Linkdump on Payments

ING Banking a bit wobbly lately

2012-01-26T07:46:00.000Z

This sunday I wanted to order a cd and sheet music by Jules de Corte. Whereas usually this is just a matter of seconds, using iDeal, I now had to circumvent it to do electronic credit transfers via e-banking. It was clear that the ING database had some glitches, but after a couple of tries I succeeded in transferring the money. While I could just repeat the exercise, others couldn't. The glitch turned into a major failure of ING-e-banking in the last couple of days. Today however, everything seems to be up and running again. And ING will once more regret using Oracle as the back-end database of an online payment system.

Fotograph your bill and pay it... new stuff from Denmark

2012-01-10T20:07:00.001Z

With all the new apps, technology and stuff, you can just build any payment produkt you like. It appears there is a Danish bank that has developed an app that lets you photograph your bill, send it to the bank and they will transfer the money to the proper account. And for those that master the Danish language: see the instructions of the Danske bank here. I am not entirely sure if this application will really be a killer-app that fullfills its consumers' needs. But it's interesting to see that nowadays the development burden for banks is lower than in the mainframe-days, allowing for test-trials in the field rather than extensive market research.

The euro-note now ten years in circulation...

2012-01-03T11:30:00.000Z

This new year brings us a bit of a memory: ten years ago we started using the euro bank notes. For many people in the Netherlands, this was a step back in terms of quality and design. And we also notices how prices were quickly moving up. At first all economists and the central bank heavily denied this, but later research (in 2005) showed that in the first year of the euro, inflation was 3,6%, of which 0,5% due to the introduction of the euro. In their efforts to deny the experience of the public, economists coined the term: 'experienced-inflation' ('gevoelsinflatie') to outline a situation in which the perception of price rises differed from reality. This helped the economists...

Looking back on 10 years of blogging.....

2011-12-31T10:36:00.000Z

These days it's about ten years ago that I started blogging: I set up the blog Retail Betaalgedachten to voice my views on the retail payments issues in the Netherlands. At that point in time a friend of mine had a personal blog, but I started to use blogs for my consultancy work, thus being one of the very early business bloggers in the Netherlands. So here's the bottle to celebrate...: Blogging has been with me ever since those first days. The Retail-betaalgedachten became: Linkdump on Retailpayments that you are now reading. And of course, when setting up 11a2.nl, a representative organisation for e-money issuers in the Netherlands, I chose the blog as the main landing/reading...

Six Pack becomes fivepack: T-mobile leaves NFC-consortium of Dutch banks and telcos

2011-12-05T15:12:00.001Z

Tweakers net today reports that T-mobile is leaving the consortium of banks and telco's in the Netherlands. The sixpack consortium is also delayed in its plans (from mid 2012 to beginning of 2013) given the considerable market share that both the banks and telco's have. So they will go to Brussels to aks for exemption of competition rules.

Costs of fraud by phishing at banks doubles in 2011

2011-11-14T11:12:00.000Z

The Dutch Bankers Association today starts a campaign to increase awareness of consumers that they shouldn't fall for the numerous phishing mails that flood their inbox. The reason is the fraudnumbers in banking. After the first half year of 2011, the fraud by onlinebanking had already succeeded that fraud over 2010 (9 million euro). And similarly, the number of phishing incidents in this first half year amounted to 2418 while over the whole year 2010 this number was 1383. The NVB has also renewed the website VeiligBankieren.NL; a website that I personally helped come into existence in 2005, as it was clear that awareness on the risks of e-banking required timely communication. This...

Finnius conference on e-money

2011-11-08T09:14:00.002Z

As some of you may know, I have had quite an interest in electronic money in the Netherlands in the past. And yesterday I had the pleasure of visiting the conference on e-money by Finnius. The conference was concise and clear with talks by Andries Doets on the regulation and a speech by the supervisor (DNB: De Nederlandsche Bank). This provided a good overview of rules, exemptions and clarified the role of DNB. After the beautiful and energizing musical break (Duo Sottovoce) Casper Riekerk moderated a discussion that focussed on business models and the difference between paper-based and digital electronic money. The panel and audience agreed that the margins in the e-money/payments...

DNB releases results of survey how Dutch consumers pay...

2011-11-03T14:37:00.002Z

Today, our central bank, De Nederlandsche Bank (DNB) released survey results on Dutch payments in 2010. It showed that in 2010 consumers in the Netherlands made 4.4 billion cash payments at checkouts (shops, cafés and restaurants, petrol stations and at markets) and some 672 million between persons. So this creates an interesting benchmark for anyone doing studies on payments. If you wish to estimate the number of p2p payments in a country, just take about 16 % of the total cash transactions (but remain aware of cultural differences though...). The study (only available in Dutch: here) also reveals that most Dutch consumers pay with the payment product that they prefer. So it...

The cultural side of payments: Hofstede provides an interesting picture

2011-11-02T10:32:00.002Z

One month ago I had a meeting with two American visitors that wished to know more about the history of payments here in the Netherlands. And as they had just arrived and had no time for the Walking tour on the history of Dutch payments we discussed those topics over a cup of coffee and lunch. And of course we came to discuss the Why-question. Why is it that the Dutch seem to be more keen on cooperating in the area of payments than other countries? Of course there are a number of historical reasons. And one might argue that the Dutch are of a more cooperative nature given that they have to battle the water cooperatively, but it's hard to substantiate this. But then I realized...

Interesting paper on best practices for Payment Regulation

2011-10-28T10:02:00.005+01:00

As I browsed through the programme and speakers of the E-MA conference on e-money I noticed that Rhys Bollen would present on regulatory issues. And upon googling I discovered his dissertation on best practices for Payment Regulation. Although I haven't finished reading it yet, I think it's quite a good read that deserves further attention.

E-money: an innovation revisited...

2011-10-27T13:47:00.000+01:00

I think it is fair to say that technology and payment innovation occurs in several 'rounds'. It's sort of a boxing game where enterprises seek their niche in terms of consumer/company services but also in terms of regulatory niches. This holds true in particular for the domain of e-money. Some fifteen years ago (I feel quite old when writing this) the buzz was all about Mondex and e-cash: two new e-money schemes. The development of these schemes coincided with the increased use of the Internet as well as the use of mobile phones. And there was a lot of debate on which rules to apply. Should e-money issues become banks or not. I remember setting up a specific branche-organisation (11a2:...

And there goes Bitcoin sinking...

2011-10-25T10:10:00.000+01:00

These days reports are out about the sinking value of Bitcoins and we see users worried about it. And so we see yet another social/payment experiment forget that it takes quite a robust design to get a payment system going. Enthousiasm and technology are important, but no enough. See also my previous post here.

NFC project by Dutch banks and telcos: six pack

2011-09-28T10:33:00.001+01:00

Since some time, work is on the way between the three big banks and telco's in the Netherlands on payments with NFC. See the report in the NFC as of July and as of September. The project is named six pack by the way and time will tell if it really deserves that name... From NFC: The banks have agreed to put the NFC payment applications onto SIM cards the telcos will issue, so they likely have agreed to some type of model in which banks would rent space for their payment applications on the telcos' SIMs. Bol declined to discuss models. ING has been designated to speak for the rest of the partners, a bank spokeswoman said. There are still many unanswered questions for the project,...

Financial History of Payments... separate log

2011-09-27T10:43:00.001+01:00

A couple of months ago, I opened a new weblog, dedicated to the financial history of payments, banking and Amsterdam. So for those interested in the old times, do have a look at my weblog on financial history here.

Latest oversight framework of the ECB: the institutional drift continues and the blind spot for outside-payments increases

2011-07-05T19:44:00.007+01:00

Today, the ECB published updated standards for oversight of payment and settlement systems. And once more I found it quite interesting to observe this big institution increase its span of control and policy-reach in a process which is called institutional drift. Which is a scientific term for: just grab something that is within reach of what you're doing and see if anyone can stop you. If not, you just expanded succesfully your territory. Which is the fuel and drive for any organisation or institution of course. The distinctive example of institutional drift, worthy of further scientific exploration (if ever a political scientist would wish to do so), regards the vague term: 'oversight'...

Fed issues rules to debit card interchange...

2011-07-02T11:21:00.000+01:00

After a lot of thinking, the FED issued its rules for debit card interchange. Essentially they've outlined the borders beteen which the outcome in the market is acceptable. And it's a smart solution for a tricky debate, because at some point it looked as if the FED didn't really knew what they were up to. An interesting element is that 3 party networks are excluded from the regulation (which is legally inevitable). And that a sort of competition appears to be forced upon the issuer. In any case, the markets reaction in terms of increasing share price was quite clear. Although it might also have been the short-squeeze in US treasuries that did the trick.

Dutch Ov-Chipcard gets instructions from parliament

2011-07-01T11:34:00.000+01:00

This week was the last week of this seasons parliament sessions in the Netherlands. And our parliament has a tendency, of late, to increasingly focus on details and incidents, rather than strategy and policy. Thus, responding to consumer dissatisfaction, the Dutch MPs approved a decree in which TransLinkSystem, the builder of the public transport chipcard, is ordered to simplify the check-in, check-out system. Upon check-in the system deducts a big amount (sort of bail) from the pre-paid purse and only if check-out functions properly, the system returns the money (and deducts the fare price). This doesn't work properly so if somehow the machines don't work properly you quickly run out...

And another nice example of attempted internet-fraud....

2011-06-14T19:07:00.000+01:00

It's not always nice to be subject to Internet fraud. Last weekend I heard about a couple that had their hotmail account hacked. And I asked for the example at hand. The result was that suddenly, their friends and family got the e-mail below. Which evidently was a scam (asking for a quick money transfer) but still got some of their friends fooled. So for prevention purposes I thought I better put the e-mail on the web. So be warned, don't fall for this !! I am sorry i did not inform you about my trip and I do hope that you receive this email in good health. I am presently in Great Britain,London to be with my ill Cousin. She's suffering from a critical uterine fibroid and must...

Bitcoin.... dubious payment mechanism

2011-06-11T16:24:00.006+01:00

Every now and then, Bitcoin keeps on popping up in posts (including mine). At first I only looked at the technical bit, but I've come to understand that essentially the amount of coins issued in the system will be fixed. Furthermore, in terms of governance, there is little known about the developer and designer. So that leaves us with a payment instrument with: - security by obscurity, both in technical and governance terms, - uncertainty as to legal rules/jurisdiction applied, - a limited amount of coins to be issued. And let me be clear. All of the above mean that it is unfit for use and essentially only an activity that may somehow benefit or amuse the owner. So, we can be...

Lessons from (Dutch) payment history

2011-05-31T21:14:00.000+01:00

Around the year 2000 I was working on both my historical research about the development of payments in the Netherlands and in the payment policy department of the central bank. As a result I started to gain some more insight into the 'unchangeable' dynamics of the payment industry. I summarized these in a presentation that I gave on the First European Financial Cryptography Conference in Edinburgh. You can download the presentation here. The location in Edinburg was very historic by the way. We were in the library, if I recall correctly, the library of the former parliament of the city. And we were in the hometown of John Law, a famous payment innovator, who was born in...

ING eliminates legacy savings accounts

2011-05-30T10:07:00.001+01:00

ING is these days kicking out all old savings accounts. Among those, the infamous: Rente, Plus and Sterrekening. These were the first savings accounts of the Former RijksPostSpaarbank that merged with the Postal Giro services (PCGD). The accounts were linked to the giro-account and worked as the savings account with the same number. And the names of those accounts was symbolic of course: - Rente - Plus - Ster creating a acrostichon for RPS, so that the name RPS would live a long time after the merger. Until this year that is, because the technology of the 20th century is not just that flexible in the 21th.

Moving to EMV-based ATM and POS-transactions.... it's the small things

2011-05-26T09:52:00.000+01:00

It's the small things in which you can see that in the Netherlands we're moving slowly to EMV-based transactions. At the ATM's we now need to press OK after entering the PIN-code. That used to be a quicker interface with merely the pincode and some other buttons. And at the POS the difference is more clear. With some shops, there's a band of plastic on the side of it so that you can't swipe any more. And in the internet-banking domain, we now don't see an amount which is directly debited. No, we can see that the amount paid is reserved, because the basis is now a Maestro payment, developed for the international payments (and thus: first the amount is reserved and later after...

Serious trouble for Rabo with DDOS attack

2011-05-03T14:22:00.000+01:00

Yesterday was the day that Rabobank was attacked by a DDOS. It took them more than a day to solve it, and they still warn the public that there may be hickups. As far as I recall, this is the most serious DDOS that we've encountered in the Netherlands. Earlier this year, the banks informed us that in 2010 the direct financial damage of attacks on e-banking in the Netherlands (trojan horses etc0 amounted to 10 million euro (five times more than the 2 million in 2009). So banks and police will remain alert and govcert will be glad that it could be of use to the banks.

Ocassional error with pre-paid card: prisoner withdraws half a million euro

2011-05-02T13:12:00.000+01:00

Funny story on nu.nl today. A prisoner who received a pre-paid debit card (ensuring that he would never witdhraw more oney than on his account) was accidentally provided with a card without a spending limit. So over time he kept on withdrawing up until a total of almost half a million euro..

History (of e-money) repeats itself... central bank alert on crowd-funding.... and (still) missing the real issues in the market..

2011-04-14T14:07:00.007+01:00

One of the major challenges for central banks and supervisors is to appreciate new technologies and to decide their policy stance on the subject matter. Currently we are witnessing a case of 'history repeats itself' here in the Netherlands, as the central bank, DNB, has informed the public that it will look out for instances of crowd-sourcing. They mean the situation that a group of people pre-pays the production of a book (tenpages.com), film or anything else. And suggest that this is the equiuvalent of attracting deposits (a bank activity), which therefore warrants a closer look by the supervisor. I dare to disagree and would suggest DNB to reflect on their policy stance and take...