Mobile Payment Industry News: 12/04/08

Thursday, December 4, 2008

Orange Money Launched in Ivory Coast

Orange has teamed up with French bank BNP Paribas to launch its Orange Money mobile payment and money transfer service in Ivory Coast.

Orange Ivory Coast is the group’s first company to launch the service.

The operator handles the services’ platform and marketing, while BNP Paribas’ Ivory Coast subsidiary BICICI is in charge of issuing and guaranteeing the electronic money.

With Orange money, Orange customers can deposit and withdraw up to XOF 100,000 (EUR 152.44) from the Orange Money account, make person-to-person money transfers, top-up their airtime credit with up to XOF 10,000 (EUR 15.24) and pay bills.

In order to use the service, customers have to open an Orange Money account which is activated for free without requiring any minimum deposit. Users do not need bank accounts to subscribe to the service. Orange Money is also to be launched in other countries over the coming months.

Worst In 3 Decades - November Retail Sales

Retailers post worst month on record, setting somber holiday tone - MarketWatch

Retailers post worst month on record

Dismal sales set somber tone for rest of holidays

By Andria Cheng,MarketWatch
Dec. 4, 2008

NEW YORK (MarketWatch) -- Retailers delivered the biggest drop in monthly sales in over three decades, an echo of their dismal October performance, as jittery consumers were pinched by the recessionary economy.

While Black Friday promotions helped bring in more shoppers and helped stem some sales declines, that still wasn't enough to help make up for poor results the rest of the month, which had about a week fewer post-Thanksgiving shopping days than last year.

This holiday season may shake out to be retailers' nightmare, with their worst combined November and December on record, analysts said.

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Prepaid Debit with Money Remittance Function

MiCash launches reloadable prepaid debit card with money remittance function

Pre-paid financial service provider MiCash launches a reloadable prepaid debit card with an integrated worldwide remittance function, aimed at unbanked or underserved consumers. The card is particularly targeted at immigrants working in the US who seek to send money home to their families.

The MiCash reloadable prepaid card allows cardholders to make electronic purchases, pay their bills online, make cash withdrawals at millions of available ATMs worldwide and employ such services as free direct deposits and mobile banking. Additionally, the cards can be used to carry out international card to card as well as card-to-cash transfers.

Card-to-cash transfers require that MiCash cardholders set up family members or friends as recipients then proceed to transfer funds to them via an online account or a call customer service. Recipients can take possession of the funds at over 12.000 Bancomer Transfer Services locations in such countries as India, China, Mexico, the Philippines, South and Central America.

Is Online PIN Debit For Real This Time Around?

In a post by Manju Murthy in his blog, Mobile Commerce Musings, he asks if Online PIN Debit is for real this time around. He also points out that a "hardware-based module needs to be involved to secure online commerce comprehensibly." Yeah...we're in resounding agreement.

Mobile Commerce Musings: Is Online PIN Debit for real this time around?

News of online PIN debit payment products popping up in the news often. ATM Direct/Acculynk and NYCE's SafeDebit are the but the latest examples.

Persistence over the past ten years to make online PIN debit a success is admirable. In an effort to overcome prior industry missteps, Acculynk and SafeDebit are offering software-based solutions.

As noted by others (last sentence) a hardware-based module needs to be involved to secure online commerce comprehensively.

Additionally, the usual suspects standing in the path of success include lack of ubiquity and changes to the user experience that make users uneasy.

The current interest in online debit payment options are driven by the credit squeeze being felt by consumers. If the current online PIN debit offerings can go commercial in the next 3-6 months with a broad array of merchants offering this payment option, there is a good chance of success.

PIN Debit on the Web

In an article recently published in Bank Technology News, Javelin Strategy and Research analyst Bruce Cundiff, seemed "pretty postive" that the time has arrived for PIN Debit on the Internet. There's two approaches. Hardware and Software Only. Software only is certainly sexier, as I've stated in the past, but is a software only approach secure? There's many who don't believe it is. Can it be PCI DSS certified? What happens when EMV is factored into the equation?

I agree with Mr. Cundiff that the stars looked to be aligned for PIN based transactions to emerge on the web. Two current trends: (1. Debit transactions outpacing Credit transactions and 2. eCommerce outpacing Bricks and Mortar.) point in favor of it happening. Combine those trends with the fact that PIN is more secure and it looks like the payments industry will see it's time has arrived.

Here's a post from Javelin's site:

Javelin Strategy and Research » A Very Tenacious Idea: Online PIN Debit

A Very Tenacious Idea: Online PIN Debit

Bank Technology News- “I’m pretty positive about it,” says Javelin Strategy & Research analyst Bruce Cundiff, who just authored the firm’s 2008 outlook on the online payments industry. “With the state we find ourselves, in terms of the credit space, I think a lot more people will be using debit cards [online].”

What Cundiff points to are results of Javelin’s 2008 Online Payments Forecast survey, which last month unearthed what the economic crisis has wrought in terms of declining credit-card transactions online. Not only are people cutting back on discretionary spending, but their credit limits are freezing as well (Thirty-seven percent of users said they’re using credit cards less often). Meanwhile, electronic spending directly from bank accounts is climbing, which means that the $148 billion online transaction market is increasingly comprised of alternative payments such as PayPal, prepaid cards and signature debit.

Sheth says it’s a perfect environment for PIN debit solutions, which could attract banks’ merchant clients looking to shave off interchange fees from credit and signature debit options; there are also some 80 million PIN-only debit cards that carry no card association ties. “The cost to adopt this payment type is negligible or zero,” says Sheth. “They’re riding the same rails they have established today, and there’s nothing for banks to change on the back end.”

The only major changes afoot appear to be the vendor’s own business model. In its original product, ATM Direct made consumers download an ActiveX control program to initiate the encrypted PIN-pad screen – not a way to pass many users’ smell test for malware. When it was a Pay By Touch company, former management attempted to build a revenue model that skewed fees and interchange for the company, but didn’t work for issuers, according to Sheth. Its biggest mistake may have been trying to collar merchants into signing separate processing agreements for the PIN debit transactions. “That’s an absurd proposition,” says Sheth, who points out those deals would have violated those clients’ existing and contractually exclusive card-processing deals with the likes of Chase Paymentech or First Data.

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CheckFree Not HackFree

CheckFree Hacked

First reported by The Register, it seems that CheckFree's website was, "webjacked" and users were redirected to a "blank" website that tried to install malware. Imagine how exponentially more "effective" the "webjacking" would have been if users were "redirected" to what looked to be CheckFree's site vs. a blank page. Here's a story about the hack from Brian Krebs of the Washington Post...the original Register report can be accessed in "Related Stories" below.

Hackers Hijacked Large E-Bill Payments Site

Hackers on Tuesday hijacked the Web site CheckFree.com, one of the largest online bill payment companies, redirecting an unknown number of visitors to a Web address that tried to install malicious software on visitors' computers, the company said today.

The attack, first reported by The Register, (Online payment site hijacked by notorious crime gang ) a security news Web site, began in the early morning hours of Dec. 2, when Checkfree's home page and the customer login page were redirected to a server in the Ukraine.

CheckFree spokeswoman Melanie Tolley said users who visited the sites during the attack would have been redirected to a blank page that tried to install malware. Tolley added that CheckFree regained control over its site by 5 a.m. on Dec. 2. The company said it was still having the malware analyzed by experts.

"The degree of exposure to users is dependent on how current their anti-virus software is and what browser they used to connect with," Tolley said, adding that the company will release more information about the attack as it becomes available.

But Paul Ferguson, a threat researcher with anti-virus firm Trend Micro, said Trend's analysis of the malware indicates that it is a new strain of Trojan horse program designed to steal user names and passwords.

It appears hackers were able to hijack the company's Web sites by stealing the user name and password needed to make account changes at the Web site of Network Solutions, CheckFree's domain registrar. Susan Wade, a spokeswoman for the Herndon, Va., based registrar, said that at around 12:30 a.m. Dec. 2, someone logged in using the company's credentials and changed the address of CheckFree's authoritative domain name system (DNS) servers to point CheckFree site visitors to the Internet address in the Ukraine. DNS servers serve as a kind of phone book for Internet traffic, translating human-friendly Web site names into numeric Internet addresses that are easier for computers to handle.

"Someone got access to [CheckFree's] account credentials and was able to log in," Wade said. "There was no breach in our system."

Among the 330 kinds of bills you can pay through CheckFree are military credit accounts, utility bills, insurance payments, mortgage and loan payments. Browsing through the first few letters of the company's alphabetized customer list reveals some big names, including Allegheny Power, Allstate Insurance AT&T, Bank of America, and Chrysler Financial. See the full list of companies here.

CheckFree's Tolley stressed that the attack occurred during off-peak hours when customer traffic to its Web site is typically low. Still, CheckFree has a huge customer base: The company claims that some 24.7 million consumers initiate payments through its services.

CheckFree declined to say how many of its customers and companies it handles payments for may have been affected by the attack. But this thread over at an Ubuntu Linux mailing list suggests that U.S. Bank may also have been affected by this attack. U.S. Bank did not return calls seeking comment.

Cogito Ergosum...

According to Finextra this morning, French mobile operators and retailers have formed a contactless payments working group they have dubbed the "Ergosum Project."

FYI: The latin term "Cogito, ergo sum" in English translates to: "I think, therefore I am"

The big French mobile operators Orange, SFR and Bouygues Telecom have teamed with eight major retail chains in the country to form a working group dedicated to contactless m-payments systems at the point of sale.

The Ergosum project will work towards a contactless payment system using international near field communication (NFC) standards and implementation specifications found in SIM cards.

The group says it "thinks" it wants contactless payments systems that work with all handsets, operators and retail chains. They should also apply to various services such as bank and loyalty cards and discount coupons, as well as be compatible with existing electronic money systems. The technology must also be coherent with the Payez Mobile system, developed by Orange, SFR and Bouygues Telecom with seven of the country's major banks.

The Payez Mobile pilot - overseen by the French "Secure Electronic Transactions" (TES) cluster in Lower Normanday - was launched in November 2007 to test customer satisfaction and interoperability among systems provided by different suppliers.

Following the trial's success, the banks and operators formed a not-for-profit association to promote the deployment of an interoperable mobile payment service in France.

Ergosum says its initial results are expected to be published in the first half of 2009 and will serve as the basis for pilots and deployments planned in 2009-2010.

The group - being run under the aegis of the private-public industry and commerce research centre Picom of the University of Lille - will also contribute to the work undertaken by the French government's Contactless Mobile Services Forum, sponsored by Luc Chatel, French secretary of state in charge of industry and consumer affairs.