AIM Buddy List feature. Users can sign up for Obopay and download the free AIM Obopay plugin at http://www.obopay.com/aim."

PayPal becomes a bank...'twas inevitable

2007-05-22T14:43:00.000+01:00

PayPal Obtains Bank Charter for European Union

from Payments News - from Glenbrook Partners by Scott Loftesness

PayPal has announced it has been granted a banking license for the European Union by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg, effective July 2, 2007. According to PayPal, "under this new charter, PayPal will be able to continue its European expansion by offering its services to more online merchants across Europe. In addition, PayPal will be moving its European headquarters to Luxembourg."

Inside Contactless + Mobile Distillery - Mobile Marketing Magazine

2007-05-09T19:46:00.000+01:00

Partnership Targets NFC Interoperability

INSIDE Contactless, which provides advanced, open standard contactless chip technologies, and NFC (Near Field Ciommunication) technology solutions, has announced a partnership with Mobile Distillery, a Java mobile porting software company, to develop an interoperable Java ME solution for NFC developers. The companies are aiming to design a software solution for the development of portable NFC/Java mobile applications across multiple NFC phones. Based on Mobile Distillery’s Celsius architecture, the solution is aimed at mobile software developers, who will need to cope with multiple implementations of NFC technologies, adding more complexity to the development of Java ME applications across multiple handsets.
By using the NFC Celsius module, the developer will be able to work on the NFC/Java ME application once, and run it across all NFC phones without any further modifications. The key benefits of the NFC Celsius module, the companies say, will be accelerated time-to-market, reduction of costs and an easy transfer to upcoming NFC phones.
The partnership is divided into two phases: firstly in the short term, the two companies will be develop a Celsius NFC prototype by the end of Q3 2007. The second step, planned for Q1 2008, will consist of the joint development of the NFC Celsius module, a complete set of Java ME NFC tools covering the commercially available NFC handsets, and ones for the near future.
“As a reference mobile execution platform, Java ME enjoyed tremendous success over the past five years, and is widely recognised by the mobile developers community, but it also undergoes an irresistible trend to fragmentation, with significantly different implementations in handsets from various vendors” says Philippe Martineau, INSIDE’s Executive Vice President of the NFC Business Line. “As an NFC pioneer and market leader, INSIDE believes that interoperability is a key success factor in delivering NFC-based services. We have a role to play and the proper expertise to bring the full benefits of the NFC standard to the NFC developers community.”

Digital Money Forum 2007

2007-05-04T09:50:00.000+01:00

Presentations

ClairMail Mobile Baking -Payments News

2007-05-04T09:46:00.000+01:00

ClairMail, TELUS Offer Mobile Banking to Canadian Banks

ClairMail has announced a strategic partnership with TELUS, a Canadian national telecommunications company, to enable retail banks, credit unions, brokerages, and credit card companies across Canada to offer mobile banking and payments services.

Offered exclusively in Canada by TELUS, the solution will be branded “2–Way Mobile Customer Interaction powered by ClairMail.” It easily integrates with a financial institution’s back-end systems, enabling customers to directly access their accounts and providing financial institutions with direct access to their customers. ClairMail also offers a host of new features to power retail banking services, including actionable alerts (2-way alerts for questionable account activity, transaction approvals and other issues requiring active customer involvement), on-demand access to account information, and no-hold customer service.
“ClairMail’s technology and applications are the only comprehensive solution for delivering banking and payments capabilities to mobile devices, regardless of carrier or model, with no new software required on the mobile phone,” said Joseph Salesky, CEO of ClairMail. “This enables TELUS to provide Canadian financial institutions with a solution for delivering mobile banking services to their customers in the most convenient, efficient way possible.”
“The addition of ClairMail’s messaging-powered mobile banking and payments system to our dynamic offering of application services, managed infrastructure solutions, and IP-based Next-Generation network further strengthens our leading position in the Canadian market,” said Luc Vilandré, vice-president, TELUS National Application Solutions. “When deciding among providers of mobile banking and payment solutions, we chose ClairMail because their approach is unique in its ability to enable competitive differentiation, create efficiencies, and enhanced client satisfaction for our enterprise customers.”
ClairMail is the only solution for two-way mobile customer interaction that does not require downloading additional software onto mobile phones. Leveraging the existing messaging capabilities already on mobile devices, including short message service (SMS), wireless email and the mobile browser, ClairMail allows secure banking transactions regardless of carrier, manufacturer, operating system or wireless transmission standard.
Utilizing the security of multi-factor authentication – the principle of requiring something only the user has (mobile phone) and something only the user knows (PIN number) – made even more secure by performing transaction-level authorizations out-of-band, ClairMail provides strong security and convenience without risking customer privacy. In fact, the ClairMail solution exceeds U.S. Federal Financial Institutions Examination Council (FFIEC) requirements for multi-factor authentication.

WSJ - Mobile Banking shifts into Higher Gear

2007-05-04T09:24:00.000+01:00

http://webreprints.djreprints.com/1657811337744.pdf

Firethorn Mobile Banking & Payments solution - Payments News

2007-05-04T09:10:00.000+01:00

Firethorn, Verizon Work to Introduce Mobile Banking, Payments Solution

Firethorn Holdings has confirmed that "Verizon Wireless is
working with Firethorn to introduce its mobile banking and payments
solution. The announcement demonstrates growing support among the nation's
leading wireless carriers for Firethorn's unique federation strategy for
making the mobile banking and payments marketplace."

Functioning as a federation to financial institutions and wireless carriers, Firethorn assembles, connects and manages the complex web of partners, network standards, and platform interfaces that make mobile banking and payments possible. To encourage adoption, Firethorn is working with all federation partners to launch joint marketing efforts and embed the Firethorn application which will enable and encourage consumer adoption.
"The mobile banking and payments industry took a giant step forward today, as Verizon Wireless agreed to join the Firethorn federation," said Firethorn Chairman and CEO Tripp Rackley. "We welcome and look forward to working with them to deliver the control and convenience of mobile banking and payments to every consumer."
The Firethorn solution is a single, secure application, authorized by the wireless carrier and controlled by the consumer. The application, which is designed to work for any institution on virtually any mobile device, enables comprehensive banking and payments capabilities.
Through the Firethorn solution, consumers can view account balances and history, transfer funds, receive and pay bills, and quickly clear contents if their mobile device is ever lost or stolen. Consumers can perform functions on any supported wireless handset, even when their device is offline.

Obopay Checkout

2007-05-04T08:30:00.000+01:00

Obopay Introduces Obopay Checkout - Payment News

Obopay has announced the introduction of Obopay Checkout, calling it "an industry-first capability that enables mobile merchants to offer consumers effortless, instant payments that monetize digital and physical offerings."

"Obopay has been experiencing rapid adoption of our person-to-person mobile payments service," said Carol Realini, CEO of Obopay. "Obopay Checkout creates another way for consumers to do more with Obopay and live the mobile lifestyle."
Leveraging the Obopay Mobile Merchant Platform, Obopay Checkout makes it simple and secure for consumers to purchase goods and services in real-time directly from mobile phones. Consumers benefit from easier transactions and thus drive more business to mobile merchants.
"This announcement marks the first time merchants and application providers will be able to offer consumers an effortless way to make purchases from their mobile phones. This translates into increased commerce and immediate monetary realization for mobile merchants," added Realini.

Which Doesn't tell us much, so let's look at another report

Obopay Says Response ‘Super Positive’ for New M-Commerce Platform - Digital Transactions News

(April 5, 2007) Mobile-payments processor Obopay Inc. expects to have at least 20 merchants accepting transactions through its new platform by the end of the year, a top executive with the Redwood City, Calif.-based company says. Obopay introduced its so-called mobile merchant platform, which extends the 2-year-old processor’s reach beyond person-to-person payments into mobile commerce with online sellers, last week at a major wireless trade show.

Reaction from merchants so far has been “super positive,” says Howard B. Gefen, executive vice president for marketing and business development at Obopay. “They see the potential. They want to try it out and see if it improves their conversion rates.” The first two merchants to sign on are Xringer Inc., a marketer of ring tones and other music-related items, and Cellfire Inc., an online marketer that provides digital coupons to mobile phones. Gefen says Obopay is in talks with Soapbox Mobile Inc., a mobile marketing firm that helps sell movie tickets, among other merchandise. “We’re working with the first several to get it right,” says Gefen. “Then it’ll be programmatic.”

Obopay lets handset users pay other individuals and now merchants via prepaid accounts, allowing for what Gefen calls real-time settlement. “It’s all about real-time mobile payments,” he says. The company hopes this will appeal to online merchants confronted with credit cards and short-message-service (SMS) billing, both of which are relatively expensive, as their most likely payment alternatives when they move to m-commerce.

The platform, which the processor is billing as Obopay Checkout, is aimed primarily at sellers of impulse items and digital content and marketers of events and venues. Sellers will create mobile applications that users will access on their handsets. Xringer, for example, could use Obopay Checkout to peddle concert tickets and band-related merchandise, such as T-shirts, to customers armed with mobile phones. Customers can have the items shipped to the addresses on file with their Obopay accounts, or pick them up by showing a bar code and transaction code sent to their phones.

But the processor, which relies on the cooperation of wireless carriers, will not target digital-content merchants that use wireless carriers to handle their billing, says Gefen. Carriers typically levy 30% or more of the sale in transaction fees, a business Obopay doesn’t want to interfere with. “We’re very mindful of the carriers,” he says. “The carriers are our partners.” Obopay Checkout’s merchant fees are not disclosed, though Gefen says they will be “very compelling.” Merchants that sign on early, he says, “will get quite the break.”

Obopay may soon see heavy-duty competition in the race to sign up merchants. Online payments kingpin PayPal Inc., which launched its PayPal Mobile service a year ago, told Digital Transactions News early last month that it planned to unveil an m-commerce version of the product soon (Digital Transactions News, March 1).

Another US entrant - MobiBucks

2007-05-03T16:42:00.000+01:00

Introducing MobiBucks - Another Mobile Payments Approach

MonVia, a specialty firm that helps accelerate the growth of early stage start-ups, has announced the launch of MobiBucks, a new mobile payment solution. According to MobiBucks, "with just a cell phone number and four-digit Personal Identification Number (PIN), consumers can now easily make free and secure cashless transactions on everyday purchases." MobiBucks was founded by Jorge Fernandes, founder and former CEO of ViVOtech, and Dave Barram, a Senior Silicon Valley Executive at Apple, Silicon Graphics and Hewlett-Packard.

Available in heavily-trafficked consumer locations, such as cafés, sandwich shops, gas stations, grocery stores, movie theatres and convenience stores, MobiBucks allows participating merchants and customers to access a payment system that mobilizes consumer cash and gift cards. Features of MobiBucks include:
Ability to convert cash into electronic payments using a cell phone even if the cell phone may not be on-hand
Uses the ubiquitous mobile phone number as a unique identifier, and a secure PIN to conduct commerce
No need to force consumers to purchase a new cell phone and merchants can also keep their existing payment systems
Eliminates critical issues related to cell phone payments such as running out of power and unsafe or unreliable conditions
"By using a device that approximately two billion people already have, MobiBucks' patent pending technology is the ultimate solution and the future of mobile payment," said Dave Barram, co-founder and CEO of MobiBucks.
"Through a soft beta launch, we were thrilled to discover that consumers love MobiBucks because it's a free, convenient and fast way to pay without having their wallet on them," said Jorge Fernandes, co-founder and president of MobiBucks. "As a result, we believe we can convert more than 50 percent of all cash transactions at these high traffic consumer locations."
The MobiBucks process involves four easy steps:
One-time registration - Register for a MobiBucks card, retailer's gift card or a combination MobiBucks card compatible with multiple retailers
Top-up - Add money to a MobiBucks account in-store or online and as often as necessary
Make transactions - Purchase at any time, whether it's daily, weekly or monthly
Check balances and transactions - Check MobiBucks account at any time online or via cell phone
"Consumers tend to spend more when they are not using cash as a form of payment," added Fernandes. "With MobiBucks, merchants will be able to convert cash into electronic payments and ultimately increase sales."

Forrestor reports low market need for P2P mobile payments

2007-05-01T21:55:00.000+01:00

April 19, 2007
Person-To-Person Payment Goes Mobile
But P2P Mobile Payment Is A Technology In Search Of A Market
by Michelle de Lussanet
with Lizet Menke, Benjamin Ensor

This is a document excerptEXECUTIVE SUMMARY

A number of firms in Western Europe have recently launched payment systems that allow consumers to make person-to-person payments using their mobile phones. Executives at other payment system operators, mobile operators, and banks need not rush to follow suit. We are not convinced that there is a large market for these new systems: Currently P2P supports only well-defined, narrow payment scenarios like mobile airtime prepay top-up of another person's prepay account. Instead, P2P payments are likely to become just one feature within broader mobile banking and mobile payment services.

Mobile Banking still in low demand

2007-05-01T21:52:00.000+01:00

Study Says Limited Consumer Interest in Mobile Banking

from Payments News - from Glenbrook Partners by Scott Loftesness

JupiterResearch says it "has found that despite renewed efforts on the part of financial institutions, overall interest in mobile banking services is limited. Just eight percent of online consumers who own a cell phone are interested in using mobile browsing to check account balances."

Mobile Visa Card - MoCoNews

2007-05-01T15:08:00.000+01:00

Mobile Visa Card Launched

By James Quintana Pearce - Wed 11 Apr 2007 06:34 AM PST

A mobile Visa debit card has been launched by MP3NY, the “boutique brand engineering firm” founded by Kevin Watson, also known as T-Weed on the TV show I Love New York, which is shown on VH1. The card allows wireless banking and potential customers only need a mobile phone and a US address. It’s targeted at unbanked Americans, small business owners and immigrants. If it works in Africa it can work in the US, the big question would be getting people to know about the card. (release)

Cingular & MasterCard Pay Pass trial in NY - MoCoNews

2007-05-01T11:46:00.000+01:00

Cingular To Test Mobile Wallet In NYC For Three Months; Content Discovery Posters Planned

By Rafat Ali - Thu 14 Dec 2006 08:29 PM PST

The needle is finally moving in U.S. on mobile payments, after some startups have emerged in the space over the last year or so. Now Cingular is teaming with Nokia and financial institutions Citigroup and MasterCard Worldwide to trial new phones that have MasterCard PayPass contactless payment capability, reports News.com. The trial, which is expected to last three to six months, will help the companies evaluate the speed and convenience of this service.

The participants will receive a Nokia handset with “near-field communication” (NFC) technology and the MasterCard PayPass payment function built in. Participants will be able to make purchases wherever MasterCard’s PayPass is accepted by holding their phone near the card reader. The payment is then deducted from the subscriber’s account.

More about the trial on the service website, here. Also the official release here. Planned on the mobile content side: special content discovery smart posters located in the city featuring the trial symbol, with offers to download voice tones, movie trailers, and mobile phone wallpapers. Lots more details in the FAQs here.

Mobile Industry Settling On Mobile Banking Standard

2007-05-01T11:39:00.000+01:00

Mobile Industry Settling On Mobile Banking Standard
MoCoNews

by james@moconews.net

A number of telcos, handset manufacturers, and Mastercard have joined a mobile banking standard which combines the Mifare chip by NXP and Felica by Sony..."By combining this secure chip with an NFC chip, a universal contactless IC (integrated circuit) platform can be created for mobile phones,” Mifare and Felica said in a statement. The big news is that Nokia has signed on, along with Samsung and LG (and I assume Sony Ericsson isn’t going to stand against parent Sony) which covers a significant portion of the handset market. The telcos who have leapt on board include KPN, Maxis Communications, Mobilkom Austria, O2, Orange, SFR, SingTel, SKT, and Wind, reports

They join 14 carriers already trialing the system, including China Mobile, Vodafone, Cingular and Telefonica. Trials with the new standard Pay-Buy Mobile are slated to start in October, and will allow consumers to use the phone as a wallet or payment system by waving it over a wireless reader and punching in a PIN.

MobileMail puts money into TxtNation

2007-05-01T11:30:00.000+01:00

MobileMail To Buy Into TxtNation

from MoCoNews by james@moconews.net (James Quintana Pearce)

UK-based MobileMail has announced plans to buy 49 percent of compatriot txtNation for 1.25 million pounds (US$2.5 million) in cash and US$7 million in stock over an 11 month period. TxtNation provides mobile messaging, content and billing services, and MobileMail (which targets the PC-to-mobile communication market) is buying into it with plans to provide an end-to-end solution for companies in the mobile industry.

Vodafone Mobile Payments for German Trains - ECT

2007-05-01T11:10:00.000+01:00

Vodafone Tests Mobile-Payment System in Germany

Deutsche Presse-Agentur
03/16/07 9:20 AM PT

Speaking at the CeBIT computing expo in Hannover, British-based Vodafone and Deutsche Bahn said they hoped to develop a system that would be salable to other companies within the next year. Bahn planned to introduce the system nationally after the pilot phase. To participate, phones must be equipped with near field communication modules, which are fitted in many handsets.

Worldwide wireless company Vodafone (NYSE: VOD) said Friday it would make a fresh foray into the micro-banking business , testing a mobile payments system in partnership with German railways company Deutsche Bahn.

Instead of buying tickets, passengers will simply press a button on their mobile phones as they hold it near a "touch-point" when they board and disembark from a train. They will then receive a monthly bill for the total of their travel.

The pilot project, code-named Touch & Travel, would be operated from October on an intercity line between the German capital Berlin and Hannover, Germany, and on public transport in the suburbs of Berlin.

Near Field Communication

Speaking at the CeBIT computing expo in Hannover, British-based Vodafone and Bahn said they hoped to develop a system that would be salable to other companies within the next year. Bahn planned to introduce the system nationally after the pilot phase.

To participate, phones must be equipped with near field communication (NFC) modules, which are fitted in many handsets.

Previously Tested

Big international phone groups have in the past tested schemes to use phones as devices to make small payments. Such systems would have made phone companies competitors to the credit card industry, with customers settling their bills monthly with the phone company.system

Previous mobile phone projects were abandoned after phone companies grew concerned at the high risks and lack of profits.

Google e-money License reported on Payment News

2007-04-12T12:33:00.001+01:00

Google Obtains eMoney License in UK

from Payments News - from Glenbrook Partners by Scott Loftesness

A friend of Payments News sends a pointer to a story about Google Payment Limited now being listed as an eMoney licensee by the UK's FSA. If you do a search for Google on the FSA site - it shows an eMoney license was issued to Google Payment Limited on March 19, 2007. PayPal has a similar license - issued February 13, 2004.

US Mobile Banking round-up at Information Week

2007-04-12T12:24:00.000+01:00

Three Mobile Banking Developments To Keep Your Eye On

By Elena Malykhina,
03:24 PM ET, Apr 6, 2007

The next time you take out your cell phone to make a phone call or send a text message, don't forget to check your bank account balance, pay your bills, or transfer money to your relatives in another state. These services and others are either already available or will become available by midyear now that financial companies are stepping up their mobile banking efforts.

Mobile banking is finally hitting the United States, which is lagging behind Europe and Asia where consumers can already do basic stuff on their cell phones like check their bank statements, as well as use their cell phones to make purchases in stores and at vending machines. There are three key waves coming from the banks, the credit card companies, and the cellular carriers that you should be aware of:

1. Mobile banking, which uses mobile devices for self-service functions. Several major banks, including Citibank, Wachovia, and Bank of America, have launched mobile applications that will allow customers to view their account balances, pay bills, transfer money, and even call customer service reps with one click -- all using a cell phone or smartphone.

2. Contactless payments, which enables cell phones to be used as payment devices instead of credit cards. As a separate effort, top credit card issuers MasterCard and Visa are paving the way for "contactless" payments, where cell phones serve as electronic wallets for purchases that can be made at CVS, McDonald's, and many other retailers. The phones use Near Field Communication, or NFC, a wireless technology for short-range communications between electronic devices.

3. Mobile marketing, which includes things such as loyalty programs, ads, and electronic coupons. MasterCard plans to offer rewards and special offers via text messages that customers can redeem when they visit stores, as an incentive for using its mobile services. Similarly, Visa will provide customers with electronic coupons on their cell phones as part of its payment-related services. Other companies have similar mobile marketing efforts under way.

"Banks are scrambling today to get customers to sign up for their services," says Richard Crone, of Crone Consulting. There were 236 million U.S. wireless subscribers at the end of 2006 and their data revenue totaled $4.8 billion in the fourth quarter, according to research firm IDC. With increased usage of data services, banks see this as the right time to introduce their mobile apps.

What the banks and the wireless carriers have yet to figure out is how to get consumers to actually use mobile banking and their cell phones as payment devices. Solving the challenge will require a lot of industry collaboration, and a lot of trial and error, of course.

Are you interested in mobile banking or using your cell phone as a wallet? Comments and opinions are welcome! For more information on the topic, look for my mobile banking story in Monday's issue of InformationWeek.

KushCash launched

2007-04-10T17:10:00.000+01:00

There's a new US player on the mobile payments scene, KushCash:

Secure Wireless Transfers (SWT) is opening up entirely new commerce-enabling opportunities by providing a secure alternative mobile payment method for instant, easily accessible cash transactions from anywhere. Consumers can now send and receive money and make purchases securely and inexpensively through its end-to-end authentication and payment processing system. The system uses SMS text messaging for instant notifications providing users with updated, timely account history and transaction alerts. With an easy-to-use interface, support for major cell phone services and models, and unique industry relationships SWT is forming a strong community of consumers around next generation mobile payment solutions. Based in Aliso Viejo, California, SWT was founded in 2005. For more information, visit KUSHCASH.com.

From the first persusal, it's got a combination of web-based, app-based and WAP-base functionality, is passing on the card charges for top-up to the user, and is charging payment fees to the user:

a. Sending Money - Once you have deposited funds into your KushCash account it is free to send money to a friends account.

b. Transferring funds from your credit card to your KushCash account - The fee taken from the gross payment sent to your KushCash account is 2.8% plus .30 cents per transaction gateway fee.
c. Transferring funds from your KushCash account to your bank account – The fee is .50 cents per transaction.
d. Receiving Funds – The fee is .50 cents per transaction when receiving funds into your KushCash account.

e. Chargeback - It is your responsibility to insure the integrity of transactions received to your account. Your KushCash account will be charged $35.00 plus the original fees for each chargeback received.
f. Retrieval Requests – The fee of 5.00 per item is charged for KushCash to provide hard copies of transactions.

They have a pretty good website, and seem to have lined up some good early merchants in the sports world. The name's a bit bizarre though: perhaps it's surfer slang?

I'm not to sure about their refer-a-friend promotion though, it functions too much like a pyramid scheme for comfort:

Invite a friend to join. When they accept you, you become their "Kush Line".

As a Kush Line, you will now make 10% of every transaction fee that they accumulate.

If they add a friend, then they become a "Kush Line". You will receive 5% of every transaction fee generated, even if you don't know them.

Any friend generated after that will net you 1% of fees. That's all there is to it. The more friends you add - the more money you can potentially make!

Belgium launches mobile payments - NOC

2007-03-29T17:03:00.000+01:00

Belgian mobile operators launch m-payment service

Buy waffles with your phone

Belgium's three main mobile operators, Belgacom's Proximus, KPN's BASE and Mobistar, launched a mobile payment system on Tuesday.

The operators have teamed up with electronic payments company Banksys and Belgium's banks to offer the service, which is designed to enable mobile users to pay for home deliveries, tradespeople, or indeed anyone providing a service, with their mobile handsets.

It is available to all BASE, Mobistar and Proximus customers. Users must have a SIM card enabled with Banksys' m-banxafe technology and a Belgian bank card featuring Bancontact or Mister Cash debit facilities.

The mobile operators will generate revenues from the service by charging a fee to both the end-user and the payee in each transaction. Customers will pay €0.25 including VAT and merchants €0.49 excluding VAT. The operators will not charge a connection or subscription fee.

In order to use the service, customers have to register their SIM card and link it to their bank account.

To carry out a transaction, the payee makes a request for payment using his mobile phone. The paying party then receives a text message asking for payment, which he then authorises using a passcode. Both parties receive a text message confirming the transaction.

The payment is carried out as though the customer had used his debit card.

In a joint statement, the mobile operators and Banksys noted that the scheme is a practical solution for customers who don't have cash to hand and cannot get access to an ATM. From the tradesman's point of view, the service provides security in that it guarantees immediate payment.

BASE, Mobistar and Proximus have been working on the service for some time, having initially announced plans to provide m-payments using m-banxafe technology in July last year.

Springwise on Bankless Banking

2007-03-28T15:25:00.000+01:00

We've written about peer-to-peer lending marketplaces before: Zopa (UK) and Prosper (US) both allow people to lend money directly to others, cutting out banks and other middlemen. Which means better interest rates for borrowers and higher returns for lenders. Described as eBay for loans, the P2P money exchanges work as follows: borrowers list loan details and a personal profile, and lenders bid on the loan. Lowest interest rates win. Lenders bid in increments and minimize their risk by bidding on numerous loans.

A study by Online Banking Report predicts that by 2011 person-to-person lending in the US could surpass 100,000 loans a year, worth more than USD 1 billion. Unlike eBay, which can connect buyers and sellers from around the world, peer to peer lending is generally bound by local financial regulations. Which means there's ample room for national or regional versions. A quick run-down of our most recent spottings from the realm of social lending:

Boober | Launched last month, Boober is bringing peer to peer lending to The Netherlands. The start-up works much like Zopa and Prosper, with prospective borrowers listing the amount they want to borrow, their credit rating, purpose of the loan, interest rate they're willing to pay, etc. Credit ratings are determined by credit report agency Experian. And loans to AA and AAA borrowers are guaranteed by debt collectors Intrum Justitia, at 90% and 99.5% respectively. Investors are required to distribute their capital over at least 10 borrowers to minimize risk. Borrowers pay EUR 19.95 to have their credit rating determined, and if their loan is funded, they pay Boober a yearly fee of 0.5% of the loan. Investors pay a yearly fee of 0.5% over the funds they've invested, as well as an annual contribution of EUR 9.95.

Boober's founder, Guus Drijver, doesn't hesitate to share his feelings about why Boober is better than the Big Banks: "Boober doesn't work with hidden costs and is completely transparent. We don't sponsor yacht races or soccer teams, and don't have expensive headquarters or pay thousands of people high salaries." Boober isn't alone in this sentiment; many consumers are equally discontent with banks and their high profit margins, driving interest in alternatives like p2p lending. After a beta phase in The Netherlands, Boober hopes to expand to Belgium and Germany.

Website: www.boober.nl / Contact: www.boober.nl/?lang=nl&content=contact.htm

Smava | In Germany, Boober will have to compete against Smava, which launched earlier this month. Smava currently allows loans of EUR 500 to 10,000. The company charges borrowers a 1% fee of the loan amount and EUR 10 for a credit check. Unlike Boober, Smava is following Prosper's lead by encouraging borrowers to form groups. By adding a level of peer pressure and control, tight-knit groups help lower the risk of defaults, boosting a group's reputation and attracting lenders at better rates. Smava's backers include Stefan Glänzer of Last.fm and ricardo.de.

Website: www.smava.de / Contact: www.smava.de/Startseite-223-972-Kontakt.html

CommunityLend | Set to launch in Fall 2007, CommunityLend hopes to revolutionize the way lending works in Canada. A test phase over the next few months will let users set up profiles, manage loans, bid on auctions and create groups without using real money. One to watch! Or invest in ;-)

Website: www.communitylend.com / Contact: info@communitylend.com

Wiseclerk.com | Meanwhile, feeder businesses are starting to pop up, too. Just as eBay spawned offline drop-off shops to facilitate online selling, Prosper has led to the creation of Wiseclerk.com, which aims to provide extra information to help borrowers and lenders make smart decisions: "With currently approx. 103,432 listings in over 989 groups created by over 46,779 borrowers and over 8899 loans successfully funded, it is hard to identify overall trends and find the pearls. Wiseclerk.com is dedicated to serve as an automated clerk, offering you the information you need."

Website: www.wiseclerk.com / Contact: info@wiseclerk.com

Spotted by: Marijke Krabbenbos

http://www.springwise.com/weekly/2007-03-28.htm#lending

came across a post from a year ago

2007-03-13T18:09:00.000Z

Google hosted mobile monday

Date: Wed, 2006-02-08 08:57

I went to the 4th monthly Mobile Monday London (aka momolondon), my third one. I missed the one last month at Yahoo's offices because I was in Turkey.

Google really laid on a slick hosting job. They had nice printed signage, including a label on the elevator button for the floor to go to, coat check, free t-shirts and pens*, plenty of free booze and food handed out by catering staff wandering the floor. The presentation equipment was also tops, dual projectors and the presenters' slide shows were technically seamless.

* Figuring out how to open the free pen may be an example of the infamous Google recruiting tests, it took about 3 or 4 different approaches before I figured it out. Maybe not something to brag about.

Oh yeah, the presentations themselves were pretty interesting as well. The theme for the evening was payment systems, in other words, ways for content providers to make enough money to make it worth doing. This probably is the biggest thing holding back the content industry, shady ring-tone clubs aside.

Shannon Maher from Google gave the first talk, and although it was the one least targeted to the theme, I think that most of the attendees, sated with Google-booze and delicious toothpick-meat, didn't mind. Google is building a new London-based mobile engineering team to complement their team in California. It sounds like their main reasons for doing this are to tap into the European mobile scene, given that as Mr. Maher said, the UK now has 100% penetration versus 70% in the US; and for partnerships with external organizations, including carriers (mobile network operators, as I usually call them), OEM's, and "industry", whatever that means.

Maher was fairly cagey on the specifics of Google's product plans, at one point begging that he hopes not to see his offhand musings blasted onto front pages the next day as announcements of new Google services. He said the first step is to bring existing properties onto mobile, then step 2 would be to innovate, and design for the mobile experience.

One thing he mentioned that I think resonated well with attendees is that Google considers small content providers as being of key importance, and wants to help them out. In an industry which cripples itself with walled garden strategies, breaking down the walls is the only way to get the kind of success people keep claiming is inevitable. Google is an ideal company to help with this.

An interesting point that Mr. Maher made was the fact that search is very different on the mobile. The mobile web is not nearly as well-linked as the regular web, so Google is struggling with finding all of the content that's out there so people can search it.

Other attendees raised questions about how people are actually going to "discover" mobile services. Very few people whip out their phone and go to Google to find things the way we do on the regular web. The operator portals can be a major source of traffic, but the most popular is the old fashioned texting a keyword to a shortcode approach. I believe that mixing non-mobile and mobile is the key, both for this discovery/marketing process and for most applications. There was some discussion on the floor about mobilized adwords and adsense, but I think there's a lot of mileage to be gotten out of using normal Google Adwords to drive people to mobile applications.

Margaret Gold presented Luup, which is Yet Another Payment Scheme (my term, not hers), basically a mobile-oriented Paypal. She used a new-fangled presentation style, rapid-fire slides with just a word or two or a picture, which was pretty cool. But when someone asked why Luup will succeed where others have failed, especially given that Paypal can easily move into mobile, her answer was pretty weak, basically saying there's room for more than one. The Network Effect suggests that there probably isn't room for more than one, and Paypal already has a massive head start. I don't think being the first into mobile will matter.

One thing a lot of mobile dotcom wannabees don't appreciate is that mobile is not an entirely new playground, it's just an extension of the web. There's a parallel here with the original dotcom bubble, where entrepreneurs thought the web was an entirely new economy, separate from the old one. It turned out to be just another facet of the old economy.

Jeremy Flyn from Vodafone talked about xPay, which sounds like a set of standards which is trying to pick up the pieces left from the crash of SimPay. One of the reasons SimPay failed was that it used a single model across Europe, but different European countries have very different economics for mobile content, including how much they pay out. Flyn repeatedly emphasized that the UK has the highest payout to content providers for premium SMS messages. So xPay is a UK-specific standard, which the operators and SMS aggregators will hopefully all sign onto.

Richard Watney from Reporo gave a fairly brief demo, using a phone, of their service, which basically seems to be a custom J2ME shopping applicaiton. Users browse shops that have signed up with Reporo, and Reporo stores credit card details and uses them to charge purchases.

So the talks were fairly interesting, although in a lot of ways there didn't seem to be anything very new. I think this demonstrates that online mobile services, although it's becoming very hot at the moment, is still struggling to find it's place in peoples' everyday life. I'd say we're basically at a similar stage to the 1996 Web, where very few people were actually making money outside of porn and ripoffs, and it's still difficult to make an unshakable argument that it will become a real, profitable, mature market. Personally, that's what makes it fun to me, just like then, it's uncharted territory.

Multichannel Merchant on Alternate Payment Systems

2007-03-09T18:17:00.000Z

Resource Guide: Alternate Payment Systems

Mar 1, 2007 12:00 PM , By William Atkinson

Merchants operating businesses through the mid-1960s were in the habit of receiving two types of payments from customers: cash and checks. From the mid-1960s through the mid-1990s, more and more customers began replacing cash and checks with credit-card payments. Now, in the 2000s, merchants and customers have a plethora of payment options, conveniently termed alternative payment systems (APSs).

According to research conducted by Celent Communications, a financial services IT consulting firm in San Mateo, CA, credit- and debit-card payments, which accounted for 90% of online payments in 2000, will account for fewer than 50% by 2009. The reason: the increase in APSs.

While brick-and-mortar retailers are becoming involved with APSs to some degree, it is really direct marketers that are leading the charge — or rather, the move away from the charge. Partly it's to win over consumers who remain concerned about online security and thus are reluctant to pay for Web purchases via credit card. But there's also the fact that most APS transactions are less expensive for the merchant than credit-card transactions.

“There is quite a bit of allure for merchants and customers, and I don't see this trend tapering off,” observes Jeffrey Burke, senior product manager for CyberSource Corp., a Mountain View, CA-based provider of electronic-payment and risk-management services. “In fact, I see the market bringing on more and more types of alternative payments as time goes on.”

Marwan Forzley, president/CEO of Wayne, PA-based MODASolutions, which provides an APS called Secure-eBill, agrees. “If you go into a retail store, you can pay by cash, check, credit card, or debit card. However, if you go on that same retailer's Website, you can probably pay only by credit card.” For direct marketers to set themselves apart from the online competition and to compete with offline merchants, they need to offer more payment options.

	CATEGORIES OF APSs

Some examples of types of APSs are electronic check processing, debit cards, third-party deferred billing options (such as Bill Me Later), wire services (such as Western Union's Speedpay), installment plans, and stored-payment options (such as PayPal and the relatively new Google Checkout). But categorizing the various options can be incredibly difficult. For one thing, numerous providers offer multiple services in a number of categories. For another, many providers offer services that seem to straddle two or more categories.

Pascal Burg, a director with Atlanta-based financial services consultancy Edgar, Dunn & Co., offered three categories of APSs:

Pull payments
An example is an automatic clearinghouse (ACH) electronic funds transfer that is initiated by the merchant, enabling the merchant to pull funds from the customer's account via an electronic check. Banks, the traditional providers of credit and debit cards, are working hard to stay abreast of options in this category.
For example, U.S. banks are working on the NACHA Online Payments Pilot, where buyers would be able to send payments to retailers from their Internet banking facility, Burg says. NACHA is a nonprofit organization representing financial institutions and others involved in electronic payment processing.
Joel Van Arsdale, senior consultant/director of research for First Annapolis Consulting, a Linthicum, MD-based payment products consultancy, also sees the growth of bank involvement. “Merchants are exploring ACH payments, which take the form of e-checks, and other ways to debit from bank accounts,” he says. “Merchants like this because these transactions are quite a bit less expensive that some other forms of payments, especially credit cards.”
Secure-eBill is one such option. Consumers who pay via Secure-eBill receive an e-mail invoice confirming their purchase, then pays online through their bank, just as they might pay their utility bills. Once the merchant receives the payment, it ships the merchandise. Secure-eBill, which doesn't store any financial information from the consumers, minimizes the risk of hacking. “The only information customers need to disclose to merchants are their e-mail addresses,” says MODASolution's Forzley.
Merchants that accept Secure-eBill payments pay MODASolutions 1%-1.5% of the value of each transaction, depending on their volume; there are no set-up fees. In comparison, credit-card processing fees generally range from 1.7% to 3.5% of the value of each transaction. Because the consumer moves funds from his bank to the merchant's bank, these are considered “good funds,” and there are no chargebacks.
Push payments
These are fund transfers initiated by the buyer to the merchant. Wire services are an example. Say a customer wants to pay for an online purchase via Western Union. He'll complete his order and receive a reference number from the merchant. He then generally has up to 48 hours to go to a Western Union branch and pay cash; Western Union subsequently informs the merchant that payment has been made, and the merchant ships out the merchandise. This is a very low-cost — sometimes even free — transaction for the merchant, as the customer is the one who pays a fee to Western Union.
New payment options
This is pretty much a catch-all category for APSs that are neither true pull or push payment options and for new players that are unaffiliated with traditional providers. “There aren't many providers in this category,” Burg says, “because it takes time to build a lot of awareness among merchants and customers.”

Three of the most popular methods in this category are PayPal, Google Checkout, and Bill Me Later.

PayPal has more than 100 million accounts worldwide and represents about 10% of U.S. online sales volume. Merchant fees start at $0.30 per transaction plus 2.9% of the total payment.

The original PayPal model is akin to a pull-payment method. A consumer signs up online for a PayPal account, providing a credit-card number and/or his online banking data. PayPal keeps this information and does not share it with the merchants. When the consumer makes a purchase from a merchant and wants to use PayPal, he clicks on PayPal on the merchant's site, enters his user name and password, and authorizes PayPal to transfer the funds from the credit-card or bank account he linked to PayPal to the merchant's PayPal account. The merchant can then keep the money in its own PayPal account to pay its own vendors or transfer the funds to its own bank account, among other options.

PayPal also recently rolled out a virtual debit card, software that consumers can download that generates a one-time MasterCard debit account number for use at e-commerce sites that accept MasterCard but not PayPal. As part of its battle with Google Checkout for market dominance, PayPal isn't charging merchants to handle these transactions.

“PayPal has a two-pronged pitch to the merchant community,” explains First Annapolis's Van Arsdale. “On the one hand, there is the potential for cost savings, since PayPal has the ability to drive down its cost in the future by emphasizing other forms of payment beyond credit cards.” And because it already has so many consumer account holders, it can make a strong case to merchants that it is on the way to becoming a standard online payment method.

One potential concern for merchants and consumers alike, though, according to CyberSource's Burke, is that PayPal is both the issuer and the acquirer. “As such, there have been some concerns about their objectivity as they mediate disputes between buyers and sellers,” he cautions.

“Google Checkout is similar to what the early stages of PayPal was,” says Van Arsdale. “It is targeting small, Web-oriented businesses, and it is more of an acquiring option for micro-businesses.” Consumers provide Google with their credit-card and shipping information, which Google stores. The system currently supports credit cards from Visa, MasterCard, American Express, and Discover but not bank-account transfers. Users then purchase goods and services at participating merchants without having to share credit-card information with those merchants. Google charges merchants $0.20 per transaction plus 2% of the transaction value.

One advantage Google Checkout has is that it is a recognizable brand. “However, one advantage of other services such as PayPal is that they have a funding mix, allowing payments through credit cards, payments from other PayPal accounts, and ACH transfers to a bank account,” Van Arsdale says.

Burg adds that, because it is so new, Google Checkout has limited traction so far, but it is already “top of mind.” “It may take awhile before it gains traction,” he notes.

Bill Me Later's pitch to merchants is similar to that of PayPal, in that it has the ability to drive down merchant costs and appeals to a community of shoppers who prefer not to use a credit card online. Its merchant fee is 1.5% of the transaction value.

For consumers, Bill Me Later is similar to applying for a line of credit. Once the customer decides what he wants to buy, he provides his name, the last four digits of his Social Security number, and his date of birth. Bill Me Later then does an instant credit review and decides whether it wants to loan that amount of money to the customer. If it approves the credit, the customer gets a statement from Bill Me Later. The customer can pay the amount off all at once or pay over a period of time. If he pays over time, he also pays interest.

	MAKING YOUR SELECTION(S)

The good news about APSs is that the technology is well ahead of merchant demand at this time. Another bright spot is that there are dozens of providers from which to select.

This, however, can also be a downside, as it makes the narrowing-down process that much more difficult. In addition, there have been a lot of false starts, and a number of providers have already folded or merged with other providers. And not just small, “upstart” providers: Some large companies that entered this market have already abandoned the field. For example, Microsoft scratched plans to turn Passport into a payment service, and Yahoo! gave up on PayDirect Network in 2004.

As such, when considering providers, look for a healthy track record, a strong share of market, and general popularity among consumers. Here are some other tips for selecting an APS provider:

Anytime you add a new payment system, you will have to make some investment of money and time, such as technical upgrades and reprogramming of your Website. “I don't recommend jumping into each and every alternative payment system that comes along simply because it exists, because there is some track record of failure for this type of product,” notes First Annapolis's Van Arsdale. “Look for the ones that have attained a certain level of attraction, then experiment with them. Offer them, and see how your customers react.” He also suggests collecting data and feedback from customers to determine the impact.
“Find out what your three or four major direct competitors offer,” says Burg. At a minimum, you should offer as much as your competitors. Then consider adding one or two forms of payment that your competitors don't offer in order to differentiate yourself.
But start out slowly. To assess cost-effectiveness, introduce one alternative payment system and see if it leads to incremental business. “If so, consider adding another,” Burg suggests.
Besides going to each APS provider's Website for information, it may be worthwhile searching online for the provider's name to see how many hits show up. While not a scientific study of popularity, it can help you narrow down the list.
“Find out what your customers are asking for,” advises Joan Broughton, vice president, content and education for the Shop.org division of the National Retail Federation. “Then ask the providers who else is using their technology. Contact those merchants to see what their experience has been with it.”
Focus on providers that either have a lot of positive and extensive press already or are actively working to promote their services to consumers. It is not your responsibility as a merchant to publicize an APS or how it operates; it's the provider's responsibility, says CyberSource spokesperson Bruce Frymire.
“Merchants have a certain amount of real estate available to them on their Websites and a certain amount of time in front of the consumer,” Frymire says. “If it were their responsibility to educate customers on the various payment methods, it would direct attention away from where it should be, which is on making the sale.”
If you have a lot of international customers, it may make sense to accept wire transfers, as well as PayPal, which is worldwide.
“One claim many of these services make is that your cost will be lower than that of credit-card transactions,” notes CyberSource's Burke. “Read the fine print to make sure this is the case. Also, make sure you will get your money as quickly as you would with a credit-card payment.”

Having your own merchant account, as with a credit card set-up, increases the flow of funds to your bank. While the account provider will hold your funds to prevent chargebacks, it's usually only for about 48 hours. With an APS provider, however, you may need to wait for a week before you receive your funds.

	“How many payment methods are enough?”

According to research conducted by CyberSource Corp., a systems integrator that provides electronic-payment and risk-management services

59% of its clients support one or two alternative payment system options;
30% support three or four options; and
1% support five or more options.

What is the ideal number to have? There is no easy answer.

“If have too many options, it can become very costly,” says Joel Van Arsdale, senior consultant/director of research for First Annapolis Consulting, a payment products consulting firm. “In addition, it can become confusing for the customer.”

Pascal Burg, a director with Edgar, Dunn & Co., a financial services consulting firm, agrees. “You don't want to confuse customers at the checkout stage, so you don't want to offer too many. In addition to credit cards, you probably only want to accept two or three more services.”

But CyberSource senior product manager Jeffrey Burke says that according to the company's research, merchant that offered at least three alternative payment methods had a 14% higher sales conversion rate than those that offered only one or two. — WA

	A sampling of APS providers

It is virtually impossible to decisively categorize APS providers, because some of them offer a wide range of services that cut across a number of categories. In addition, some of the services seem to straddle two or more categories.

It is also difficult to organize providers by size, because that changes monthly. Some of these providers may not even be in existence anymore in a month. Others may have merged with larger providers. Still others may increase market share quickly in the near future (as Google Checkout is expected to do).

As such, providers here are listed alphabetically.

ACIES
www.aciesinc.com

AUTHORIZE.NET
www.authorize.net/echecknet

BILL ME LATER
www.bill-me-later.com

CERTEGY
www.certegy.com

CHECKFREE
www.checkfree.com

FASTLANE SECURE PAYMENTS
www.fastlanecpn.com/us/

GOOGLE CHECKOUT
checkout.google.com

IMPACT PAYSYSTEM
www.impactpaysystem.com

MOBILE-LIME
www.mobilelime.com

NATIONWIDE PAYMENT SOLUTIONS
www.getnationwide.com

PAYPAL
www.paypal.com

PAYPASS (division of MasterCard)
www.paypass.com

PEPPERCOIN
www.peppercoin.com

QPASS
www.qpass.com

RBA INTERNATIONAL
www.rbaintl.com

SECURE-EBILL
www.secure-ebill.com

SPEEDPASS
www.speedpass.com

SPEEDPAY (Western Union)
www.speedpay.com

Telecheck
www.telecheck.com

TEMPO PAYMENTS (formerly Debitman)
www.tempopay.com

TIO NETWORKS
www.tionetworks.com

TRIVNET
www.trivnet.com

VALISTA
www.valista.com

VIVOTECH
www.vivotech.com

	“Why we added two APSs”

Computer and electronics merchant TigerDirect.com accepts payment via Secure-eBill as well as by PayPal. “We introduced two alternative payment systems for a number of reasons,” says vice president of sales Patrick Fiorentino.

“First, customers are looking for alternative ways to make payments. There is a big trend toward people wanting to remain third-party to their payment information. They don't want to give credit-card information or do direct transfers to vendors. They want to go through a third-party that they believe will hold that information secure.

“Second, customers want to pay in a number of ways. If you don't offer these permutations, they won't do business with you.

“Third, we prefer customers to go this direction because of the financial benefit we receive by using these services, compared to credit-card charges.

“Fourth, our risk-analysis department consists of 40 people who spend their time reviewing and analyzing credit-card payments to determine whether to accept them or not. However, credit cards represent only 14% of our total transactions.

“When we introduced PayPal two years ago, we wondered how many people would actually use it. We were surprised to find that that business doubled year over year. And since introducing Secure-eBill, we have seen the numbers go up every month.”

Silicon.com on Mobile Ticketing

2007-03-09T17:51:00.000Z

Mobile ticketing gets groovy in club trial

'If your name's not on the phone, you're not coming in'

By Gemma Simpson

Published: Wednesday 29 November 2006

London club Minstry of Sound has completed a live trial of end-to-end mobile ticketing that saw clubbers able to buy, receive and redeem tickets on their phones.

The clubbers, who must be registered PayPal users, started the process by sending a text to a number designated by the Minstry of Sound. This activated an interactive voice-response callback which confirmed the ticket request by asking the caller to authenticate their PayPal PIN. Once confirmed, a mobile ticket was delivered to the handset in the form of a text message.

Cheat Sheets

♦ Mobile location-based services
♦ FMC
♦ 3G

The text 'ticket' contained another PIN number which was verified at the nightclub's doors when revellers turned up to a student night at the London club.

Felicity Ive, head of strategic brand partnerships at the Ministry of Sound, told silicon.com consumers were receptive to the mobile tickets and said "we will be looking to use mobile ticketing in the future".

The next step would be to use barcode mobile ticketing, in which an electronic barcode is sent to the ticket buyer's mobile phone via text message. This method is quicker to process when clubgoers arrive at the venue, requiring just a scan of the mobile phone as opposed to manually entering a PIN number, Ive added.

Around 1,100 people came through the club doors on the night of the trial, with roughly 10 per cent using the mobile ticketing service.

High-tech ticketing methods are popping up in a wide variety of venues with Fulham FC issuing RFID football tickets, the Eden Project adopting mobile queue jumping and Chiltern Railways trialling mobile train tickets .

Firethorn - Payments News

2007-03-09T17:47:00.000Z

A First Look At Firethorn Mobile

Earlier this month, Firethorn announced a partnership with CheckFree to deliver mobile banking and bill payment services to financial institutions. Subsequently, Firethorn announced it was teaming with Cingular Wireless for its service and announced Synovus as its initial financial institution customer. In this article, we take a quick look at Firethorn's new mobile banking service based on the information on the company's web site and from its press releases.

Importantly, Firethorn's immediate focus isn't on mobile payments but, rather, on mobile banking. Firethorn says it is seeking to play the role of an intermediary service provider between financial institutions and wireless carriers - saying its "unique federation strategy links financial institutions to wireless carriers through a unified, secure and scalable technology platform that seamlessly extends full-service banking and payments capabilities to a consumer's mobile phone or other wireless device." Firethorn says it's different from others "because its federation strategy represents wireless carriers and financial institutions independently and equally."

Firethorn's approach isn't SMS-based but, rather, is based upon a secure application that is downloaded into the user's mobile handset. The challenges of developing and supporting an application like this acrossthe wide variety of handsets, carriers, etc. almost demand a company like Firethorn acting as the intermediary for developing and, importantly, supporting that application.

Via that application, in combination with a user's account data from the financial institution partner, users can perform several functions including viewing real-time financial account balances, conduct intra-bank transfers between accounts, have electronic bill presented, pay those bills electronically from the handset, and "clear contents quickly and easily in the event of loss."

Firethorn's initial partnerships with CheckFree, Cingular, and Synovus are certainly impressive. Founder and CEO Tripp Rackley previously built nFront, an online banking solutions provider that was acquired by Digital Insight. Rackley's recruited an impressive board of directors with experience in both telecommunications and payments - including Global Payments CEO Paul Garcia. We'll be watching this company for further developments as it pursues its federation strategy.

BankTech Magazine on Mobile Banking

2007-03-09T17:41:00.000Z

The Handheld Bank

Dec 01, 2006

In the battle to stay connected with consumers, banks have leveraged technology advances to develop and enhance distribution channels, from ATMs to interactive voice response systems and even online banking. Now, financial institutions are tapping the potential of wireless networks and mobile devices to serve their customers. As a result, these solutions are helping banks to deliver critical account information and strengthen customer relationships. >>

According to Oyster Bay, N.Y.-based ABI Research, 245 million mobile devices shipped in the third quarter of 2006. And the telecommunications technology research firm reports that the global mobile devices marketplace is on target to reach 1 billion units by year-end. Realizing that almost every banking customer uses some sort of mobile device, financial institutions are rethinking how to exploit these units and wireless networks to foster more customer interaction.

While early mobile solutions caught the attention of financial services firms over the past five years, the "technology just was not ready," says Paul Race, director of innovation marketing for Dayton, Ohio-based ATM manufacturer NCR. Race tests emerging technologies at NCR's Global Research Center for Research and Development for Self-Service Business in Dundee, Scotland. "As we start to emerge from the stage of disillusionment, technology is getting more robust, bandwidth is stronger and customers are more accepting," he says. Like any emerging technology, however, "wireless solutions will only work if consumers see their benefits and adopt them," Race adds.

As statistics prove, few individuals leave home without a cell phone, PDA (personal digital assistant) or other personal wireless communications device. And as more customers rely on mobile devices, it is not surprising that they are managing more daily tasks while on the run. "Mobility is increasingly important in people's daily lives, and these 'mobile' people expect to incorporate the management of their finances into this lifestyle," says Frank Georgi, global lead, CRM financial services, Internet and mobility practice for Accenture in Munich.

That said, banks are in the hot seat as more of their customers are requesting mobile banking services. The trend is so strong in Europe that "research indicates that 25 percent of all U.K.-based banking customers would be willing to switch to another bank if it offered them a comprehensive mobile banking service for free," Georgi reports.

But consumer demand is not the only driver behind the mobility trend in banking. Mobile solutions are expanding internal opportunities for banks as well. "Rather than invest thousands of dollars into stationary PCs, banks can expand the power of their enterprise by leveraging existing wireless networks," asserts Richard Rushing, chief security officer for AirDefense, an Alpharetta, Ga.-based provider of wireless network security solutions.

And wireless applications seemingly are endless. They can empower the workforce, or service customers both inside and outside of the branch. More important, wireless and mobile applications enable banks to create a new marketing channel and extend their brand in new ways. "They allow banks to differentiate themselves in the marketplace and offer their customers more freedom and flexibility," Accenture's Georgi says.

Thus, banks are partnering with technology vendors and delivering more applications via mobile solutions. "The key is to create a two-way channel [wherein] users can deliver and access information in a secure way," says Joe Salesky, CEO of mobile messaging solutions provider ClairMail (Novato, Calif.).

Unleashing the Power of Mobility

The easiest way for banks to whet their appetites for mobile applications is to untether their workforces -- a task that is becoming more important as more associates become mobile, according to Ed Martino, director, finance industry, Sprint. "The number of employees working outside of the office in mobile locations has increased dramatically over the last couple of years," he relates. "Enterprises need a way for these associates to remotely reach into the back office and access databases and mission-critical information," he adds. "Thanks to wireless-enabled laptops and consumer handheld devices, employees can conduct business from a hotel, home or a remote office."

Chicago-based Northern Trust ($52.6 billion in total assets) is no stranger to the mobile workforce. Whether conducting perspective sales or servicing existing clients, Northern Trust's relationship management associates are never far from their BlackBerrys or other handheld devices.

"All PDAs are password-protected and hooked to our server," says Diane Spradlin, the bank's senior vice president and director of enterprise relationship management. "These units keep associates connected to their calendars and e-mail, and deliver information to their fingertips," she adds. "They can also access details about customers rather than carry reams of paper files."

Northern Trust's internal and customer portals are getting renewed attention thanks to wireless networks. "Northern Trust's internal portal provides sales and client servicing partners the capability to access client and prospect information by bringing up a real-time view of the customer," says Deb Dworman, VP, Northern Trust.

And mobile solutions can boost profitability for banks. "Customers are no longer forced to make a trip into the bank," explains Sprint's Martino. "By allowing associates to go to the customer, wireless networks and mobile devices are a catalyst for profit growth."

Loan officers, for example, no longer are tethered to their desks in a branch. "With 220,000 loan officers available in the industry today, they need access to data while on the road," says Shane Hughes, cofounder, president and CEO of Waltham, Mass.-based Pyxis Mobile, a wireless software provider.

While meeting with customers in their offices or homes, for example, loan officers can use wireless laptops and printers for loan origination. "They have access to customer information and can deliver a quote on the spot, enabling customers to make an investment decision," Sprint's Martino says.

Building Customer Relationships

Mobile solutions also have merit for banks as they connect with customers in-branch. Whether they use a kiosk, wireless tablet or a handheld device, "Mobile solutions enable banks to serve more customers," says AirDefense's Rushing. "They can process a transaction as customers wait in line, enroll them in new accounts or cross-sell new products."

According to Northern Trust's Spradlin, the bank currently is exploring how to apply mobile solutions to cross-selling efforts. Northern Trust, which has been supporting a customer relationship management (CRM) program for approximately eight years, will launch the first release of an enterprise relationship management (ERM) tool in November. Spradlin says her goal is to eventually enable users to access data via mobile devices, but she declines to specify a rollout date.

"One of our distinctions is that we do not force our clients to visit us -- we go to them," explains Northern Trust's Dworman, who is leading the project. Since it's crucial for the bank's remote relationship management executives and sales staff to be on the road and in front of clients, "We need to keep them connected to all client data available in our enterprise systems."

New York-based Citigroup ($83.6 billion in assets) also is bullish on employing technology to expand customer relationships. "Besides interacting with customers at ATMs, call centers, branches and through the Internet, we are also testing mobile solutions," Richard Naddy, SVP, North America decision management, Citigroup, said during the SAS user conference, "BetterManagement Live!," held in Las Vegas in October. "We are committed to focusing on how to connect with customers across all distribution points," he added. "Mobile technology is part of this strategy." Naddy declined to discuss specific projects during the session.

One popular mobile application that offers enormous potential for relationship building is SMS (short message service) text messaging services. In 2005, an average of 5 billion text messages were sent a month in the United States, up from 2.8 billion in 2004, according to the wireless trade association CTIA.

"Text messaging is a $35 billion-a-year business," explains ClairMail's Salesky. "Text messaging is a natural way to invoke two-way communication with customers."

For example, banks can use text to deliver actionable alerts to their mobile customers. These may indicate a low balance, seek to verify a transaction, deliver a cross-selling opportunity or even supply special dial-in information for the contact center.

"The mobile phone can strengthen the abilities of agents at the contact center," says Accenture's Georgi. "The combination of a person in the contact center and the mobile device opens up the next level in terms of contact center services," he adds. "Texting becomes a means for the customer to connect with you rather than call in and wait on hold."

According to ClairMail's Salesky, if a bank is outfitted with the vendor's solution, for example, the customer can text the bank, and ClairMail's system puts that person in the call queue. "Then we text the customer with a message alerting them with a time and number to dial into," Salesky says. "Being on hold never benefits anyone. Texting is a means of connecting the bank more easily and getting better customer service."

Better Safe Than Sorry

Before banks can make any mobile opportunities a reality, however, they need to be mindful of security. Clearly, banks are comfortable with traditional configurations, in which PCs are wired and plugged into networks via Ethernet cables. "Banks can see where the computer is plugged in and detect where the firewalls and other layers of security are," explains AirDefense's Rushing. "But with wireless, all bets are off."

In fact, a lack of security is a surefire way to kill any wireless project. "Customers will only adopt [wireless applications] if they trust their bank, and if applications are treated and maintained responsibly," NCR's Race asserts.

While wireless networks are not yet 100 percent secure, there is hope on the horizon. "The encryption problem has been solved, but due to the nature of wireless, users are still able to mimic and piggyback onto networks over the air," AirDefense's Rushing says. "Until this is resolved, banks need to monitor what is going on and who is doing what functions."

Despite some security concerns, however, new mobile banking applications already are emerging. While total mobile banking remains a theory for the time being, the first step toward achieving that nirvana may be through contactless payments. Supported by a contactless smart card or NCF (Near Field Communication) chip embedded in a mobile device, customers may gain a new way to access ATMs, pay for purchases or make electronic deposits. An NFC chip encrypts credit card or bank account information; then, using short-distance radio waves, transmits data to a receiver that can reside in a point-of-sale payment terminal, an ATM or a kiosk. Since the chip is considered two-way technology, the unit also can receive other data, such as receipts or coupons.

"The concept also holds the opportunity to mitigate payment card skimming and fraud," NCR's Race points out. "By removing the mag stripe from the equation, consumers no longer need to insert a card into an ATM slot. This eliminates the chance of embedded data being skimmed or cloned."

Looking ahead, banks may choose to outfit entrance doors with electronic sensors that detect these chips. "This will alert associates to when a valued customer enters the branch," Race says.

While European markets already are testing various contactless banking applications, the domestic market may soon follow suit, according to Race. NFC chips will gain traction during 2007 and 2008, paving the way for these solutions, he contends.

While U.S.-based banks are hopeful, they do remain cautious. "Banks overseas are testing mobile payment alternatives, and they clearly provide an opportunity," said Richard Martino, senior vice president, U.S. Bank (Minneapolis; $217 billion in total assets), at the "BetterManagement LIVE!" conference. "However, it will happen over time," he added.

Daniel Thorpe, senior vice president with Charlotte, N.C.-based Wachovia ($700 billion in assets), agreed. "Europe is ahead in this arena, and from a business level, they are more comfortable with the technology," he told show attendees. "To gain critical mass here, the industry needs to ensure security [for users]."

Security issues aside, banks also are at the mercy of another factor. "The mobile phone industry will enable and drive these solutions, as they own the underlying and supporting technology -- not the banks," concludes Thomas Spitzer, president and CEO of Tyfone, a Portland, Ore.-based provider of applications for mobile phones. **

Consumer Report on Virtual Wallets

2007-03-09T17:38:00.000Z

Virtual wallets

Safer ways to pay online

Illustration by Bob Eckstein

Uneasy about spreading your credit-card number around the Internet as you go about your holiday shopping? Several services, including PayPal and Bill Me Later, can offer added security in an electronic world vulnerable to credit-card fraud and identity theft. But they’re far from foolproof.

The services are convenient. You register just once with each. Then, whenever you buy something from a participating merchant, you merely click on the service’s icon and the transaction speeds through, without your having to retype your personal data. The service pays the merchant by billing your credit card or by dipping into your bank account. For buyers, all the services are free.

Beyond that, each one works a little differently. Here are some basic types:

Auction payment services. To pay for auction winnings or to deal with a small retailer, most likely you’ll use PayPal, BidPay, or a similar payment service. PayPal bills your credit card or withdraws the money from your bank or out of your PayPal cash account.

Checkout services. Google Checkout is the newest, but individual retailers like Amazon have long offered express checkout. When you click on an icon, your purchase is billed to your credit card. Google search results now show a shopping cart under a company’s name if the retailer participates.

Credit accounts. Bill Me Later instantly checks your credit worthiness after requesting the last four digits of your Social Security number, your address, and birth date. The service sends the first bill by mail, but you can pay subsequent bills electronically. As with credit cards, you’re subject to late fees and interest charges, currently 18 percent.

Buyer beware

If you use a credit card for purchases through any of the payment services, you get the same protections as if you paid with your card directly.

But using a bank or cash account for online purchases is riskier. Federal law entitles you to a credit for returns, damaged goods, and missing shipments bought with a credit card. It also limits your liability for fraudulent charges to $50. Those protections don’t apply if you pay from a bank or cash account. You’ll have to haggle with the bank or payment service for redress.

Online payment services promise some protections, but they’re not required by law and could change. Bill Me Later says customers aren’t responsible for any fraudulent charge. If there’s a dispute, PayPal will cover a buyer for up to $1,000 if buyer and seller can’t reach agreement through its resolution program. But you’re out of luck if you bought more than $1,000 worth of stuff.

(Last fall, without admitting to any wrongdoing, PayPal agreed in a settlement to pay $1.7 million to 28 states. It also announced a separate proposed settlement for $3.5 million in a class action that found the company hadn’t adequately disclosed its policies to customers. One problem: Customers with more than one account on file didn’t always realize their bank account rather than their credit card would be tapped first for purchases. Now PayPal must conspicuously disclose that policy.

Before signing up for any of the services, heed this advice:

Use a credit card to make payments to the services. You’ll have more protection.
Never click on links in e-mail that appears to be from payment services, especially if it asks for confidential information. And don’t reply. If you do, you might become a victim of phishing, a scam designed to cull sensitive personal data.
Look for a lock icon at the bottom of a company’s Web site page, indicating that it has been encrypted.
With the Verified by Visa or MasterCard SecureCode programs, you can skip the payment services and use your credit card online with an added password protection. (See the companies’ Web sites for details.)

You can go cardless

Online shoppers have many electronic options for paying. The services below are three of the larger players. PayPal and Google require you to sign up at their Web sites. You can register at Bill Me Later when you’re ready to make your purchase. All have been vetted for credibility and trust by Consumer WebWatch, a project of Consumers Union, nonprofit publisher of this magazine.

Service	Major online merchant partners
Bill Me Later bill-me-later.com	Wal-Mart, eCost, Dick's Sporting Goods, Bluefly, Overstock, KB Toys, Cabela's, TigerDirect, American Girl, Shoes.com
Google Checkout checkout.google.com	uBid, Buy.com, Bluefly, eCost, Ritz-Camera, Starbucks, Dick's Sporting Goods, Timberland
PayPal paypal.com	eBay, Dell, Buy.com, Hotwire, iTunes, TigerDirect, Starbucks, Skype, Ritz Camera, H&R Block, Cooking.com

Creating Wealth from Payments Innovation - Payments News

2007-03-09T17:27:00.000Z

Creating Wealth from Innovation

One of our research initiatives at Glenbrook this fall has been exploring innovation in electronic payments - how payments innovations happen, the characteristics of the most important drivers of them (including the impacts of key people, industry structure, and any important technologies) that enable innovations, and how to best measure and define their success.

One way to measure success - a measure that's naturally of particular interest to investors in payments companies - is whether and how wealth has been created as a result of the innovation. Looking back at wealth creation in payments over the last several years, there are really only a couple of truly standout US examples: PayPal (before its acquisition by eBay) and MasterCard (with one of the most successful initial public offerings this year).

PayPal's innovation was using a classic Clayton Christensen "entry from below" strategy - to provide payment services to individuals and small merchants who might not otherwise have been able to qualify for a bankcard merchant account with a traditional merchant acquirer. MasterCard's wealth creation wasn't the result of innovation in markets or technologies - but, rather, innovation in governance and, curiously, ownership.

In thinking about innovation in payments, it's striking that while there's been a lot of talk about the high costs of merchant card acceptance, etc., there's been no successful emergence to date of a "low price" payments player. Where's the Wal-Mart or Southwest Airlines of payments? Where's the Dell, the Ikea, even the ING Direct of payments? How about the Intuit of payments - radically changing the economics of payments in the same way that Intuit completely changed the ecosystem of tax preparation? Will Prosper and Zopa emerge as stunning examples of revolutionary changes in consumer lending that displace banks - or end up just being "science fair" experiments?

This month's Harvard Business Review has an article titled "Strategies to Fight Low-Cost Rivals" by Nirmalya Kumar, a professor of marketing at the London Business School. It's one of the best articles I've read about how incumbents need to think about the potential emergence of low-cost rivals. I enjoyed the following commentary from Kumar's article:

Many price warriors don’t figure in listings of the biggest companies, but they have created wealth—and pots of it. Look at Forbes’s list of the world’s richest people in 2006, for instance, and you will discover that 12 of the top 25 billionaires made their fortunes by creating (or inheriting) low-cost businesses. They include Sam Walton’s five heirs, whose combined net worth was estimated at $80 billion, Aldi’s Theo and Karl Albrecht with $32 billion, IKEA’s Ingvar Kamprad with $28 billion, Mittal Steel’s Lakshmi Mittal with $23.5 billion, Dell’s Michael Dell with $17 billion, Zara’s Amancio Ortega with $14.8 billion, and Wipro’s Azim Premji with $13 billion.

So, where is the first new payments billionaire of this century going to come from?

Bango's summary of Payforit

2007-03-08T10:49:00.000Z

Mandatory Payforit compliance in UK coming soon: Protect your business

Traditional text message driven mobile content sales are in decline. The big growth is now in browse and buy, WAP based, content sales.

To ensure customer protection as they drive this new model forward, the UK mobile operators are mandating Payforit compliance if you want to offer your content through a mobile web experience.

To meet their requirements, and benefit from the transition to the internet model, you must...

Design your mobile content service to work with and without the user's phone number being provided to you.
Select a Payforit accredited intermediary to collect payments on your behalf.

If you don't take these steps, your mobile content business is at serious risk. Mandatory Payforit compliance starts as early as 1st June 2007.

Payforit for WAP billing in the UK

What is Payforit?

Payforit is a UK cross-mobile operator initiative to promote a safe and trustworthy environment for mobile phone users to purchase goods and services on the mobile web and charge to their mobile phone. It aims to improve the consumer experience for one-time and subscription based services by introducing a safe, transparent and unified approach to mobile purchases.

Payforit applies to the following:

One-off payments
Refunds
Subscription set-up
MSISDN pass through
Subscription payments
Customer care
Subscription management
Audit tracking

Payforit compliance will be automatically implemented as required by the UK operators within the Bango WAP based payment flow. You don't need to change anything in your mobile website.

Earlier in 2007, Bango organized and hosted a very successful session where 35 leading content providers met with the 5 UK operators to discuss Payforit and the way ahead. O2 announced their intent to mandate Payforit for "WAP billing" flows from June 2007. Each operator may add its own implementation requirements, and the scheme rules are likely to evolve over time as they each learn more about the different models.

We are ready to activate Payforit the moment it becomes mandatory.

LUUP powers Amnesty International donations

2007-03-04T20:38:00.000Z

Amnesty offers new donation method

Source: nma.co.uk | Published: 01 March 2007 00:00

Amnesty International is to launch a mobile phone donations service powered by LUUP, a mobile payment technology developed by Norwegian specialist Contopronto.

LUUP allows people to donate up to £800, and provides charities with more of the proceeds than traditional premium SMS channels. ...

ZDnet covers Obopay

2007-03-01T16:17:00.000Z

Social money on your cell: Citi mobilizes financial transactions

Posted by Donna Bogatin @ 11:02 am

Do you want to Obopay?

The mobile person-to-person payment service platform is betting you do, touting a “fast and easy way to make payments using mobile phones.”

Citigroup also believes in the potential of Obopay’s “Social Money” solution. Citi financial services company is gearing up to launch a Obopay-powered real-time, person-to-person mobile payments service for Citi credit and debit card customers to:

Easily and securely send and receive money instantly via any mobile phone. Remotely track and manage mobile payment accounts by checking balances, viewing payment histories, and adding funds directly from their mobile phone. Funds received via the Citi-Obopay Mobile Person-to-Person service can also be accessed with a debit card provided with the service.

Carol Realini, Obopay Founder and CEO:

We are making it easier for consumers to instantly send, spend and get cash when its needed most.

"Get Money, Send Money, Spend Money" are the mottos of Obopay, all via any mobile phone, the fun and social way!

Realini underscores Obopay is not just about enabling access to money on the go, it is about empowering “social money” experiences:

For a society that pays so much for convenience, it’s ironic how inconvenient money itself has become. We’re making money convenient again with new social money services.

Obopay describes “social money” as the money that passes between people when they engage in shared consumer experiences, such as:

Roomates spliting living expenses (rent, utilities…)
Travelers sharing a hotel room,
Co-workers pooling money for an office gift
Friends dining together…

Obopay believes that as friends, family and co-workers do more things together, there can be confusion and conflict over who owes what. Obopay to the resuce: “Obopay’s social money services remove the tension.”

How? Obopay promises “All you need is a mobile phone and your friend’s mobile phone number, Whether you choose to use Obopay via text messaging, your phone's Internet browser or download Obopay onto your phone.” Obopay also promises a $5 prepaid MasterCard start-up bonus.

HOW OBOPAY WORKS

Obay uses a prepaid debit model in which users add money to their Obopay accounts in advance of purchases. Money may be added to an Obopay account through: Obopay merchant locations, Interactive Voice Response, Obopay website (obopay.com), and customer service representative. Account holders then have access to these funds through their mobile phones to make and receive payments, and check account activity. As a software solution, Obopay only requires users to have a mobile phone and Obopay account. There is no additional hardware or Internet access required.

An Obopay account is created through the Website or customer service center. One registered, a unique PIN is given to the user to verify all transactions. Upon registering, the account holder enters their mobile phone number to have the Obopay Mobile Application pushed to their phone. Once installed, they can begin using Obopay for their financial transactions.

To users, Obopay transactions are seamless. They simply send a message from their mobile phones to the Obopay server using the application. The server validates the transaction and transfers the funds or responds to the user’s request for account information.

An Obopay account holder can send money to any SMS-enabled handset user, even if they do not have the Obopay application or an Obopay account. The recipient will get a text message indicating that funds have been transferred in their name. To get access to these funds, the recipient will need to register their own Obopay account. Minimal transactions fees apply.

OBOPAY TECHNOLOGY

The Obopay Mobile Application is based on the Java 2 Platform, Enterprise Edition (J2EE). Development plans include support for every protocol and every phone operating system.

The Obopay system incorporates security, communication, ledger, currency, fraud, reporting and administration. Incoming and outgoing transaction requests are processed by HTTP or Web Services commands.

OBOPAY FUNDING

Qualcomm is an Obopay strategic partner. Obopay also garnered $10 million in Series A funding a year ago from Redpoint Ventures, Onset Ventures and Richmond Capital, undoubtedly not delivered “social money” style, however.

McDonalds M-Payments - MocoNews

2007-02-28T11:30:00.000Z

NTT DoCoMo Ties Up With McDonalds Japan For M-Payments Joint-Venture

Posted by Peggy Anne Salz
Mon 26 Feb 2007 08:03 AM PST

Reuters reports that Japanese mobile operator NTT DoCoMo is setting up a mobile payments joint-venture McDonald’s Holdings Co. (Japan). McDonald’s Japan will hold a 70 percent stake in the joint venture, with DoCoMo owning the rest. The companies had announced in July their intention to launch a 300 million yen ($2.48 million) venture. In addition to enabling mobile payments, the venture will offer some users special promotions. (However, the article is thin on details, so no idea how this will play out in mobile marketing campaigns and/or loyalty-schemes.)

LUUP on the gadget show

2007-02-23T15:16:00.000Z

https://www.luup.com/Home/User/Gb/AboutUs/luupnews/News/gadgetshow.aspx

Upaid launches new service

2007-02-23T14:31:00.000Z

Upaid's new 'payments club' to go live in early 2008

Upaid used last week's 3GSM Congress as a platform to announce the arrival of a new product - ValU, a hosted 'payments club' solution that connects with VisaNet and other providers' back-office systems at one end, and mobile subscibers at the other.

Processing payments via mobile has long been one of the industry's big hopes, but after years of trying, very little has emerged in to commercial reality.

Upaid hopes to change all this, as its senior VP of sales, Richard Owen explained, by integrating mobile devices in to existing banking systems, instead of trying to create new ones.

"We'd rather use real banking and payments processes than imitate them," said Owen.

Upaid's ValU is planned to go live in early 2008. The key features are that customer data is not exposed to the merchant or other third parties, being communicated only between Upaid and the user, the whole thing is compliant with VisaNet specifications, and everything is encrypted to 128 bit SSL, with 3DES being included in later upgrades.

Although the user interface with a merchant is set up over the mobile data link, the communication between the subscriber and Upaid is carried as an SMS message, thus providing out-of-band authentication.

NOC report on NFC

2007-02-23T14:14:00.000Z

GSMA endorses wireless mobile payments

Demonstrations of proximity payment systems, allowing users to pay for products with a wave of the phone, have been around for years, but developments at 3GSM last week might show more progress in that direction, but there's still a long road to be travelled.

Fourteen mobile operators around the world have teamed up to create a standard payment system using Near Field Communications (NFC).

To be called "Pay-Buy Mobile", the standard is backed by AT&T and China Mobile, among others, and should lead to interoperability between suppliers' equipment and financial companies.

The NFC Forum takes care of the radio communications standards necessary to facilitate mobile payment, but doesn't get involved in the logistical structure of managing financial transactions. The GSMA has recently mapped out how that structure might look, through various white papers and guidance to members.

Proximity payment enthusiasts often point to the FeliCa system, operating successfully in Japan, which allows customers to install the EDY payment system onto their phones, enabling them to pay for small purchases, and (critically) public transport, with a wave of their handset.

FeliCa handsets are now sold by all the Japanese networks, though NTT DoCoMo was the driving force behind it. As an investor in BitWallet, which owns and runs the EDY system, and FeliCa itself, NTT DoCoMo has a real interest in promoting the system, and with its expansion into banking it has also established a revenue stream.

And it is the revenue stream which is still causing problems for operators elsewhere - they are going to have to pay for the hardware through handset subsidy, and so far their opportunity to recoup that investment is hard to pin down.

At 3GSM Nokia demonstrated the Nokia 6131 NFC, a handset featuring integrated NFC and applications to manage them. We'll be getting a couple at Vulture Central and will let you know what we think. But even when handsets do come along (and the NFC Forum were promising several manufacturers would have integrated handsets by the end of 2008), network operators are going to have to believe they can make money out of NFC, and proximity payments, if the technology is going to go anywhere.

Payment Widgets - Mashable!

2007-02-22T17:35:00.000Z

MySpace Charity Badges - CareBadges

from Mashable! by Pete Cashmore

Raising money via MySpace widgets has become a growing trend: ChipIn has refocused around MySpace widgets, while Heifer also has one. Another newcomer, CareBadges is starting to emerge, and its links with RockYou should help it succeed.

CareBadges are Flash-based fund-raising widgets that let you collect money or raise awareness for any cause. The standout feature is tracking: they’ll track how much you’ve raised, but also the “spread” of widgets around the web. So if you post a badge to your page and twenty visitors repost it to their pages, the funds raised by all those referred users will also be logged - it’s like a big affiliate scheme.

A new feature they’re promoting is the ability to add RockYou slideshows to your widget, too. In fact, Carebadges’ co-founder Saar Gur was an angel investor in RockYou (not to mention co-founder of BrightRoll, angel investor in Frengo and more), and the site has managed to score a mention on the RockYou blog. That RockYou widget is the most viewed by far, scoring 2,257,505 impressions. However, it has only raised $69 during that time, suggesting that the conversion rate might be low. That said, we’re all for promoting good causes on Mashable, and the combination of viral widgets and a positive message should be pretty powerful.

Hooman over at Widgify also covered CareBadges this week.

Obopay buys BillMonk - MoCoNews

2007-01-31T14:59:00.000Z

Mobile Payments Firm Obopay Buys Small Rival BillMonk

Posted by Rafat Ali
Tue 30 Jan 2007 02:04 PM

Mobile payments firm Obopay, backed by Qualcomm, Redpoint Ventures, and others, has bought out a small, two-person Seattle-based company called BillMonk.
BillMonk was founded by former Amazon.com employees Gaurav Oberi and Charles Groom. The service helps people track what they owe using mobile devices, while Obopay actually handles the mobile payment transaction. BillMonk will help roommates, travelers and co-workers split bills, what it calls “social money” services.
More details in the release here.
Related:
-- Obopay Receives Additional Funding
-- Mobile Payment Firm Obopay Gets $7 Million Funding; Adds Three VPs

BillingWorld - MoCoNews

2007-01-26T13:44:00.001Z

Vulnerabilities In Billing For Mobile Content

Posted by James Quintana Pearce
Thu 25 Jan 2007 07:15 PM

Over at BillingWorld there’s a fairly comprehensive piece about the problems and vulnerabilities in mobile billing systems, seen from both the carrier and the content providers point of view.

“For now, the service providers' content strategy remains in an early phase, where the focus is on infrastructure and throw-it-against-the-wall-to-see-what-sticks tactics. But content has been a multibillion-dollar business for several years, thanks largely to ring tones. Now service providers are busy introducing new partners and new types of content. While things like fraud prevention and revenue leakage are in the discussion, effort is not yet being spent on putting the controls in place that a mature content business will need.”

Obviously some companies are focusing on this, but the industry as a whole might need to look a bit closer. If you’re involved in the actual process of selling or buying content between carriers and providers, this article is worth a read.

The same site has a Q&A with Charmaine Oak, senior product managerenablers and billing for Orange UK, and Graham Carey, marketing director--EMEA for Portal Software, about the carriers mobile content experience.

Helio partners with Obopay - FierceWireless

2006-12-21T14:49:00.000Z

Helio taps Obopay for mobile payments

Chalk another MVNO up for Obopay: After announcing an expected deal with Amp'd Mobile, Obopay has signed one with MVNO Helio for its mobile payments service. Just like the Amp'd offering, Obopay will enable Helio subscribers to use its "real-time, secure, mobile peer-to-peer payment service, which is linked to an Obopay Prepaid MasterCard account." The service allows users to check balances, view payment histories, add funds and more.

For more details on the Helio-Obopay tie-up:- read the company press release

African mobile payments - 160 Characters

2006-12-19T16:05:00.000Z

m-Payment: African Virtual Pre-Pay By SMS

Submitted by Mike Grenville on Tue, 12 Dec 2006 11:36

Text messages are helping resellers replace scratch cards in Africa and South America.

Africa has the quickest growth rate in pre-pay communication, over and above any other region in the world apart from Eastern Europe. Africa had more than 60 million pre-pay subscriptions at the end of 2003 increasing to 100 million in 2005, nearly doubling the size of the market in just two years.

For GSM operators in Africa, as well as in Asia and Latin America, 75-90 per cent of their revenue comes from pre-pay. In these places, few people have credit cards or bank accounts and so scratch cards are mostly used to top up credit. However, as well have having distribution problems to remote areas, they are also vulnerable to theft.

XIRING believes that the pre-pay communication solution that they have developed, in conjunction with Expand, will provide operators with a secure and flexible way to resell credit.

All the operator has to do is provide the merchant with a time credit, which is uploaded onto a smart card and inserted into a mobile XIRING reader. After inserting the correct PIN code, recharge numbers are generated which can then be resold o mobile phone users. The user then sends a SMS to the operator with the recharge code and receives a SMS in return with their time credit.

There are two styles of offline card readers - one small and other like PDA size which can connect to small printer as required legally in some countries.

Roger Mechri,(pictured) International Indirect Sales Manager, XIRING comments: “This type of pre-pay solution is particularly valuable in the developing world, such as Africa, where there is an absence of telecommunications infrastructure and where there are very few cash points and even fewer people with bank accounts. The mobile pre-pay technology allows GSM operators to increase their distribution channels, reaching a much larger network of people, even those individuals in the more deprived regions."

“This virtual pre-pay solution also provides greater security allowing operators to get rid of scratch cards and the associated problems of control and distribution. Africa has the quickest growth rate in pre-pay communication, over and above any other region in the world apart from Eastern Europe. Africa had more than 60 million pre-pay subscriptions at the end of 2003 increasing to 100 million in 2005, nearly doubling the size of the market in just two years.”

Launched February 2006, so far three companies are using the solution in Africa; MTN Nigeria has 5,000 terminals distributed, Nginge Boke 2,000 terminals in South Africa, Expand in Seychelles and in South America Umbryo in Brazil is running a pilot. Discussions are progressing with two operators in Madasgascar - Orange & Madagascar Telecom.

"The technology is encouraging an entrepreneurial spirit amongst small businesses keen to distribute the solution, thereby helping to stimulate the local economies in Africa" said Mechri.

Barclays Oyser Card - ePaymentNews

2006-12-15T13:34:00.000Z

Barclays to Add London Transit to Contactless Cards
Transport for London

Dec 14 2006 : Barclays Bank is to launch contactless credit and debit cards that double up as Oyster travel cards.

Oyster is a prepaid contactless smart card that contains London transit tickets. Since Oyster was launched in 2003, 6 million cards have been issued to Londoners. Oyster cards can be topped up over the Internet, by phone or at a ticket office. One of the UK's top five banks, Barclays has signed an agreement with TranSys, which runs the Oyster card scheme on behalf of Transport for London (TfL), the capital's transit authority. The deal gives Barclays exclusive rights to place Oyster on contactless Barclaycard credit cards and Barclays Connect Visa debit cards for the next three years. Barclays says its contactless credit and debit cards will contain EMV chip-and-PIN technology. For transactions over £10 (US$19.70), cardholders will need to swipe their cards and enter a PIN. However, for payments under that amount, cardholders will simply wave their cards in front of a contactless reader, Barclays says. Following a trial in February 2007 involving Barclays, Visa, TranSys and TfL, the first Barclaycards and Barclays Connect cards to include Oyster will be issued in mid-2007, Barclays says. Barclays is the first UK bank to commit to launching contactless cards, although Royal Bank of Scotland has been trialing contactless cards at its Edinburgh head office. Last month, Visa UK announced that its member banks had agreed to roll out contactless cards across Britain, starting in London, by the end of next year.

Related Links

www.barclaycard.co.uk
Barclays news release
Transport for London website
Visa UK Plans Contactless Rollout in 2007
MasterCard Announces European Contactless Trials
RBS Says Contactless EMV Trial a Success

Infineon E-purse - ePayments News

2006-12-09T16:34:00.000Z

Infineon Combines Contactless E-purse with Access Cards

Thales

Dec 06 2006 : Chip manufacturer Infineon has implemented a contactless e-purse payment system for 6,500 employees working at its new site in Munich, Germany. Staff have been issued with smart cards which carry both e-purse and security access information on the same Infineon chip, the firm says.

The chip is loaded with e-cash at a loading station and used at locations such as the canteen, food and drink vending machines, coffee machines, and the on-site hairdressers. These locations have been equipped with 140 contactless e-purse payment terminals from France's Thales. The 140 terminals between them process some 10,000 transactions per day, says Infineon. The canteen uses a cash register system from Schaupp along with Thales's AVT.compact payment terminals. Infineon has also installed AVT.compact terminals in food and drink vending machines.

Additionally, one hundred coffee machines have been equipped with the unattended Thales AVT.controller module, Infineon says. The rollout of e-purse technology has been a success, with noticeably shorter waiting times at busy locations such as the canteen's cash registers, Infineon says. More than 90 percent of all staff payments at Infineon's Munich offices are now being made electronically, it says. "In the canteen, we are able to process six payments a minute," Wolf Ruediger Moritz, Infineon's Vice President of Business Continuity, says in a statement. "Even at peak hours, we no longer have substantial queues." Infineon was previously the semiconductor division of Germany's Siemens.

Related Links
www.thalesgroup.com/etransactions
MasterCard, Keycorp Offer Low-Cost Contactless Cards
Europe's Unattended Payment Market Set To Grow
UK's EMV Cards Could Carry An Oyster Application
Japan's E-Cash Market Holds Many Opportunities

Netcash - ePaymentnews

2006-12-09T16:32:00.000Z

Netcash Launches Digital Currency In UK

Creditman

Dec 04 2006 : UK start-up Netcash has launched a digital currency system, which it says can be used for both PC and mobile phone-based payments.

The system, also known as Netcash, is being marketed to retailers as a low-cost alternative to accepting credit card payments over the Internet. As a special promotion, Netcash is waiving its standard one-time, sign-up fee of £ 450 (USD885) which includes integration of Netcash as a payment option on the retailer's Website.

To buy Netcash currency, consumers can deposit physical cash at one of the company's partner high street banks or make an electronic transfer from their Internet bank account to Netcash. They can then email Netcash currency to other people, or make a funds transfer from the Netcash Website, the firm says. Netcash claims that the system offers real-time funds transfers for a fee of 1 percent of total transaction value. As no credit cards are used to make online purchases, there is no risk of chargebacks from stolen cards, it says. The system can also handle micropayments, for example media content downloads, according to Netcash In a statement, Netcash says its system has already been implemented by companies4u.com, a UK firm which provides e-commerce services to online merchants.

Netcash also says the Netcash system is accepted by a number of online retailers in the UK. But, in addition to targeting retailers, Netcash wants to encourage consumers to use its payments system on eBay as an alternative to PayPal. Congleton, Cheshire-based Netcash says it is accredited as an e-money issuer by the Financial Services Authority, the UK banking regulator. The firm is run by managing director Paul Tolley and international marketing coordinator Mark Hodkin.

Related Links
Netcash website
www.companies4u.com
Financial Services Authority
PayPal to Support 10 Extra Currencies

Visa trails mobile coupons and rewards

2006-11-24T17:24:00.000Z

Visa USA HQ Trials Mobile Phone Payments

Computer Business Review

Nov 21 2006 : Visa USA is to launch a mobile phone payments trial this month at its San Francisco, California headquarters. The pilot follows on from Visa's consumer trial of Near Field Communications (NFC) mobile phone payments at the Philips Arena in Atlanta, Georgia.

The San Francisco trial will involve around 500 Visa employees in California. Trial participants will receive mobile payment coupons and rewards via text messages and graphic and bar code images direct to their handsets. According to Visa, the coupons and rewards can be redeemed at on-site cafes located at its corporate campus. Visa says the pilot is expected to lead to larger-scale public trials over the next year which will test both mobile payments and value-added applications.

"With more than 225 million mobile phone users in the U.S. alone, it's only natural for consumer payments to extend to the mobile device," Elizabeth Buse, executive vice president at Visa USA, says in a statement. An online survey carried out by Visa USA recently found that 61 percent of respondents between the ages of 25 and 34 are interested in making mobile phone purchases. The survey also found that over half of US consumers carry their mobile phones at least 75 percent of the time and that 64 percent of consumers are interested in receiving coupons via their mobile handset.

The Atlanta trial, which was launched in December 2005, ended in September. During the trial, 150 Atlanta Thrashers and Atlanta Hawks season ticket-holders with both a Chase-issued Visa credit card and a Cingular wireless phone account made payments at ViVotech contactless readers at concession stands throughout the arena. Also, Atlanta trial participants downloaded content to their Nokia 3220 mobile phones such as ring-tones, screensavers and video clips of favorite players. The Nokia phones were equipped with NXP's NFC chips, Visa says.

Related Links
www.visa.com
www.jpmorganchase.com
www.NXP.com
www.vivotech.com
Issuer-Operator Disputes Delaying NFC Phone Rollout Says Analyst
Visa Offers Contactless Card Toolkit
MasterCard Announces European Contactless Trials
MasterCard NFC PayPass Trial with 7-Eleven and Nokia

Visa contactless cards - ePaynews

2006-11-24T17:19:00.000Z

Visa UK Plans Contactless Rollout in 2007

Visa

Nov 24 2006 : Visa UK says its member banks have agreed to roll out contactless cards across Britain, by the end of next year, starting in London.

The rollout will enable cardholders to purchase low-value everyday items, such as their morning coffee and newspapers, by waving a contactless card over a card reader in participating stores, Visa says. The contactless cards will contain EMV chip-and-PIN technology as well as an RFID contactless chip. Cardholders will not be required to enter their PIN for contactless transactions that are under a preset amount. However, if the number of contactless transactions carried out by a cardholder exceeds the card's daily floor limit, the card will need to be swiped in a reader and the PIN entered. "With over 75 percent of all UK cash payments being less than £10 (USD19), the introduction of contactless payments will play a major role in encouraging the use of cards over cash for low-value transactions," Sandra Alzetta, Visa Europe's Senior Vice President, Consumer Market Development, says in a statement. Visa says contactless payments are particularly suited to retail environments such as fast food outlets, newsagents, parking facilities and vending machines, all of which have a high cash turnover and where rapid checkout times are desirable. Research carried out by Visa indicates that UK consumers are likely to appreciate the convenience and speed that contactless cards offer as an alternative to cash, the association says. Visa and its UK members are currently holding discussions with retailers to win their support in advance of the contactless rollout. Further details of the launch plans are expected to be available by March 2007, according to Visa.

Related Links
www.visaeurope.com
MasterCard Announces European Contactless Trials
RBS Says Contactless EMV Trial a Success

NFC on ePaynews.com

2006-11-17T14:17:00.000Z

Issuer-Operator Disputes Delaying NFC Phone Rollout Says Analyst

Nov 15 2006 : Disagreement between card issuers and mobile operators as to control over payment facilities embedded in Near Field Communications (NFC) enabled handsets is holding back deployment of the technology, says ABI Research senior analyst Jonathan Collins. He tells epaynews that key issues to be resolved are the location of card payment information on the handset, activation of the payment application, and fees payable to mobile operators by card companies.

The Mobile Payments Café

Mobile Payments review on Fast Company

Time to get back up to date

MMA Publishes Mobile Banking Overview - 160 Characters

Beem from Mobile Sense makes no sense whatsoever

Simple SMS Sign Up

Short Merchant List

Strong Competitors

NBAD launches mobile payments in Abu Dhabi - 160 Characters

Awards

Paybox expands its mobile payment service - 160 Characters

New E-Monday rules coming out of Brussels - reported on the Register

Stats & Research: Mobile Banking Becoming A Reality

Banks To Double

Dispelling The Myths

Untapped Potential

Grameen Bank & Obopay Partner - Portfolio.com

Glenbrook covers the launch of the Visa Mobile Platform initiative

Amazon DevPay

Apple has filed a iPhone Wireless payment patent

APACS - Payment Myths

KPMG's report on Mobile Payments in Asia

Payoneer on Prepaid Devit Cards on E-Commerce Times

The Need

The Problem

The Solution

The Product

The New Challenge

High Hurdles

New Goals

Mobile Wallets developments on 160 Characters

Money Transfer Not Wallets

Changes Needed To Government Regulation

Great synopsis of Mobile Banking Biz Cases - BAI

Payforit update at NOC event - 160 Characters

Positive Feedback

Customer Experience Improvements

Data Charge Shocks

On and Off Portal

Streamlined Subscription System

PayPoint partners with Telrock - 160 Characters News

Already Popular With Consumers

Slow Education Process

Gpay - not a big surprise

14:30, Sep 3rd 2007 by Tim Green

Blimey, Google has filed a patent for a mobile payment system being dubbed Gpay.

M-Pesa adds US $8 m to Safaricom's bottom line in first e months!

Danal gets investment

PayPal widget on Facebook

Cellular News on Mobile Banking

Post Office launch mobile payment service

Safaricom & M Pesa in Kenya - SMS Text News

PayPal introduces Mobile Checkout

IP Commerce and PayPal Partner

Contactless Technology in the US - Card Technology

Nonbanks in the Payments System - Conference Papers

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Mastercard + RBS + Paypass = Contactless Card

Business Week chimes in Mobile Payments & Banking

Imagine having your very own mobile ATM—otherwise known as your cell phone—in the palm of your hand

Fee-for-All

Plenty of Players

Spend-shifters

Mercator report on Micropayments

Javelin research on Mobile Banking

Obopay partners with AIM

PayPal becomes a bank...'twas inevitable

Inside Contactless + Mobile Distillery - Mobile Marketing Magazine

Digital Money Forum 2007

ClairMail Mobile Baking -Payments News

WSJ - Mobile Banking shifts into Higher Gear

Firethorn Mobile Banking & Payments solution - Payments News

Firethorn, Verizon Work to Introduce Mobile Banking, Payments Solution

Obopay Checkout

Obopay has announced the introduction of Obopay Checkout, calling it "an industry-first capability that enables mobile merchants to offer consumers effortless, instant payments that monetize digital and physical offerings."

Another US entrant - MobiBucks

Forrestor reports low market need for P2P mobile payments

Mobile Banking still in low demand

Mobile Visa Card - MoCoNews

Cingular & MasterCard Pay Pass trial in NY - MoCoNews

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You may download a free version of the reader from the Adobe Acrobat website.