"Free Checking" Accounts, Not So Free

From EarthTimes.org

Banks Reap Huge Profits From Overdraft Fees on 'Free Checking' Accounts

Posted : Mon, 19 Nov 2007 18:31:49 GMT
Author : California Reinvestment Coalition

SAN FRANCISCO, Nov. 19 /PRNewswire-USNewswire/ -- Banks are robbing their customers blind with overdraft fees. It is modern day usury to allow customers to spend money they don't have and then charge them excessive fees without their consent, as banks do with overdraft fees. The California Reinvestment Coalition (CRC) released a report today that reveals how the complicated and deceptive overdraft policies at California's biggest banks allow them to reap huge profits from their mostly working class account holders.

"The free checking accounts that banks advertise are not really free. Customers are lured into debt traps by being allowed to use their debit/ATM cards even when there is no money in their account," says CRC Senior Policy Advocate Rhea Serna.
Click here to read more.

By using IPM pre-paid, stored value cards instead of bank accounts, unknown fees can be avoided.

Cross-Border Banking

From U.S. Federal Reserve Bank of New York

Customers who bank with U.S. depository institutions enjoy some of the best and strongest consumer protection laws and deposit insurance available in the world. These safeguards include laws and regulation designed to ensure that:

Interest rates charged for loans or paid on deposits are explained truthfully and clearly
Bank deposits are insured

Personal and confidential information is used and handled appropriately
Depository institutions are managed in a safe and sound manner and in full compliance with applicable federal and state laws and regulations

If U.S. banks and depository institutions fail to adhere to laws and regulations to protect depositors, you can file complaints with federal or state regulators.

The open nature of the Internet makes it easier for you to get information on financial products and services offered by banks and financial institutions from around the country and the world. Thus it is important to remember that if you do business with institutions outside the United States:
Your transactions may not be protected by United States or state laws or regulations, and your deposits may not be insured
Instead, the laws and regulations of the foreign bank's home country may apply
Consequently, it is wise to know a foreign bank's reputation before you decide to open an account or purchase financial products or services. This includes learning where the institution is located or chartered and what kinds of consumer protection, if any, the bank's home country offers.

Most banks provide information on their Web site about where they are located and how to contact them by telephone, in person, or by postal mail. Do not hesitate to contact them if you still have questions about consumer protections after reading on-line materials.

Directo a Mexico program

Referrence: Directo a Mexico FAQ

Directo a MéxicoSM (Direct to Mexico) is a joint marketing effort between the Federal
Reserve Banks and the Banco de México, the central banks of the United States and
Mexico, respectively. This program is designed to help U.S. financial institutions increase
their share of the rapidly growing U.S. to Mexico remittance market by encouraging and
assisting their customers in using the Federal Reserve Banks’ FedACH International®
Mexico Service.

What is the FedACH International Mexico Service you ask? Well you came to the right place to find the answer. International Personnel Management, Inc. (IPM) can show banks in the United States and in Mexico how to take advatage of the Directo a Mexico program which will help banks and customers alike.

Further information about Directo a Mexico program can be found in an article in the Havana Journal.

"The Federal Reserve and the Central Bank of Mexico are promoting a joint
program called Directo a Mexico, under which participating U.S. banks charge low
fees to send money to Mexico by using the central banks as intermediaries.

People sending money to Mexico pay as much as $15 per transaction—known
as a remittance—to companies such as First Data Corp.’s Western Union Financial
Services Inc. and MoneyGram International Inc. Those companies handle most of
the estimated $20 billion a year sent between the United States and Mexico.
Banks account for only about 5 percent of that amount."

It Costs Money to be Poor

Predatory businesses such as pawnbrokers, pay-day lenders, rent-to-own stores, and used-car lots prey upon the poor and heavily indebted. There is a better way.

From Spero News
By John S. Rausch

A row of identical signs arranged like landing lights at an airport repeat the appealing offer: “Borrow $200, Repay $203.” This modern spider-to-fly invitation displayed in front of the office of payday lenders appeals to hard strapped workers who just need a boost till payday. What’s three bucks? Technically, since the loan spans only 14 days, three bucks in this case represents 39 percent interest (APR). After this introductory offer, the second $200 loan will demand a $230 repayment–or 390 percent APR!

Payday lenders, together with pawnshops, check-cashers, tax refund lenders, rent-to-own stores and “buy here/pay here” used car lots represent the fringe economy. The term “fringe economy” refers to those businesses that engage in financially predatory relationships with low-income or heavily indebted consumers by charging excessive interest rates or exorbitant fees and prices for goods and services. Other parts of the fringe economy include credit card companies charging sky-high late payments or over-the-credit-limit penalties, cell phone providers pushing excessive prepaid plans and subprime mortgage lenders hiding the real cost of the mortgage.

...

Around the world the poor have fought the money lenders through collective action with institutions like the Grameen Bank and credit unions. These are structures people of faith can explore as more middle class families slide into the ranks of the working poor. Universal health care would save countless families from bankruptcy, while a standard living wage would shrink the pool of the financially desperate. Add to this stricter and enforced usury laws and you create rungs on the ladder for moving up.
The vision: replace the spider-to-fly economy with one permitting a-place-at-the-table for everyone.

Click here to read the whole story.

Calling Cards get Static from Immigrants

While reading the story below about poor performance by telephone calling card companies, realize that IPM cards can be used as cash loadable phone cards. We can offer comprehensive cards and attract dissatisfied calling card customers.

From the Las Vegas SUN

By Timothy Pratt

For Adolfo Galvez, keeping in touch with his wife and 3-year-old daughter back home in Guatemala has meant learning a thing or two.

You change telephone calling cards every few months, because some cards lose minutes after being on the market for a while.

If you dial your wife's cell phone, you'll get fewer minutes than if you call her on a land line.
Then there are some things you just accept - fewer minutes than the calling card promises, dropped lines resulting in a loss of minutes.

If you complain? "There's no one who will listen," Galvez said.

The 30-year-old stood Thursday afternoon outside the Phone Card Super Center, a busy store near Bonanza Road and Eastern Avenue plastered with fiesta-colored posters offering dozens of $5 cards that allow immigrants and others to call foreign countries.

After four years in the United States, his experience with the cards has mirrored the results of a study released this week by the Hispanic Institute, a Washington nonprofit organization.

The study said the calling card industry is ripping off Hispanics and other immigrants, offering fewer minutes than advertised and hitting millions of immigrants , many of whom don't complain, with hidden charges.

Read the rest by clicking here.

IPM Starts Remittance Radio Webcast

International Personnel Management, Inc. (IPM) has begun a 30 minute weekly webcast about the latest in international remittance and stored value technology.

The live broadcast will be every Sunday afternoon at 3pm Pacific Time; 6pm Eastern.

Anyone may call in to the show by calling +1(724)444-7444 and when prompted the the Talkcast ID is 52760.

If you miss the weekly live webcast you can listen to past episodes anytime by coming here to the IPM Blog at http://internationalpm.blogspot.com/ or going directly to the Remittance Radio page on Talkshoe.com.

Listen in to hear the latest capabilities and methodologies in the rapidly growing industries of stored value and remittance.

Boycott protests Western Union fees

By David Milstead,
Rocky Mountain News
September 14, 2007

Western Union has spent much of 2007 worrying that some of its customers have stopped sending money for fear of deportation.

Now, an immigration-advocacy group is urging the transmitter's customers to stay away for a different reason: The company's prices are so high, the group says, they're exploitative.
The Transnational Institute for Grassroots Research and Action, an Oakland, Calif.-based group, is launching a boycott. The group says Western Union's fees are too high and it doesn't reinvest enough in the communities it serves.

The boycott announcement comes just as Douglas County- based Western Union announced a new, five-year, $50 million charitable-giving program called "Our World, Our Family."

The program includes scholarships for children in two-country families and immigration advocacy. It follows the company's earlier five-year, $40 million program of giving.

"We believe our level of giving is comparable with others in the industry," said spokesman Daniel Diaz. "We strongly believe our model of contributing to communities is working."

Francis Calpotura, founder of the boycott group, argues that the charitable giving is small in relation to the company's size, particularly when its fees "come from families without a lot to begin with."

Western Union's pricing has been a sore point before. The company faced a number of lawsuits in the 1990s that alleged consumers were misled by the company's undisclosed profits on foreign currency exchange. They were settled in December 2000, and the establishment of the Western Union Foundation was part of the deal.

There's no question the company's prices are higher than its competitors', as the company positions itself as having an unparalleled branch network: 300,000 agents worldwide, or as many as the next eight largest money transmitters combined.

Competition on certain transmitting "corridors," particularly to Mexico, has been intense in the past several years, and Western Union reduced prices to narrow the distance between it and other companies. Still, said Gwenn Bezard, research director at consulting firm The Aite Group, Western Union's prices remain about 10 percent to 15 percent above closest competitor MoneyGram.

"To an extent, you can argue it's too expensive," Bezard said. "But there aren't too many good alternatives."

Migrant Cash is World Economic Giant

"Immigration, Inc. - one of the biggest businesses on the planet."

From the Associated Press.
By WILLIAM J. KOLE
Associated Press Writer

TIRANA, Albania (AP) -- Josif Poro pats his new sofa, points with pride to his carpets and runs a wrinkled hand over a gleaming white refrigerator. He and his wife barely scrape by on their $220 monthly pension. They'd have to do without many of the items in their cramped apartment if their son, a factory worker in Greece, didn't faithfully send home part of his earnings.

"We call him our golden boy," said Poro, 83, a retired textile mill worker.
Around the world, millions of immigrants are sending billions of dollars back home.
One sweaty wad of bills or $200 Western Union moneygram at a time, they form what could be called Immigration, Inc. - one of the biggest businesses on the planet.

Experts tracking the phenomenon told The Associated Press they have gotten a much clearer picture since the 9/11 attacks, when authorities trying to cut the flow of cash to jihadists began taking a harder look at how immigrants move their money around.

Click here to read the rest.

Remittances, Free Trade and Cross-Border Banking

From AOL Money and Finance via PR Newswire.

DALLAS, Aug. 20 /PRNewswire/ -- Remittances to Mexico, free trade and cross-border banking are the focus of the Federal Reserve Bank of Dallas' latest issue of Southwest Economy. Find the July/August issue online at http://www.dallasfed.org . Lower money-transfer costs and better measurement techniques likely explain the post-2000 growth in remittances from the United States to Mexico, according to Dallas Fed assistant economists Jesus Canas and Roberto Coronado and senior economist and policy adviser Pia Orrenius.

In "Explaining the Increase in Remittances to Mexico," the authors assert that the growth in the Mexican migrant population and their income alone can't account for the increase in remittances.

"Real remittances grew 170 percent from 2000 to 2005, but in the U.S., the Mexican-born population grew only 20 percent," they write.

Instead, they find that more migrants are turning to formal channels to send remittances due to reduced fees and that the Banco de Mexico has modernized procedures for collecting and recording remittance data.

"Spurred by declining costs for both senders and receivers, migrants increasingly have been transmitting remittances through formal channels rather than informal channels, such as carrying cash back home," according to the authors.

Many Americans get only the protectionist viewpoint on free trade, says Blake Hastings in this issue's "On the Record" conversation. "They rarely hear how protectionism distorts the economy, leads to higher prices, breeds mediocrity in service and product quality, and reduces variety," says Hastings, vice president in charge of the Dallas Fed's San Antonio Branch and former executive director of the Free Trade Alliance in San Antonio.

Hastings points out that South Texas cities, including San Antonio and McAllen, are reaching out to China, Brazil, Canada and Europe for trade opportunities. "All these communities are learning that you can't just wait for trade to come to you," he says.

In "Banking Industry Evolution Along the Texas-Mexico Border," economic analyst Joaquin Lopez and senior economist and policy adviser Keith Phillips review presentations from a recent Dallas Fed conference, "Cross-Border Banking." They report that as opportunities for banking increase along the border, the divide between U.S. and Mexican financial systems will continue to fade.

Speakers at the conference included Dallas Fed international financial analyst Edward Skelton, who said that explosive growth in the securitization and mortgage market in Mexico will boost the nation's economy by encouraging higher-quality housing, increased savings and greater wealth creation. SOURCE Federal Reserve Bank of Dallas

Go Green with Your Green

From the Payroll News Wire and the American Payroll Association.

Click here to watch video or listen to audio in several formats.

"Don't have a bank account? Ask your employer to pay you with a paycard." Getting paid electronically is not only quicker and more convienient, it can also help save the environment.

Every year, more than 146 million workers in America receive a paycheck. That's more than 3.5 billion paychecks per year. For many employees, a trip to the bank on payday is a favored tradition. But that innocent trip to cash your check costs more than just wasted time. In fact, the way you're paid could be damaging the environment.

Most American companies offer a number of free and easy ways to make how you're paid more environmentally friendly. The American Payroll Association offers these tips to "go green with your green."

Direct deposit – Only 71% of workers in America take advantage of this "green" payment method. When you sign up to receive your paycheck electronically via direct deposit, your pay goes straight into your bank account. No waiting in line at the bank drive-thru, idling your car and releasing dangerous ozone-depleting emissions. Plus, your money is always there on payday, even when you're on vacation.

Paycard – Don't have a bank account? Ask your employer to pay you with a paycard. You'll get the same conveniences and "green" benefits as with direct deposit. Your pay will be deposited into an account that's accessed by a pin protected card, similar to an ATM card. You can use the card to make purchases, get cash back at retailers and withdraw money from an ATM. Plus, no more paper as you can keep track of your pay online.

IRS e-file - This IRS program provides a way for many workers to file their income tax using a paper-free method. In fact, 70% of workers can have their taxes prepared and filed completely free using e-file! Use this "green" method to file your tax return and you will get your tax refund weeks faster. Additionally, you can choose to get your refund sent directly into your bank account via direct deposit, saving paper, stamps and delivery costs.

Direct deposit, paycards and IRS e-file are all easy, safe, secure and environmentally friendly. For more information on how you too can go "green" with your green, visit www.nationalpayrollweek.com.

Prepaid Cards: The State of the Industry

Hat Tip: Bobsguide.com

Boston, MA - 23 July 2007

Aite Group expects the value of branded and private label prepaid card transactions to amount to US$178 billion by 2010, up from US$113 billion in 2007.

A new Impact Report from Aite Group sizes and forecasts the evolution of the prepaid card industry in the United States. It examines the key trends impacting each major component of the industry value chain.Among key findings, the report reveals that despite rapid industry growth, gaining scale in branded prepaid card processing remains a major challenge for processors and issuers. The report also indicates that the introduction of reload services for branded and private label prepaid cards, the drive to offer private label prepaid card products to small merchants, and the deep integration of branded and private label prepaid cards into various industries' business processes are today's three major trends reshaping the industry.
"In the coming few years, the concept of prepaid will grow increasingly irrelevant as it becomes ever-more successful," predicts Gwenn Bézard, research director at Aite Group and author of the report. "Over time, the subtle distinctions between the various card products, such as debit versus prepaid versus credit, and branded versus private label, will erode as products grow in diversity and complexity and mesh together. By the middle of the next decade, the prepaid card industry will have ceased to exist as a recognizable entity."

Anti-laundering compliance costs mount

Hat Tip: Washington Post


By MADLEN READ
The Associated Press

NEW YORK -- Complying with anti-money laundering laws has been much more expensive than banks anticipated, and some still aren't meeting all requirements, a new survey says.
Banks around the world saw compliance costs jump an average of 58 percent over the past three years _ more than in the previous three years, and higher than the 43 percent increase banks predicted in 2004, said a survey commissioned by Swiss cooperative KPMG International.

Among the six regions surveyed, North American banks saw the highest percentage cost increase, with costs rising 71 percent over the last three years. The Middle East and Africa region was close behind with a rise of 70 percent. Banks' compliance costs rose 58 percent in Europe; 37 percent in Asia; 59 percent in Central and South America; and 60 percent in Russia.
Most of the money went toward buying technological systems and hiring experienced personnel to monitor transactions, said the KPMG report, which did not measure the dollar value of the costs.

"A lot of institutions were not automated to the degree regulators were expecting them to be," said Teresa Pesce, U.S. partner at KPMG's forensic practice.

North America respondents said they predict a cost increase of 28 percent in the next three years. Globally, costs are expected to increase 34 percent in the next three-year period.
Many governments require that banks take steps to prevent money laundering. Money laundering involves making certain financial transactions to hide the source, nature or destination of illegal funds. The United States has the Bank Secrecy Act, which was passed in 1970 and amended by the USA Patriot Act of Oct. 26, 2001. It has since been used increasingly to stop the flow of financing to terrorist organizations.

According to KPMG's survey, 93 percent of North American respondents said they had a formal system in place, meaning 7 percent of banks were not in compliance with the Act's testing requirements.

Noncompliance can be costly.
Last year, Fort Lauderdale-based BankAtlantic agreed to forfeit $10 million to the U.S. government to avoid criminal charges that it permitted millions of dollars in suspected drug money to be laundered through its accounts.

And in 2005, Riggs Bank, now owned by Pittsburgh-based PNC Financial Services Group Inc., agreed to pay a $16 million fine and pleaded guilty to a felony charge of failing to report suspicious transactions involving foreigners including former Chilean dictator Augusto Pinochet and members of his family.

Despite the possible ramifications, just 63 percent of the survey's North American respondents said anti-money laundering issues were a high priority for senior management.

Independent research agency RS Consulting surveyed 224 of the world's 1,000 largest banks, in 55 countries, through telephone interviews over a six-week period.

Ninety-five percent of North American banking executives surveyed said the number of suspicious activity reports had increased, and 63 percent of those same executives said the number had increased "substantially."

"The better your systems are, the better your monitoring is, the more you'll see _ that's going to drive up the number to some extent," Pesce said.

America's Great Divide

Hat Tip: Bank Technology News

About 73 million people in the U.S. are unbanked or underbanked, a marketplace that is as diverse as it is unknown-often new to the U.S., frequently entrepreneurial and all lacking credit histories. Banks will find a bevy of new risk tools to help reach out to this market of emerging creditors

By Michael Sisk

The subprime mortgage troubles have grabbed a lot of headlines this year as delinquencies and foreclosures mount and lenders scramble to tighten underwriting standards and head off onerous new rules from a populist-minded Washington. But this story has masked another lending phenomenon gathering momentum: lending to unbanked or lightly banked consumers, whom some are calling "emerging credit."

Make no mistake, there is a significant difference between subprime and unbanked. The former have established and blemished credit histories that can be viewed through the three major credit repositories, while unbanked can't be easily tracked because they have never had a credit card, car loan, mortgage or other financial product that would leave a credit trail. However, these two groups do have two major commonalities: risk profiles that fall outside the norm and must be carefully studied before extending credit; each group also represents a deep pool of potential customers.

Reaching the unbanked is one of those perennial dilemmas for banks, but several new technology tools recently have been unveiled that show great promise in helping to bridge this gap. And it is a gap worth bridging. The Center for Financial Services Innovation estimates 73 million people in the U.S. are either unbanked or underbanked. When one considers that that figure is 56 percent of the total banked population of 130 million, it becomes pretty clear how much business is up for grabs.

Click here to read the rest.

Payroll card is for people without bank accounts

Hat Tip: Gannett News Service

For 71 percent of America's workers, payday means an automatic direct deposit into a bank account.

But for as many as 28 million people in the United States who don't have a bank account, payday means cash or a paper check.

Those paper checks aren't convenient for so-called "unbanked" people, who end up paying exorbitant fees to cash a check or pay bills. And it's not great for employers, either, who pay $1 to $2 per paper paycheck and up to $9 to replace one if it's lost. An increasing number of employers are now finding a solution in a new type of plastic: the payroll card, a pre-paid card that employees can use just like a regular ATM/debit card, and employers can reload with the same ease as direct deposit into the bank.

"Better, faster, safer, more secure," is how William Dunn of the American Payroll Association describes the payroll card option. The association estimates 4 million paychecks are lost or stolen annually.

"The paycard helps employers increase the number of electronic payments they make to employees," Dunn says. "You don't have to deal with check fraud; if they lose a paycard, it's easier to replace; and it's really good for the employee as well."

Similar to ATM cards, people using the payroll cards to withdraw money are subject to fees at ATM machines not in their network. The money is debited directly from their card accounts.
Employees benefit because they no longer have to pay $5 or $6 fees to cash their paychecks, says Tom Crowder, Discover's general manager of prepaid products. Employers benefit because they save money by depositing money directly into the card account instead of cutting a check every week. (It can cost as little as 20 cents to issue a payment through a card, studies from VISA have shown.)

Discover also benefits by having more branded cards in the hands of more consumers, says David Robertson, publisher of the Nilson Report, a newsletter on the payment cards industry.
"If you're a card company, you're looking to get as many pieces of plastic out there with your name on it" as possible, Robertson said. "There is an opportunity to put a payment card into the hands of America's poorer population. They are cash-oriented spenders and this is a way to maybe make them card-oriented."

Card issuers can also gather data on cardholders over time, learning more about their spending patterns and habits, Robertson said. That allows card issuers to eventually use that information to develop and market new products in the future.

Employers loaded about $6.3 billion on about 1.5 million payroll cards in 2005, according to the Mercator Advisory Group, a Waltham, Mass.-based payments industry research firm. Those numbers are expected to increase to 3.2 million cards and $12.1 billion in payments by the end of 2007, and could reach 4.6 million cards with $17.4 billion in payroll deposits by the end of 2009.

It's not only the unbanked population that uses the cards, says Tim Sloane, who directs the Mercator Group's debit and prepaid advisory practice.

Employers also like to use payroll cards when an employee is part-time or works on an as-needed basis, if the employee moves around a lot, or if payments are irregular, such as with contractors or salesmen who earn variable commissions, Sloane said.

JPMorgan Chase & Co. issued its first VISA-branded payroll debit cards in the late 1980s, said Ted Grunberg, the New York bank's product manager for prepaid products.
But only in the last three years have the cards really taken off, Grunberg said. He attributes that to consumers' increasing comfort with plastic. Now more than 1,000 employers — from large corporations to mom-and-pop shops — use Chase's VISA-brand payroll cards, Grunberg said.

"People are getting used to this," he says. "Gift cards have just flown through the ceiling."

Automation is Washing Money Orders Away

Source: John Adams of Bank Technology News

"Prepaid cards are the new vehicle of choice among the unbanked who have long endured high money order fees. Payments firms better take note."

The amount of walk in payments for bills is decreasing in the face of more availability of stored value debit cards to the unbanked and underbanked. As people are able to transfer money to and from their cards at much less cost than the price of a money order and with more convenience the market movement is obvious.

Companies affiliated with International Personnel Management, Inc. (IPM) will maximize their entry into one of the fastest growing markets in the world.

Click here to read more.

IPM partnered with UniCache

International Personnel Management, Inc. is partnered with UniCache, Inc. to bring to the market the best remittance and st0red value card based transaction technology to the international market.

Latin America is Ready for EMV Cards

From gtnews.com.

An excellent entry point to the Card transaction market with partnership from IPM.

Smart cards that comply with global payment standards are set to take the Latin American market by storm now that previous barriers to the adoption of EMV cards - high cost, the small card user base and lack of guidelines in the region - have been overcome.

The use of EMV cards (smartcards that comply with the global standard for payment systems) is exploding in some Latin American applications, such as prepaid wireless and closed-loop stored value cards. But the conversion from magnetic-stripe cards to EMV cards in the region's banking sector, which was loudly predicted five years ago, has not yet happened. InfoAmericas believes the region will see watershed change, with rapid EMV card adoption over the next few years.

Two important obstacles that stood in the way of this transition are now being overcome. The first was the lack of uniform acceptance guidelines in a region dominated by international banks. Until recently, there were no well-established specifications that could allow smooth adoption of the EMV standard across terminal platforms that vary from country to country. The second obstacle was the enormous cost of transitioning to EMV technology given the relatively small card base and its concentration in the affluent market. The benefits to financial institutions, retailers and cardholders were not seen as sufficient to justify the switch, especially considering that EMV cards are also more expensive to produce than magnetic-stripe cards. The market was stuck in a gridlock situation where no EMV terminals were being installed because there weren't enough EMV cards in circulation, and banks were not issuing EMV cards because there weren't enough terminals.

Debit and Credit Cards Reach Critical Mass

Now, however, sustained growth in the debit and credit card market has finally established the critical mass necessary to drive EMV implementation. Twenty-five million new credit cards have been issued since 2001, while the number of debit cards in circulation expanded by more than 30 per cent. This has created the economies of scale needed to support implementation of a variety of EMV card solutions and products.

Previously, the most compelling arguments for adopting EMV cards did not apply to the Latin American market. The card base was too small for issuers and retailers to benefit from the enhanced customer profiling capabilities that EMV cards offer. Fraud was also seen as insufficient justification, since until 2003 the incidence of card fraud in the region was among the lowest in the world.

Other less prominent factors also contributed to the reluctance to adopt EMVs. Many Latin American banks were in the midst of consolidation or acquisition, which was poor timing for any new technology. Banks were focused on expanding their market presence through expanded ATM networks and promotion of financial services. Retail loyalty programs were also limited, as a result of shaky economic recoveries and a generally unsophisticated and untested consumer market.

Fraud Reduction is the Leading EMV Driver

The Latin American card market has grown rapidly over the past few years as it shifted focus towards new lower socio-economic segments and multiple card possession. The expanding card base fostered an increase in fraud, which in turn strengthened the economic case for EMV card adoption. Although the fraud-loss rate in Latin America remains below 0.4 per cent, it is nearly five times higher than in the US market, and growing an alarming 12 per cent a year.

A recent InfoAmericas study revealed that only about half of the banks surveyed believed that the level of card fraud in their portfolios had already reached unacceptable levels. On the other hand, 73 per cent stated that, within the next three years, fraud levels will reach a point where they cannot be offset by portfolio growth, leading to the adoption of EMV cards. Pilot tests conducted by Visa indicate that counterfeiting can be cut by 70 per cent and fraudulent use of lost and stolen cards could be chopped by 90 per cent with EMV cards. Visa and MasterCard are also in the process of changing the rules that allocate responsibility for fraudulent charges, and they will apply these new rules to Latin America beginning in January 2006. After that, the cost of any fraudulent transaction that could have been prevented with EMV technology will be shifted from the card issuers to banks not using EMV.

The Largest Untapped Stored Value Card Market in the World

When reading this article from the Shanghai Star about the cash based economy of China and the desire or in fact the "imperative" of a card based economy, one realizes just how big an opportunity exists for stored value card provider companies.

Even though this article was written in 2003, one can realize that the extremely large and growing Chinese market is far from having a society where stored value and credit cards are ubiquitous.

At International Personnel Management, LLC (IPM) we stand ready to facilitate the entry into the Chinese economy for secure card based transactions.

Ukraine One of the Biggest Money Transfer Countries

Ukrainian workers in Europe transfer many Euros back home to their relatives and the amount is increasing. News out of Ukraine is that the tendency of Ukrainian workers in Europe to use electronic money transfers will increase during 2007.

The entry of large money transfer companies will increase competition in the money transfer business and will increase awareness of new money transfer solutions through abundant advertising.

As of now the primary means of money transfer is through existing banking methods which is the traditional wiring of money from one bank branch to another. So far there is not much use of stored value cards or card-to-card transfers. International Personnel Management, LLC (IPM) is positioned to change that.

Stored Value Remittance Card Systems

Reference the PR Newswire and the MiCash, Inc. website.

The MiCash Card is not by any means the only card system that performs stored value, purchase and remittance functions. The MiCash Card is an example of the types of capabilities that we at IPM are able to implement worldwide.

Through a partnership of existing providers and technologies a robust remittance, merchant and customer system can be beneficial to many populations in areas around the world. International Personnel Management LLC has the expertise to bring together the proper technologies with the decision makers and civil society to implement workable systems.

A Better Way to Wire Cash Home

Reference: Hispanic Business.com

"Atsumasa Tochisako's $2 million, 60-employee microfinance and remittance processing upstart, Washington [D.C.]-based Microfinance International (MFIC), wants to shake up the $268 billion worldwide remittance industry, traditionally dominated by Western Union (WU)."

"With more than 30 million potential customers and 20,000-plus agent locations, MFIC will see its remittance processing capability expand from its current reach of 10 countries in Latin America to 85 countries, with additional locations in Asia, Eastern Europe, and Northern Africa."

"Tochisako, a 53-year-old former Japanese banker, says he doesn't want to create the next Western Union. He's more interested in proving to the world that a financial services company can benefit poor people and make money by adapting traditional microfinance models to serve immigrant populations in the U.S. and underserved people in the developing world, a goal he set for himself after witnessing abject poverty in Mexico while first working there in 1979."

International Personnel Management, LLC (IPM) is positioned to link companies like Microfinance International with public authorities and civil societies to facilitate economic growth and increased personnal lifestyles in developing countries.

Remittance from Japan to Peru

There is a large population of Peruvians of Japanese decent (Nikkei people) who live in Japan. The number of Nikkei people in Japan has been growing since the late 1980's. Japanese banks have up to now not been in the business of facilitating the transfer of money from the Peruvian workers back to Peru.

An organization called Convenio Kyodai was formed to help Peruvians working in Japan to overcome language and cultural barriers. An informative narrative on a Peruvian experience in Japan can be found here.

There are growing numbers of Dekasegi entrepreneurs who return to Peru from Japan to start new businesses. Japan has an increasing linkage to Latin American countries especially Brazil, Peru and to a lesser extent Argentina.

There are many opportunities to create robust remittance networks beyond the United States and Latin America. We at IPM are uniquely positioned to facilitate remittance transactions worldwide because of our established long term relationships.

International Remittance Market Sparking Interest from Big Banks

The international remittance market has become so lucrative and beneficial that large international banks are taking an interest in "taking back" a market that has gone to money transfer companies.

Big banks (especially those based in the United States) faces some challenges in the international remittance market because of the many post-911 restrictions imposed upon them by the U.S. government. Despite these challenges the banking industry is exploring opportunities because the remittance market is expected to "grow 10.1% through 2008."

As can be seen in this article on CNN Money.com, the barriers both real and perceived faced by immigrants to use money transfer technology are being broken down by younger generations acceptance of being "plugged into tech."

We at IPM are poised to guide banks, money transfer companies, merchants and end users through this dynamic time in the international remittance market.

Credit Unions Have Robust Remittance Capability

As seen on a CUNA press release.

CUNA (Credit Union National Association) & Affiliates [in May 2003] entered into an agreement with the World Council of Credit Unions, Inc. (WOCCU) and Travelex to make international money remittance services more broadly available to credit unions in the United States.

The new international money remittance program will operate under the umbrella name “IRnet” which has been licensed by WOCCU to CUNA & Affiliates for use in the United States. The agreement gives U.S. credit unions the option of using Travelex’s Worldwide Money Remittance system or the Vigo Remittance service, the service currently used by WOCCU.

“This agreement means U.S. credit unions can provide international money remittances to their members and potential members efficiently and economically to the consumer,” says CUNA President and CEO Daniel A Mica. “The IRnet name is well-established, so licensing it from WOCCU gives the program instant name recognition and credibility in the marketplace.”

Credit Unions increased their remittance capability in 2003 and continue to expand. More and more systems facilitating international remittance transaction mean that IPM and our business partners will continue to bring state of the art solutions to our customers.

Recipients' Interest in Joining the Banking System

From the study conducted by Visa International found on the Payments News website there are listed benefits for remittance recipients to join the banking system. From the article (Thanks to Bankwatch for the source):

"Key findings highlight the recipients' interest in joining the banking system.

• Approximately 50 percent of the remittance volume to the region is distributed through financial institutions, but only 11 percent is received in bank accounts; the remainder is distributed in cash. This shows that despite the participation of financial institutions in the process, recipients are not yet receiving the benefits provided by banking.
• 56 percent of interviewees expressed an interest in establishing some type of formal relationship within the financial system. Similarly, 70 percent showed a favorable attitude toward banks.
• Remittances are not the only source of family income. Nearly half of the beneficiaries are employed part-time or full-time, and for 52 percent of them remittances represent supplemental income. Only one of eight beneficiaries considers remittances the only source of income.
• 15 percent of beneficiaries save or invest the money they receive because remittances increase their income by 50 percent.
• Most frequent uses include purchasing goods, developing a business, savings in foreign or local currency, paying debt, and certain luxuries such as traveling.
• The level of solvency, spending potential, savings and investment are higher among remittance recipients than among people of similar socioeconomic levels who do not receive remittances. Nearly half are economically active people.
• 24 percent of senders interviewed have been living abroad for 10 to 15 years and continue to send remittances periodically, showing the consistency of this business in the long term."

We at IPM are uniquely positioned to benefit provider companies, civil authorities and end users.

Banking Potential of Remittance Recipients

As shown in an article by Payments News:

"Visa International, Latin America and Caribbean Region, has conducted a study that "revealed the banking potential of remittance recipients, as well as their interest in establishing more productive relationships with financial institutions. The remittance market reached US$52 billion in 2005, marking a 15 percent increase over the previous year."

This idea goes against the conventional wisdom that most remittance participants don't trust banking institutions and will remain un-banked. This is of great interest to us here at IPM and to banking institutions.

The statistics keep showing a revolutionary change is occurring in cultural attitudes about banking and the transaction of money.

Hat Tip: Bank Watch