The payment terminal is about to become a point-of-sale entertainment center, as VeriFone Holdings Inc. prepares to expand the marketing engine it designed for taxicabs to large retailers.

The Indian state of Orissa plans to introduce an online-payment system for the payment of electricity bills, a spokesperson for Orissa’s State Power Ministry tells PaymentsSource. “While other states have such systems for electricity for consumers in the urban areas, no one has done (it) in both rural and urban areas like we will,” the spokesperson says. Power-distribution companies in Orissa have signed a memorandum of understanding to offer the service. Consumers with payment cards and Internet access would make payments through an Orissa Web site. Urban utility customers would be able to pay bills using credit cards, debit cards, prepaid cards and online funds transfers, according to the spokesperson. Customers in rural areas would use biometric readers that read fingerprint algorithms to make payments from bank accounts. The state expects to deploy at least 5,000 biometric readers, the spokesperson says, noting the service for urban customers is scheduled to begin on Jan. 1 followed by rural service in February.

Price reductions could help spark demand for cards that display one-time passcodes consumers may use to secure online-banking and retail transactions, according to some observers. Consumers in various countries already use readers plugged into personal computers, passwords and challenge-response questions to authenticate themselves when using online-banking and merchant sites. Companies such as Los Angeles-based Innovative Card Technologies Inc. hope the increasing use of Web sites for transactions, combined with increasing awareness of fraud, persuade more consumers to use cards that display passcodes based on algorithms unique to each cardholder. Consumers type in the passcodes when prompted by Web sites for authentication. Innovative has shipped at least 500,000 such cards, Richard Nathan, the company’s president and CEO, tells PaymentsSource. Still, the market remains relatively small. “The reason the market is what it is is because of the price barrier,” he says. For instance, Bank of America Corp. charges consumers a one-time fee of $19.99 for its SafePass card, which displays a six-digit passcode, according to the financial institution’s Web site. Low demand for the devices has kept prices high, says Thomas Flynn, director of marketing for identity and access management for France-based smart card vendor Gemalto NV. Flynn says one-time passcode cards cost between $10 and $20, though he would not be more specific. Dennis Brestovansky, president and CEO of Minneapolis-based Aveso Inc., which makes modules for one-time passcode cards, tells PaymentsSource bringing the cost of such a card down to $5 would help increase demand. Aveso hopes to “be close” to that target by late 2010, he says.

Fannie Mae reported this week that delinquencies in its mortgage portfolio are still rising even as the financier's portfolio size shrinks. Fannie said October's serious delinquencies, those at least 90 days behind, rose to 4.98% on single-family homes from 4.72% in September and 1.89% in October 2008.

The Reserve Bank of India has increased limits for transactions initiated with mobile phones, the country’s central bank said in a notification released this week. The bank raised the limit for mobile phone funds transfers and retail purchases to 50,000 rupees (US$1,070 or 745 euros) per day, a bank spokesperson tells PaymentsSource. Previously, the central bank capped mobile funds transfers at 5,000 rupees, while it limited mobile purchases of goods and services to 10,000 rupees. Those limits stood for more than a year. “In addition, transactions up to 1,000 rupees can be facilitated by banks without end-to-end encryption,” the spokesperson adds. In addition, the central bank says it will allow banks to offer services that enable consumers to transfer funds from bank accounts that recipients can redeem in cash instead of account credits. “These funds can be [redeemed] by recipients via ATMs or through agents appointed by banks as business correspondents,” the spokesperson says. “The limit for cash transfer through ATMs or business correspondents has been capped at 5,000 rupees per transaction and 25,000 rupees monthly.”

Consumers in Indonesia will have to use chip-enabled credit cards starting on Jan. 1, a spokesperson for Bank Indonesia, the country’s central bank, tells PaymentsSource. “The domestic system will only process payments made by chip-enabled credit cards,” the spokesperson says. “However, tourists and foreigners will still be able to use magnetic stripe cards, provided they are issued overseas.” The directive does not apply to debit cards, though some Indonesian banks issue chip-enabled debit cards. The move to chip credit cards originally was supposed to occur in 2008, the spokesperson adds, noting officials pushed back the deadline because not enough banks and merchants were ready for the switch.

Consumers worldwide cannot account for an estimated 20% of their weekly cash spending, according to statistics released last week by Visa.

The number of contactless smart cards shipped per year will break the 1 billion mark by 2014, United Kingdom-based IMS Research predicts in a recent report. “The market for contactless is set to nearly double between 2008 and 2014 as the three largest end-user sectors–government and health care identification, transportation, and payment and banking cards–all gain traction, analyst Don Tait said in a statement. The report cites health care as the biggest sector, but transportation is booming. IMS also expects bank and payment cards to move the fastest toward contactless. Though there are relatively few shipments in that sector thus far, consumer awareness and adoption are growing, the firm says. However, adoption is not always smooth, according to research director John Devlin. “One key area that has yet to fully adopt contactless is mobile,” he says, citing the lack of a common certification standard as a chief cause. The lack of agreements between various stakeholders also is holding back the growth in Near Field Communication payments, the company says. IMS is not forecasting major contactless shipments in the mobile segment until 2012.

Monitise PLC, the British mobile banking vendor, says it plans a broader push next year into mobile retailing, initially in the United Kingdom, then across Europe and in the United States.

One more person-to-person payment application for mobile devices might seem merely like incremental progress toward mobile payments, but it demonstrates the increasing pressure to make phones into financial tools, analysts said earlier this month.

A new generation of person-to-person money transfer services is quickly gaining traction with banks, offering a way to regain a share of the electronic payments that was ceded long ago to nonbank rivals.

A substantial percentage of customers now access account information via smart phones and handsets rather than PCs, even at home.

The state government of Victoria, Australia will launch the contactless ticket system for trains in Melbourne, a spokesperson for the Transport Ticketing Authority, which manages the ticketing system, tells PaymentsSource. “We are assuming that it will be at least a couple of weeks before the system can be [launched] on trams and buses,” the spokesperson says. The state government says that about 1,000 government workers have been testing the cards in the Melbourne area for about two months. Myki is designed to replace a number of ticketing systems in Victoria, primarily the Metcard (metropolitan Melbourne) and V/Line (regional) ticketing systems. “For the passenger‚s convenience, we will run the old ticket system alongside myki for at least six months before we scrap [the old system],” the spokesperson adds. The myki system has run into previous problems, including 11,000 instances of overcharging across the state and complaints from bus passengers in the region of Geelong about malfunctioning readers and wrongful charges. Matthew Sinclair, executive director with Australia-based Carpadium Consulting, tells PaymentsSource that if myki operators cannot get the system working in a town the size of Geelong, with a population of about 162,000, then the scheme likely will fail in a city as large as Melbourne, with a population of about 4 million. “And this will be a big problem because Melbournites are big users of public transport,” he adds.

ATLANTA–Two Wisconsin-based credit unions have implemented VSoft’s outsourced branch item capture solution offered by its ASP platform, VSoft Managed Services. The $725-million Altra FCU and the $422 million Pioneer CU said the implementation will add additional convenience for members.

Monitise PLC, the British mobile banking vendor, says it plans a broader push next year into mobile retailing, initially in the United Kingdom, then across Europe and in the United States.

Though cards with displays that offer one-time passcodes for online transaction security could gain wider acceptance in the United States, the "jury's out" on whether the technology will win over Europeans, an executive with card vendor Gemalto NV tells CardLine Global sister publication PaymentsSource. "We are going to see the adoption of card [form] factors in the U.S. because it's familiar and people like it," says Thomas Flynn, the Amsterdam-based firm's director of marketing for identity and access management. "In Europe, you have familiarity with home [card] readers," which attach to consumers' computers to enable more-secure online-banking transactions via EMV chip cards and passcodes. Cards that display one-time passcodes generate those codes based on algorithms unique to each cardholder, and financial institutions typically store the algorithms on central servers. Consumers authenticate themselves by entering the numeric passcodes on the appropriate Web site-for instance, a bank site when initiating online transactions. The cards are the same size as traditional payment cards. "The credit card form factor is very familiar, and you can brand [the cards] in a similar way," Flynn says. Gemalto offers this technology through its Ezio Display Card, which "one major bank in the U.S." is using, he adds. Gemalto also sells at-home card readers, and the company Wednesday took a deeper step into that field when it announced it has completed the 20 million euro (US$29 million) purchase of the banking activities of France-based Xiring, which sells readers for online-banking transactions consumers complete at home.

By letting businesses pay each other with card accounts, Bank of New York Mellon Corp. says it can profitably ease the inherent tension between suppliers, which want to be paid as early as possible, and buyers, which often want to hold onto the funds until the last minute.

Results of a newly released online survey conducted in November show that nearly one-third of consumers believe the economic downturn has yet to bottom out.

WEST PALM BEACH, Fla.-Credit unions were atwitter like never before in 2009, as social media became a prime focus for marketing and member outreach strategies.

CHARLESTON, W.V.-A small credit union here became the first financial institution in the country to create an iPhone remote deposit application.