London's commuters will be able to use their mobile phones and bank cards for "ticketless travel" across the metropolis, if Transport for London's plans come to fruition. ZDNet reports.
Thousands of London bus users already pay their fares using contactless bank cards instead of TfL Oyster cards, which have been widely used over the past decade. Users pay different charges for different London Underground zones, so that's a trickier proposition.
... Once TfL's systems come into common use, other businesses will try to exploit the same payment mechanisms. TfL could therefore drive the widespread adoption of systems such as contactless EMV (Europay, MasterCard and Visa) bank cards, Barclaycard's PayTag stickers, and the NFC (Near Field Communication) system already built into many smartphones.
Mobile money, the ability to bank using cell phones -- is a game-changer in global development. This video chronicles M-Pesa, a mobile money product made by Safaricom, and its unparalleled success with mobile banking in Kenya.
UK mobile users will be able to send and receive money by sharing only their phone number by Spring 2014, the Payments Council has said, reports the BBC.
Account owners will be asked by their banks if they want to opt-in to a database that will allow the sending of money by text message.
The scheme is being backed by eight major financial institutions:
-- Barclays
-- Cumberland Building Society
-- Danske Bank
-- HSBC
-- Lloyds Banking Group
-- Metro Bank
-- Royal Bank of Scotland
-- Santander/p>
Its launch will bring the UK up to speed with technology long in use in the developing world.
Many African nations use systems such as M-Pesa, typically seen as a secure way to transfer funds quickly between individuals and businesses.
A spokesman for the Payments Council told the BBC it had taken the UK longer to catch up due to the technical challenge of building and testing a new database to power the system.
Mobiles in the UK are already being used for a variety of online banking tasks, with services such as Barclay's PingIt simplifying sending money to and from accounts.
But this new set-up will be the first to not require users to set-up a separate account with a mobile wallet service.
Despite its widespread use, SMS technology has lost its luster as a safe means of verifying the identity of an individual during a banking transaction. Armnet reports.
This is what the lobby group for Australian telcos is claiming in the wake of a recent fraud incident.
The said incident involved an Australian family who had $35,000 stolen from a bank account following an identity theft.
In this case, the victim had their mobile number ported to another provider without their apparent knowledge or approval.
This action allowed the criminal to then change the bank PIN and withdraw $35,000 before a stop was put on the breached account.
The identity theft was eventually traced back to key logging malware on the victim’s PC that recorded the account details, and since one-use SMS access codes for the account are required, the criminal then used the acquired details to port the phone number to another account.
Securing SMS
While the lobby group and consumers may be up in arms about the perceived security of SMS, SecurEnvoy CTO, Andy Kemshall, said the real issue is not the security of the mobile technology.
Instead, he lays the blame at the ease that Australian telcos allow hackers to request a number be ported to another phone, as highlighted in the recent incident.
“This has far wider consequences than just SMS, as a hacker can setup a premium rate call line and run-up extortionate bills by calling these numbers after porting over the number,” Kemshall said.
The lobby group for Australian telcos has declared that SMS technology should no longer be considered a safe means of verifying the identity of an individual during a banking transaction. ITNews reports.
Communications Alliance chief executive John Stanton, representing the interests of mobile providers Telstra, Optus and Vodafone, took the extraordinary step of of declaring the technology insecure in the wake of numerous reports of Australians being defrauded via a phone porting scam first uncovered in Secure Computing magazine.
"SMS is not designed to be a secure communications channel and should not be used by banks for electronic funds transfer authentication," Stanton told iTnews this week.
Citibank has launched a service which allows customers in Singapore to pay their credit card bills via SMS. Today Online reports.
Citibank will send customers an SMS when their credit card bill is ready. Customers can then make a minimum or full payment by replying to the message.
The SMS payment service is part of the bank's strategy to expand its mobile banking capabilities as it aims to be the world's leading digital bank.
A must read article by Lonnie Shekhtman for TriplePundit on exciting mobile innovations geared towards improving lives in the developing world, some based in their local markets and others developed internationally. Here are four noteworthy innovations focused on improving access to financial services and fair wages:
Labor Link allows companies to easily communicate information—via SMS and voice recordings—to workers across their entire supply chain, and to collect real-time data from them on satisfaction, working conditions and social impact...
Allows Kenyan consumers to pay merchants via their mobile phones, while providing a web-based application that enables small- and medium-sized businesses to accept and track these mobile transactions...
Following the recent strike in Kenya by state-employed teachers, lecturers and doctors, the country’s treasury has said it will cover the approximated $300 million USD cost in wage increases through cost cutting and introduction of new taxes, including on mobile money transfer services such as Safaricom’s M-Pesa. The Next Web reports.
The tax measures announced by the finance minister Robinson Githae will include a 10 percent excise duty on cash transactions using popular mobile money transfer systems.
M-Pesa is the largest mobile money transfer service provider in Kenya, with more than 14 million subscribers. The mobile money service has proved to be a crucial service for revenue growth for the Vodafone-owned Safaricom. It is estimated that M-Pesa handles some 2 million transactions per day.
This announcement by the finance ministry will surely have caught the mobile service providers by surprise, coming a day after Airtel Kenya removed transfer costs on its mobile money services to allow subscribers to send money through their phone at no cost, in a bid to cut into M-Pesa’s market share.
Bank of America Corp is testing a technology that allows a customer to pay at a store register by simply scanning an image with a smartphone, such as Apple Inc's iPhone or Google Inc's Android devices.
The pilot program is being tested in Charlotte, North Carolina, where the second-largest U.S. bank is headquartered, and marks the latest effort by a financial institution to come out on top in the race to determine how people will pay for things in the future.
Of all the options available to consumers, mobile coupons have emerged as bargain hunters’ best friends. Business Insider reports.
To quantify the impact, Chitika analyzed millions of mobile search impressions from the Chitika Ad network the first week in September. Clothing and Restaurants make up the lion’s share of mobile coupon searches, together encompassing more than 50% of the market (27.8% and 22.4%, respectively). Retail and Arts & Crafts coupons fall in at third and fourth place, making up 17.7% and 12% of coupon searches.
Smart shoppers are consulting multiple platforms to aid with shopping and to save money, according to recent surveys. eMarketer reports via @StKonrath.
Not only are they cashing in print and online coupons, but consumers are increasingly using their smartphones to get deals while in the store.
According to a July study by media and marketing services company Valassis, due to rising food and gas prices, 74% of US consumers planned to use more coupons this year.
Mobile coupon usage, in particular, is skyrocketing. According to the Valassis study, use of mobile coupons or apps increased by over 100% in 2011, and 100% again in 2012.
Although trailing online coupons by a few percentage points, the Valassis study showed that 79% of US internet users were using more mobile coupons this year—on par with print coupons and circulars.
The number of people in Africa using mobile phones to pay for goods and services is forecast to reach 14.2m this year, nearly double last year's 7.7 m, according to Informa Telecoms and Media.
What's the most successful mobile payment system to date? It's an application that can be downloaded onto your phone to pay for coffee. Yes, the Starbucks app, launched in January 2011, has processed 55 million transactions. The app, which is quite simple, uses a bar-code-like technology to scan your phone. But that's as far as it goes -- it's a payment app used by only one merchant. C/net reports.
Then why is it so popular? It's not because you can pay for a latte with your phone instead of pulling out cash or a credit card, but because it's also your loyalty card. It keeps track of how many times you've visited the store and what you've purchased so that Starbucks can push you more offers and coupons that keep you coming into its stores. And the beauty of integrating this into a mobile app is that you don't have to carry around that card on a key chain or tucked into your wallet. It's always with you on your phone.
Reuters reports that PayPal is in the early stages of what may be a blockbuster mobile payments deal with McDonald's Corp, the world's biggest hamburger chain.
McDonald's is testing a mobile payments service featuring PayPal at 30 of its restaurants in France.
PayPal is racing against start-up Square Inc and other technology companies to become the mobile payments service of choice as consumers increasingly use smart phones to make purchases in shops, restaurants and other retail locations.
A new service — to be created jointly by Wal-Mart, Target and other retailers — could give customers an easier way to combine their digital wallet, instant coupons, gift cards and loyalty points in one app. USA Today reports.
The announcement by retailers on Wednesday to create the Merchant Customer Exchange (MCX) is also a line in the sand drawn to remind banks, credit card companies, Google, wireless carriers and technology start-ups that they aren't about to give up control of customers' wallets without a fight. They also see the technology as a way to cut the fees they pay others for processing customer transactions.
Several competitors have a head start in this lucrative market. Worldwide mobile payments are estimated to grow 62% this year to $172 billion and could reach $617 billion by 2016, research firm Gartner says.
The developed nations continue to debate the best way of introducing mobile payments. In Africa, and in Kenya specifically, the use of mobile money is already well established. In fact it is doing so well that the World Bank has issued a warning about the way payments systems are developing and the threat of monopoly. The Wall Street Journal reports.
According to the World Bank there are over 40 million mobile money users worldwide and almost half of those are in Kenya, a country with more cellphones than adults.
More than eight in ten of the country’s cellphone owners use mobile money, mostly through the largest mobile network Safaricom’s M-Pesa service. The World Bank recommends interoperability across mobile money services.
Although Kenya has more than three mobile money operators, none allows cross network services. Only Tangaza and Mobikash offer mobile money across networks in the country but the services which serve parts of Nairobi are just a drop in the ocean compared to nearly 30 million mobile subscribers across the country.
This move [to interoperability] might not go well with the mobile money operators as it would mean a cut in their profits…
According to the World Bank, transactions across networks expand a firm’s clients and even increases revenue through surcharge. Mobile money operators however see this as a threat to their business after investing much in their infrastructure.
The warnings from the World Bank about allowing a monopoly to develop reflect the success of mobile money in Kenya. A post by Izabella Kaminska in the ft.com’s Aphaville blog suggests that this could be a model for Europe. The article also provides a description of how the mobile money system was born.
The Pay With Square service makes transactions easier than ever. If a retailer has your name and photo in its system, you only have to announce yourself to pay your bill.
PayPal has bought Card.io, a young company that has developed technology for using smartphone cameras to scan credit cards. TechRadar reports.
PayPal already works with Card.io, using its technology in PayPal Here to take payments simply by snapping a picture of a credit card. It can also use a triangular blue iPhone dongle for swiping them instead.
The Card.io employees will join forces with the PayPal global product team. With whom, according to PayPal's global product VP Hill Ferguson, they will "create new experiences to make it even easier for consumers and merchants to use the PayPal digital wallet.
A beginner’s guide to m-Pesa and an examine its implications for financial access in developing economies. By Ken Banks for National Geographic.
New innovations are challenging the idea that development requires handing ideas down from developed to developing. In banking and finance, the big ideas in cashless transfers and mobile, flexible exchanges are not to be found in Geneva or London or New York. A revolution in mobile money transfer has occurred, but not in these financial centres. Instead, it’s happened in Kenya, with m-Pesa.
The service was developed between Safaricom and Vodafone, and launched in 2007. And it’s not just something used in cities or by big commercial interests. By 2010, over 50% of Kenya’s population had used it – this means rural villagers haggling over produce, then using their Nokias to make the final deal. It means Masai herdsmen bringing their phones to market along with their cattle, ready to stock up on essentials to bring back to their homes.
... For people who live in isolated areas, the service means no longer having to carry lots of cash to markets or towns, risking losing huge amounts to banditry and theft. For people without permanent addresses or bank accounts, the service means they can pay what cash they have to m-Pesa in exchange for mobile credit, making payments and transfers and building up savings – becoming participants in an economy from which they had previously been locked out. For migrants, the service allows them to send money home to their families and villages safely and simply.
So how does it work? m-Pesa relies on a network of small shop-front retailers, who register to be m-Pesa agents. Customers come to these retailers and pay them cash in exchange for loading virtual credit onto their phone, known as e-float. E-float can be swapped and transferred between mobile users with a simple text message and a system of codes. The recipient of e-float takes her mobile phone into her nearest retailer when she wants to cash in, and swaps her text message code back for physical money. There are already more m-Pesa agents in Kenya than there are bank branches.
Korean messaging Kakao Talk has launched its own virtual currency called ‘Chocos’, taking a lead from the country’s top social network Cyworld, and its ‘acorns’ profit model. The new service is live today, following an announcement earlier this week. TheNextWeb reports.
Chocos’ are Kakao Talk’s cyber money which users can buy to pay for premium services on the mobile messaging app. These services can already be bought using other payment options, but the idea of the virtual currency is to reduce the inconvenience of having to pay separately each time – effectively allowing users to bulk up on credit.
As of now, ‘chocos’ can only be used to pay for the company’s own emoticons in Kakao Talk, as external gifts and icons are not yet supported by the new cyber money. However, that is likely to change and we expect that more items will become available going forward, particularly when the service introduces its game center in July.
The retail industry is experiencing a revolution on a par with the introduction of plastic payments in the 1950s or the launch of the internet and e-commerce in the early 1990s. The mobile device, a gadget we check more than 200 times every day, is changing the way we discover and buy products and services. The Guardian reports.
PayPal predicts that we won't have physical wallets by 2016. Visa Europe predicts that 50% of all its transactions will be made via mobile by 2020, and retailers are already reporting that up to 12% of their traffic comes from mobile channels (eDigitalResearch, May 2011). There is no doubt the market is buzzing with expectation and retailers are starting to catch-on.
... The mobile is a highly personal device. It is smart, always connected and capable of two-way interaction. Mobile retail isn't just about moving your wallet to your device or delivering internet sites to your mobile; it has the potential to revolutionise the entire retail experience. For example, the way we search the internet, the way we receive marketed, make buying decisions and pay for things.
Facebook began rolling out a new mobile payments system today that reduces the number of steps users must take to complete a purchase from seven to two. [via C/net]
The "low-friction carrier billing" is available to the majority of wireless carriers in the U.S. and U.K. as well as in more than 60 countries around the world, Facebook said today in a developer blog announcing the new system.
There's a cold war going on in the technology world. As smartphones become ubiquitous and online shopping grows, tech companies and payment companies are arming themselves for battle over how people pay for things.
Money transfer via mobile phones has expanded to 16 percent of the total population in sub-Saharan Africa, according to a new World Bank study that provides a global picture for how people save, borrow, make payments and manage risk. PC Advisor reports.
The Global Financial Inclusion Database, or Global Findex, has found only 3 percent of the population in the rest of the world take advantage of money transfers through mobile phones.
In sub-Saharan Africa, take-up of mobile money services, pioneered by Kenya-based Safaricom's M-Pesa service, has been boosted by the fact that traditional banking is hampered by transportation and other infrastructure problems.
"Money transfers through mobile phones is a form of increasingly nontraditional banking that often doesn't require users to travel or set up an account at a brick-and-mortar bank," according to a statement issued by World Bank.
"Such mobile banking allows account holders to pay bills, make deposits or conduct other transactions via text messaging," the World Bank noted. Kenya, where 68 percent of adults report using a mobile phone for money transactions, has seen particularly impressive growth in this market.
According to the study, three-quarters of the world's poor do not have a bank account, not only because of poverty, but also because of the cost, travel distance, and the amount of paperwork involved in opening one.
Visa has announced that Samsung’s new Galaxy S III will indeed be the official London 2012 Olympic Games smartphone, joining forces to offer NFC payments to athletes while they are competing in the city. TheNextWeb reports.
Launched last week, the Galaxy S III is Samsung’s flagship Android smartphone, featuring a 4.8-inch Super AMOLED screen (with a 1280×720 HD display), a 1.4 GHz Exynos 4 Quad processor, 8-megapixel camera, 32GB of internal storage and a range of new voice, eye-tracking and software features that make it easier to share content with friends, make calls and find new information.
A report by credit card processor, MasterCard has identified Singapore, Canada, the USA, Kenya and South Korea as the most prepared markets for mobile payment services to take off. Cellular News reports.
Their Mobile Payments Readiness Index of 34 countries indicates that while it's early stages for mobile payments adoption, all markets globally -- either highly scaled and integrated ones like the UK or compact and technology-driven ones like Singapore - are making progress towards reaching an inflection point where mobile devices account for an appreciable share of the payments mix.
... In addition, findings of the MPRI reveal that partnerships among the key players in the mobile payments ecosystem are essential to accelerate the commercialization of mobile payments
MasterCard announced PayPass Wallet Services Monday, a new global offering that makes it easier and faster for customers to make purchases in stores and online, by allowing those purchases to be made with a single click or tap.
The digital wallet service - which faces tough competition from the likes of Visa, PayPal and Google - will launch in Australia in the third quarter of this year, with initial partners including JB Hi-Fi, American Airlines, Commonwealth Bank and Westpac.
The cost of cellphone-based services is hurting huge swaths of the developing world. Slate reports.
Despite the hype, a harsh new reality is unfolding. Take the case of the often glamorized M-PESA, Kenya’s popular mobile-phone-based payment and money transfer system. In only four years, M-PESA has grown to 14 million users. It now processes more transactions domestically in Kenya than Western Union does globally.
The use of mobile phones to transfer money and manage personal finances has provided a speedier and more cost-effective delivery system for millions of Kenyans. The Economist reported in 2009 that Kenyan households using M-PESA saw their incomes increase—anywhere from 5 percent to as much as 30 percent—after beginning to use mobile banking. By the end of 2009, M-PESA had reached 65 percent of Kenyan households.
But there’s a downside to this program—and others like it—that’s too often ignored: Access. Telecom companies have relatively little incentive to build out infrastructure, especially in poorer, rural markets.
Africa is the continent where “mobile money”—monetary transactions on mobile phones—is by far the most advanced. According to a new survey of financial habits by the Gates Foundation, the World Bank and Gallup, in 20 countries more than 10% of adults said that they had used mobile money at some point in the previous 12 months; 15 of those countries were in Africa. For the most part, mobile phones are a substitute for traditional banks, enabling people who live miles from a branch or ATM to use financial services.
London's commuters will be able to use their mobile phones and bank cards for "ticketless travel" across the metropolis, if 
Thousands of London bus users already pay their fares using contactless bank cards instead of TfL Oyster cards, which have been widely used over the past decade. Users pay different charges for different London Underground zones, so that's a trickier proposition.
A must read article by Lonnie Shekhtman for 
Following the recent strike in Kenya by state-employed teachers, lecturers and doctors, the country’s treasury has said it will cover the approximated $300 million USD cost in wage increases through cost cutting and introduction of new taxes, including on mobile money transfer services such as 
Bank of America Corp is testing a technology that allows a customer to pay at a store register by simply scanning an image with a smartphone, such as Apple Inc's iPhone or Google Inc's Android devices.
Smart shoppers are consulting multiple platforms to aid with shopping and to save money, according to recent surveys. 
What's the most successful mobile payment system to date? It's an application that can be downloaded onto your phone to pay for coffee. Yes, the 
Reuters 
A new service — to be created jointly by Wal-Mart, Target and other retailers — could give customers an easier way to combine their digital wallet, instant coupons, gift cards and loyalty points in one app.
A beginner’s guide to m-Pesa and an examine its implications for financial access in developing economies. By Ken Banks for 
Korean messaging 
The retail industry is experiencing a revolution on a par with the introduction of plastic payments in the 1950s or the launch of the internet and e-commerce in the early 1990s. The mobile device, a gadget we check more than 200 times every day, is changing the way we discover and buy products and services. 
New technology to enable people to withdraw money from cash machines using their smartphone has been unveiled. The 
Visa has announced that Samsung’s new Galaxy S III will indeed be the official London 2012 Olympic Games smartphone, joining forces to offer NFC payments to athletes while they are competing in the city. 
