A brief update on mobile payments in Korea.

Lee Kidder from TowerGroup writes about the classic "chicken and egg" problem of many new services.

In this non-zero-sum game, all or most parties stand to gain as a result of participating, making the net result positive. EIPP is therefore a win-win proposition for all, and lockbox is dead. The end. The only problem with this scenario is that isn't happening now and won't happen in five years despite the interest and activity in EIPP and in business-to-business (B2B) e-commerce in general.

Following its earnings announcement and conference call yesterday, Concord EFS is trading down almost 20% this morning. Analysts were pleased with revenue growth at the company but questioned the cost structure of the business and the pressure it's putting on margins. Concord EFS' largest competitor First Data Corp. is also trading down over 10% this morning.

Mosaic Software‚s Postilion and SmartTrust‚s Delivery Platform (DP) products have been integrated to make it possible for mobile operators and financial services providers to accept authenticated payments from a mobile handset. The solution employs SMS or GPRS messaging to create a secure payment channel from the handset‚s SIM card through to its user‚s bank account.

Scotiabank has announced a new cash-back feature on its Classic Visa cards.

USA Today reports on paying with your fingerprint.

The FDIC is hosting a seminar tomorrow in New York (which will also be webcast) on this subject.

Chris Weeldreyer writes how Internet banks haven't changed the world -- at least not substantially.

Customers don't care about the latest technology if it doesn't satisfy their basic goals. The Internet-only banks provide a good cautionary tale here. Among many other customer service gaffes, many of these banks have failed largely because they didn't provide a good way to accept deposits or dispense cash. It seems obvious in hindsight, but designing a bank that didn't satisfy the basic need for depositing and withdrawing money was doomed to failure. How can you avoid making expensive mistakes like these?

Based upon the carriers listed as offering the service (KTF and LG Telecom), this appears to be a Brew application.

Yang said that customers will need a Kookmin Card service and to download the mobile payment settlement program from Kookmin Card's website onto their handsets in order to use the service. Only KTF (016 and 018) and LG Telecom (019) mobile service users will be able to utilize the service. ... Customers will be able to settle payments by pointing their phones at the point-of-sale (POS) device at the sales counter and pressing their password into the phone's keypad, just as they do when they switch TV channels with remote controller. Then the money will be charged to their credit card.

Visa International has posted version 2.0 of its Proximity Payments Messaging Specification.

Sue Gordon-Lathrop, VP Emerging Consumer Enviroments at Visa International, pens this article on the need for proximity payment solutions.

With all proximity payments technologies, Visa is providing support to its member banks based on the demands and requirements of their customers. Even as a mature technology proximity payments will not replace the trusted plastic payment card; rather it will add value and utility to the cardholder, and improve efficiencies for merchants.

American Express this morning introduced the new Cash Rebate Card.

Cash Rebate of up to 5% - The cash reward is based on customer spend and payment behaviors. The annual cash reward for purchases is up to 3%. There is an additional rebate of up to 2% for purchases in months in which the account carries a balance. An account is eligible for a rebate applied to a maximum of $50,000 of eligible annual spending.

The Omaha World-Herald has an interview with FDC's Eula Adams.

A delicious article about how the world might evolve...Google winning "all".

RFID Journal profiles ExxonMobil's Speedpass.

"Giordano says the company‚s market research finds that more than 92 percent of Speedpass customers are highly satisfied with the technology. Giordano says Speedpass are likely to make one additional trip per month to the gas station, which translates into a significant increase in revenue. "We‚re very happy with our investment," he says."

The benefits to merchants are many. They can collect data that are untrackable through cash purchases and, by moving customers through more quickly, save on labor costs.

It says Speedpass customers tend to make an additional visit a month, which translates into a 20 percent increase in their spending. Although the use of Speedpass in convenience stores is still fairly low, the average sale tends to be larger than those by cash or credit card. A typical cash transaction is $3 to $3.50, on average, while credit card sales tend to be 60 percent higher. The average Speedpass transaction is more than double the cash amount, Mr. Clayton said.

Grocers say that users like the convenience of the system. "It speeds up the checkout process," Mr. Huddleston said. "The female customer does not have to bring her purse in the store."

Microsoft has today released a new .NET Passport overview document titled "NET Passport: Balanced Authentication Solutions For Businesses and Consumers".

VeriSign announced a "Trusted Commerce" initiative today.

The initiative, which will extend through the holiday shopping season and into 2003, aims to increase merchant, consumer, and industry awareness of the importance of authentication as the underpinning for secure transactions; drive the development of authentication standards by key industry participants; increase consumer awareness of what's necessary to ensure a trusted online experience; and notify consumers and online merchants about risky practices of "quick" or reduced authentication that doesn't adequately identify online businesses.

A profile of Sun's JavaBadge program and other enterprise smart card initiatives.

"Carol Coye Benson" of "Glenbrook Partners" had a bit too much "federation" reading through the Liberty Alliance specifications earlier this week.

First Data Corp. announced today that it is acquiring PayPoint from BP.

"This transaction underscores a strong and strategic commitment First Data has made to meeting the future payment needs of merchants in growth segments such as petroleum, supermarket and QSR," said Scott Betts, president of First Data Merchant Services. "Our first priority is to ensure new benefits and continued quality service for PayPoint clients, and to complete the BP implementation. Both First Data and PayPoint clients will benefit from the combined strength of First Data and PayPoint. It will enable us to deliver market- specific payment-processing solutions to more merchants. That includes capitalizing on First Data's ongoing success in penetrating the PIN-based debit market," Betts added.

Another AutoID demonstration center focusing on showcasing applications for "smart" RFID tags is opening at the University of Cambridge in the UK. It is similar to another center at MIT.

Benchmark Capital lost the lawsuit it filed in Delaware Chancery Court last week against one of its portfolio companies, Juniper Financial.

Glenbrook Partners is supporting a new identity-focused venture capital working group announced today by Digital ID World.

Digital ID World today announced the formation of the industry's first venture capital working group to focus on opportunities within the emerging digital identity industry. Participants include Brad Feld of Mobius Venture Capital, Walter Knapp of Novell Technology Capital, Dave Chen of OVP Venture Partners, Gus Tai of Trinity Ventures, Rick Patch of Sequel Partners, Alex Tosheff of St. Paul Venture Capital and Shawn Luetchens of Saffron Hill Ventures. The group is supported by Allen Weinberg of Glenbrook Partners, a consultancy focused on identity, and by Digital ID World, the premier source for digital identity news, views and the presenter of the Digital ID World Conference.

Amazon has introduced a set of web services which developers can use to add Amazon content to their web sites.

The Economist reports on the eBay/PayPal deal.

The real surprise is that it took so long. For months, rumours had been circulating on Wall Street that eBay, the leading online-auction service, would buy PayPal, the dominant provider of Internet payments. When the takeover was finally announced on July 8th the terms, too, were much as expected.

CNET is reporting that the "federal government is working on a plan that would require citizens and business to pass through one central online gateway when they need to get their identities certified with the federal government."

At today's Burton Group Catalyst Conference in San Francisco, the Liberty Alliance announced and released version 1.0 of its specification for simplified user sign-on. A flock of vendors have announced their plans to support it. Sun announced it will be making a complete announcement tomorrow. Separately, the Alliance announced 26 new members joining the organization. Phil Becker, editor of "Digital Identity World", shares his perspective on the announcements.

But Liberty's biggest achievement with the Phase 1 specification is likely to be the softening of the market for federated identity. The language of the specification talks of multi-level authentication of users --- i.e., the ability to authenticate Johnny's bank transaction at a different level than Sally's Amazon purchase. This language is an extension of a core concept of the Phase 1 specification. It allows separate silos of identity to be linked, so that, while Silo B can determine the strength of authentication Silo A used, Silo B cannot at any time learn the data associated with the identity in Silo A.

Jay Krall reports on wireless shopping in this morning's ecommerce special section.

Matt Richtel writes about the inquiry by the New York attorney general's office into the use of PayPal's service for gambling.

Mr. Sinclair said that during the last year he received virtually no business plans for new online casinos but more than 100 business plans from people looking to find a way around the payment problem. "The opportunity to create the better payment mousetrap is just huge," he said.

Bob Tedeschi writes about how online retailers are dealing with increasing credit card fraud by scaling back international operations.

Mr. Rusick said the company did not accept credit cards on overseas orders because foreign credit card issuers do not have address verification systems. "So we can't verify that, yes, indeed, the person making the order matches the information the bank has on them," he said.

The Wall St. Journal reported yesterday that venture capital firm Benchmark Capital has sued one of its portfolio companies: Juniper Financial. The lawsuit involves financings by Juniper in 2001 and a new financing round which is about to happen.

PayPal announced this morning that the underwriters of its recently completed secondary offering have exercised their over-allotment option to acquire an additional 900,000 shares from the selling shareholders. Not bad for a few days work -- the underwriters bought those shares for $19.00 -- with the ability to immediately sell them at the post-eBay announcement price of roughly $23.

In a press release posted on its web site yesterday, the Basel Committee on Banking Supervision reached agreement on a number of issues related to the New Basel Capital Accord proposal.

First Data Corporation this morning reported revenues up 9% and earnings per share up 21% in the second quarter. The company also confirmed its previously provided guidance of 14-17% revenue growth and 15-18% EPS growth for the full year 2002.

Practical Futurist columnist Michael Rogers writes about the increasing interest in biometrics.

„There are very few technologies that undergo an overnight change,‰ says Raj Nanavati, one of IBG‚s co-founders. „But that‚s what happened to biometrics after September 11.‰

The NY Times reported this morning that 35 bank accounts were opened by the hijackers without legitimate Social Security numbers.

Dow Jones is reporting that the eBay/PayPal deal is expected to be approved by antitrust authorities.

Both First Data Corp. (FDC) and Concord EFS (CEFT) have experienced significant declines in the prices of their common stock over the last few days. FDC, currently trading below $33 per share, is scheduled to announce earnings tomorrow morning before the market opens and Morgan Stanley analyst David Togut writes this morning that he views the recent price weakness as a buying opportunity. CEFT is also trading lower this morning with its stock falling 4.5% to $26.28. Intraday low was $26.03. CEFT announces earnings on July 30th. The company gave an investors' presentation at a June 25th William Blair conference. Update: FDC closed at $32.58 after hitting an intraday low of $31.45. CEFT closed at $26.36 after hitting an intraday low of $25.63.

"I do think we have not done a good enough job convincing the credit card associations that we are a fundamentally complementary service," Sollito said. `"We can be a partner that extends their reach to a host of new customers."

Eric Dean, chairman of the Liberty Alliance Project and CIO of United Airlines, plans to provide details about the technology July 15 at The Burton Group's Catalyst Conference 2002, according to an invitation distributed Monday to the press. Leading up to its debut next week, few details have been released about the specification, and some industry watchers have started to tag the specification "vaporware." Still, the idea of a standard technology for linking various authentication systems has received an enthusiastic response from a diverse collection of hardware, software, and Internet companies, said David Smith, senior analyst at Gartner.

The new issue of Fortune has an article about Bank One's CEO Jamie Dimon.

Then, in what seems to be a masterful tonal switch, he turns from pep-rally arrogance to locker-room inspiration. "Winning isn't about patents or your IQ or where you went to school," he says, punching out the clauses in his staccato Queens accent. "It's about one thing--how much you want it!" The crowd is his.

After failing to sell them, the FDIC is shutting down 800,000 NextCard credit card accounts today -- apparently on one day notice.

Card-issuing banks that support online authentication, such as the Verified by Visa and MasterCard Secure Payment Application (SPA) programs for Internet purchases, can enable cardholders to seamlessly link their personal .NET Passport account with the secure, online card authentication of TransFort. Cardholders can log on, shop and authenticate online purchases using a simple and familiar Passport sign-in and interface.

The Motley Fool laments the acquisition of PayPal -- they were just about to add it to their "Rule Breaker" portfolio!

Initally, we were disappointed that PayPal is being acquired. PayPal was one of the most promising Rule Breakers we'd considered. It is already profitable; it leads an important, emerging, and ultimately immense industry -- that of online payment transactions; and, at $20, it had a reasonable valuation. We felt we had a big winner here! We were just about to pounce when eBay swooped it up, buying the company for $1.5 billion -- an 18% premium to last Friday's price. Thanks a lot, eBay! Now, on second thought, we're happy that eBay also saw the value in PayPal, and that eBay -- our portfolio's largest holding -- paid a reasonable price.

More coverage on yesterday's announcement by eBay of its planned acquisition of PayPal. Analyst comments on the deal were generally positive for eBay. One negative (for some folks) is eBay's decision to withdraw PayPal from its use on gambling sites.

Visa believes that the merchants should have to keep their agreement to honor all Visa cards. Our "honor all cards" commitment enables Visa members to provide consumers with all kinds of payment options: Visa cards that are linked to lines of credit, Visa cards that contribute money to charities, Visa cards that provide airline miles, and, of course, Visa cards that are linked to checking accounts. With this lawsuit the merchants, led by Wal-Mart, want to eliminate this choice and limit consumers to one kind of Visa card.

eBay announced this morning that it is acquiring PayPal. EBay is exchanging 0.39 eBay shares for each PayPal share valuing the acquisition at $1.5 billion. At Friday's price, the deal values PayPal at $23.61 per share, an 18% premium over PayPal's Friday closing price. PayPal's IPO in February sold 5.4 million shares and was priced at $13 per share. A secondary offering of 6 million shares was completed in late June (in which all of the shares offered were by selling shareholders) at a price of $19 per share. The transaction is expected to close around the end of the year.

"eBay and PayPal have complementary missions. We both empower people to buy and sell online," said Meg Whitman, President and CEO of eBay. "Together we can improve the user experience and make online trading more compelling. We can also capture greater value from the e-commerce opportunities occurring both on and off our site." "eBay and PayPal have built vibrant user networks on the Internet," said Peter Thiel, Founder and CEO of PayPal. "The beauty of this deal is that it will allow us to offer our communities new tools and added flexibility to do more business. Integrating our services is a win-win situation for millions of current and future online consumers."

A report on how banks are profiting from the current interest rate climate. See also this discussion about the article. The article is based upon this year's annual report to Congress by the Federal Reserve on the profitability of credit card operations of depository institutions.

Staff writer Verne Kopytoff profiles VeriSign and its current troubles. At the core of the problem is the shrinking domain name renewal rate and the impact that is having on revenues -- coupled with some questionable marketing practices by VeriSign in trying to deal with that problem which have brought on litigation.

Sunday business section article that discusses EZpass, SpeedPass, etc.

A report on the fees that have been added by many card issuers for foreign currency transactions.

Despite these fees, paying with a credit card is still typically a better option for travelers making purchases abroad than using traveler's checks or exchanging cash. In some cases, withdrawing cash in the local currency from an A.T.M. might provide a slight savings, but it depends on the fees charged by your bank and the local bank ˜ and carrying a lot of cash has its own drawbacks.

A report on the increasing use of the Mexican consular ID card for banking.

The UK Home Office is considering issuing 'entitlement cards'. This page links to two PDF files on their work including studies on identity fraud.

Representatives of national privacy authorities said that a number of elements of the U.S. software company's service, designed to make it easier for people to shop online, "raise legal issues and therefore require further consideration." But the probe isn't a formal investigation, the privacy police said, describing it rather as "a dialogue" with the company and others developing similar products.

BT Retail is to begin trialling a system for making small payments online that could be attractive to thousands of Web sites, at a time when Internet companies are pinching pennies. The system, which has already proven a success in Germany, could also make it easier for users to make small, one-off purchases, such as archived print articles or other premium content.