IPM

Cell phone firms eye new anti-fraud rules

2008-07-17T10:55:00.001-07:00

Domestic cell phone companies, including the nation's [Japan's] three leading firms, will voluntarily introduce new rules to prevent so-called remittance fraud using cell phones, such as only allowing up to five lines per customer, it was learned Wednesday.

Police will cooperate by, for instance, responding to inquiries from cell phone retailers requesting information about driver's licenses to prevent the use of forged licenses.

At present, driver's licenses are used for about 70 percent of identifications when customers concluding cell phone contracts at shop counters need to prove who they are.

The new voluntary rules will be enforced as soon as NTT Docomo Inc., SoftBank Mobile Corp. and KDDI Corp. and others are ready to implement the regulations. The exact timing for the new scheme is being coordinated among concerned parties, sources said.

The total costs incurred by remittance fraud cases has topped 100 billion yen over the past four years, with some victims driven to suicide.

In one particularly common style of remittance fraud, a con man concludes several dozen contracts under one name using a forged driver's license. He and his accomplices then concoct stories and begin calling people to try to persuade them to send money.

In response to the problem, the Liberal Democratic Party established a task force on combatting remittance fraud, headed by House of Representatives member Isshu Sugawara, which reached a basic agreement on the rules with cell phone firms and the National Police Agency.

According to the agreement, the number of cell phone lines that can be held under one person's name will be limited to five, the sources said.

In addition, when cell phone firms judge it will be necessary to confirm the identities of clients when concluding contracts with them, they will ask police to confirm the authenticity of the customers' licenses.

If a customer refuses to submit to the policy inquiry, firms will decline a contract, and will contact police if they become suspicious about a customer, the sources added.

Cell phone firms eye new anti-fraud rules : National : DAILY YOMIURI ONLINE (The Daily Yomiuri)

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Remittances stay resilient

2008-07-17T10:52:00.001-07:00

By Maricel E. Burgonio, Reporter

MONEY sent home by overseas Filipino workers (OFWs) rose significantly in the first five months of the year due to steady growth of deployed workers, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.

In a statement, BSP Governor Amando Tetangco Jr. said total remittances grew 14.7 percent year on-year to $6.8 billion in the five-month period. In May alone, remittances rose 15.6 percent year on year to $1.4 billion.

The bulk of remittances continued to emanate from the US, Saudi Arabia, Canada, the United Kingdom, Italy, the United Arab Emirates, Singapore, Japan and Hong Kong.

“Behind the continued expansion in remittances for the period was the steady growth in the number of deployed Filipino workers and enhanced financial services offered by the banks to overseas Filipinos,” Tetangco said.

Preliminary data from the Philippine Overseas Employment Administration showed that the number of deployed Filipino workers worldwide jumped by 39.5 percent to 533,945 for the first five months of the year.

Tetangco said this reflected the distinct preference for the skills, quality and competence of Filipino workers.

More jobs were available to qualified Filipinos particularly from current expansion of a giant oil processing complex in the Middle East to service the rising global demand for crude.

Meanwhile, banks and non-bank remittance centers have been aggressive in expanding financial services to OFWs and their beneficiaries.

Tetangco said the establishment of more remittance centers, correspondent banks, and branches or representative offices abroad, together with the existing tie-ups with foreign financial counterparts, is expected to further facilitate the flow of remittances.

Click here to read entire article: The Manila Times Internet Edition | BUSINESS > OFW remittances stay resilient

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Fed Accepting Comments On Proposed Credit Card Rules

2008-07-07T10:05:00.001-07:00

More reasons we at IPM see banked and unbanked people moving to more pre-paid, stored value card and electronic transaction products.

Article follows:

Hat Tip: Mish's Global Economic Trend Analysis

The Fed has proposed sweeping changes for the credit card industry and is now accepting comments. MarketWatch sounded the horn in Your own bully pulpit.

"The Federal Reserve is accepting comments through Aug. 4 on credit-card reform rules it proposed in May. (The deadline for comments regarding related proposals, mainly to do with credit-card disclosures, is sooner: July 18.)

Already, more than 9,300 people have commented on the sweeping set of proposed changes that, among other things, would prohibit credit-card companies in some instances from hitting you with a higher interest rate on debt you've already incurred.

The proposed rules also would prohibit "two-cycle billing," in which banks compute interest on debt on days preceding the most recent billing cycle, a practice that can result in borrowers paying interest on debt paid off during the previous month's grace period."

Mish's Comment: Discover Card uses the two cycle billing method. For more on two cycle billing, please see Read the Fine Print On Credit Cards.

"Credit industry disagrees

Credit-card issuers say the proposed rules are bad news for consumers.
"We are deeply concerned that these rules will result in less competition, higher consumer prices, fewer consumer choices and reduced consumer access to credit cards," said Edward Yingling, president and chief executive of the American Bankers Association, a Washington-based trade group, in a statement released soon after the Fed's proposal."

Mish's Comment: The credit card companies do not give a damn about consumers. Here is a better translation of their concerns: "We are deeply concerned that these rules will result in fewer fees, less revenue, and less profit for the industry."

"And the Fed rules don't really address fees. That's where Congress may step in. A veritable feast of pro-consumer bills has been introduced over the past year or so.

In February, Rep. Carolyn Maloney, D-N.Y., introduced H.R. 5244, a bill that, among other things, would end "universal default" -- when a credit-card issuer raises a consumer's interest rate based on late payments to other, unrelated creditors. The bill would also prohibit "any time, any reason" changes in credit-card terms, with certain exceptions.

Sen. Chris Dodd, D-Conn., recently outlined a bill he intends to introduce with similar provisions to Maloney's, such as requiring banks mail statements 21 days before the bill is due rather than the current 14, according to Dodd's statement.

In May 2007, Sen. Carl Levin, D-Mich., introduced S. 1395, which proposes a cap on "penalty" interest-rate hikes to no more than seven percentage points above the previous interest rate. The bill would also prohibit charging interest on fees, among other provisions.

Sen. Robert Menendez, D-N.J., introduced S. 2753 in March. Like Dodd's proposal, the bill limits the ways in which banks offer credit to people under age 21. Also, it would prevent late-payment fees on any payment postmarked by the payment date, among other changes."

Reform Is Coming

Credit card reform as well as a potential rewrite of the bankruptcy reform act of 2005 are very likely under the next Congress. Please see Bank of America's Parking Meter Play for more discussion of this theme.

Mish's Global Economic Trend Analysis: Fed Accepting Comments On Proposed Credit Card Rules

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Money is just an SMS away

2008-07-03T11:27:00.001-07:00

This is a service that will soon be available through IPM for remittance transactions from U.S. to Mexico and beyond.

Article follows:

By JO TIM BUONG

INDONESIANS sending money home do not need to stand in line anymore because they can now do it with their mobile phones.

Local mobile content company, Com2U Sdn Bhd recently launched moneyMe, an operator-independent mobile remittance service, to immediately and securely transfer money within Malaysia and Indonesia via SMS.

The service currently allows Maxis and DiGi mobile subscribers to transfer money between Malaysia and Indonesia.

Com2u plans to make the service available to Celcom subscribers next month.

Currently, most fund transfers to Indonesia are done manually at banks and results are not instantaneous, Com2U said.

Com2u decided to launch its service in Indonesia based on the huge number of its workers earning a living in Malaysia. It estimates that about 66% of foreign workers in Malaysia are from Indonesia.

“Most of them come from ‘under-banked’ areas and the beneficiaries live in those under-banked areas,” said Tan Sri Ahmad Mohd Don, Com2u chairman.

Ahmad added that every family in those under-banked areas would have at least one mobile phone that is shared among its members.

This he said, makes mobile remittance a perfect service for them.Com2U has also established a strategic partnership with PT Ebays, an authorised marketing distributor of Duit Pos Multiguna Service in Indonesia to allow beneficiaries to withdraw funds at Pos Indonesia outlets with the Wesel Pos Instant Service, a remittance service found in Indonesian post offices.

“It’s as easy as reloading your mobile airtime credit,” said Eugene Loke, Com2U chief executive officer told In.Tech after launching the service last week.Registration and subscription via SMS to the service is free. After registering, users can go to any outlet with e-pay facilities to load the desired amount to their moneyMe mobile wallet.

E-pay facilities can be found at numerous bookstores, convenient stores and restaurants nationwide.Subscribers are allowed to transfer up to RM50,000 a day and are charged a processing fee from as low as RM9.

The beneficiary will be notified with a text message identifying the amount and sender of the funds and it can be cashed at any Pos Indonesia agents.

MoneyMe’s functionality is guarded by a Personal Identification Number (PIN) and a subscriber’s account details are not stored on the phone.

“They can call moneyMe customer service to freeze the account if they lose their mobile phones,” Loke explained.

Com2u said it will be expanding its moneyMe service to banks in Indonesia to make it even more convenient for beneficiaries to claim their funds.

The company said it also plans to expand the service to other countries in South-East Asia but did not elaborate further.

Money is just an SMS away

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Hackers steal $2M from Citi ATMs

2008-07-03T08:04:00.001-07:00

Citibank ATM breach reveals PIN security problems - Jul. 2, 2008

SAN JOSE, Calif. (AP) -- Hackers broke into Citibank's network of ATMs inside 7-Eleven stores and stole customers' PIN codes, according to recent court filings that revealed a disturbing security hole in the most sensitive part of a banking record.

The scam netted the alleged identity thieves millions of dollars. But more importantly for consumers, it indicates criminals were able to access PINs - the numeric passwords that theoretically are among the most closely guarded elements of banking transactions - by attacking the back-end computers responsible for approving the cash withdrawals.

The case against three people in U.S. District Court for the Southern District of New York highlights a significant problem.

Hackers are targeting the ATM system's infrastructure, which is increasingly built on Microsoft Corp.'s (MSFT, Fortune 500) Windows operating system and allows machines to be remotely diagnosed and repaired over the Internet. And despite industry standards that call for protecting PINs with strong encryption - which means encoding them to cloak them to outsiders - some ATM operators apparently aren't properly doing that. The PINs seem to be leaking while in transit between the automated teller machines and the computers that process the transactions.

"PINs were supposed be sacrosanct - what this shows is that PINs aren't always encrypted like they're supposed to be," said Avivah Litan, a security analyst with the Gartner research firm. "The banks need much better fraud detection systems and much better authentication."

It's unclear how many Citibank customers were affected by the breach, which extended at least from October 2007 to March of this year and was first reported by technology news Web site Wired.com. The bank has nearly 5,700 Citibank-branded ATMs inside 7-Eleven Inc. stores throughout the United States, but it doesn't own or operate any of them.

That responsibility falls on two companies: Houston-based Cardtronics Inc. (CATM), which owns all the machines but only operates some, and Brookfield, Wis.-based Fiserv Inc. (FISV, Fortune 500), which operates the others.

A critical issue in the investigation is how the hackers infiltrated the system, a question that still hasn't been answered publicly.

All that's known is they broke into the ATM network through a server at a third-party processor, which means they probably didn't have to touch the ATMs at all to pull off the heist.

They could have gained administrative access to the machines - which means they had carte blanche to grab information - through a flaw in the network or by figuring out those computers' passwords. Or it's possible they installed a piece of malicious software on a banking server to capture unencrypted PINs as they passed through.

What that means for consumers is that their PINs were stolen from machines that showed no signs of tampering they could detect. In previous PIN thefts, thieves generally took steps that might draw notice - sending "phishing" e-mails, for example, or installing false-front keypads or even tiny cameras on ATMs.

Getting the PINs is a key step for identity thieves. It lets criminals encode stolen account information onto blank ATM cards and withdraw piles of cash from compromised accounts.

Click here to read entire article: Citibank ATM breach reveals PIN security problems - Jul. 2, 2008

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Credit Card Issuers Face Bigger Losses Than Expected

2008-06-29T11:42:00.001-07:00

Hat Tip: Mish's Global Economic Trend Analysis

We at IPM think this is a positive development for our stored value pre-paid card market. As the credit card market continues to drop, the demand will continue to increase for stored value cards as a way to conduct electronic monetary transactions.

The stored value pre-paid will continue to expand in the unbanked and banked markets.

Article from CNNMoney.com follows:

Dow Jones Newswire

June 27, 2008: 10:54 AM EST
By Aparajita Saha-Bubna and Marshall Eckblad

Investors sold on plastic may want to reduce their balances.

Credit card issuers - ranging from standalone companies such as Discover Financial Services (DFS) and American Express Co. (AXP) to those at banks like Washington Mutual Inc. (WM) and Citigroup Inc. (C) - are likely to suffer worse losses in the coming quarters than initially expected.

Hit by the double-whammy of a growing reliance on credit cards by cash- strapped borrowers and a worsening economic downturn, issuers' earnings should be dented by deeper loss reserves and higher defaults.

New credit card data from Fitch Ratings indicate that losses are hovering around or have exceeded five-year averages and issuers have increased their loss expectations or withdrawn guidance in the face of rising unemployment, record- high gas prices and a housing slump that has yet to bottom.

"The deterioration in credit cards is accelerating faster than many had expected," said Christopher Wolfe, an analyst at Fitch and one of the authors of the report published Friday. "The message we are trying to deliver is that things are going to get worse before they get better. Thus far, credit card businesses have been profitable but that could change.

Click here to read entire article: Credit Card Issuers Face Bigger Losses Than Expected

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Fed Looking To Bend Rules To Aid Banks

2008-06-27T11:55:00.001-07:00

Hat Tip: Mish's Global Economic Trend Analysis

CNBC is reporting Fed May Ease Rules on Private Equity Bank Stakes.

The U.S. Federal Reserve is considering steps to make it easier for private-equity firms and others to invest in banks, the Wall Street Journal reported on Thursday, a move that could open the door to more capital for cash-starved banks.

Fed officials recently have met with big buyout firms, including J.C. Flowers, Carlyle Group, Kohlberg Kravis Roberts and Warburg Pincus, and banking lawyers to discuss the obstacles, according to people familiar with the matter. Under federal law, to own more than 24.9 percent of a bank, an entity must register as a bank holding company, which is subject to heavy regulation and can be forced to serve as a "source of strength" for the bank, the Journal said.

Ownership of more than 9.9 percent of a bank also subjects the entity to regulatory scrutiny to ensure that it isn't controlling—or even influencing—the bank's operations.

The Fed can't change those laws, but it has room to maneuver in how it interprets them. This announcement today is not unexpected. It is in strict accordance with the Fed Uncertainty Principle.

Uncertainty Principle Corollary Number Four: The Fed simply does not care whether its actions are illegal or not. The Fed is operating under the principle that it's easier to get forgiveness than permission. And forgiveness is just another means to the desired power grab it is seeking.

When it comes to new rules or bending the rules, if the Fed does not like an interpretation, it will simply make the one it wants. The key point now,however, is the Fed feels a personal need to intervene directly in the markets to help line up sources for capital.

If the worst was over as Bernanke suggested (See Things That Have Not Yet Happened) then why is there a need for these kind of actions?

Have the Sovereign Wealth Funds in Singapore, China, etc. had enough? It's looking more like that every day. Yet the writeoffs continue.

Click here to read entire post: Mish's Global Economic Trend Analysis: Fed Looking To Bend Rules To Aid Banks

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Consumer ire puts ATM charges on hold

2008-06-24T22:13:00.001-07:00

22:19' 15/06/2008 (GMT+7) VietNamNet

After first announcing that all ATM transactions would be charged a minimum fee of 1,000 VND starting in July, the Vietnam Bank Card Association has now reconsidered its plan following questions about the current state of ATM services and infrastructure.

An ATM of the Bank for Foreign Trade of Vietnam (Vietcombank)ATM cardholders began speaking out against the policy almost as soon as it was announced, claiming that the poor quality of most banks’ ATM services did not merit their collecting additional charges.

“If banks get fees from customers, they have to ensure good services. I don’t feel happy with the fact that at the moment sometimes ATMs don’t work properly,” said Nguyen Van Hung, construction engineer in Hanoi.

Many customers such as Nguyen Quoc Viet, a construction workers from Hanoi , say they face difficulty in finding an ATM at the end of month to get their salaries.

Students who often use the ATM as a means of receiving money from their families are vowing not to use the service anymore if fees are charged. “If the bank does so, it changes the contract with customers. Having to pay fees makes students’ lives more difficult,” said Tran Van Phu, sixth year student from Hanoi ’s Medical University.

The plan to charge fees has been delayed until the infrastructure is in place to improve ATM service quality, said the chairwoman of the Vietnam Bank Card Association, Nguyen Thu Ha. The association will propose to the State Bank the specifics on fee collection, but is not ready to choose a date for implementation.

The Government has been pushing business and agencies to move from paying salaries in cash to using banks and paying through ATMs since the beginning of 2008. Charging fees right now could work against this effort.

Right now only about 10 percent of Vietnamese people use bank services like ATM cards or credit cards, reported the MCKinsey company.

There are now about nine million cards in-use out of which 4,500 are ATM cards. An additional problem is that each ATM system only accepts certain kinds of cards. To help alleviate accessibility problems, banks are joining forces.

“With the present scale of the problem, it is very difficult for any bank to do it alone. So co-operating is the best way to improve the situation,” said Nguyen Duc Huong, general director of Lien Viet Bank. Banknetvn and Smarlink have officially operated their bank alliance for the last five months. With this new alliance, owners of cards belonging to Vietcombank, Vbard, BIDV, Vietinbank and Techcombank can do their transactions at ATMs.

By the end of March, the amount of ATMs of the five member banks had gone up to 3,614, accounting for 64 percent of the total machines in the market.As planned, by the third quarter of 2008, Banknetvn and Smartlink will cooperate to increase the number of machines to 4,500.

VietNamNet - Consumer ire puts ATM charges on hold

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Washington Pays Youth Workers with Prepaid Cards

2008-06-24T22:04:00.001-07:00

ePaynews.com Jun 24 2008 :

The Washington, DC, Department of Employment is using prepaid debit cards to pay the wages of 19,000 workers participating in a summer youth employment scheme.

The 2008 Passport-to-Work Summer Youth Program offers young people an opportunity to work on a temporary basis in a wide range of occupations. The 10-week program is offered to young people living in DC who are aged 14 to 21.

The prepaid Visa cards are issued by JPMorgan Chase as part of its Payroll debit card program, which was first launched in 1987. Processing for the cards is also provided by JPMorgan.

The cards can be used at the point of sale or at ATMs with a PIN. They are reloadable and will be funded twice a month during the 10-week program.

“We hope the real-life experience gained by using payroll debit cards to budget and purchase items will help these students become responsible for their own finances,” says Dr Natwar M. Gandhi, chief financial officer for the District of Columbia.

Another advantage of the cards is that, by not incurring check-cashing and bank account fees, they will save the workers money, Gandhi says.

ePaynews.com - the payment news and resource Center

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Line of Credit Linked to U.S. Prepaid Card

2008-06-23T09:19:00.001-07:00

ePaynews.com Jun 20 2008 :

Meta Payment Systems (MPS) is offering small loans that are deposited on a prepaid card to the millions of Americans who cannot afford conventional bank loans.

The U.S. prepaid card firm originally launched the iAdvance Line of Credit product in February 2008, but is now enhancing it with the help of Fiserv and TransUnion.

The basic version of iAdvance does not involve any credit checks. However, in autumn 2008, MPS will launch a version of iAdvance which will offer lower interest rates and longer payback periods to credit-worthy borrowers. Currently, the company charges $2.50 for each $20 borrowed, equal to an annual percentage rate of 150 percent.

TransUnion says it will provide MPS with risk management and credit decisioning systems for the new version of iAdvance, while U.S. payments software firm Fiserv will supply processing and receivables management technology.

Once a borrower has applied for either a basic or enhanced iAdvance loan, the money is available immediately on a prepaid card issued by MPS’ parent Sioux Falls, South Dakota-based MetaBank. The borrower’s repayment performance is reported to the three main U.S. credit reference agencies, Equifax, TransUnion and Experian.According to MPS, the loan application process takes just a few minutes.

ePaynews.com - the payment news and resource Center

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Mexican Issuers Leverages Canadian Gift Card Software

2008-06-23T08:57:00.001-07:00

ePaynews.com

Jun 20 2008 : Mexico’s Mercadotecnia, Ideas y Tecnologia (MIT) is launching a gift card program using software developed by Toronto-based Smart Processing Solutions.

MIT will use the SmartIssuerPro system to provide gift cards which will be issued by its clients.SmartIssuerPro enables independent sales organizations (ISOs), financial institutions, retailers and processors to issue and manage prepaid, debit, gift, and loyalty card programs in-house.MIT provides transaction switching services for Mexican banks, retailers and payment networks.

Smart Processing Solutions provides processing and switching software for banks, ISOs, processors, acquirers and retailers. In Canada, its software is used to drive a network of around 11,000 non-bank ATMs.

ePaynews.com - the payment news and resource Center

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American Express is OPEN

2008-06-21T15:03:00.001-07:00

Chris Brogan shows how American Express' OPEN FORUM website works and has positive influence on how businesses are run.

by Chris Brogan
June 21, 2008 OPEN Forum

It’s interesting to see an implementation of content networks the way I first envisioned them in May 2006.

I recently heard from Federated Media’s James Gross about American Express’s OPEN Forum. Basically, it’s a project where AMEX through Federated has a blog area that aggregates interesting business content, with the mindset of gathering a conversation in a sponsored area.

Mentioned as a place to find insight from business experts, it’s essentially a way for AMEX to spread its brand across some select blog content (with the bloggers’ permission).

I asked James what the plan was: The primary goal was for OPEN to start identifying, curating, and participating in a media landscape that was constantly changing. They had done a lot of work with other publishers, but it was always on the publishers domain and like most microsites, tended to be lightly trafficked and not converting people to the OPEN forum.

Not to mention, with what we call, “the de coupling of media” surveys were finding that most SMBs were using blogs and other forms of social media far more than major publishing brand’s SMB sites. It’s interesting to me, because it’s the other way around from how we perceive our blogs.

I think it’s definitely a way to build a content network that would be more useful to end readers. It’s not that we don’t want more traffic to our blog, but that there are ways this content can be made more useful to end readers, by being curated by others in interesting ways. That’s why we use Creative Commons. That’s why we use RSS. It’s the plan.

Click here to read entire post American Express is OPEN | chrisbrogan.com

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Anticipated Demand for Prepaid Cards among Latin America Unbanked

2008-06-20T12:32:00.001-07:00

Paynews.com

Jun 17 2008

By 2015, 324 million unbanked Latin American consumers could have general-purpose prepaid cards, according to a study by NovoPayment.

The Miami, Florida- and Caracas, Venezuela-based firm develops prepaid card programs for the unbanked in Latin America.

NovoPayment says that by 2015, annual general-purpose prepaid card spending by unbanked Latin American consumers could reach US$214 billion a year. Prepaid cards will bring access to point-of-sale, ATM, mobile and online card transactions to consumers who today rely almost exclusively on cash, NovoPayment says.

The study by NovoPayments covers 15 countries across Latin America including Argentina, Brazil, Chile, Colombia, Guatemala, and Venezuela. NovoPayment says that Brazil, followed by Mexico, will be the biggest general-purpose prepaid card market in the region by 2015.

In Brazil, there will be 109.9 million general-purpose prepaid cards in 2015, accounting for US$22.15 billion of spending, NovoPayment says. In Mexico, there will be 64 million general-purpose prepaid cards in 2015, accounting for US$54.34 billion of spending.

“Our study discovered a significant number of consumers with the income, access to infrastructure, and spending behavior to be viable users of prepaid general-purpose cards,” says NovoPayment CEO Anabel Perez. “Around 57 percent of the Latin American population has the need, the capacity, the means, and the necessary economic and social incentives to warrant prepaid cards.”

ePaynews.com - the payment news and resource Center

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BBK makes remittance easy for NRIs

2008-06-19T10:21:00.001-07:00

MANAMA: Bahrain-based BBK has signed an agreement with Bahrain Indian International Exchange Company (BIIECO) to provide all its non-resident Indians (NRI) banking customers the opportunity of seamless remittance.

Customers will now be able to remit funds from their BBK account in Bahrain to their BBK or any other bank account in India.

Present at the signing ceremony held at the BBK head office in Manama were BBK assistant general manager - international banking division Ashish Sarkar, NRI business head Mudit Mathur, BIIECO chairman and managing director Khalil Ebrahim Qamber and general manager Lakshmi Narasimhan.

"BBK is one of the leading retail banks in the kingdom and we have a strong base of NRI clients in Bahrain and Kuwait," Mr Sarkar said."With this tie-up we will now provide them with a service to remit money back home more efficiently. In contrast to the traditional remittance services available, this would be a more convenient and trustworthy method as the client is directly dealing with their bank instead of a third party."

Our commitment at BBK NRI business remains, to serve the Indian community, through our own branches via such alliances with the best-in-the-industry partners.

"Our endeavour is to offer a wide range of quality products and services to our clients to cater to their growing needs with the BBK quality of service," he said."This is a proud moment for us at BIIECO to partner with a leading bank like BBK. This tie-up will enable us to reach out to the vast NRI community and increase our volume of business," Mr Qamber said.

http://www.gulf-daily-news.com/Story.asp?Article=219257&Sn=BUSI&IssueID=31076

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First Bank Steps Into Chinese Market via Cooperation with Sumitomo Mitsui

2008-06-17T10:23:00.001-07:00

The Chinese remittance market is starting to open.

Taipei, June 12, 2008 (CENS)

First Commercial Bank has successfully stepped into the Chinese banking market, despite the absence of business points there, thanks to the cooperation with Japan`s Sumitomo Mitsui Banking Corp.

Chang Chao-shun, chairman of First Bank, pointed out yesterday (June 11) that the bank has successfully provided yuan-denominated loans to a number of Taiwanese-invested enterprises in China for working-capital use via the Chinese branches of Sumitomo Mitsui Banking. The bank, though, still plans to set up its own Chinese branches, according to Chang.

The business is part of the cooperative venture between the two banks following their signing of the memorandum of cooperation on Dec. 17, last year. During a meeting reviewing the achievements of the cooperation last week in Taipei, ranking officials of the two banks looked into the results of their cooperation in the fields of corporate banking, greater China business, syndicated loan, forex remittance, cooperation between overseas branches, credit card, trust custody, forex trading, fund maneuvering, consumer banking, risk management, and personnel exchanges.

An official of First Bank noted that both parties have attained good results in the fields of client recommendation, syndicated loans, forex remittance, financial trading, loans for Taiwanese enterprises in China, and personnel exchanges. Thanks to the assistance of Sumitomo Mitsui, First Bank, for instance, has solicited substantial amount of banking business for Japanese individuals and enterprises in Taiwan.

The official reported that the bank will intensify its cooperation with the Japanese partner, especially in the core businesses of greater China market, domestic and international syndicated loan, wealth management, and marketing, this year.(by Philip Liu)

CENS.com – The Taiwan Economic News

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Microfinance institutions can facilitate remittances

2008-06-16T10:42:00.001-07:00

From: Manila Times web edition

Sunday, June 15, 2008

By Maricel E. Burgonio, Reporter

Microfinance institutions can facilitate remittances Microfinance refers to the provision of financial services to low-income clients, including the self-employed. It also refers to a movement that envisions “a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial srvices, including not just credit, but also savings, insurance, and fund transfers.”

Microfinance institutions can take the form of cooperatives and other self-help groups, rural banks, and small economic formations. They are now emerging as remittance channels and can effectively play this role, as they are present in many rural areas and poor people’s enclaves.

Lately, money transfer agent PetNet Inc. has decided to tap microfinance institutions to expand its remittance market.

Lorenzo T. Ocampo, PetNet president, said PetNet has partnered with microfinance institution Alalay Sa Kaunlaran, Inc. (ASKI) to widen its market in Regions 1, 2 and 3 that ASKI covers.

“In the partnership, Aski’s clients can remit through PetNet. These areas are underserved,” Ocampo told reporters.

PetNet signed on Wednesday a memorandum of agreement (MOA) with ASKI. Under the partnership, ASKI’s clients may channel its remittances through PetNet.

ASKI has 21 branches in the three regions, all of which are areas with high demand for microfinance loans. PetNet, meanwhile, is a money transfer agent of Western Union, has 200 locations nationwide.

Rolando Victoria, ASKI’s executive director, said its loan portfolio increased by 20 percent year-on-year to P240 million as of May. It also has a capital base of P63 million.

ASKI provides P5,000 to P150,000 worth of micro loans with 3 percent monthly interest rate to its clients.

“There is strong demand for microloans such as in agricultural loans and for small businesses,” he said. It also provides microinsurance with only P20 paid every week in exchange for P120,000 insurance coverage.

ASKI also plans to use make use of ATM services in releasing loans to their clients.

Besides ASKI, PetNet also signed a MOA with GSIS Family Bank in April.

The Bangko Sentral ng Pilipinas (BSP) has been encouraging banks to engage in microfinance, a flagship program for poverty alleviation.Microfinance loans posted double-digit growth last year as more banks increased their participation in microfinance lending.

Amando M. Tetangco Jr., governor of the BSP, earlier said microfinance loans grew 12 percent to P6 billion last year.About 229 banks are into microfinancing, with a total client base of 780,000.

The Manila Times Internet Edition | OFW TIMES > Microfinance institutions can facilitate remittances

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The Ethics of the Bottom of the Pyramid

2008-06-15T02:21:00.001-07:00

Hat Tip: World Bank

It looks like Ethical Corporation has caught on to the ethics of serving the bottom of the pyramid. An article in their most recent newsletter discusses opportunities in the vast bottom of the pyramid market in Latin America. About 360 million people in Latin America fit into this category. So far, local companies have left multinationals in the dust:

A third noteworthy trend is the leadership of national companies over their international peers. Micro-insurance firm Paralife in Mexico, Peruvian financial intermediary Cajasur and many of the other high performers in the index are local firms. With the bulk of their local market being low-income consumers, such firms have learned to search out opportunities among the “majority” by default.

Multinational companies, by contrast, often lack the experience, the local relationships, the market understanding and often the vision to trouble themselves with poor customers. Yahoo, Microsoft and PepsiCo feature among the big-brand laggards in the index.

What's it going to take for the multinationals to catch on?

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Super ATMs Coming to a Location Near You

2008-05-15T11:40:00.001-07:00

Here is a story about a machines that don't do nearly as many things as our new CCARDS machines will do. We like these machines being out there in the marketplace because people become accustomed to using machines to perform banking tasks previously done only with person to person contact in a traditional bank. Story follows:

Hat Tip: Digitaltransactions.net

(May 8, 2008) Non-bank ATM network operator Cardtronics Inc. has been trying to pump up transaction volume on its advanced-function Vcom machines ever since it bought them last July from 7-Eleven Inc. as part of the 5,500-machine ATM fleet the convenience-store giant unloaded for $137.3 million. Next week, part of that strategy takes effect when the 26 million members of credit unions belonging to the Co-Op Financial Services network will be able to make envelope-less deposits at the machines.

The 2,200 Vcoms, manufactured by NCR Corp. and located in 7-Eleven convenience stores, are capable of imaging checks, sparing the depositor of the need to enclose checks in and fill out a deposit envelope as is required for a traditional ATM deposit. Jack Antonini, president and chief executive of Houston-based Cardtronics, revealed the pact this morning at Cardtronics’ first-quarter earnings conference call. He also mentioned Cardtronics’ previously disclosed deal with another credit-union network, Financial Services Center Cooperatives Inc.

“Between the two of them, 30 million customers will now be able to make deposits 24 hours a day,” he said, adding that “we’ve got another very large bank in the queue.”

Jim Hanisch, executive vice president at Rancho Cucamonga, Calif.-based Co-Op Financial Services, tells Digital Transactions News that the Cardtronics deal helps put credit unions at the forefront of a new banking service in which most of the headlines have gone to giants such as Bank of America Corp., Wells Fargo & Co., and JPMorgan Chase & Co. Co-Op first began testing an image-capable ATM at California Center Credit Union in November 2005 (Digital Transactions News, Dec. 7, 2006). Some 150 of the network’s 5,400 ATMs now offer imaged deposits. “We’re beyond test,” says Hanisch.

Co-Op and Cardtronics did not disclose revenue arrangements, but the credit union to which the depositor belongs will pay interchange to Cardtronics as the ATM owner, according to Hanisch. The Vcoms are Citibank-branded, but Citi won’t be a party to the transactions.

While there have been some reports of imaging ATMs not working as they’re supposed to, Hanisch says Co-Op’s members have had few problems. The advantage for consumers is faster deposit verification and access to funds. For deployers, imaging ATMs need less servicing than traditional models. Hanisch says deployers typically send couriers to pick up checks from imaging machines only once or twice a month compared with daily for regular ATMs. “The hardware is relatively expensive, but it also changes the service dynamics for the ATM and it also makes it substantially more viable to place an ATM in an off-premise location for deposit taking,” he says. Co-Op also is working on a home-based deposit-capture service.

Cardtronics will be promoting image deposit as it seeks more business from financial institutions. “It’s an area that has a lot of banks very, very interested because it’s a cost saver and it’s a significant convenience improvement for their customers,” Antonini said.

The underperformance of the Vcoms contributed to Cardtronics’ first-quarter loss of $4.59 million, up from $3.45 million in the 2007 period. The Vcoms generated operating revenues of $1.24 million but had expenses of $2.27 million. Cardtronics is trying to reverse the Vcoms’ losses through cost reductions from contract renegotiations, bringing outsourced service functions in-house, and replacing low-volume Vcoms with traditional ATMs in some 7-Eleven stores. To build transaction volume, the company will concentrate its Vcom advertising efforts in about 15 major cities. Marketing efforts will highlight the Vcoms’ functions, which, besides imaging, include electronic bill payment.

Co-Op recently signed deals giving its 2,800 credit-union members’ depositors surcharge-free access to 350 Cardtronics machines in Costco Wholesale Corp. stores and all Walgreen Co. drug stores in Florida.

Meanwhile, boosted in large part by the 7-Eleven deal, Cardtronics today said its average number of transacting ATMs increased to 32,475 in the first quarter from 25,228 a year earlier. Some 3,674 machines are in the United Kingdom and Mexico. Total transactions grew 87% to 83 million from 44.4 million. Monthly cash-withdrawal transactions per ATM grew to an average of 553 from 412 in 2007’s first quarter, good for a gross profit of $290 per machine compared with $224 last year. More than 9,500 machines sport bank brands, Antonini said. In those branding deals, the bank and Cardtronics work out revenue arrangements to replace the surcharge fees—Cardtronics’ chief revenue source of revenue—from surcharge-free transactions initiated by the partner banks’ customers.

In all, Cardtronics reported first-quarter revenues of $115.1 million, up 61% from $71.7 million in the year-earlier quarter. While it is still profit-challenged, Cardtronics doesn’t plan to raise its surcharges to $3 as some big banks have. “We have not made any moves that extreme; we’d be concerned about our transaction counts being negatively [affected] if we did that,” said chief financial officer J. Chris Brewster.

Technorati Tags: financial kiosk, remittance, electronic transactions

International Remittance Legal Guide for Banks

2008-02-09T17:47:00.000-08:00

New Appleseed Guide Helps Banks Provide Fair and Efficient Services to Growing International Remittance Market
January 8, 2008

Appleseed, a network of public interest justice centers in the U.S. and Mexico, this morning released a first-of-its kind guide to assist banks and other financial institutions in better serving the growing remittance market. Immigrants living in the U.S. sent $45 billion to Mexico and Latin America in 2006, according to recent estimates from the Inter-American Development Bank.

In addition to providing a detailed market overview, “Banking in a Global Market” offers a comprehensive hands-on approach to setting up transparent and efficient remittance services, drawing on the experiences of large and small financial institutions throughout the U.S.
“Appleseed has found banks need guidance in starting remittance programs and serving the immigrant market. It’s win-win: by offering remittance services, financial institutions get new customers, and immigrants have more safe and convenient places to remit money, keep savings, build credit without paying high and unpredictable transaction fees,” said Betsy Cavendish, executive director of Appleseed. Over the past four years, Appleseed has educated immigrant communities about the U.S. financial services system and highlighted the market potential in immigrant communities to financial institutions. Appleseed has pressed for transparency in the remittance market, urged that a history of sending remittances be considered evidence of credit-worthiness, and fought taxation of remittances.

Approximately 100 banks and credit unions in the U.S. currently offer and actively market consumer remittance products. “That is a fraction of the number that could be providing remittance services to growing immigrant communities,” according to Ann Baddour, senior policy analyst for Texas Appleseed and lead author of the guide. Among Latin American immigrants, 70 percent of remittance senders use cash-to-cash transfer services through money transfer businesses such as Western Union and MoneyGram, while estimates of remittances sent through banks range from five percent to 19 percent.

Through detailed profiles of 11 financial institutions, Appleseed’s guide illustrates six approaches to setting up remittance programs. The profiled financial institutions are:BankCherokee , Central Bank of Kansas, Citizens State Bank, First Bank, Harris Bank, Latino Community Credit Union, Mitchell Bank, Pinnacle Bank, United Americas Bank, U.S. Bank and Wells Fargo.

###

Appleseed, a nonprofit network of 16 public interest justice centers in the United States and Mexico, uncovers and corrects social injustices through legal, legislative and market-based structural reform. Appleseed and Appleseed Centers bring together volunteers from the law, business and academic professions to devise long-term solutions to problems affecting the underprivileged and underrepresented in such areas as education and financial access. For more information, visit: www.appleseednetwork.org.

APPLESEED CONTACTS:
Patti RiippaCommunications Associate202-347-7960, ext. 104
Eric GutiérrezImmigration Policy Director202-347-7960, ext. 120(Available for Spanish-language media)
Ann BaddourSenior Policy Analyst and lead report authorAppleseed Financial Access Project512-473-2800, ext. 104512-203-3556 (cell)

CONTACTS FOR PROFILED FINANCIAL INSTITUTIONS:
Latino Community Credit UnionAngel RomeroMedia Relations919-688-9270
United Americas BankJorge FormentPresident and CEO404-240-0101
Mitchell BankJames MaloneyPresident and CEO414-277-9080
Wells FargoLisa Westermann Assistant Vice President, Public Relations Wells Fargo Card Services415-222-6236 415-845-7759 (cell)
Pinnacle BankDaniel PadillaDirector of Latino Banking402-434-3134

MoneyBancard

2008-01-07T13:48:00.000-08:00

We have secured the Internet domain www.moneybancard.com and are launching a new pre-paid, stored value card which will be called MoneyBancard.

We think that this will be a dominant brand in the money remittance and stored value transaction market. Be sure to listen to our podcasts via the control on the right column of this blog to hear more about our concept of where this exploding market is going.

"Free Checking" Accounts, Not So Free

2007-11-20T11:12:00.000-08:00

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

2007-10-28T19:31:00.000-07:00

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

2007-10-19T10:22:00.000-07:00

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

2007-09-26T15:15:00.000-07:00

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

2007-09-24T16:50:00.000-07:00

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.