Mobile Payment Industry News: 11/25/08

Tuesday, November 25, 2008

Brazil E-Commerce Up 35%

Brazil e-commerce to hit nearly USD 3.5 billion at the end of 2008, up 35%

The Brazilian e-commerce market is expected to register a turnover of USD 3.48 billion (BRL 8.5 billion) at the end of December 2008, up 35 percent from the year-earlier period, when the e-commerce market reached USD 2.58 billion (BRL6.3 billion).

The increase is attributable to the rapidly growing population of online buyers and to the convenience of shopping on the internet. Almost 39 percent of surveyed consumers plan to purchase electronics online this year, spending USD 349 (BRL 850) per purchase, while IT products are to account for 36 percent of total expenditure. The number of online shoppers has increased from 2.6 million in 2003 to 7 million in 2006 and to 9.5 million in 2007. As far as online payment methods are concerned, almost 49.5 percent of Brazil's online shoppers use a credit card for their purchases, as compared to 39 percent who use a banking ticket to buy online and 10 percent who turn to debit or electronic transfer, and payment on delivery.

Data was revealed by the European Travel Commission (ETC).

France: 70% Visit E-Commerce Website in Q3

In France, more than 70% of internet users have visited an e-commerce website in Q3 2008 - study

In Q3 2008, 70.8 percent of French internet users, representing more than 22 million customers, visited one of the country's top 15 online shops every month in Q3 2008.

eBay ranks highest in terms of unique visitors (12.36 million) for the period under review, followed by online retailer PriceMinister with 8.89 million visitors, voyages-sncf.com (a website for online reservations for train tickets) with 8.19 million visitors, Fnac and La Redoute with 7.06 million and 7.01 million visitors respectively. Amazon came sixth, with 6.79 million visitors. As far as online travel agencies across France are concerned, during Q3 2008, voyages-sncf.com was the most visited one, followed by lastminute.com, with 2.9 million visitors, Promovacances with 2.68 million visitors and Nouvelles Frontieres 2.52 million visitors.

Data has been released by Mediametrie.

S.Korea - 34% Online Growth

South Korean online transactions hit record numbers in Q3 2008: USD 110 billion, up 34%

According to data released by the National Statistical Office, in the period ending September 2008, South Korean e-commerce registers a record of USD 110 billion (KRW 167 trillion) in turnover, growing by 34 percent year-on-year and by 6 percent over Q2 2008.

This is the highest increase since data began to be gathered in 2001. The growth is attributable to a climb by 33 percent in business-to-business (B2B) transactions from Q3 2007 to USD 100 billion (KRW 151 trillion), representing more than 90 percent of all e-commerce.

Business-to-government (B2G) deals have registered a higher increase (53 percent), while business-to-consumer (B2C) transactions have jumped 17.5 percent to USD 3.05 billion (KRW 4.6 trillion).

80% Asia Pacific Shops Online Now

80% of Asia Pacific internet users make online purchases - study

Within the past 12 months, almost 80 percent of internet users across Asia Pacific have made an online purchase and spent more than USD 3.000 on average for this purpose, a study indicates.

Of these, almost 60 percent preferred to pay via Visa credit and debit cards. When asked about the advantages of making purchases on the internet, 88 percent of those involved in the study mentioned the ability to shop at any moment, 83 percent referred to best prices and 82 percent cited the possibility to shop easily. In terms of e-commerce categories, digital entertainment ranks highest in terms of consumers' preferences, with 59 percent of Asia Pacific internet users purchasing such products online, followed by travel (51 percent) and fashion (49 percent). Indian internet users were the most avid buyers of digital entertainment, with 76 percent of them buying such products and services. For the period under review, Asia Pacific internet users have spent the highest amount of money (USD 812 on average) for online travel services, such as airline and rail tickets, hotel accommodation and travel packages.

The countries with the most frequent online buyers for the last 12 months are Japan (99 percent) and Korea (93 percent), while Australian and Singaporean internet shoppers have spent the highest amount of money in the region: an average spending of USD 4.160 and USD 3.480 respectively for online purchases. I

n Japan, South Korea and India the average online spending reached USD 3.175, USD 3.027 and USD 2.147 respectively. In terms of cross-border transactions, Hong Kong registers the highest percentage of internet users who have made a purchase on a website from another country (75 percent).

Average online spending in the past 12 months

1. Australia - US $4,160
2 . Singapore - US $3,480
3. Japan - US $3,175
4 . South Korea -US $3,027
5. India - US $2,147
6. Hong Kong -US $1,698

The survey is titled 'E-Commerce Tracking Survey' and it was conducted by Visa.

Visa Introduces 3V Internet Shopping Card in UK

UK'S First Internet Shopping Gift Card Makes Gift Giving Easy

The new 3V Visa Internet Shopping Gift Card means that present givers everywhere can get it right this Christmas. It's the first gift card in the UK that lets the lucky recipient shop on the internet and choose the present that they really want, because the 3V Visa Internet Shopping Gift Card lets you buy anything anywhere online that accepts Visa.

And in these times of economic recession it gives everyone the opportunity to make the most of the great deals that can be had online, so 'present money' goes that little bit further. And because you can pool the money on these gift cards together, recipients can get that dream present they really wanted.

The 3V Visa Internet Shopping Gift Card, with GBP25 of value, is available in high street retailers including, The co-operative, Martin's Newsagent, Martin McColl's and Borders. The card comes in four funky designs ...

Here come the girls ... a fab Sparkly Shoes card for those special, 'can't live without' treats
A sports car model for the Boys Toys card goes straight to the heart of the male psyche
The Space Hopper fun retro-style card is great to bring a smile to anyone's face
Wrapped up with a silver bow image, the Celebration card is the ideal gift for any special occasion, including a simple 'thank you'
3V Visa Internet Shopping Gift Cards can be used to shop online, through mail order or over the telephone, wherever Visa is accepted.

The joy of the 3V Visa Internet Shopping Gift Card is that recipients don't need a credit or debit card, or even a bank account to use it. There is no interest to pay - ever and it's really simple to use. All you need to do when shopping is go to the checkout, click on Visa and then enter the unique Visa number and security details that are sent to you. It's just like using a Visa card to shop online.

The 3V Visa Internet Shopping Gift Card also provides complete security when shopping online because once the Gift Card has been activated a unique Visa number is issued to the recipient and, simultaneously, the security details (3 digit security code and expiry date), so when you shop online you don't reveal any sensitive personal or financial data. In addition, the 3V Visa Internet Shopping Gift Card is backed by Alliance & Leicester.

How to use the 3V Visa Internet Shopping Gift Card. You can use a 3V Visa Internet Shopping Gift Card as soon as you have paid for it in the shop and activated it at http://www.3Vgiftcards.com.

The activation process consists of two simple steps whereby you enter the activation and pin codes on the reverse of the gift card along with a few personal details. It does not take long to complete - about two minutes. Once you have clicked 'activate' at the end of this process you will receive your unique Visa number and at the same time security details (3 digit code and expiry date) will be emailed to you. You can then shop online, over the phone or via mail order, wherever Visa is accepted.

Feds Insure Open, Closed Left Out of Loop

Fed insures open loop cards but leave closed loop alone

In November 2008, the Federal Deposit Insurance Corp.'s board of directors approved its General Counsel's Opinion No. 8 requiring the funds held in FDIC-insured banks that secure open loop, stored value cards be secured up to $250,000. According to the FDIC ruling, "All funds underlying stored value products will be treated as deposits and subject to assessments."

The opinion was proposed in August 2005. Following a comment period required by regulatory agencies to allow feedback from consumers, merchants and financial institutions, the final ruling was implemented after all comments were considered.

Additionally, the approval comes in the wake of three large retailer bankruptcies during 2008 in which consumers lost over $100 million in nonused and invalidated gift cards.

"It's a very good opinion," said Gail Hillebrand, spokeswoman for Consumers Union, the advocacy group that publishes Consumer Reports magazine. "It makes it very clear there is a way now for banks to set up prepaid cards so consumers can get FDIC insurance."

Closed loop left out

According to Holli Targan, Attorney and Partner with the Jaffe, Raitt, Heuer & Weiss law firm, funds covered under FDIC insurance include network-branded payroll and gift card products only. Private label (merchant-branded) cards issued and funded by retailers are exempt.

"Explicitly excluded are funds backing closed loop cards, such as cards usable at a specific merchant or cluster of merchants," Targan said. "This Opinion says that FDIC insurance doesn't cover merchant branded cards, so if that merchant goes under, the consumer has no way of recouping their money.

"On the other hand, open loop cards – under the FDIC's definition – that are issued by a bank are covered if the bank fails. The cardholder could then make a claim and not lose the money that was on the card," she added. Cardholder funds for stored value cards held by an insured bank – as opposed to the pool of funds held by the card distributor with closed loop cards – are individually insured to FDIC limits.

New standards right on

"If you think about these new standards for open loop cards, it's just like a savings account at a bank," Targan said. "Banks sometimes go under, but when they are FDIC insured, you have confidence that your money is protected. Consequently, I think generally this opinion will make prepaid cards more attractive to consumers, which is a good thing for the ISOs and MLSs out there selling them."

Federal regulators, according to Targan, have normally been "sort of hands off" in relation to stored value products and have attempted to allow the market to develop without imposing too many regulatory burdens. However, the failings of Sharper Image Corp., CompUSA Inc. and Linens 'N' Things Inc., coupled with a petition filed by the Consumers Union with the Federal Trade Commission, got regulators' attention.

Consumers caught in between

In September 2008, the Consumers Union asked the FTC to protect consumers from losing money on gift cards when retailers filed for bankruptcy. "Gift cards shouldn't be the gift that stops giving when retailers go bankrupt," said Michelle Jun, Senior Attorney for Consumers Union.

Bankruptcy courts treat unused gift card funds as a debt and determine whether a bankrupt retailer must pay it. The retailer must then petition the court to allow it to continue to accept its gift cards. Consumers may lose the value of their cards if the retailer does not make such a request or if the court denies it. The only remaining option for consumers is to file a claim as an unsecured creditor to the bankruptcy proceeding.

"Gift cards have exploded in popularity in recent years, but consumer protections haven't kept pace with the record sales," Jun said. "With more retailer bankruptcies on the horizon, the FTC should make sure that consumers with gift cards are protected when companies go bust."

Prepaid center of attention

Targan believes the General Counsel's opinion is an indication the FDIC and other government entities know what is going on in the marketplace and will impose regulations when they think it's important to do so. Additional regulations recently imposed in several states require securitization of stored value card funds as well as more transparency with banking regulatory agencies.

"Since the last time the Counsel issued an opinion on this topic in 1996, the banking industry has developed new types of stored value products, and therefore they thought it was time to readdress it," Targan said. "I think this should be good for [financial services] because it will give some comfort to people holding or distributing open loop cards that now have the benefit of federal insurance."

LML Files Patent Infringement Against 19

Patent firm files 19 infringement lawsuits

Vancouver, B.C., Nov. 25, 2008 --

LML Patent Corp. (``LML''), a wholly-owned subsidiary of LML Payment Systems Inc. (the ``Corporation'') filed suit in the U.S. District Court for the Eastern District of Texas against all the payment companies who provide equipment, systems and services that convert paper checks into electronic transactions, including:

JP Morgan Chase
Wells Fargo Company
Wachovia Corp
Citigroup, Inc.
Bank of New York Mellon
HSBC Holdings plc
Capital One Financial Corp.
ABN AMRO Holding N.V
Northern Trust Corp
Regions Financial Corp
National City Corp.
Fifth Third Bank
Citizens Financial Group, Inc. (subsidiary of Royal Bank of Scotland)
M&T Bank Corp.
UnionBanCal Corp.
First National of Nebraska, Inc.,
Deutsche Bank Trust Company Americas (subsidiary of Deutsche Bank AG (Germany)
and PayPal, Inc. (subsidiary of eBay Inc).

In the suit, LML alleges that the defendants infringe U.S. Patent No. RE40220. LML is seeking damages, injunctive and other relief for the alleged infringement of these patents.

"The filing of this lawsuit is consistent with our strategic objective to protect our intellectual property,'' said Patrick H. Gaines, chief executive officer and president of LML Patent Corp. and LML Payment Systems Inc. ``We have awarded several licenses to industry participants in the past and what we will not allow is these defendants to use our intellectual property without a proper license.''

LML is represented by the law firms McKool Smith LLP, Gillam & Smith, L.L.P. and Ward & Olivo.

About LML Payment Systems Inc. (http://www.lmlpayment.com )

LML Payment Systems Inc., through its subsidiaries Beanstream Internet Commerce Inc. in Canada and LML Payment Systems Corp. in the U.S., is a leading provider of financial payment processing solutions for e-commerce and traditional businesses. We provide credit card processing, online debit, electronic funds transfer, automated clearinghouse payment processing and authentication services, along with routing of selected transactions to third party processors and banks for authorization and settlement. Our intellectual property estate, owned by subsidiary LML Patent Corp., includes U.S. Patent No. RE40220, No. 6,354,491, No. 6,283,366, No. 6,164,528, and No. 5,484,988 all of which relate to electronic check processing methods and systems.

Source: Company press release.

PayNet Available in Vietnam

Vietnamese customers can now pay online via local PayPal version: PayNet

An online payment portal called PayNet has been made available to customers across Vietnam.

In Vietnam, there are over 60 million mobile subscribers, 15 million bank accounts and more than 20 million people using the internet.

Based on technology provided by electronic payment systems company OpenWay’s Way4, the service allows online shoppers to make transactions without the need for bank accounts or Visa and MasterCard-branded cards.Way4 is a payment processing framework for banks, processors and mobile operators, incorporating WAY4 Switch, WAY4 Card and Merchant Management, WAY4 Smart Card Personalisation, WAY4 Loan Management, WAY4 Behaviour Loyalty services.

Customers who are interested in paying online with PayNet must set up an account with a private code number. The money that shoppers have put into such an account is to be transferred to sellers and then deposited into banks. All the money that buyers put into the account will be deposited into banks after being transferred to sellers. All transactions are to be followed up with an email or SMS mobile phone message.

Text Scams Coming

Text scam tries to fool bank customers

Nov 25, 2008 (Kerrville Daily Times - McClatchy-Tribune Information Services via COMTEX) --

Don't give out personal information to an unknown source. That's the message from Bank of the Hills Regional CEO Harold Wilson after area cell phones owners were inundated with text messages stating that Bank of the Hills debit cards had been deactivated.

According to Wilson, the text messages were sent out beginning Friday to Verizon and Sprint customers, and blanketed the area.

The Kerrville Police Department received two reports of the scam as of Monday afternoon. The text message reads: "Bank of the Hills alert. Your debit card has been deactivated. Please contact us at (830) 448-0088 to reactivate your card." Callers to the number are offered two options -- to activate the card or to change the PIN number. After choosing an option, callers are prompted to give personal information, such as their debit card and personal identification numbers.

KPD spokesman Paul Gonzales said one of the victims' bank accounts was cleared out the day after responding to the text.

"After providing both the debit card and PIN number and further research, it was discovered that the text was a fraud, also known as a phishing scam," Gonzales said. "One victim's account was changed immediately resulting in no loss, while the second victim's account was depleted of approximately $1,500."

Bank of the Hills posted a warning on its Web site Friday about the scam, and Wilson said steps are being taken to identify from where the texts originated. "Scammers usually do this kind of activity on a Friday so they can have all weekend to use the information," Wilson said. This is the second phishing scam this year to use Bank of the Hills' name. In May, bank customers were targeted by both e-mails and phone calls asking for account information. Wilson said Bank of the Hills or any other bank would never try to solicit account information over the phone or by e-mail, especially PIN numbers.

"The advice is simple. No bank would ever ask anybody to reveal their PIN number," he said. "We don't know it, and we don't want to know it.

"Anytime someone is asking for a PIN number, it's a scam," Wilson added. Gonzales advised that text messages, e-mails, telephone calls or letters requesting bank account or other personal ynformation should be ignored and turned over to the police.

SafePass from Bank of America

Bank of America Introduces SafePass

Yesterday, in a Finextra article, it was announced that PayPal has introduced it's 6 digit SMS program. Now Bank of America has announced the release of the SafePass(R) Card - a "new wallet-sized card essentially builds on SafePass, a one-time-use, six-digit code sent as a text message to consumers' mobile devices to authorize and help safeguard sensitive transactions."

"The introduction of the SafePass Card extends this additional layer of security to customers who prefer to receive it through a card instead of their mobile phone," said Lance Drummond, e-Commerce and ATM executive for Bank of America. "Now, customers have an additional way to access security products that help them to manage their finances safely on-the-go."

The SafePass Card is available for a one-time fee of $19.99, while the mobile-phone-based SafePass is still a free service to all customers.

For more information on SafePass and the SafePass Card, visit http://www.bankofamerica.com/privacy/index.cfm?template=learn_about_safepass

Tuesday, November 25, 2008

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