Vietnamese remittances set to reach $7.3b

Overseas remittances have surged strongly this year and were expected to reach US$7.3 billion by year's end, an increase of over 14 per cent over 2009, said State Bank of Viet Nam Governor Nguyen Van Giau.

The growth in this figure was considerable in comparison to other measures of foreign capital inflows, e.g., foreign direct investment or official development assistance, and had been increasing steadily in the past two weeks, Giau said, suggested that the increased inflows would help stabilize the foreign currency supplies and reserves, as well as the balance of payments.

With foreign reserves currently thin and the demand for dollars expected to undergo a seasonal increase before the Lunar New Year holidays, the State Bank of Viet Nam has already needed to intervene in the foreign exchange market by pouring additional dollars into the commercial banking system.

The World Bank recently released a report on remittances worldwide in 2010, with Viet Nam ranking 16th among the top 30 countries surveyed.

Remittance fees to Pacific countries higher than global averages says report

A recent report says the average cost of remitting to the Pacific is significantly higher than global averages.

"Fiji Live" reports that according to the report called "Trends in Remittance Fees and Charges" prepared by Australia and New Zealand, this is a challenge to the Pacific’s primary remittances policy.

It says the average cost of sending remittances to Pacific Island Countries is 21.7 percent of the amount remitted when sent from Australia, and 15.2 per cent when sent from New Zealand.

It says it is estimated that remitters to the Pacific pay at least 90 million US dollars in remittance fees each year.

The report, which was presented at the recent Forum Economic Ministers meeting in Niue, noted that around 470 million US dollars was formally remitted to Forum island countries in 2008.

Following discussions about the report, the Forum Economic Ministers Meeting in Niue agreed "to explore and prioritise support for domestic initiatives in both sending and receiving countries to promote lower remittance costs."

UK debit card usage overtakes cash for the first time ever

Cash has finally succumbed to the rise of the debit card over this past summer. Debit cards passed the historic milestone over the UK’s August Bank Holiday, when the running total of debit card spending (£272 billion) finally overtook the cumulative amount of cash spent (£269 billion) in the economy for the first time ever.

Debit cards are growing at break-neck speed. The number of purchases rose 10% this summer compared to last, an additional 1.6 million transactions on debit cards every day between July and September. The amount spent rose almost 11%. Debit cards were used three times more frequently than credit cards in 2010 Q3.

As a further indication of the move away from cash, withdrawals from cash machines fell 1.5% in the third quarter, compared with the same period in 2009, a decline in real terms of almost 5%.

Sandra Quinn, Director of Communications, Payments Council explained: “Cash is too cumbersome for many consumers these days – they prefer a card for anything more than the smallest transactions. We now expect our debit cards to be accepted everywhere we go – in pubs and clubs, at the corner shop, online and on the high street. Having quickly supplanted cheques, then claimed the scalp of credit cards, they have now usurped cash’s throne too.”

Credit card spending remained fairly flat in the third quarter of 2010, when compared with the same period in 2009. Summer credit card spending was up just 2.2%, well below CPI while the total balance outstanding on our credit cards fell to its lowest level since 2003 – showing that customers are taking repayments seriously.

Credit card spending has barely changed in cash terms in recent years – over the last year it is up only 5% compared to 2005, a decline in real terms of a tenth. Since 2005 the number of cards in issue has also fallen from 70.6 million to 60.7 million (-14%), and the number of cardholders has decreased from 31.7 million to 30 million.

Quinn said: “Once credit cards were the only convenient way to pay as alternatives to physical cash and cheques, but now people have far more options. Conscious of the need to repay credit borrowed, consumers are increasingly choosing their debit card over credit card. Contrary to expectation, the possibility of greater financial stress during the recession and beyond has not driven people to rely more heavily on their credit cards.”

Cheques accelerated their flight into the payments wilderness. 104 million fewer cheques were written over the last twelve months compared to the previous year. At this pace of decline, both the number of cheques written and the value of money they move will almost halve by 2015.

Quinn added: “Cheques are very rarely used by consumers to pay for things – they are now mainly reserved for larger transactions, especially moving savings and investments around, although they are still popular for giving gifts.”

Among electronic transfers, Bacs were flat in real terms in the third quarter (up 3.4% by value compared to the third quarter of 2009 with Direct Debit volumes growing by 2%), and CHAPS fell slightly in real terms (up 0.4% by value). Faster Payments, however, rose 53% in value terms and 42% in volume terms, as more banks joined the system and in September the maximum value threshold for internet and phone payments rose from £10,000 to £100,000.

Quinn concluded: “Faster Payments have met a huge demand for people to move their money instantly, and have generated more transactions too. Consumers expect their banks to offer the service now – whereas a tenner borrowed from a friend was once repaid in cash, now it’s quite common for a Faster Payment to do the job direct. The volumes continue to soar – the growth rate is likely to slow, but we expect Faster Payments to take an ever bigger share of UK payments.”

The Payments Council is the organisation that sets strategy for UK payments. It has been established to ensure that UK payment systems and services meet the need of users, payment service providers and the wider economy.

The Payments Council has three core objectives: to have a strategic vision for payments and lead the future development of co-operative payment services in the UK; to ensure payment systems are open, accountable and transparent; and to ensure the operational efficiency, effectiveness and integrity of payment services in the UK.

Kenyan banks plan to tap mobile money

Financial institutions in Kenya plan to leverage on mobile money transfer technology to enlist more Kenyans in the formal banking system.

A player in the sector believes this will go a long way in boosting the agency-banking model while at the same time reducing the cost of doing financial transactions.

Equity Bank Chief Executive Officer James Mwangi said that while mobile money transfer has been successful in easing financial access, the next phase is to get money from the un-banked population into the formal economy.

“What we are really pushing for is that Kenyans should not be dis-intermediated. If we don’t converge telecoms money transfer with banking facilities, what we are very busy doing is disabling Kenyans from having financial access,” Mr Mwangi said stressing that Kenyans needed more than money transfer services.

According to Central Bank statistics, the mobile money platform from telecom operators moves in excess of Sh3 billion a day, an indication why financial institutions are eager to take advantage of the system.

Mr Mwangi said interfacing telecom services with those from financial institutions would undoubtedly make Kenya the regional hub for financial services owing to the ease of accessing credit.

“It is important we interface the two so that Kenyans continue to build a banking history as well as a credit history that guarantees them access to financial services,” he said.

Since the introduction of money transfer services in 2007 with Safaricom’s M-PESA, Kenya has become a case study to the world given its success. Since then, all four mobile operators have introduced similar services with 58 percent out of the 20 million mobile users embracing the service.

CBK Governor Prof Njunguna Ndung’u has in the past indicated the plan is to eventually have a financial system that would see agency banking change the brick and mortar banking concept and which will deepen financial services especially in rural areas.

Equity Bank has been at the forefront of bridging the gap by partnering with mobile operators to create a platform that essentially ropes money into the banking system.

Speaking during the signing of a partnership agreement with Essar Telecom’s yuCash service, Mr Mwangi said such partnerships would fast tack the process.

Through the partnership, yuCash customers will be able to transfer funds from their yuCash accounts to their Equity Bank accounts directly from their mobile phones and from their bank accounts to their yuCash accounts.

Designed as what is technically known as a Mapped Account, Mr Mwangi added that yuCash customers will alongside basic money transfer now manage to send and receive cash across the various local mobile network operators.

“Through such partnerships, we have managed to significantly bridge the gap between the banked and un-banked masses as part of our overall goal to boost social-financial inclusion as a poverty alleviation strategy,” he said.

Essar Telecom Country Manager Atul Chaturvedi said the deal would help the operator deliver services that have been informed by the needs of the ordinary Kenyan and powered by innovative technology acquired from global industry leaders such as Obopay.

“yuCash presents a significant step towards delivering universal access to financial services through innovative mobile banking and payments services and working with Equity Bank is a step in the right direction essentially geared at meeting our customer expectations,” Mr Chaturvedi said.

Tech-savvy Brits lose queuing cool within 11 minutes

The typical British adult can stand queuing for 10 minutes and 42 seconds before their patience starts to fray, according to research published recently by the UK’s Payments Council. Indeed, the stereotype of patiently queuing Brits is becoming a thing of the past, with eight in ten UK adults (83%) turning to virtual alternatives, from shopping online to direct debit bill payments, to avoid the need to stand in line.

• Older people least willing to wait, but under-35s most prone to blow a fuse.
• Eight in ten buy, bank or pay bills electronically to avoid having to queue…but many resort to more desperate measures.
• Two thirds of queuers (66%) can’t stand others ‘faffing’ in front of them, but just 14% pick the quickest way to pay and go.

So how does one dodge a queue?

The UK’s favourite ways to avoid queuing are to bank and pay bills online (58% and 54%), buy travel or event tickets remotely (45% and 39%), and to purchase goods such as books and electronics online or over the phone (35%). However, the survey also reveals some of the more drastic measures people are adopting to preserve their precious time, especially among younger people.

One in five people (21%) have done their shopping at night to avoid queuing, while 18% have changed what they buy or where they shop. More extreme still, one in 12 (8%) young people (18-34) have taken time off work to avoid peak time queues, and one in eight (12%) admit to sending someone else to queue for them (compared to 5% and 8% of the overall population respectively).

Sandra Quinn, spokesperson for the Payments Council commented: “Britain has a long and illustrious tradition of queuing, and clearly what we’ll put up with varies widely. Our research shows that more of us are waking up to the fact that you can skip the queue altogether, saving time and money, by using ‘queue dodging tactics’ like internet shopping, online banking and paying bills electronically. It can definitely be worth thinking about making the most of these if you haven’t done so already.”

Asked about their biggest annoyances when waiting in line, two thirds (66%) said they can’t stand other people “faffing” around in front of them, with other top peeves being children getting bored and frustrated, and other people in the queue causing irritation. Despite these aggravations, only four in ten (40%) make sure they have everything to hand by the time they get to the front, and only 14% try to pick the fastest way to pay.

And whilst older respondents (over-55) admit to becoming restless nearly three minutes before younger people - with breaking points of 9 minutes 30 seconds, and 12 minutes 18 seconds respectively - younger queuers are twice as likely to take it out on those around them. Furthermore, one in six younger adults (17%) resort to phoning friends or family to vent their frustration, compared to just 3% of over-55s.

Challenging their image as impatient, Londoners were overall prepared to wait longer than anyone else, at an average of 12 minutes and 12 seconds before getting restless, 31% longer than the least patient region, Yorkshire and Humberside.

68% of the over-55s said there’s nothing good about queuing compared to 55% of the 18-34s, a quarter of whom say they like the opportunity to daydream, and a further 7% take the chance to sort out other things by phone or online whilst waiting. Overall, 12% of people said they like the opportunity to socialise with people, showing that perhaps queuing isn’t all bad.

But despite our wealth of queuing experience, it seems Brits often underestimate the time it can take to queue, with 12% saying they have missed a train or plane due to waiting in a queue, rising to 20% of those aged 18-34. Other ill effects include getting in trouble at work (9%), missing a date (4%), and getting a parking ticket (11%).

Supermarkets topped the list of the nation’s least favourite places to queue, followed by the Post Office and airport check-in and security.

The future of screen technology

What does the future hold for mobiles and smartphone? What will Apple and Android products look like in 2015 or beyond?

Check out this demonstration of the future from the Swedish firm TAT.

Faulu Kenya launches mobile banking service

Faulu Kenya has launched phone mobile banking where customers can open and operate their bank accounts.

Customers can transfer money within accounts and across mobile networks and do automatic and instant loan applications among other functions.

Chief executive John Mwara said: “We intend to bring on board several agents once Central Bank releases the prudential guidelines on agency banking for microfinance institutions,” he said.

The Central Bank of Kenya has issued guidelines on how commercial banks can appoint agents to provide banking services on behalf of institutions.

Information and Communications minister Samuel Poghisio said that despite remarkable progress in the last three years, access to financial services outside main cities remains limited.

The minister said the key lies in efficiencies that intertwine banking with lifestyles of every Kenyan.

“Besides more coverage by regular banks, alternatives such as microfinance and saccos should be strengthened and encouraged to expand”, he said.