Australian banks to launch iPad banking apps

Australia's major banks are rushing to develop applications for the Apple iPad tablet on the back of significant growth in mobile banking use.

St.George Bank has become the first of the major banks to announce a dedicated app, which is to be made available for free download from the Apple iTunes store next week.

The iPad is being launched to Australians this week.

The app will go beyond the stripped back service made available by most banks for the iPhone, offering users the full functionality of St.George Internet banking, as well as a branch and ATM locator, product and service information, interest rates and product selector tools, and access to St.George video content through the bank's YouTube channel.

St.George head of eDistribution, Travis Tyler said more than 110,000 St.George customers use the bank's mobile banking service.Tyler thinks the iPad is more likely to be used by customers at home.

"We wanted to make sure we provided the full functionality of Internet banking".

Tyler also revealed the bank has a dedicated "think tank" of in-house experts working on new functionality for both the iPhone and iPad as customers embrace what Tyler said is a far more feature-rich experience than that offered by traditional websites.

NAB has also developed a dedicated iPad app, which it will launch today. The app will include full service NAB Internet banking, an ATM and branch locator and currency exchange rates. The bank said it will expand functionality over coming months.

Sam Plowman, executive general manager for direct banking at NAB said that as customers continue to embrace new technologies, "internet banking should be available anywhere, anytime, on any device".

Ean van Vuuren, head of consumer online with Westpac said the bank is definitely looking at building for iPad as mobile banking continues to gain popularity, but it has no firm launch dates at this stage.

ANZ and CBA (Commonwealth Bank), meanwhile, are first looking to simply optimize its existing online site for viewing on an iPad.

"We believe that the iPad and devices like it will become very popular for accessing online services in the home," an ANZ spokesman said.

She said the bank has already made changes to its platform to ensure that its internet banking service works well on the iPad.

"We are also working on other concepts related to the iPad and our approach is to deliver a customer experience that fully utilises what Apple have created in terms of screen size, multi-touch and other capabilities."

A CBA spokesman described the iPad as "an exciting device."

"We have tested NetBank on the iPad and think it’s a good experience, so we won't be developing a specific iPad application," the spokesman said.

Spanish financial institution Banco Sabadell became the first bank to release a native iPad app in late April.

MasterCard to open up its payment system to mobile and internet payments

MasterCard has announced it is to let mobile and web developers integrate its payment technology directly into apps. The move appears to mirror the model announced by PayPal, which serves up its own payment software for programmers.

However, those behind the venture have suggested MasterCard will be willing to let third parties take even more of a hands-on approach, with the company looking to make its payments system as flexible as possible.

According to the New York Times, MasterCard's chief innovation officer, Josh Peirez, is keen to see what third parties can come up with. The idea is that those outside MasterCard will be able to utilize the technology in ways the company hasn't considered before.

"A big part of the strategy is to be able to harness the innovation of others in the developer community to really push our business forward," Peirez told the paper.

It's no surprise MasterCard is looking to open up, with the firm having previously “built” its own payment apps that relied on merchant agreements and repeated data entry - a set-up deemed unappealing by many.

MasterCard's new approach appears more open, with MasterCard Labs which is behind the project - stating 20 of its services are available for third parties to use in their applications.

The news follows a renewed bid by PayPal to make its PayPal X software the default choice for developers, with its in-app purchase system now available for Android as well as iPhone.

It would appear PayPal still has some time before MasterCard becomes a real competitor, however, with Peirez merely stating that the company aims to open up its technology “by the end of the year”.

US faces long wait for mobile payments at PoS - Boston Fed

Mobile payments are unlikely to take off on a large scale in the US for at least the next three years, according to an analysis by the Federal Reserve Bank of Boston.

The prospects for the emerging technology are considered in a public policy discussion paper issued by the bank, which suggests that the investment costs currently outweigh the potential benefits.

On the demand side, consumers and merchants are well served by the current card system, and face a low expected benefit-cost ratio, at least in the short run, suggests the paper. On the supply side, low market concentration and strong competitive forces of banks and mobile carriers make coordination of standards difficult.

"Although it appears that some useful standards, both proprietary and open, will be available in the short or medium term, they will not be widely adopted until a business model develops that gives industry participants incentives to support this product, or until consumer demand for mobile payment services increases substantially," the paper concludes.

It suggests that the Fed could intervene in a policy push to establish appropriate regulatory oversight for mobile payments and encourage private industry stakeholders to work together to establish common industry standards.

Download the full analysis directly from the Boston Fed at http://www.bos.frb.org/economic/ppdp/2010/ppdp1002.pdf

Visa and Bancomer Transfer Services launch new money transfer system for Remittances from the US

Visa and Bancomer Transfer Services (BTS) have launched of a new money transfer service that will provide an additional alternative for consumers that send money from the United States to friends and family living abroad.

Starting this month, consumers will be able to initiate a Visa money transfer transaction at any BTS location in the United States. The Visa money transfer transaction can reach any eligible Visa account in the world, including all key remittance destination countries; however, the initial deployment of the service will enable consumers to send funds from the United States to select countries such as El Salvador, Brazil, China and The Philippines, with plans to extend the program to allow remittances from BTS locations to any country within the Visa network.

The new program offered by BTS is an enhancement to its recognized service offering that enables US consumers to safely and securely send remittances worldwide.

"The expansion of Visa money transfer to enable remittances from the US to eligible Visa accounts in Latin America is a significant milestone for Visa and our clients," said Jim McCarthy, Global Head of Product at Visa Inc. "Our alliance with BTS is a great example of how Visa is expanding its business network to bring the convenience and security of Visa digital currency to more consumers in more countries around the world."

According to the Inter-American Development Bank (IDB), the Latin America corridor is one of the largest money transfer markets in the world, with a total of USD $58.8 billion transferred in 2009. In 2009, BTS alone accounted for USD $10 billion in consumer funds transferred to Latin America, making BTS one of the largest processor of remittances for this region. Other large remittances markets served by BTS from the U.S. include Asia, Europe and Africa.

"As a member of the BBVA Group, we are always working to help people simplify their lives via sound, innovative products and services," said Moises Jaimes, President and CEO of BTS. "This goes far beyond being a complement to our traditional money transfer services. Our work with Visa strengthens our commitment to the evolution of the remittances industry, and, by providing our consumers with a wider array of safe and secure services and channels, it gets us one step further in our quest towards serving this important segment in the financial services industry."

Visa money transfers initiated at a BTS location in the U.S. are processed through Visa's secure network and will become available to Visa cardholders, who won't need to go to a physical location to receive the money. Funds can be transferred to eligible Visa debit, credit or prepaid accounts. The agreement with Visa provides BTS with access to Visa's global network and has the potential for BTS to reach more consumers in more countries.

"The Visa money transfer and BTS agreement is a serious endorsement of Visa's ability to become an alternative channel for money transfer companies and banks," said Gwenn Bezard, Research Director at Aite Group. "Money transfer companies' desire to enable remittance transfers directly into bank accounts has grown in recent years, and Visa is positioned to become the go-to utility for that service."

For the launch of this new service, Visa worked closely with BTS and Visa Debit Processing Services (DPS), to securely connect BTS' money transfer platform to VisaNet, Visa's global processing network. DPS is Visa's issuer processing service in North America that connects outside parties, such as issuing financial institutions and merchants to VisaNet.

Mobile banking - SMS upgrades dominate recent development in the UK

The May 2010 update of Mapa’s UK Mobile Banking and SMS Competitor Intelligence dashboards recorded notable new services as well as removed services in the UK market.

Mapa’s UK mBanking Dashboard compares a list of 70 individual Mobile Banking services across 7 banks. All information is obtained replicating the customer experience through the live accounts that they hold with these banks.

Mapa’s SMS Banking Dashboard compares a list of 100 individual SMS Banking services across 21 competing providers. All information is obtained replicating the customer experience through the live accounts that Mapa hold.

Both Dashboards is updated quarterly, highlighting competitor changes that have occurred in the market during that time.

Barclays have been the most active player in the mobile field the last months. Following the removal of SMS Banking highlighted in the Mapa update from February, the bank has now introduced their new and upgraded SMS Banking service. Barclays LayerCustomers sign up within Internet Banking and can register for regular balance alerts as well as triggered transaction alerts for a flat fee of £2 a month.

The use of ‘Augmented Reality’ has now reached the UK financial market. Within the mobile phone application Layar, available on iPhone and Android, Barclays customers can search for branches, ATM’s and contactless retailers. By combining the use of camera and GPS, users are able to see hits on a map, in a list or on the screen as an extra layer in the reality seen live through the camera.

HSBC and First Direct continue to extend the free period for their mBanking service which now lasts until the end of 2010.

A&L have now shut down their mBanking and SMS Banking services following the takeover by Santander.

Halifax has extended their SMS Banking services to include all customers. Previously, only Reward account customers were able to sign up for alert when going into unarranged overdraft.

The main change in the UK credit card market was the introduction of free text alerts by MBNA. This service has been available before but with service charges. The new service also includes new ad hoc alerts.

Additionally, an interesting finding from Mapa research was the use text messages in correlation to the flight disruptions caused by volcanic ash. Several UK banks seized the opportunity to contact their customers via SMS with information on how they could get financial help from their bank.

Bank regulation reform on the cards in the UK

Financial regulation will be put back in the hands of the Bank of England under the proposed Financial Reform Bill announced in the Queen's Speech at the opening of Parliament yesterday .

It will abolish the tripartite regulation system that Labour introduced in 1997. Under that system responsibility is shared between the Bank of England, the Financial Services Authority (FSA) and the Treasury.

But there was no mention of a tax on banks' profits despite earlier reports. The Conservative-Lib Dem coalition government announced plans last week in its agreement document to introduce a levy on banks as well as measures to tackle "unacceptable" bank bonuses.

It also said an independent commission would be established to look at breaking up banks into their retail and investment banking arms to reduce risk.

However, there was no further mention of either of these in the Queen's Speech, although it is likely that there will be an update on the bank levy in the Budget on 22 June.

"Legislation will reform the framework for financial services regulation to learn from the financial crisis," the Queen said.

The proposed reform is one of 22 bills announced in the Queen's Speech, setting out what the new coalition government hopes to achieve over the next 18 months.

The Conservatives have long been in favour of getting rid of the FSA and giving the Bank of England responsibility for maintaining financial stability.

However, the Liberal Democrats have previously said they would keep the FSA and make it the single regulator, with the governor of the Bank of England having overall responsibility for systemic stability.

It is currently unclear what role, if any, the FSA will play under the proposed changes.

Banks reveal extent of 'dark pool' trading

Six big investment banks published trading volumes for their "dark pools" for the first time yesterday, showing them as a tiny fraction of the market and not the major hidden rivals to stock exchanges that some argue.

Citi, Credit Suisse, Deutsche Bank, JP Morgan Cazenove, Morgan Stanley and UBS together executed €596m of equity trades from 15 countries on their automated crossing systems on Friday, according to Markit data.

That accounted for about 0.4 per cent of all types of cash equity trades in Europe and 1.6 per cent of all over-the-counter (OTC) trades reported on the Markit BOAT service that day, according to Thomson Reuters data.

Dark pools are electronic platforms that allow would-be buyers and sellers of large orders of shares to avoid revealing pre-trade information and signaling their intentions to the rest of the market.

Bankers argue that for the bulk of OTC trades they act purely as dealers, using their own money or share inventories to take one or another side, or they act in a non-automated way to match buyers and sellers for big blocks of stock.