Category: Payments

Payments, Security

Lower limits are not the answer to fraud

Colin Henderson

Barclays are following the normal pattern of mitigating risk through reduction in transaction limits.  This is inconvenient to customers and drives up costs, by insisting on manual intervention for “above limit” transactions. And of course, the limit doesn’t solve the fraud .. it just forces the bad guys to be even more creative at being high volume, low cost operators, functioning within the lower limits. Finextra: Barclays limits online funds transfers to fight phishing fraud Barclays has lowered its online transfer limit from £2000 to £1000 to protect customers from fraud. Relevance to Bankwatch:In order to compete effectively, and be … Continue reading Lower limits are not the answer to fraud

Payments

Single Euro Payments Area (SEPA) – significant implications for Banks with Euro presence

Colin Henderson

McKinsey study compares different approaches to banks’ making money, and found three broad approaches. The McKinsey Quarterly: How Europe’s banks should prepare for payments reform 1. Institutions in the United Kingdom and France are “balance earners.” UK banks earn revenue largely from the interest on credit card balances, while their French counterparts generate income from interest rate margins3 on current accounts.2. “fee-oriented” banks, including institutions in Italy, Poland, and Spain—charge their customers for everything from transactions to account maintenance. Such activities are largely profitable for institutions in Italy and Spain (2002 profits totaled €3.9 billion and €1.5 billion, respectively) but … Continue reading Single Euro Payments Area (SEPA) – significant implications for Banks with Euro presence

Payments, Security

Fujitsu Transaction Solutions software may have stored PIN and customer information

Colin Henderson

This story indicates that Fujitsu software may be part of the problem with the Citibank ATM fraud last month. Visa warns software may store customer data | CNET News.com A popular software that retailers use to control debit-card transactions may inadvertently store sensitive customer information, including PIN codes, says Visa. Relevance to Bankwatch: Banks have to worry about information as much (more) than they do about money. Banks need Chief Information Officers, and corporate principles to govern storage, and use of information.  This includes specific rules surrounding authentication, and authorisation of services. These principles must be applied to third parties … Continue reading Fujitsu Transaction Solutions software may have stored PIN and customer information

Payments

Google payments now in limited release

Colin Henderson

Its now official. Most banks haven’t figured out how or why they should worry about Paypal, and now Google is here. Help Center: How do I accept payments through Google? This feature allows individuals based in the United States to sell commercial items on Google Base and accept payments for these sales through Google. So lets consider the consequences here … Purchaser can pay seller through Google. But the actual money is coming out of the purchasers credit card. So in effect Google is in competition here with the payment networks, the card acquirers. The card issuers have to ensure … Continue reading Google payments now in limited release

Payments

The future of credit card networks – An AEI/ Brookings Paper

Colin Henderson

Fascinating paper, based on the introduction.  its seems to be an excellent primer with clearly written background to the credit card industry, with explanations about the three components; issuers, acquirers, and networks. It provides five scenarios for consideration: Merchant Plaintiffs Prevail: No More Uniformity in Interchange Fees Regulation of Interchange Fees Nationalization of Credit Card Networks Breakup of MasterCard/Visa Reorganization of MasterCard/Visa Conclusion: We are not sufficiently clairvoyant to predict which of the multiple scenarios for the card industry will come to pass. Our educated guess at this point is that if the interchange fee cases eventually go to trial … Continue reading The future of credit card networks – An AEI/ Brookings Paper

Payments

Nacha to pilot online authentication concept

Colin Henderson

Following on this proof of concept announced last year, NACHA is to move to pilot. The concept levers Banks' investment in mandated (US) two factor authentication, and requires ecommerce transactors to log into their online banking to validate payments. This makes sense and is not dissimilar to the Canadian Interac Debit which is slowly moving out there. It remains to be seen though, whether it can be implemented in a way that's not inconvenient to the user, particularly compared to credit card purchases. News (April 13, 2005) An operational test of a system by which consumers could instruct their banks … Continue reading Nacha to pilot online authentication concept

Innovation, Payments

Online Credit Card security and the PSP sector

Colin Henderson

Good summary of some of the changes developing in the credit card industry.

Relevance to Bankwatch:
The message here is that there is no magic bullet, and despite the several initiative listed here, liability fraud is not eliminated, and liability remains with the card issuer in many situations.

SECPay – Online Credit Card Security and the PSP Sector

Note: About SECPay

SECPay is the UK’s largest independently owned processor of secure, real-time, online credit and debit card transactions. Specialising in the provision of payment services for merchants on the Internet, through Call Centres and for Mail Order Fulfilment Houses. SECPay handles the capture, authorisation and settlement of credit and debit card payments and all the associated electronic and physical security required.

Despite the early fears surrounding e-commerce transactions, using credit cards online has become safer due to the steps taken by key industry members. Chris Dipple, Technical Director at leading real-time payment service provider, SECPay, explores how online credit card security has improved and what still needs to be done to ensure all online credit card transactions are as secure as possible.According to the IMRG, Internet Shopping is expected to be worth around £17 billion in the UK this year, representing around 7% of all retail sales. The IMRG predicts that 400 million orders will be made by the UK’s 16 million internet shoppers. With this phenomenal level of financial transactions, online payment methods have evolved significantly over the last decade.

Continue reading “Online Credit Card security and the PSP sector”

Payments, Security

Association of Financial Professionals – new Payments Risk Survey; Feb 2006

Colin Henderson

Association of Financial Professionals new report, on how US corporations manage payment risk.  They key point is that the majority of Corporations have risk mitigation plans, but I’d note that its the larger corporations, and its not top of mind for many, with 19% of large corporations having no written plan. Payments Risk Survey Key findings are: Payments Fraud Sixty-eight percent of organizations were targets of attempted or actual payments fraud in 2005 Checks and ACH debits were the most frequently used vehicles for payments fraud The majority of organizations (54 percent) that experienced card payments fraud suffered a financial … Continue reading Association of Financial Professionals – new Payments Risk Survey; Feb 2006

Payments

Banks beware – Paypal is starting to wake up

Colin Henderson

After being purchased by eBay and focussing that auction market for several years, Paypal is getting back to its roots.  Banks should worry about this. Third Screen: PayPal goes mobile – Mar. 6, 2006 “It’s reasonable to think that PayPal will be offering mobile payment services through mobile devices and text messages to its customers,” says Schatt. “It’s a logical extension to what they do, and they’re well-positioned to do it. They’ve got a secure and trusted payment system which will make it possible to pay on the go.” Unfortunately for Banks and credit card acquirers, this move will disintermediate … Continue reading Banks beware – Paypal is starting to wake up

Payments

NTT DoCoMo, Mizuho tie up for phone credit card

Colin Henderson

The convergence of phones, electronic wallets, and payments must only be a matter of time.  Of critical importance, will be the password methodology to ensure even if the phone is stolen it can’t be used by the bad guy. NTT DoCoMo, Mizuho tie up for phone credit card TOKYO, March 4 (Reuters) – NTT DoCoMo Inc , Japan’s largest mobile phone operator, will tie up with Mizuho Bank and Credit Saison Co. Ltd. to start a service allowing mobile phones to be used as credit cards, the Nihon Keizai Shimbun said on Saturday. In an agreement that the paper said … Continue reading NTT DoCoMo, Mizuho tie up for phone credit card