Banks hold the key to mobile payments

Smartphone users would be more likely to engage with mobile commerce if their bank provided the service, according to a report conducted by mobile money services company Monitise.

More than 50% of UK smartphone users are buying items with their devices, but almost 60% would feel more confident doing so if they could use an app provided by their bank.

The Future Foundation report conducted by Monitise, also found that PayPal was the most trusted company to handle mobile payments (60%), followed by banks (48%), Mastercard, Visa or another card (46%), retailers (34%) and mobile network operators (12%).

“I have a very clear view [of the roadmap], but I have no idea if I’m right,” said Ben Green, head of mobile at Santander at a Monitise event. “What I’ve seen is nudging through the phases,”

He also said that banks need to build up trust slowly - customers need to be able to bank anywhere with instant access to their balance and transactions before they get into payments.

The Monitise research stated that checking a bank balance (59%) was ranked as the most important service banks provided for mobiles, this was followed by checking statements (45%).
Green also said that payment models need to be made as simple as possible for small businesses to utilise.
“Big corporations are more experimental, opposed to smaller traders who see it as a better cash flow opportunity,” said Green.

But he said that there is potential for SMEs to “mix things up” and play around with their retail footprint by offering services such as easy check-out options for customers who regularly visit a store and want to pay quickly and seamlessly.

Visa are counting on contactless payments to push mobile payment adoption, but near field communication (NFC) is still far from becoming a ubiquitous technology.

“Contactless is straightforward. We know consumers like it and the key is by getting contactless cards out of the door so that consumers can get familiar with it, and then getting it onto the mobile,” said Sandra Alzetta, head of mobile at Visa Europe. “It can be very overwhelming.”

Transport for London (TfL) began accepting contactless payments on buses in December 2012 and intends to roll this out to the entire TfL network by early 2014.

Visa said by the end of 2013, Europeans will be exceeding 52 million contactless transactions every month.
But technologies like NFC, peer-to-peer payments, apps like Barclays’ PingIt, QR codes and wallets are all making ground in the developing mobile payments market. Counting on one technology to catalyse the market would be “very dangerous” said Simon Andrews, CEO of digital mobile agency Addictive.

Tom Hanks: See the Actor Play Walt Disney in Saving Mr. Banks

In Saving Mr. Banks, Walt Disney (Tom Hanks) shows Disneyland to Mary Poppins author P.L. Travers (Emma Thompson).
The resemblance is uncanny: Tom Hanks suits up (and sports a mustache) to portray the legendary Walt Disney in the upcoming movie Saving Mr. Banks. In the first official still from the film, the actor shows author P.L. Travers (Emma Thompson) around Disneyland in Anaheim, Calif.

When Disney's daughters begged him to make a movie of their favorite book, Travers' Mary Poppins, he promised to deliver. It took him 20 years to obtain the rights -- and when he did, he was forced to deal with its curmudgeonly, uncompromising author. "She's the most difficult person I've ever played," Thompson, 54, tells TIME of her character. "She was a woman of quite eye-watering complexity and contradiction."

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The film tells the story of Disney's quest to make the classic 1964 Mary Poppins movie that starred Julie Andrews and Dick Van Dyke.

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"Often I play people who are controlled by some very clear guiding moral principles," says Thompson, a two-time Academy Award winner. "There are very clear moral prisms these women pour life through, and I understand that very well. And [Travers] was not like that at all. She was far more chaotic and confused and morally various."

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Directed by John Lee Hancock, the film also stars Colin Farrell, Rachel Griffiths, Paul Giamatti, Jason Schwartzman and B.J. Novak. Saving Mr. Banks will be released nationwide on Dec. 20, 2013.

Banks balk at Icahn's Dell deal

FORTUNE -- I believe that Carl Icahn sincerely wants to buy Dell Inc. Maybe not always, but by now he really has talked himself into the idea that this is a great company beset by lousy management.

At the same time, I don't believe he has a shot at it.

My last slivers of doubt were wiped out this morning, when Icahn disclosed that he had secured $5.2 billion in bank debt to help finance his proposed $14 per share tender offer for the company. Or, more specifically, when Icahn disclosed that he personally was financing more than half of that $5.2 billion. Seems most lenders didn't want anything to do with his Dell (DELL) deal.

According to a proxy statement, Icahn affiliates would put up 65.8% of the $5.2 billion package -- or $3.42 billion. But it actually comes in at only $3.1 billion because of a series of back-to-back commitment letters where other buyers would take around $320 million off Icahn's hands.

When first discussing the deal publicly back in May, here is what Icahn told CNBC:

"I personally have said that i would be good for over $2 billion if needed. So that brings it down to only $3.2 billion, and we got $1.6 billion already from Jeffries without going anywhere yet."

So Icahn ultimately had to put in $1.1 billion more than he had originally projected, after Jefferies proved unable to syndicate out the $1.6 billion it hadn't committed off its own balance sheet (after two months of work!).

To be fair, Icahn was discussing a recap rather than a tender during his CNBC interview -- in part because he thought Dell's board would only consider the former to be a "superior offer" -- but this still represents a pretty broad rejection of his plan.

Remember that Icahn only gets Dell if (a) Shareholders reject the $13.65 per share buyout offer from Michael Dell and Silver Lake, and (b) If Dell's board subsequently votes in Icahn's slate of directors who then would engage the tender (a vote in which Michael Dell could participate).

And if lenders are saying no, why does he think equity holders will be any different. Particularly given that the bondholders would have greater protections? Moreover, there's a high likelihood that the stock is now largely in the hands of arbs who are content with the $13.65 per share price, and have no interest in a longer-term hold.

Icahn today argued that his ability to put together the $5.2 billion package should be enough for Dell's board to realize he's serious. Unfortunately for Icahn, it also makes everyone realize that he's got a losing hand.

Central banks told to back off

Federal Reserve Chairman Ben Bernanke hinted that the central bank would pull back on stimulus measures later this year.

But a powerful group, representing global central banks, wants more.

In its annual report, the Bank for International Settlements suggested that global central banks should stop relying on stimulus to grow their economies and instead encourage authorities to speed up reforms.

"We are past the height of the crisis, and the goal of policy has changed -- to return still-sluggish economies to strong and sustainable growth," said the BIS, a consortium of central banks like the Fed and the European Central Bank.

"Can central banks now really do "whatever it takes" to achieve that goal?"

Related: Fed sets road map for end of stimulus

The report stated that the initial purpose of stimulus programs was to do "whatever it takes" to prevent financial collapse.

But at this point, the BIS called the programs "cheap money" which delays needed reforms in the economy and the financial system.

Investors have been skittish around any kind of central bank pullback talk. U.S. markets fell two weeks in a row after the Fed suggested it could start easing up on its controversial stimulus program, which is pumping $85 billion a month into the U.S. economy.



Central Bank action in China and Europe also has people on edge.

The People's Bank of China, which maintains tight control over the banking system, has been taking a tough line with Chinese lenders. It refused to inject cash into the financial system last week despite rocketing short-term borrowing costs, rattling investors.

The ECB, meanwhile, is in a wait and see mood and seems poised to move in the opposite direction.

The bank says it is ready to do more if an economic recovery fails to materialize later this year. It has discussed negative interest rates to ease a credit squeeze by encouraging banks in depressed southern Europe to lend more money to businesses and consumers.

Europe is constantly wrangling with the long-running debate over spending cuts and tax increases that have formed the core of the eurozone's response to its credit crisis. In recent months, European policymakers have gone out of their way to acknowledge that there are limits to austerity programs.

 

China stocks crater as banks warned over credit

The People's Bank of China told the country's largest banks Monday to rein in risky loans and improve their balance sheets, a warning that sent a jolt through already unsettled equity markets.

The Shanghai Composite lost 5.3% of its value and closed well below the 2,000 point barrier, the latest in a series of dismal performances. The struggling index is now down 13.5% from the start of the year.

The sell-off comes after short-term borrowing costs skyrocketed last week in China, leading to a credit crunch.

The rate at which Chinese banks lend to each other overnight hit a record high above 13% last week before moderating. Another key measure of cash in the banking system -- the 7-day "repo rate" -- peaked at 25%.



Rates continued to stabilize on Monday. But analysts questioned why the bank's leaders had not quickly intervened, and why the bank's intentions were not communicated to investors as rates continued to rise.

Official state media unraveled some of the mystery over the weekend, reporting that the China's shadow banking system was the central bank's target. "It's not that there's no money," the Xinhua commentary said. "It's that the money is not in the right places."

Some analysts worry that China's credit boom has saddled unworthy businesses with large loans, fueled the country's shadow banking system and put local governments on the hook for billions.

Related story: Is China's debt a crisis in the making?

A credit squeeze by the central bank would discourage risky loans, and help China's economy complete a rebalancing that most experts say is required to secure long-term growth.

The central bank suggested Monday that its tough medicine is likely to continue.

"Commercial banks must pay close attention to the liquidity situation in the market and must strengthen their analysis and forecasts of factors affecting liquidity," the central bank said in a note posted Monday but dated June 17.

The notice also said that banks must "prudently manage liquidity risks that have resulted from rapid credit expansion" and "appropriately contain the pace of loans and bill financing."

As of now, the central bank said, "overall bank liquidity conditions are at a reasonable level."

Related story: Central banks put on notice over stimulus

Nomura economist Zhiwei Zhang said the guidance note suggests that the central bank's policy stance will remain tight.

"We believe this is another sign that the PBoC is not willing to loosen policies or inject liquidity to bring down interest rates," Zhang said.

Growth in China slipped to 7.8% last year. The government's target for this year is 7.5%. But the risk of a disappointment is rising and with it the prospects of a weaker-than-expected recovery in the global economy.

Many economists have downgraded their growth projections for China's economy, with some warning that an expansion of less than 7% is possible in the second half of the year.

 

BIS to global central banks: Time to reduce stimulus

Federal Reserve Chairman Ben Bernanke hinted that the central bank would pull back on stimulus measures later this year.

But a powerful group, representing global central banks, wants more.

In its annual report, the Bank for International Settlements suggested that global central banks should stop relying on stimulus to grow their economies and instead encourage authorities to speed up reforms.

"We are past the height of the crisis, and the goal of policy has changed -- to return still-sluggish economies to strong and sustainable growth," said the BIS, a consortium of central banks like the Fed and the European Central Bank.

"Can central banks now really do "whatever it takes" to achieve that goal?"

Related: Fed sets road map for end of stimulus

The report stated that the initial purpose of stimulus programs was to do "whatever it takes" to prevent financial collapse.

But at this point, the BIS called the programs "cheap money" which delays needed reforms in the economy and the financial system.

Investors have been skittish around any kind of central bank pullback talk. U.S. markets fell two weeks in a row after the Fed suggested it could start easing up on its controversial stimulus program, which is pumping $85 billion a month into the U.S. economy.

 

Central Bank action in China and Europe also has people on edge.

The People's Bank of China, which maintains tight control over the banking system, has been taking a tough line with Chinese lenders. It refused to inject cash into the financial system last week despite rocketing short-term borrowing costs, rattling investors.

The ECB, meanwhile, is in a wait and see mood and seems poised to move in the opposite direction.

The bank says it is ready to do more if an economic recovery fails to materialize later this year. It has discussed negative interest rates to ease a credit squeeze by encouraging banks in depressed southern Europe to lend more money to businesses and consumers.

Europe is constantly wrangling with the long-running debate over spending cuts and tax increases that have formed the core of the eurozone's response to its credit crisis. In recent months, European policymakers have gone out of their way to acknowledge that there are limits to austerity programs.