Monnet Should Be Ready for 2010 Launch

Visa and MasterCard might have a new member of their dynamic duo sooner rather than later...or will Monnet paid Visa and MasterCard into a corner?



As I stated in an earlier post, Monnet is a project designed to provide European's with a independent debit system to that of Visa and MasterCard.  Deustche Bank and the European Central Bank created Monnet, an alternative pan-European Debit System  to challenge the dynamic duopoly known as Visa and MasterCard.



Fact: Europe has already converted to Chip and PIN, and because the US has not yet made the shift, Europe is seeing an enormous increase in "Card Not Present" fraud.|



One of the underlying reasons for that "enormous increase" is that Visa and MasterCard push the less secure "signature debit" over the more secure "online (PIN) debit"   Signature Debit requires only the Primary Account Number...thereby opening a door for fraudsters to clone European Cards and use them in "Card Not Present" environments, i.e. "the web."



Keep in mind that HomeATM closes that door tight, by eliminating "card not present" transactions entirely...with the only PCI 2.x Certified 2FA 3DES E2EE PIN Entry Device in two hemispheres.  (Type = CNP     Swipe = Card Present)



Think about it.  Even if the US were to switch over to Chip and PIN, it would not address the problems we are having with web-based transactions.  What would?  Swiping the card and converting the transaction into a "card present" one.  Of course it doesn't hurt that HomeATM already has an EMV ready PIN Entry Device which would read the integrated chip on smart cards and provide PIN Entry.  

Either way, until online shoppers are instructed to "swipe" vs. "type" all the solutions provided by all the solution providers in the world won't address eCommerce transactions.  You must capture the data on the magnetic stripe or on the integrated chip/smart card.  You cannot do that when you type.  All that does is create a card not present environment...and card not present transactions create card not present fraud.   



Retail based solutions, such as Chip and PIN, Contactless TAP and GO, RFID, NFC etc are not designed for use on the web.   All the aforementioned solutions require that the card be present.  Tap what and go?  The card.  Chip and PIN requires a Chip and PIN "card" Reader.  NFC requires an RFID enabled "card." 



What does the web require?  Typing your number into a box.  Try walking into a store and writing a credit/debit card number onto a piece of paper and handing it to the clerk saying this is all  I have.  It works on the web right?  Because in effect, this is what online shoppers are doing every day.   



Anyway...back to Monnet:  



I just read that Monnet – the planned pan-European debit network that aims to challenge Visa and MasterCard – is set to be completed in November of 2009. 

Bernard Dutreuil, The head of systems and the means of payment unit at the French Banking Federation (FBR), told delegates at a cards and payments conference held by the European Financial Management and Marketing Association (EFMA) that Monnet should be ready for launch from 2010.

As reported earlier on the PIN Payments News Blog (see related posts below) a number of French and German banks are involved in the Monnet project, including Deutsche Bank, Deutsche Postbank, Commerzbank, WestLB, Banque Populaire, Caisse d'Epargne, La Banque Postale and Société Générale.



From  Lafferty Cards Insider:  (subscription link provided below)

"According to Dutreuil, Monnet is the ‘right answer’ for Europe and allows banks and payment players to fully embrace the Single Euro Payments Area (SEPA): “The international card schemes are quite profitable and we need to end reliance on them. To stay independent, we need an alternative to the existing profit-oriented international card schemes.”



Other Pan-European cards schemes, such as the Euro Alliance of Payment Schemes (EAPS) and PayFair, also aim to compete against the dominance of Visa and MasterCard.



EAPS chairman Ugo Bechis said the best way to build a new European scheme is to build on the ones that exist already. While there may be a single European payments scheme in the future, Bechis said that in the next three to five years, it would be more logical to build on and extend the capabilities of the current domestic schemes.



During his presentation at the EFMA conference, Dominique Buysschaert, the CEO of PayFair, stressed that the technical infrastructure for the PayFair scheme is ready and discussions are well underway with market participants in Germany and France. PayFair is scheduled to be piloted in Belgium in October.



Buysschaert also rejected suggestions that PayFair is a retailer-led scheme. “We have a neutral position”, he said."

Related Posts:

Monnet Talks...Will it Walk the Walk? | PIN Debit Payments Blog

Aug 13, 2009

MasterCard Inc. and Visa Europe could face competition in the coming years from new European-centered payment card networks such as Payfair and Monnet. Belgian retailer Colruyt Group is planning to begin testing the Payfair debit card ...

PIN Debit Payments Blog: Monnet Could Challenge V/MC with ...

Jul 10, 2009

I would suspect that Monnet would be based on the Chip and PIN system, which is more secure than what Visa and MasterCard have been pushing with their signature debit. I have long said that signature debit should be scrapped in it's ...

Test in the Works for European Card Cardline Global | Tuesday ...

Jul 14, 2009

Several major French and German banking companies are said to be backing the Monnet debit card, and said last week that they expect to create a company then that would focus on building a payments network. See "Is Monnet Painting Visa into a Corner?