Barclaycard and Egg to integrate

After acquiring Egg this April, Barclaycard have announced plans to integrate the 1.15 million Egg credit card accounts into their portfolio. From November, servicing of Egg accounts will move from Egg's Derby centre to existing Barclaycard locations.

This means possible redundancy for Egg's 659 employees who have agreed to transfer to Barclaycard. If they happen, redundancies would occur in stages over the remainder of the year. Paula Gowland, Operations Director at Barclaycard, said:

“Our proposal to cease operations in Derby was a tough decision to make. People were informed as soon as the decision was made to give them as much time as possible to consider their options and take advantage of the extensive support and assistance we’ll be offering to every individual throughout the transition.

iPhone owners enthusiastic about mobile wallets

Although Google has led the charge, it is users of the rival iPhone that are most looking forward to the technology according to a recent study. The survey, by Retrevo, also showed that consumers wanted Apple to provide the service. On the whole though, the figures were not overwhelming and suggest traditional wallets will still be around for a while.

 

Alternative payments to double in 3 years

By 2015 so-called 'alternative payments' will double from the $62 billion they are currently worth, according to a new report. Alternative payments are defined as those which are entirely electronic and conducted mostly by mobile phone or the internet.

They have already doubled since 2006 and were up 25% in 2010 on the previous year. The report, by Packaged Facts, predicts this will continue with Packaged Facts' research director, David Sprinkle, saying:

"PayPal alone announced $750 million in total mobile payment volume worldwide in 2010 and expects to reach $2 billion for 2011. Though PayPal may be the only player recording that level of mobile payments, several major initiatives either rumored or announced indicate that interest in mobile payments is hitting critical mass. The old school payments paradigm will start losing more and more of the playing field."

Major players, such as Google and Mastercard, are making significant moves into the arena and a number of countries are investing in preparing for new technology such as contactless payments.

Alternative to NFC for contactless payments?

Until recently near-field communication (NFC) technology has been synonymous with the recent rise of contactless payments. But now a California-based startup has come up with an alternative technology.

The company, called Naratte, claims to have created an app which will allow any phone to process contactless payments regardless of NFC capability. 'Zoosh' generates an inaudible, extremely high pitched noise which creates a secure conncetion to either another Zoosh-enabled phone or a special reader.

The technology has the same functionality as NFC but can be used by a much wider range of phone as all that is needed is a speaker and a microphone. Older phones which don't support apps will be able to use the service through text messages with embedded audio files.

As ever, the problem will be take-up. Naratte must get its Zoosh terminals into stores or consumers won't use the technology.

Orange pushes mobile payments in Poland

Having already focussed on the UK, Spain and France, Orange is now looking to roll out its contactless mobile payment scheme in Poland. In order to do so, the company's Polish arm PTK Centertel has formed a new partnership with Gemalto. Gemalto will provide PTK with NFC-enabled SIM cards and applications which will help their customers take advantage of the 35,000 contactless terminals already in the country.

Krzysztof Sieczkowski, director, product and content development, PTK Centertel, said:

"We need a complete solution to speed up our time-to-market, and leverage the strong contactless payment network already existing in Poland to make our consumer the first to benefit from the NFC experience."

Sega latest hacking target

The seemingly endless string on recent hackings has continued with Sega. 1.3 million customers of the company have had their details stolen, including login IDs and passwords but no credit card details. However, people affected should still be watchful of their bank accounts.

Cheques will be staying

After failing to find a suitable paper-based alternative, the Payments Council has put plans to phase out cheques on hold. Cheques will still be an accepted form of payment until 2016, which will be welcome news to the charities and elderly people who are the main users of cheques.

Richard North, head of the Payments Council, said:

"There is no question of there being a closure of the cheque clearing system without there being alternatives in place which are widely in use."

Pizza Express diners can now pay by mobile

In a rush after dinner? Well, if you're eating in Pizza Express you can now use your phone to pay and be on your way. Created in partnership with PayPal, the new iPhone app will provide users with a unique code to use for payments. Both the customer and the restaurant will receieve electronic notifications to confirm the payment, ensuring there are no 'dine and dash' accusations. The chain will also be rolling out free wifi in all their branches to make the process even easier.

Mark Angela, chief executive of Pizza Express, said:

"We knew there was no point just launching an app for the sake of it, so we waited until we had a system that could genuinely improve our customers' experience of eating out at PizzaExpress."

Vodafone and O2 collaborate on NFC

Vodafone, O2 owners Telefonica UK and Everything, Everywhere are joining forces with the aim of creating a standardised platform for mobile payments. The group also plans to liaise with banks, advertisers and retailers to make the system as easy as possible to implement.

There are also plans to create offers, coupons and tickets which can be used via smartphone.

Starbucks app to include Android phones

The global coffee chain Starbucks have extended their mobile payments application to work with Android smartphones. In addition, Chuck Davidson, Starbucks' card innovation manager, said that the company would focus on barcode readers on mobiles rather than NFC technology. So, the app allows store readers to scan barcodes on smartphone screens. Davidson added:

"Having NFC readers is not the issue; it's NFC in the phones, which we believe is two-and-a-half to three years out."

The company saw 3 million mobile transactions processed in the first nine weeks following the scheme's launch.

Music festival introduces contactless wristbands for payments

Music lovers attending the Isle of Wight Festival were invited to trial Mastercard pre-paid contactless wristbands during their stay. And 100% said they would use it again.

The system obviates the need to carry a large amount of cash at festivals and participants also found them quicker and easier to use than traditional debit or credit cards. The wristbands were loaded with £30 and distributed to people in the festival's VIP section. Hany Fam, President of Mastercard UK and Ireland, said:

“During this pilot we have made some significant steps towards achieving this [cashless] goal. We look forward to extending the PayPass prepaid wristbands to provide access as well as payments at more festivals and events across the UK.”

South Korea to invest in m-commerce

With plans to install near-field communication (NFC) terminals in 300,000 merchants and new requirements for mobile phones to be set up for contactless payments, South Korea has become the latest country to jump on the contactless/mobile bandwagon. The country's communications commission announced the move on Monday, and the commission's head said:

"Mobile payment technology has been available since early 2000 but it failed to take off for various reasons ... but today's agreement is a small step toward mutual growth going forward."

The reasons he mentioned include the relatively small range of NFC-enabled handsets and the lack of standardised checkout systems but the authorities believe the new measure will boost sales of NFC handsets to over 5 million units this year.

NZ trial contactless mobile payments

Mastercard and NZ are working together to pilot the first mobile payments system to use near-field communication (NFC) technology in New Zealand.

The pilot will consist of ANZ employees, who will be issued with either an NFC-enabled memory card or a sticker (similar to those used by Bling Nation) to use in conjunction with their phones. The stickers can be used with any phone model although the MicroSD memory cards are only compatible with BlackBerry handsets. Then, using Mastercard's PayPass technology, participants will be able to make purchases of up to $80 simply by tapping their phones on NFC terminals.

Currently there are around 300,000 locations worldwide using the PayPass technology but ANZ will be working to install that in major chains across New Zealand. The technology should receive a wider launch later this year.

Did Citigroup drag their heels?

It has emerged that Citgroup waited up to three weeks before informing customers of the recent hacking in which e-mail addresses and account numbers were stolen. The reason given for this is that the company was using the time to conduct an internal investigation and produce the necessary replacement cards.

The investigation took between 10 and 12 days and in some cases Citi took action to protect the accounts they believed to most vulnerable. This had led some to accuse Citi of dragging their heels on the issue. The company has informed the authorities and will send replacement cards to the majority of those affected. The hacking also coincides with hearings on data security by the US Senate banking committe.

Virtual payment system launches in China

China UnionPay has launched an online and mobile payment system, the first of its kind in the country. It can be used for transactions on the internet both domestic and international. The system also supports the Apple iOS, Android and Windows phone operating systems.

Using the system, customers log in and use their card numbers to pay for things. China UnionPay also has agreements in place for more than 60 other banks in the country to support the system. Feng Lin, an e-commerce expert with the China eBusiness Research Centre, said:

"It will take time to see whether China UnionPay's online payment is attractive to customers. And it also depends on how much the merchants will pay if they want to cooperate with China UnionPay."

Citigroup hacked

An estimated 200,000 customers have had their details stolen in the latest in the recent series of high profile hackings. Other targets have included Sony's Playstation Network, Google and defense contractor Lockheed Martin.

Citigroup have said that during routine monitoring they discovered that around 1% of its 21 million credit customers had had their details stolen, including account numbers and e-mail addresses. They insisted though that hackers had not been able to access birthdates, social security numbers or card security codes. This means that the hackers should not be able to use the information for identity theft, the usual aim of this sort of data theft.

However, the details the thieves need could be obtained using the stolen e-mail addresses so the bank and their customers must remain vigilant.

Bling Nation pauses for thought

The American mobile payments company, Bling Nation, has admitted that its business model has failed to lure in merchants. They are now rethinking their approach.

The company provide near-field communication (NFC) stickers which are put on mobile phones and then used to make contactless payments. In the early days things seemed to be going well, $30 million funding was raised and several smaller banks signed up, glad to have an alternative to the payment giants.

Late last year Bling introduced FanConnect and that was where things began to go wrong. FanConnect is a social-media based reward scheme which was compulsory for their bank and merchant partners. Merchants began to ditch the service rather than adopt FanConnect.

They have now accepted they need to change and have shut down in order to rethink. Such a pause may prove costly, however, with mobile payments gaining momentum all the time.

Ericsson launches mobile wallet in Europe

Hot on the heels of Visa and Google, Ericsson have launched a mobile money network in seven European countries. Users in the UK, Germany, France, Poland, Sweden, Spain and Italy are being offered the chance to sign up to the system which allows them to send and receive money using their mobile phone handsets.

Ericsson created a Money Services division specially for the creation of this scheme, which uses the Ericsson Money Interconnect network and is compatible with other mobile wallet systems. The company plans to rollour the scheme across the rest of Europe.

Semir Mahjoub, president of Ericsson Money Services, said: "Simply having a friend's phone number, irrespective of where he or she is in the world, will open up access to financial services and mobile money in a new way. Individuals around the world can benefit from globally connected money services in their everyday lives by making money transfer more like mobile communication."

Visa makes mobile move

The $100m acquisition of cellphone company Fundamo by Visa with allow them to "accelerate the execution" their global mobile payments strategy. Visa bought the Cape Town-based company in a cash deal in order to get at their estimated 5 million reigistered users across Africa, Asia and the Middle East as well as the potential to rach over 180 million more.

Bill Gajda, Visa's head of global mobile products, said that the aim is for customers to be able to process financial transactions "wherever and whenever they choose, using a card, a computer or a mobile device".

Paper-based alternative to cheques must be available

After the House of Lords debated phasing out cheques by 2018, they have told the Payments Council that any alternatives must include a paper-based system. Lord Sassoon, treasury secretary, said:

"Back in December 2009, the government welcomed the commitment made by the Payments Council, which was clear that if it took a decision to end the present system of cheque clearing in October 2018, it would do so only if there is an available, acceptable and widely adopted alternative system. The government have been clear that that must include a paper-based system."

But some peers wondered how a new paper system would differ significantly from cheques. Sassoon cited the decline in the use of cheques and said that a rewrite of the current system would be "very expensive", while insisting that a new sysytem must be "acceptable to small businesses, charities and other individuals".

France to launch NFC payments in 2012

France is all set to launch contactless payments in the Spring of next year. The French government has promised twenty million Euros to help promote the technology's adoption and four mobile networks (Orange, SFR, Bouygues Telecom and NRJ Mobile) and four banks (BNP Paribas, Credit Mutuel, CIC and Credit Agricole) have all announced plans to roll out the technology nationwide.

The government has long been a financial supporter of contactless payments and the latest money has been made available to French cities to fund innovative ways in which NFC benefit citizens in their daily lives. the Association Européenne Payez Mobile (AEPM) has also worked to ensure interoperability and security for the emerging technology.

Could Nigeria become a cashless country?

The Central Bank of Nigeria (CBN) has received support from the World Bank to introduce a nationwide electronic payment system. The aims of such a scheme would be to combat widespread corruption in the country and save 10 million Naira by not having to print banknotes.

The World Bank's backing came at a book launch for Achieving Nigeria’s Financial System Strategy 2020: Making Finance Work for Nigeria. The World Bank argued that the introduction of such a scheme would not only strengthen the economy but also encourage growth and thereby lead to new jobs.

The CBN recently announced its intention to create a cashless economy beginning in June 2012 but the general public was less than thrilled with the news. They plan to begin by limiting the amount of cash individuals and businesses are allowed to draw and imposing charges if these limits are exceeded.

20 million contactless cards in the UK by the end of the year?

Visa has predicted that there will be 20 million contactless cards in the UK by the end of this year. At the end of March there were already 13 million Visa PayWave cards in circulation, with more and more people are expected to start using them as NFC terminals are installed by major businesses, such as McDonald's and Starbucks.

More banks are also starting to use the technology. Royal Bank of Scotland, Lloyds and Bank of America have all joined Barclays in issuing contactless cards. Transport for London's contactless Oyster system will also allow people to use their Visa PayWave cards by 2012.

2012 is set to be a big year for contactless payment, with Visa and Lloyds raising the technology's profile ahead of the London Olympics, in which they are official partners.

BP/Aral to launch contactless payments in UK, Germany and Switzerland

Consumers will soon be able to use their contactless cards in more than 4,000 petrol stations in the UK, Switzerland and Germany. Mastercard PayPass terminals are to be installed in BP and Aral sites over the next two years.

With the upgrades in place, users will be able to buy petrol, snacks and other items by simply tapping their contactless card on the special readers. However, these transactions are currently limited to £15 in the UK, 25 Euros in Germany and 40 Francs in Switzerland. The same cards can be used for larger payments but a signature or PIN code will be required.

Contactless pickpocketing?

There have been concerns over whether contactless technology means fraudsters will be able to steal data from the cards in your pocket. But is this a serious risk?

Experts say not. It is possible to use a card reader to 'sniff' people's data but there are measures in palce which limit what they can do with it after that. New encryption measures are also developing along with the technology itself.

The issue came to light at the end of last year when a man in Tennessee was able to use a card reader and laptop to steal card information from passers-by. He was able to retrieve card numbers, expiry dates and some names. But Jack Jania, secure transactions general manager for North America for digital security provider Gemalto said:

“It’s one thing to obtain the information. It’s another to be able to use it.”

Most contactless cards use a dynamic verification system for transactions in addition to encryption which mean the data retrieved would not be sufficient to allow the thief to start spending.

O2 makes first move into payments

Hot on the heels of Orange, O2 are branching out into payments. The mobile phone network provider has launched a new Facebook app which allows people to top up their phone through the social networking site. Pre-paid customers will be able to store credit card details on the secure app which thye can then use for top-ups.

When a transaction has been completed confirmation will be sent to the user in the form of a text message. With the huge popularity of Facebook, O2 believe their customers will appreciate not having to log out of the site in order to process transactions.

O2's head of social, Alex Permain, said:

"We decided to launch with a payment mechanism that people are already used to and confident with [in terms of security]. We'll take this a lot further if it proves successful."

The app seems to be an early step towards the mobile wallet scheme which O2 announced they were developing earlier this year.

JPMorgan Chase creates app for small businesses

The new Jot mobile application, from JPMorgan Chase, aims to help small business customers control their finances. The bank hopes the app, available on iPhone and Android, will attract new customers to their Ink from Chase business division, as well as benefiting existing ones.

The app's release comes at a fortuitous time as a survey released this morning by the Small Business and Entrepeneurship Council showed that 78% of small businesses believe that smartphones can save them time. Although there are many similar apps available, JPMorgan Chase believes this one beats them all. Jot allows business owners to track employee expenses in real time, and the employees themselves can categorise expenditure while it is still fresh in their minds.

Richard Quigley, president of Ink from Chase, said:

“Jot was designed with small business owners’ immediate financial needs top of mind. Jot will enhance the finance-savvy business practices of small business owners, allowing for additional time and an improved focus on the passion and sense of accomplishment they have for their businesses.”

Ingenico installs NFC in black cabs

You can now pay your taxi fare using your contactless card, thanks to Ingenico who are making the technology available to all of London's 25,000 black cabs. The scheme, launched this week, is part of a Visa Europe led initiative to widen card acceptance in the capital's taxis.

The system is based on Ingenico's iCT250 contactless device, which also accepts traditional cards, and will feature additional services such as mobile phone top-ups. The company hopes this will lead to increased revenue for taxi drivers as well as an improved experience for customers.

Viruses not a serious threat to contactless m-commerce

According the Mobile Data Association (MDA), although there are potential virus risks in contactless mobile payments, there are sufficient controls in place to combat these.

Mike Hawkes, chairman of the (MDA), said:

"It's somewhat more difficult to put out a virus that will work across all devices. If you consider how many various handsets and types of software there are, it's actually very difficult to put something into a handset that can propagate onto other devices.

The conventional viral models are actually very difficult to put onto mobile networks. The networks themselves are also very proactive in this area; the likes of O2 and Orange are extremely good at preventing viruses from coming down to handsets over the air."

Australian hospital goes cashless

Macquarie University Hospital has set up a cashless payment system for its patients. They will use pre-paid contactless cards to pay for food, phone calls, etc around the hospital. The cards will also work with bedside terminals which track patient care.

Macquarie opened last year as a 'paperless e-hospital' and this initiative is all part of that. The hospital also digitised all its records, which doctors can now access securely using contactless cards.

The hospital's CEO, Mike Rawston, joked that not everything is so hi-tech though. They installed their 9-tonne MRI machine by dragging it across the floor with "15 guys using 3 ropes".