Mobile Payment Industry News

Tuesday, July 29, 2008

Chase Paymentech Breakup = New Payment Processing Option for Online Retailers?

More changes are coming in online payment processing. as more payment alternatives slowly gain traction, with more (can you say HomeATM?) on the way. Soon, online retailers will have another payment-processing option as a big processor plans to split into two.

That company is Chase Paymentech Solutions LLC, which claims to process two out of three e-commerce purchases made by U.S. consumers.

Chase Paymentech Solutions is a 12-year-old joint venture now owned by First Data Corp., the biggest U.S. payment card processor, and J.P. Morgan Chase & Company, one of the country’s biggest banks and card issuers.

After private equity firm KKR (which yesterday announced it is going public) bought First Data, Chase had the option of busting up the joint venture, and announced in May it would do just that.

What it means for the many online retailers that use Chase Paymentech as a processor—including Walmart.com, Zappos.com, Overstock.com and Buy.com—is that the company will split nearly in two, with Chase taking the Chase Paymentech name, 51% of the assets, the Dallas headquarters and most of the employees. Importantly for e-retailers, Chase will retain the Salem, N.H., processing facility that specializes in handling online and catalog transactions.

However, First Data will get a copy of the Salem technology and is expected to launch its own e-commerce processing operation.

Once First Data gets that operation up to speed, expect increased competition for the processing business of online retailers, says payments consultant Steve Mott of BetterBuyDesign. “Many of them will have multi-year contracts, so there will not be a mass exodus right away,” Mott says. “But in time there should be a very vigorous competition for these customers.”

More of the details of the division of contracts and assets will be forthcoming over the next few months, says Mia Shernoff, executive vice president of marketing at Chase Paymentech. Ultimately, she says, retailers will benefit, “because online merchants will get two companies very focused on investing in the business in their own way.”

A First Data e-commerce processor would join an already crowded field in which prices keep going down, especially for larger online retailers. The competition among large processors has driven processing costs for big e-retailers down to under a penny per transaction, says Allen Weinberg of the Glenbrook Partners payments consulting firm.

(Editor's Note: Regardless of lower processing fees due to competition, the Interchange Fees remain much higher than they would be if processed as a "PIN Based" Transaction)

There are certainly plenty of alternatives, but as of now...they're all the same. Providing online retailers with a PIN Debit/Credit option would place HomeATM into a unique position to change the way transactions are done online.

Meanwhile, consumers have several ways to pay other than the familiar pieces of plastic carrying the brands of Visa, MasterCard, American Express and Discover. Adoption of alternative payments is growing gradually and analysts expect it will pick up—especially if more merchants offer and promote these alternative payment types.

Many consumers continue to shy away from buying online because they fear their personal or payment card information will fall into the wrong hands. (What I call the "Hand It Over Buddy" effect) and why yesterday I posted my article entitled: "Reverse Matriculation: Bringing the POS Device Home" in which I talked about why we should put the swipe/PIN Entry device into the hands of online shoppers so they don't have to enter card information.)

In a survey late last year, 75% of respondents agreed that they did not like giving out their credit card number or personal information online, including 36% who strongly agreed with that statement.

The Top 25 Internet Retailers

According to Internet Retailer, in aggregate the Top 500 retailers accounted for a total of $101.7 billion, of the nation's $166 billion in online retail sales in 2007.

The Top 500 grew their online sales by 21.6 percent. The top three e-commerce application and service providers will be listed by Internet Retailer in its August issue. To apply for a free subscription (US subscribers only), click this link.

Published by Chicago-based Vertical Web Media LLC, Internet Retailer is a monthly national business magazine, Web site conference and directory that serve the retailing community. The Internet Retailer family of products focuses on the Internet's vital role in a wide array of retailing activities, including Web merchandising, supply chain management and multichannel integration.

Here's the Top 25 and their 2007 numbers:

(from Internet Retailer’s Top 500 Guide: America’s largest e-retailers (based on 2007 sales)

1. Amazon.com ($14,800,000,000)

2. Staples.com ($5,600,000,000)

3. OfficeDepot.com ($4,900,000,000)

4. Dell.com ($4,200,000,000)

5. HPShopping.com ($3,360,923,280)

6. OfficeMax.com ($3,162,800,700)

7. Apple.com ($2,700,000,000)

8. Sears.com ($2,589,840,000)

9. CDW.com ($2,407,520,463)

10. Newegg.com ($1,900,000,000)

11. QVC.com ($1,880,530,000)

12. Best Buy.com ($1,780,833,285)

13. SonyStyle.com ($1,774,347,120)

14. Walmart.com ($1,574,999,975)

15. JCP.com ($1,500,000,000)

16. CircuitCity.com ($1,400,000,000)

17. Netflix.com ($1,205,000,000)

18. Costco.com ($1,200,000,000)

19. Target.com ($1,153,916,993)

20. VictoriasSecret.com ($1,111,712,000)

21. Williams-Sonoma.com ($1,104,000,000)

22. TigerDirect.com ($974,610,000)

23. LLBean.com ($948,750,000)

24. Gap.com ($903,000,000)

25. HSN.com ($871,200,000)

Canada Gets Ready for Chip and PIN Adoption

The rapidly evolving payment industry is undergoing a new chip and PIN revolution in Canada and merchants will need to stay on their toes to keep up. Industry observers, including a newly appointed Canadian INSIDE Contactless executive weigh in on the issue and Rafael Ruffolo writes about it for ComputerWorld Canada:

By: Rafael Ruffolo, ComputerWorld Canada (29 Jul 2008)

With chip and PIN contactless technology set to hit widespread adoption by 2010, industry watchers are advising merchants to look at how the new payment method can benefit them in fraud reduction and value-added services, rather than worrying about the initial implementation costs.

“This is a little like the early 1980s with PCs,” Catherine Johnston, president and CEO at Advanced Card Technologies (ACT) Canada, said. “We’re beginning to understand the capabilities and the things we will be able to do with chip cards and I think merchants will need to look at the positive gains.”

Whether the positives of chip and PIN – which refers to a movement which will equip all credit cards with a chip and PIN number–will outweigh the implementation costs for Canadian merchants remains to be seen. Members of the payment card industry, including Interac Association, MasterCard Canada Inc. and Visa Canada, are in the midst of a chip and PIN trial in Ontario’s Kitchener-Waterloo area.

France-based payment chip maker INSIDE Contactless creates chip sets that are used for access control, ID, transit and other applications. Kim Madore, the recently appointed vice-president of sales and business development for the company’s Canadian operations, said the results of the Southern Ontario rollout has been promising and mass migration to the contactless payment technology should get underway this fall.

“For merchants, it will be fraud reduction that gives them the business model to move forward with this,” Madore said. “Plus, Canada has had PIN since 1992 when Interac was introduced, so consumers will be very accustomed to the technology and recognize the security benefits.”

But while the hype around fraud reduction might be enough to get consumers onside, some merchants might have a difficult time making a business case on that fact alone. Lise Dellazizzo, senior vice-president of technology research at Harris/Decima said that even though widespread rollout will occur within the next two years, many merchants haven’t had a chance to work with the technology yet..

A significant problem for some merchants, Dellazizzo said, is the expensive hardware and software costs involved in the migration. She said while businesses in the food services industry – which often rent their payment machines – may get off relatively easy, it will be a far different story for merchants in other fields.

“For the folks in the oil and gas sector, retrofitting the pumps will be a costly job,” Dellazizzo told ComputerWorld Canada earlier this year. “It’s been very difficult for the card associations and the players to convince these merchants that there is an ROI in making the move. And when it costs you $15,000 to replace each pump and you’ve got thousands of them across the country, it can be a tough pill to swallow.”

But according to Madore, merchants in many industries – including the oil and gas sector – are already taking steps to plan for the technology. “With respect to Canada and the gas industry, many of the pumps are already retrofitted,” she said. “You take a Petro Canada and they’ve even gone to the extreme of retrofitting for contactless technology as well.”

Johnston agreed with Madore, saying that most service companies have experienced similar changes over the last few decades and should be able to handle the changes that come with contactless payment technology. She added that as early as ten years ago, credit and debit card readers were missing from gas pumps.

“We’re now looking at technology like mobile payment, near field communication (NFC), and dual-interface cards that have both contact and contactless technology embedded,” Johnston said.

Her advice to merchants was to accept the fact that the payment industry is constantly evolving and take advantage of the advancements the technology can offer.

“For instance, if you look at a smaller merchant, they really don’t have a strong business case for issuing their own loyalty program cards,” she said. “But because chips can have multiple applications on the same card, merchants can band together and each put their own applications on consumer credit cards.”

Besides cutting down on the amount of credit cards in your customers’ wallet, Madore said the technology can also make transactions more personal.

“What if you went to a checkout at Tim Horton’s and the terminal actually greeted you with personalized information?” she asked. That aside, the bottom line for merchants is that it won’t be a matter of “if” they upgrade, but rather “when” they upgrade.

Visa Canada has already said Canadian businesses will need to get onboard with the new technology by October 2010 or the liability for payment fraud claims falls to the merchant themselves.

The ongoing Kitchener-Waterloo payment industry trial is scheduled to be completed this fall.

Copyright © 2008

ITworldcanada.com

Monday, July 28, 2008

Reverse Matriculation: Why Wedgies Are All Good!

Online Banking (the security of which) has been taking a beating over the past couple of weeks. But there's good news too...according to the BBC, Barclay's PIN Sentry Device has made online banking more secure. ( read more on Barclay's PIN Sentry Device and HomeATM's Wedgie) at: HomeATM Has Powerful Potential!

Last Wednesday, I posted a relatively sarcastic article pointing out how blatantly insecure paper checks were (are)...while questioning how it was, that they lasted so long. It got me to thinking... in the future, what will be the perception of the way we process today's online transactions?

So, please allow me a moment in order to set the table for the following blatantly tongue-in-cheek, (yet truly sincere) "insecure scenario:" I will use a brick and mortar example and tie it in with it's analogy to an "online purchase." Ready?

Okay, here we go...Let's imagine that you enter into a store, and you find something you'd like to purchase. Naturally, you pick the item up (hit select) and walk up to (proceed to) the checkout counter (checkout basket).

Much to your chagrin, when you arrive at the checkout counter...there isn't anyone "physically" there....nor is there a "physical" POS device which you can utilize for self-checkout. (e.g. Something along the lines of NCR's FastLane or Pay at the Pump device whereby you can "swipe" your own card and checkout.) Instead...what you find at this "unmanned" checkout counter, is a pen and a piece of paper. The piece of paper contains three rectangular boxes with instructions.

1. The first instruction tells you to: "write down (enter) your credit/debit card account number in box 1.

2. The second instruction informs you that you'll need to: "write down (enter) your secret 3-digit code on the back of your credit/debit card in the box labeled number 2" (for "enhanced security" (sic) this information is required to be entered, thus potentially hacked, by the card companies)

Furthermore, you are instructed that you CANNOT leave with your goods, as they are to remain with us here at the store. We will, however, ship them to you within 24-72 hours...if all goes well...therefore:

3. The third instruction informs you that you need to "write down (enter) your name, address, and zipcode" in box number three so we can ship your goods when the time comes. Please the sheet of paper with your name, address and card information, in the basket and leave the store or continue shopping....

Question: When put it in these terms, would you follow the instructions posed at the checkout counter? You wouldn't do it would you?

Yet, fundamentally this is how every online transaction is currently done. (except of course, ones that are abandoned*) *Note: Checkout abandonment is a costly problem for Internet Retailers, yet a problem which HATM's wedgie also helps to alleviate.)

This brings me to my point on why HomeATM's "Wedgie" is "all good." Under the aforementioned scenario, it is blatantly clear that, when it comes to online banking or online transactions, "the card swiping/PIN Entry Device" should be put into the hands of consumers!

Hand It Over Buddy

One's first reaction might be to think that asking the consumer to utilize a personal "card swiping PIN Entry Device is not how checkouts are currently done at brick and mortar locations. There, it is the retailer who is provides the card swiper/ PIN entry device. True, but therein may lie the problem(s). Let me explain...

It was these very same retailers in the "bricks and mortar" world who, "for security purposes" altered their checkout procedures by "shifting" the act of "swiping the card" over to "the consumer."

The reason behind them doing so is because it seems that there were instances whereby some customer's cards were being swiped (by insiders) not only into the retailers POS device, but also into a secondary magnetic card reader. Thus the information contained on the magnetic stripe, was being captured exposing that customers data to potential identity theft/fraud.

Word got out in the press, and in response (and to prevent this from happening), it was decided that the problem could be alleviated if the consumer never "handed it over." but, instead, "swiped the card" themselves. Thus the recent practice of consumers swiping their own cards was born.

So there's nothing behaviorally "new" when it comes to asking a consumer to swipe their card themselves. They've been doing it for a while. In fact, the practice of entering their PIN was existant well before the actual swiping of the card with the use of swivel devices that turned toward the customers in order for them to be able to enter their pin.

Swipe At Home or "Don't Leave Home With It"

With that said there really is no difference between asking a consumer to swipe their own card at home, or swipe it at a retail location. But to be sure, let's analyze:

1. Consumer Swipes their card at the physical "bricks and mortar" store location ...okay, got it...now let's do it the other way...

2. Consumer Swipes their card at "home" where the "virtual store" is located.

Seems the same to me.* *except of course, at home, whereby neither the card nor the Wedgie ever leaves the possession of the consumer, thus shielding said consumer from the potential harm caused by "a rigged" swipe device...

(See: Cost Plus Alerts Consumers in Southern California Area of Suspected Electronic Funds Transfer Unit (PIN Pad) Tampering at Eight Retail Locations)

It is appearing more and more evident that until someone figures out a way to secure transactions without them, a peripheral card swiping/PIN Entry Device that can be easily connected to a PC, PDA and mobile phone, is an online shoppers "best bet" to protect them against fraud.

Thus...HomeATM Wedgies are "all good"...

Friday, July 25, 2008

Number of Online Users in China Surpasses U.S.

There were 253 million Chinese internet users as of June 30, compared with 223.1 million in the United States. The web is widely used for business, shopping, and education, but above all to receive news that is often censored by the authorities. Strict control by Beijing, which arrests those who criticize the government and blocks unwelcome news. The new estimate of Internet users from the information center, which operates under the government-controlled Chinese Academy of Sciences, only represents about 19 percent of people in China, underscoring the potential for growth...

With 253 million internet users registered at the end of June, China has surpassed the United States as the largest online community in the world, as the China Internet Network Information Centre announced yesterday. But censorship of "unwelcome" news is also growing.

Since June 30, 2007, there have been 91 million new users, a growth of 56%. 84.6% of these, or 214 million people, have high speed broadband connections. There are 12.19 million websites registered with the domain "cn", for "China".

The increase is in part due to the rapidity and relative freedom of information on the internet, both on some websites and in the forums. Events like the snowstorms in January and February, the earthquake in Sichuan in May, and the voyage of the Olympic torch were followed by millions of people through the internet, where they received news that was often not provided by the rigidly controlled Chinese media: 81.5% of Internet users, or 206 million people, read news online, compared to 71% in the United States and 67.1% in South Korea.

Liu Bing, director of research and development at the center, observes that the internet is becoming "the most influential mainstream medium with the biggest development potential", and emphasizes the low cost and the increasing demand in the countryside, and also the use of the internet for entertainment, for example to listen to music. He expects 285 million users by the end of 2008. The strong growth is significant in part because Beijing is encouraging the use of the internet for business and education purposes, but is trying to block access to sites that it considers "subversive" (these are often the sites that deal with human rights, and many foreign sites) or that provide pornography. Dozens of people have been arrested for posting to the internet articles or e-mails that are critical of the government, or "dangerous to national security". In March, access was blocked to the photos of the protests in Tibet posted on YouTube.

The internet is also used to exchange information and opinions, through forums, on issues of current affairs that the media and even websites themselves largely ignore: like episodes of misgovernment and injustice, which have repeatedly provoked fiery protests by tens of thousands of internet users in a few days.

Online shopping is also very widespread: in the first quarter of 2008, the Chinese website Baidu.com had a profit of 265 million yuan (26.5 million euros), an increase of 87%. During that period, Baidu had a 63 percent share of China's search engine market, while Google had about 26 percent, with Yahoo trailing far behind, according to iResearch, a market research firm based in Beijing. And Tencent, a popular social networking, gaming and leisure site, now has a stock market value of $15 billion, making it one of the world's wealthiest Internet companies. By comparison, Amazon.com is valued at about $30 billion.

"The Internet market is the fastest-growing consumer market sector in China," said Richard Ji, an Internet analyst at Morgan Stanley. "And only 19 percent of Chinese people have access to the Internet. We are still far from saturation.

So the next three to five years, we're still going to see hyper-growth in this market."

High Price of Gas Means More People Shop Online

Depending on your perspective, online sales are up either despite...or....because of the economic slowdown.

With gas prices continuing to climb, a growing number of shoppers are deciding to skip car trips to the mall in favor of online merchants. Even as many brick-and-mortar stores are struggling, 11% of US consumers surveyed by Nielsen in June 2008 said they were shopping more on the Web as a result of gas prices.

"E-commerce is a bright spot," said Jeffrey Grau, senior analyst at eMarketer. "While retail store growth is in the middle-low single digits, e-commerce is still growing at least in the mid to high teens."

"With gas being such an issue, we know that mall traffic is down more than off-mall traffic," said Mike Boylson, CMO of JCPenney, in a July 2008 New York Times article. Mr. Boylson said J.C. Penney had an 8.7% increase in Internet sales in Q1 2008, compared with a 7.4% decrease in sales at stores open at least one year. The Times also reported that Gap had an 11% decline in same-store sales in Q1 2008, but a 21% increase in online sales.

The effect of gas prices on consumer behavior has been building for a while. Some 13% of adult consumers in the US surveyed in January by Vertis Communications said they were buying more online.

Over one-half of respondents to an April 2008 Piper Jaffray study selected rising gas prices as an incentive to increase online buying, while slightly less than one-half (48%) cited lower prices as a reason for making Web purchases.

Another April survey by iCongo revealed that high gasoline prices were an incentive for 33% of shoppers to purchase more online.

Thursday, July 24, 2008

HomeATM Helps Contribute to SmartCard Marketing Systems Growth

Press Release As Stated by SmartCard Marketing Systems Inc. (PINKSHEETS: SMKG)

"Management is pleased to announce the first quarter of 2008 results, whereby many months of development

began to produce tangible results for Smartcard Marketing Systems.

Customers using the VelocityMoney.com Internet platform processed almost $450,000 in deposits in the first quarter, a 637% gain over the first quarter of 2007.

The company also began processing payments from use of the "HomeATM" for the first time during this quarter. These advances contributed to a 34% increase in operating results from the first quarter of last year.

During this quarter the company's distributors activated over 1,100 new prepaid MasterCards our largest month recorded. As our business continues to grow with new merchants and consumers our existing clients have only just begun to utilize our services which will result in continued exponential results over the next 24 months as they bring service levels and usage to a larger capacity of their clients.

Additionally we have filed our first quarter financials of 2008 on PinkSheets.com and status has been upgraded to limited information. We are really pleased with these results and continue to pursue on having our status to current with additionally filings to be completed throughout the month of August."

Contacts:
Smart Card Marketing Systems Inc.
Max Barone - CEO
1-866-774-2555
maxbarone@gosmartcard.com

www.gosmartcard.com
www.velocitymoney.com
http://www.velocitymerchant.com/

Study: 75% of Banks Websites are Flawed

U of M Study: Most Bank Web Sites Flawed

A new University of Michigan study finds that more than 75 percent of bank websites had at least one design flaw that cannot be fixed with a patch and could make customers vulnerable to cyber-thievary.

Atul Prakash, a professor in the Department of Electrical Engineering and Computer Science, along with a pair of doctoral students, examined the Web sites of 214 financial institutions in 2006.

The flaws center around the layout of websites and the placement of log-in boxes and contact information, as well as the failure to keep customers on the initial website they visited. The flaws are not things that can be fixed with a patch. Prakash said some banks may have taken steps to resolve these problems since this data was gathered, but overall he still sees much need for improvement.

He got the idea for the study after noticing problem with his own bank's website. "To our surprise, design flaws that could compromise security were widespread and included some of the largest banks in the country," Prakash said. "Our focus was on users who try to be careful, but unfortunately some bank sites make it hard for customers to make the right security decisions when doing online banking." The flaws leave cracks in security that hackers could exploit to gain access to private information and accounts.

The FDIC says computer intrusion is a growing problem for banks and their customers.They will present the findings for the first time at the Symposium on Usable Privacy and Security meeting at Carnegie Mellon University July 25.

Is This Weird? Dumbographics 101

This from eMarketer Daily. To visit eMarketer Daily and subscribe to their daily newsletter, you may do so by clicking on the following link: http://www.emarketer.com/welcome.aspx

African-Americans, Online and Shopping

Over 3 million new Internet users in three years

African-American Internet users surveyed spent more than one-quarter of their total media time online in October and November 2007, according to the Radio One-sponsored "Black America Study," conducted by Yankelovich. (Editor's Note: Is that the same one from "Weird Al" infamy?)

Fully 68% of those surveyed by ("Weird Al") Yankelovich were online (compared with 71% of all Americans). More than nine out of 10 African-American teens surveyed said they used the Internet. African-Americans who lived in the South were least likely to be online; only 63% of that group used the Internet.

Two-thirds of responding African-American Internet users said they had shopped online. Among all US Internet users in 2007, 79% were online shoppers, according to eMarketer. A 2007 Media Audit study found that African-Americans trailed other ethnicities in online buying, with just over four in 10 respondents having made an online purchase.

eMarketer predicts that well over 3 million new African-Americans will join the Internet-using population in the next three years, and that more than 61% of the US African-American population will be online by 2011.

Mobile Phones Easy Target for Hackers?

In a new report titled "Consumers Are Apathetic About Mobile Banking" by Emmett Higdon from Forrester Research, "online bankers and bill payers are uninterested in the mobile banking pitch.

Why? Online bankers and bill payers don't see their transactions as urgent enough to warrant mobile access. (urgent or secure enough?) Instead, they prefer to wait until they can access the Web, ATM, or phone channel."

There may be another variable involved behind their lack of enthusiam. For instance, the subject matter in this article from "The Times of India" focuses on how easy it is to hack into mobile phones and steal bank information. That might play a part in the online bankers and bill payers reluctance...

NEW DELHI: Planning to buy that fancy smart phone? A word of caution: Internet-enabled phones have gaping security weaknesses waiting to be exploited, warn cyber security experts.

Any smart phone — including Blackberry, Windows Mobile, iPhone and Symbian phones — can be hacked by a nerd with a little bit of code and some cunning. And they don't stop at data and identity theft alone. Nor are they content with unleashing viruses on the operating system of your mobile. (Even Bluetooth makes your phone a potential target here.)

New Age mischief makers have learnt how to bug your phone and remote-control it. They can steal your bank information, send out a mischievous SMS to your girlfriend (who might just dump you!), copy your top-secret files or simply spy on every call/SMS you make from your phone.

In fact, they can even 'modify' your SMSes before these are sent out to your contacts — and you wouldn't even know it. That's not all. Hackers can also use your phone to spy on you by switching it on.

They can activate the camera and eavesdrop on your discussions during a business meeting, or while you are secretly negotiating a lucrative job offer with a rival company. What's more, they can even do an audio/video recording by sending an SMS command.

If you thought all this sounds too far-fetched, think again. Cellphone users in the US are already battling with the problem — 200 mobile viruses are on the loose and more are being spawned every day, says TowerGroup, a US-based research firm. India, too, is a prime target. Instances of mobile viruses are already rampant and experts say the threat is only going to get worse in a market growing at 11.75% per annum.

On last count, there were over 261.07 million mobile connections across the country: more than 50% phones being used are smart phones. No wonder companies that track internet and mobile security are worried. "Smart phones are easy targets for hackers. And studies show the threat is doubling every six months in India," says Anand Naik, director, Symantec India.

How do they do it? The tactics have evolved with the technology. In 2002, IBM researchers found that a cellphone's security card could be cloned in minutes. A hacker could make calls and route charges to the victim's account. The hacking technique, known as a partitioning attack, analyses power fluctuations in a phone's SIM card, allowing the attacker to read the security codes stored inside. However, the technique only worked on GSM phones and required that the attacker have access to the phone for at least a few minutes.

But hackers have become smarter. Now they simply send a spyware or snoopware through an SMS/MMS or GPRS, email or Bluetooth. "The message can even be disguised as an SMS from the service provider. The moment you click on it the spyware/virus gets activated. It starts working quietly and the user has no clue that someone is tapping everything he does. Once the virus is in, it can block/modify SMSes, intercept calls, upload data, delete or copy the address book," says Rajat Khare, CEO, Appin Group, an information security company. Spam and SMiShing (SMS phishing) are also beginning to make their way into smart phones.

So what should a user do? A few simple steps could go a long way. Adopt a multi-layered security approach. Protect mobile devices with antivirus, firewall, anti-SMS spam, and data encryption technologies and install regular security updates to protect phones from viruses and other malware. And yes, don't click blindly on any SMS, for someone may just be spying on you on the sly.

Maybe that's why India's Business Standard reports that the Reserve Bank of India has asked banks "to keep their mobile payment services on hold till it issues final guidelines for such transactions." The RBI is in the midst of finalizing its Operative Guidelines for banks on mobile payments. It recently posted a draft of the guidelines and solicited comments.

According to today's RBI notice, "While RBI has no objection for use of mobile channel to provide basic services such as mobile alerts for credit or debit entry, balance enquiry etc. which are in the nature of providing information, due care needs to be taken for permitting the channel for customers to initiate payment instructions."

Wednesday, July 23, 2008

Checks Decline, PIN Debit Rises

Here's a surprising (I'm being sarcastic) report...

I see only 9 pieces of information an identity thief would want...and it's printed on one piece of paper for his (or her) convenience. At least it doesn't contain really dicey information, such as: "our bank's name", it's routing number, our account number, our name and address...What's that you say? Our signature too? Oops! Nevermind...

And to think that we've been handing that information over to complete strangers for decades. (who in turn, forward them on to additional complete strangers) When I look back I'm still amazed that the paper check lasted as long as it did. It's a different world out there today. In a way I kinda miss the old one...

According to an American Bankers Association. report, a net 23% of consumers plan to decrease their use of checks over the next two years, while a net 14% plan to increase their use of PIN debit.

Editors Note: Prediction: That 14% number will end up being much higher as consumers learn that PIN debit eliminates holds at the gas pump...and protects them against what I consider to be the banking industry's "biggest scam (or should I call it "skim" in history" ... their so-called overdraft "protection" program. PIN Debit is processed real time...Hey, I just had an idea...has anybody started the "PIN Debit Association" yet?

Bill payment remains the last stronghold of paper-based payments -- for the time being. Checks continue to be the most commonly used bill payment method, with 71% of consumers paying at least one recurring bill per month by writing a check. However, on a bill-by-bill basis, checks account for only 49% of consumers' recurring bill payments (down from 72% in 2001 and 60% in 2003).

1.4 Billion Internet Users to Grow to 2.4 Billion Within 8 Years...IDC

25% of the World's Population Use the Internet Regularly

To expand on my post a couple weeks back entitled: "HomeATM Has Powerful Potential, I bring you this article from VUNet.com on Global Internet use. But before I do, I thought it important to point out the distinction between Web PC users and "web enabled" users. There's two sets of numbers out there.

These numbers include "web enabled" users and provide some insight as to not only the size of our potential market, but why HomeATM provides "Secure PIN Transactions From ANY Web Device." Make no mistake...HomeATM's potential market is not limited to PC users.

In order to provide an example of why that's an important distinction, here's a quote taken from a recent NY Times Article entitled: "Inside Nairobi, the next Palo Alto?" (*The link to the "full article" has been provided below)

"Nairobi is home to a digital brew that invites optimism about its chances for creating unusual innovations. The city has relatively few wired phone lines or networked personal computers, so mobile phones are the essential digital tool. Four times as many people have them as have bank accounts. Text messages are far more popular than e-mail. Safaricom, the dominant mobile provider, offers a service called M-pesa that lets customers send money with text messages. Nokia sells brand-new phones here for as little as $33. - NY Times"

Here's the article from Vunent.com:

A full "quarter of the global population" will regularly use the internet during 2008, according to IDC's Digital Marketplace Model and Forecast.

The figure of 1.4 billion people is set to jump to 1.9 billion over the next four years, bringing internet access to roughly 30 per cent of the world's population.

"The internet will have added its second billion users over a span of about eight years, a testament to its universal appeal and its availability," said John Gantz, chief research officer at IDC. "These trends will accelerate as the number of mobile users continues to soar and the internet becomes truly ubiquitous."

Net-enabled mobile devices will help drive the global online trend, surpassing the desktop PC as the primary means of accessing the internet by 2012, according to the report.

China, which last year overtook the US in terms of overall internet users, will see its online population increase from 275 million today to 375 million in 2012.

Revenue-generating opportunities will be driven by consumer and business-to-business purchases, and one billion global online shoppers will account for $1.2tr worth of business-to-consumer transactions by 2012.

However, it is in the business-to-business arena that IDC forecasts the most spectacular growth rates, generating estimated worldwide revenues of $12.4tr over the next four years.

Here are the May comScore numbers for total Internet audience

Worldwide - 853mm (up 10% from 772mm last year)

North America - 185mm (up 4% from 178mm last year)

Europe - 240mm (up 8% from 223mm last year)

Asia - 323mm (up 14% from 283mm last year)

Latin America - 63mm (up 19% from 53mm last year)

Middle East/Africa - 43mm (up 23% from 35mm last year)

As is typically the case, the smallest markets are growing the fastest. But a couple other things stand out to me. North America only added 7mm this year from last. Asia added 40mm Internet users in the past year. Europe added 17mm. Latin America added 10mm. Africa and the Middle East added even more Internet users than North America.

Tuesday, July 29, 2008

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