Marianne Crowe, Vice President, Emerging Payments Research Group, at the Federal Reserve Bank of Boston, gave a presentation last week titled "Emerging Payments - The Changing Landscape" to the Maine Association of Community Banks and to the New Hampshire Community Bankers Association. Crowe's presentation discusses the growth in debit card payments, the emergence (and potential threats to banks) of decoupled debit cards, prepaid cards for the unbanked, and the use of the Internet for bill payment, ecommerce purchases, and person-to-person or account-to-account money transfers. She also discusses contactless payments and mobile banking.

In an article titled 'Mobile Payments--A Growing Threat', the Bureau of International Narcotics and Law Enforcement Affairs of the US Department of State discusses mobile payments and worries about them saying that 'there are already indications that money launderers and those that finance terrorism will avail themselves of the new m-payment systems.' The article concludes by saying that 'much work and creative thinking will be required to maintain the advantages NPMs ('new payment methods'), including m-payments offer, while at the same time preventing exploitation and misuse by money launderers and terrorist financiers and simultaneously protecting user privacy and the integrity of the global financial systems.'

Are you interested in the future of mobile payments? Curious as to the implications of Amazon's new payment platform - the Amazon Flexible Payment Service? If so, make plans now to join the first of Glenbrook's Roundtable on Emerging Payments being held on Friday, Februrary 22, in Santa Clara, CA. The roundtable is a half-day session (with brown bag lunch provided). Online registration and more information is available at Glenbrook's Payments Education website.

Glenbrook's Carol Coye Benson spent a few days over the New Year's holiday in New York City - and files this report on using her debit card along the way.

Anthony Ramirez writes for the New York Times about New York City's cab drivers and their disdain for accepting credit cards. The head of the New York Taxi Workers Alliance says "The whole technology is economically disastrous for the drivers."

The Federal Reserve Bank of New York has published a new research paper titled "Understanding Risk Management in Emerging Retail Payments" by Michele Braun, James McAndrews, William Roberds, and Richard Sullivan.   » Continue Reading

The latest Chicago Fed Letter is titled "Using Payment Innovations to Improve Transportation Networks: A conference summary" (PDF). It contains a conference summary from a session held on June 12, 2007.

NEC Corporation and Valista International have announced forming a "strategic partnership to target payments solutions business opportunities in Japan with secure and flexible payments offerings." The two companies also said that "the partnership also has sights beyond the Japanese domestic market aiming to expand into the global telecommunications market combining NEC's proven strength in system integration and Valista's global experience in payments, settlement, and merchandizing solutions."   » Continue Reading

The Emerging Payments Research Group of the Federal Reserve Bank of Boston has published "Consumer Behavior and Payment Choice: 2006 Conference Summary" (PDF) by Margaret Carten, Dan Littman, Scott Schuh, and Joanna Stavins.   » Continue Reading

The PELORUS Group has published a new report titled "Alternative Payments: Changing The Rules" that concludes that "three emerging payment alternatives to the traditional magnetic stripe credit/debit card payments regime, when combined, hold the potential to significantly alter the payment landscape. Contactless credit and debit card payments (sometimes called proximity payments), mobile payments (m-Payments) and biometrically authenticated payments will each levy its own unique impact over the next five years. Together, they could garner over $400 billion in revenue by 2011." [Editor's note: I suspect that's payment volume on those instruments, not revenue.]   » Continue Reading

Dave Birch picks up the discussion about the question we asked a few weeks ago in our Creating Wealth from Payments Innovation post: why isn't there a Wal-Mart for payments? Dave blames regulation - and that's certainly a factor. Reminds me of the days when airline fares in this country were heavily regulated, preventing a Southwest from emerging. On the other hand, the most successful new entrant in payments in recent history - PayPal - navigated the regulatory waters (state money transmitter laws primarily) relatively easily. One could argue regulation wasn't much of a barrier for their entry. Google Checkout - acting not like PayPal as a money transmitter but, rather, as a master merchant - seems to have avoided any financial regulatory issues. On the other hand, mobile payment provider Obopay's job description for a VP Treasury Operations includes being responsible for "compliance with Federal banking regulations such as Anti Money Laundering, Patriot Act, Regulation D and E, and the FFIEC guidelines" and for "state money transmitter regulations".

The Federal Reserve Bank of Chicago has announced its seventh annual payments conference, "Competitive Forces Shaping the Payments Environment: What's Next?", to be held in Chicago on May 10–11, 2007.   » Continue Reading

Financial Insights is holding a webinar tomorrow at 11 AM Eastern time titled "Inside the Mind of the Consumer: Understanding the Process of Financial Decision Making". Aaron McPherson, research director, Payments, will be presenting the results of a recent consumer survey on emerging payment methods that "provides a valuable source of objective data on how consumers are using products such as payroll cards, benefits cards, and online bill payment. And learn about our expanded study scope for 2007 on why consumers choose to pay with one method over another and how they weigh the importance of cost, convenience, fraud risk, and other factors in their decision-making."

One of our research initiatives at Glenbrook this fall has been exploring innovation in electronic payments - how payments innovations happen, the characteristics of the most important drivers of them (including the impacts of key people, industry structure, and any important technologies) that enable innovations, and how to best measure and define their success.   » Continue Reading

The Financial Action Task Force of the OECD has issued a 40-page report studying "new payment methods" (PDF) - defined as including "prepaid cards, Internet payment systems, mobile payments, and digital precious metals." The FATF is an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing. The study summary says that it "found there is a legitimate market demand served by each of the payment methods analysed, yet potential money laundering and terrorist financing vulnerabilities do exist. Specifically, offshore providers of new payment methods may pose additional money laundering and terrorist financing risks compared with service providers operating within a jurisdiction."

Jan Chipchase is a researcher for Nokia - and a great blogger too. He recently gave a presentation titled "Connecting the Unconnected" (in PowerPoint format annotated with notes) that's a real delight.

Finpago has announced the availability of the FSAok Debit Substantiation service including Finpago’s FSAok Real-Time Eligibility Engine. According to the company, these services provide "the industry’s most comprehensive set of tools for generating and documenting consumer driven health care claims automatically and ensuring IRS compliance for the widest possible number of merchant categories. Through WageWorks' Health Care Choice card program, the services provide flexibility and convenience to flexible spending account account holders by automatically selecting prescription and over-the-counter medication purchases and submitting them for reimbursement."   » Continue Reading

The Payments System Research department of the Federal Reserve Bank of Kansas City has published a new working paper titled "Payment Industry Dynamics: A Two-Sided Market Approach" by Zhu Wang and James McAndrews. The paper explores the "micro-foundations of two-sided payment markets, and emphasizes the roles that consumers' income distribution and merchants' size heterogeneity play in adopting new payment devices. The findings suggest that both the increasing concentration of payment card networks and the growth of consumer income relative to card service costs may help explain the puzzles surrounding payment card interchange fees."

Darry Madden writes for the Brattleboro, VT Reformer about the city's just finalized plans to deploy a smart card-based parking payment system. Madden says "rarely does anything related to parking get characterized as "so cool." According to the story, initially the card will be a simple parking card available at convenient spots downtown. But eventually some would like to see it accepted at area businesses, like any debit card. "That way, in this cashless economy, anyone with a parking card could buy a cup of coffee, for example."

Jane Kim reports for the Wall St. Journal on an expected announcement by American Express today that it is working with New York real-estate firm Moinian Group to allow condominium buyers to pay for their down payments using their American Express cards. Talk about a big ticket purchase!

Duncan Solutions and Peppercoin have announced a strategic partnership to "offer innovative, integrated solutions that grow parking revenues by increasing the profitability of credit and debit card transactions and deliver greater conveniences to motorists." The companies, who already work together in a number of cities, including Las Vegas and Oklahoma City, are enhancing their relationship with additional technology integration and coordinated sales efforts.   » Continue Reading

Ellen Rosen reports for the New York Times on the parking payment system developed by Parcxmart Technologies and its CEO John J. Regan.

The new issue of the Visa Quarterly focuses on emerging markets in an interview with Visa International's Debbie Arnold, vice president and managing director for emerging markets. Other articles include Financial Literacy Unveiled, Visa's Remittance Solutions, a look at WAY Systems' Mobile Transaction Terminal, and Credit Bureaus and Visa.

The Federal Reserve Bank of Chicago has published "Investing In Payment Innovations: Risks And Rewards" (PDF) by Carrie Jankowski and Tiffany White. From the abstract: "Advances in technology have helped usher in new payment mechanisms catered to current demographic and cross-border demands. Yet these payment innovations also pose increasingly complex security challenges worldwide. Participants at a recent Chicago Fed conference discussed the implications of these developments for the payments industry." The agenda, selected speeches and presentations from the May 2006 conference are also available online.

Entropia Universe, a fast growing virtual world utilizing a real cash economy, has announced "the launch of a new monetary deposit platform designed by Paysafecard.com, Europe's first prepaid card for online payments."   » Continue Reading

The Department of Communications, Information Technology and the Arts of the Australian Government earlier this year engaged the Centre for International Economics and Edgar, Dunn & Company to study the future of the electronic payments markets in Australia. The full report of their findings is now available online: Exploration of Future Electronic Payments Markets (PDF).   » Continue Reading

Payment Processing, Inc. has announced a partnership with mobile commerce provider Verrus to offer integrated credit card payment processing for pay by cell phone parking service.   » Continue Reading

Gail Liberman and Alan Lavine report for MarketWatch on emerging payment methods - saying that "newer online technologies, which include the ability to make a purchase by keying in a checking account number or PIN to debit a checking account, are moving mainstream." They cite a report by Celent's Dan Schatt who says that "although online alternatives to debit and credit accounted for just 12% of payments volume in 2005, they will more than double in the next three years to account for 26% of online payment volume. Credit-card volume will drop below 50% of online payment volume by 2009."

Booz Allen Hamilton discusses the impact of Google Checkout on the eCommerce market in the UK and concludes that the market for online payments will consolidate around Google Checkout, PayPal, and 1-2 others major players.

If existing providers (predominantly the card issuers and acquirers) do not find an effective counter strategy we believe they could lose 10-20% by 2008 and in the long term up to 30%.

Executives from Chase, Peppercoin, TYS, and Visa plan to hold a Small Payments Webinar on July 19th. Moderated by Jeff Green of Card & Payments Magazine, the session will cover contactless payments, card acceptance in the everyday spending market, and emerging loyalty requirements. Jeff Gordan, an Arby's Roast Beef franchise operator, will provide the merchant perspective. Peppercoin will also be unveiling new Ipsos-Insight data on the growth and obstacles facing the contactless payments adoption, as well as which markets have the greatest potential.

Sean Flynn reports for the Newport Daily News about citizen frustrations with a recently deployed card accepting pay-and-display parking system in Newport, RI. "It's a nightmare," said Richard Korn, co-owner of Yesterday's and The Place restaurants in Washington Square. "People have been getting tickets for the past eight weeks because the machine doesn't work. It's made for so many irate customers and angry visitors to Newport. It's unbelievable." [Editor's note: Sounds like the first law of payment systems - consumer convenience - has been violated with this system!]

Market Platform Dynamics shares former Visa executive Win Derman's "A Baker’s Dozen Questions for Emerging Payment Technologies" from his closing keynote speech at the "CardTech/SecurTech Emerging Payment Technologies: Challengers, Contenders" workshop held recently. In his paper, Win lists 13 questions that he always asks about any new payments technology.

A great friend of Glenbrook's is Broox Peterson, formerly Senior Vice President and Assistant General Counsel for Visa for over 20 years. Broox retired from Visa a couple of years ago and since then has been doing free lance legal work with information technology and payments companies.

Broox has written a great article about some of the implications that entrepreneurs may want to consider regarding the regulatory implications of building a new payments company - something that, in our experience, entrepreneurs may not fully understand or appreciate.

Click here to continue reading Broox's insights into this important topic.   » Continue Reading

The presentations from this year's Digital Money Forum held in London in late March are now available online - including via a convenient link to a zipped file (14.3 MB) with all of the speaker presentations in one download and another for all of the panelists.

Included is a very interesting presentation from the perspective of a major merchant looking at contactless technology titled What Do Retailers Want From The New Technology? (PDF) by Paul Chapman, Advanced Payments Manager at Tesco, and another on Mobile Financial Services for the Third World by Susie Lonie of Vodafone describing the M-Pesa mobile finance pilot in Kenya.

Eric Dash and Ken Belson report for the New York Times on mobile payments using cell phones.   » Continue Reading

Michael L. Kasavana reports for AMonline.com on how proximity payment systems powered by radio frequency identification media is pushing vending to the forefront of the dynamic changes taking place in retail commerce.   » Continue Reading

Black Lab Mobile has announced the availability of billmycell, a service they describe as enabling consumers to make credit card transfers to any person or business via their cellphone.   » Continue Reading

Patrick Driscoll reports for the San Antonio Express-News on a pilot project by Parkeon Corp. that installs new parking pay stations that accept credit cards and coins as a replacement for parking meters.   » Continue Reading

I just stumbled across a posting from late January on the MobileRadicals Blog (from a a collection of mobile researchers based at the Department of Communications at Lancaster University in the UK) titled Mobile Payments - Six Years After WAP.

Click&Buy has announced that Skype is now accepting Click&Buy as an online payment option for Skype users. Click&Buy reports that over five million consumers and 4,000 online merchants are successfully using Click&Buy worldwide. Last month, Click&Buy's owner WebPay AG announced completion of a $23 million financing round led by 3i.   » Continue Reading

Steven Lemongello reports for The Jersey Journal on how the implementation of new fangled parking lot pay stations is leaving some drivers puzzled. Amazingly, the new pay stations are still cash-only acceptance devices.   » Continue Reading

Adjoined Consulting has announced a strategic partnership with Proximities, Inc. that takes advantage of Proximities RFID wristbands to enable consumers to gain access to public events, make purchases, and verify their age.   » Continue Reading

Clayton Park reports for the King County Journal (WA) on Coinstar, the Bellevue, Washington-based company perhaps best known for their coin counting machines in supermarkets (which, by the way, count about $2 billion in coins a year).   » Continue Reading

CRMToday reviews a recent TowerGroup research report on the effects that emerging technologies could have on consumer payments over the next ten years.   » Continue Reading

Cooper Marcus, the founder and CEO of startup Spark Parking, has started the Spark Parking Founder's Blog where he says he'll "be writing about all manner of items related to Spark Parking, including wireless sensors, mobile phones, future commerce (typically involving mobile phones or Web 2.0 approaches), and of course parking!"

Friend and colleague Dave Birch of Consult Hyperion sends news this morning from the UK about the new Digital Money Forum blog that he's launched.   » Continue Reading

Daniel Terdiman reports for CNET News.com from the Demo '06 conference about two companies who claim to handle secure payments while on the go without physical credit cards, cash or checks: Portland, OR-based mobile payments startup PayWi and San Francisco-based fingerprint biometric focused Pay By Touch.   » Continue Reading

FASTLANE has published a press release with a bit more background on their new driver's license-based payments network planned for official introduction at the ETA show in April.   » Continue Reading

Heartland Payment Systems has announced that it is making a strategic investment in Parcxmart Technologies, an electronics payments company.   » Continue Reading

TowerGroup has released new research concluding that, while futurists have spun predictions of a "cashless" society since the middle of the last century, momentum is gathering that may turn this vision into reality in as little as 10 years. The report says that a combination of market- ready and emerging technologies is aligning to drive a majority of consumer payment transactions from cash toward other payments "form factors" - including the Internet, mobile and contactless payments.   » Continue Reading

The Emerging Payments Research Group of the Federal Reserve Bank of Boston has published a call for papers for its second annual Consumer Behavior and Payment Choice Conference to be held in Boston, MA on July 26-27, 2006.   » Continue Reading

Digital Transactions reports on Combined Payments Network LLC, a startup preparing to introduce a new ACH-based payment system that would use driver's licenses instead of plastic cards.   » Continue Reading

The Smart Card Alliance has released a new white paper: Smart Cards and Parking: A Smart Card Alliance Transportation Council White Paper.   » Continue Reading

Arthur D. Little has recently released an update on Mobile Payments by Karim Taga, managing director, and Johan Karlsson, consultant - both in ADL's Vienna, Austria office and members of its Telecommunications, IT, Media & Electronics practice. The report is available for free - but requires entering your order on their website.   » Continue Reading

Kensuke Nakazawa writes for Yomiuri Shimbun on the evolution of e-money in Japan - being driven by increasing competition between two rival systems: Sony Corp.-sponsored Bitwallet Inc., and East Japan Railway Co.'s Suica.   » Continue Reading

Douglas Jackson, chairman of e-gold, Ltd., has posted a letter on the e-gold website responding to last week's Business Week article about investigations underway concerning the company.   » Continue Reading

Market Platform Dynamics has announced a new paper exploring the evolution of mobile payments in Japan and Asia by Andrei Hagiu, an Assistant Professor at Harvard Business School, titled "i-modes and Octopi: Will Asia Reshape the World's Payment Industry?"   » Continue Reading

January 9th edition of Business Week contains a lengthy investigative report by Brian Grow on online money transfer systems like e-gold Ltd. The article focuses on the potential use of the e-gold payment service by those wanting to move money while skirting the reporting obligations associated with US money laundering regulations.

Technorati Tags: E-gold, Money Transfer

The Payment Cards Center of the Philadelphia Federal Reserve Bank has just published a new discussion paper, Risky Business: Managing Electronic Payments in the 21st Century (PDF) by Marilyn Bochicchio and Stanley Sienkiewicz.   » Continue Reading

The Federal Reserve Bank of Chicago has published a special edition Fed Letter titled "Innovations, Incentives, And Regulation: Forces Shaping The Payments Environment" (PDF) as a follow-up to its fifth annual payments conference held last May and summarizes the conference participants’ responses to the following questions:

• What emerging innovations have the greatest potential to improve the payment system?
• Why have certain payment innovations been more successful than others?
• How does the current legal and regulatory framework affect the adoption of efficient payment mechanisms?

Voca, the ACH processor for the UK formerly known as BACS, has announced the formation with Retail Decisions and Mi-Pay of a new joint venture company, Digital Payments.

Digital Payments will be a first - enabling retailers to manage consumer payments on digital sales channels including digital television, the internet and mobile phones. Consumers will be able to pay by Direct Debit across these channels for the first time in the same way as they use a credit card. By using Direct Debit consumers can organise direct withdrawals from their bank securely and with ease.

PropertyBridge and Visa USA have announced a strategic alliance to market online rent payment services for residential properties.

"PropertyBridge's combination of technology and financial expertise has created a new level of data integration that is enormously attractive and productive for property managers," added Jim Eitler, VP, Merchant Relations, Visa USA.

"Through this relationship, we hope to continue to grow the opportunity within the property management space, offer property managers the benefits of card acceptance, and extend added convenience to Visa cardholders."

Australia's Department of Communications, Information Technology and the Arts (DCITA) is funding an exploratory study examining future developments in the Australian electronic payments market.

San Francisco-based research firm Financial DNA has announced its Emerging Payments 2005 conference to be held on May 12 in San Francisco.

Jeff Staples reports in Contactless News on "A (Contactless) Day in the Life".

The Wharton School's Strategic Management newsletter highlights a talk by Visa International CEO Christopher Rodrigues at a conference last month in London.   » Continue Reading

Reuters reports from Toronto on the cashless society as created by Dexit.   » Continue Reading

iBill and DuoCash have announced a joint marketing agreement that allows iBill's online merchants to accept prepaid phone cards as an alternative to credit cards for payment.   » Continue Reading

Philips and ViVOtech have announced a new initiative to deploy Philip's Near Field Communication (NFC) technology-based contactless payment solutions at merchant locations allowing an NFC-enabled mobile phone to be used as a payment and promotion device.   » Continue Reading

The Taipei Times posts Yale University's Robert Shiller's commentary on the implications of electronic money.

Two benefits of electronic money stand out, and will likely contribute to its growth. Most important, it will have profound intellectual benefits by creating incentives for the active pursuit of ideas. Second, electronic money will advance globalization, expanding the scope and versatility of the Internet and making it easier for people to interact constructively with others around the world. Taken together, these two benefits will enable millions of minds to work together far more effectively than ever before.

The US Navy has announced initial deployment of Navy/Marine Cash™ on 175 Navy ships. Combining a debit card with a smart card-based electronic purse, the system uses on-board cashless ATMs to transfer funds from bank accounts to the on-card electronic purse.   » Continue Reading

Ellen McCarthy reports in the Washington Post on Blackboard Inc. (NASDAQ Symbol: BBBB), a company expecting to complete its initial public offering later today. Among other services provided to schools and universities, Blackboard operates a payment-related business with its BbOne offering.   » Continue Reading

The Stanford University Law School is hosting a conference on June 25 titled "How to Deal with the Uncertainties of Online Business". Speakers include executives from Visa International, Google, Yahoo!, Apple, Microsoft and partners from a number of law firms.

WJLA in Washington, DC reports on a new combination MasterCard and SmarTrip fare card for the Washington area Metro transit system to be issued by Citibank.

The European Union has announced that it is soliciting comments from industry regarding its current E-Money directive.

The Bank for International Settlements has published a survey of developments in electronic money and Internet and mobile payments.

A new edition of Payments and Settlements News has been posted by the ePayments Systems Observatory at the European Central Bank.

Seth Lubove reports in Forbes on the activities of Stephane Touboul and his company ChargeMeLater.

The company...

"allows consumers to buy online and pay for it simply by entering the sum of the last four digits of their social security number. Touboul uses a proprietary algorithm that corroborates the identity of users based on a search of multiple databases and their phone numbers, validates their ages and addresses, makes sure they're good for the money, and then sends a bill to the user's house."

Jennifer Kingson writes in tomorrow's American Banker on efforts by Internet retailers to encourage consumers to use alternatives to credit and debit cards.

Tower Group's Edward Kountz writes in Bank Systems and Technology Online about opportunities for the bank card industry in prepaid micropayments.   » Continue Reading

Evan Ramstad reports in the Wall St. Journal on the success the Hong Kong Octopus e-money card has had.   » Continue Reading