Plan Would Require Declaration of Prepaid Cards Shipped into EU

Customs_officer_sign_baggage_checkA proposed plan by the European Commission (EC) to combat terrorism financing would require customs declarations for prepaid cards sent in postal parcels or freight shipments into or out of the EU. Currently, cards sent or shipped across EU borders are not covered by the standard customs declaration requirement. Coming in the wake of a truck attack in Berlin that left 12 people dead and dozens wounded, the proposal is part of the EC’s action plan against terrorist financing, an initiative unveiled in February 2016, designed to help EU nations cut off the supply of funding for terrorist activity. One major component of the action plan involves empowering customs authorities to inspect more types of goods coming into the EU.

In addition to examining prepaid card shipments, the EC’s proposal also calls for tighter controls on cash moving into or out of the EU. Under current law, individuals carrying more than €10,000 (US$10,483) in cash into or out of the EU must declare it at customs, or risk the funds being seized. The new plan would enable officials to seize funds below that threshold “where there are suspicions of criminal activity.” The proposals must be approved by EU states and the European Parliament to become law.

The plan does not appear to require declarations by consumers when they carry prepaid cards with balances greater than €10,000 into the EU. In the U.S., FinCEN previously proposed to implement an anti-money laundering rule to reclassify prepaid cards as monetary instruments, which would have required consumers to declare when they transport prepaid cards with a value of more than $10,000 into or out of the U.S. Although the proposal was met with an outcry from the industry about privacy concerns, among other issues, a FinCEN spokesman told Reuters in August that the rule is being revised and could be submitted next year.

The EC’s latest proposal follows other initiatives unveiled by European officials following the November 2015 attacks in Paris aimed at stemming the flow of terrorism funding. In February, the EC proposed amendments to the 4th Anti-Money Laundering Directive that would bring virtual currencies, such as bitcoin, under the scope of the directive, requiring virtual currency exchange platforms to identify and verify the identities of people using such platforms. The commission also raised the possibility of requiring prepaid card distributors to verify consumer identities at the time of sale or activation of the card, rather than later—a requirement that could prove overly burdensome and cause providers to stop offering prepaid products altogether, critics of the plan cautioned.

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Too Close for Comfort? PayPal Sues India’s Paytm over Logo Similarities

court_gavel_justice_311956964_smGrowth brings the fierce attention of competitors, a lesson that India-based online commerce platform Paytm is learning. U.S.-based PayPal reportedly has filed a copyright suit against the firm, alleging that the blue color scheme of its logo, along with the fact that “pay” is the first word of the company’s name, is deceptive, according to eMarketer.

The suit comes amid significant growth for Paytm and its competitors in India, with digital transaction rates in India increasing as much as 1,000 percent since Nov. 9, when the country’s prime minister took out of circulation old 500 (US$7) and 1,000 (US$15) rupee notes. Paytm is emerging as a leader in Indian digital transactions, with more than 100 million users and investment from Chinese e-commerce giant Alibaba and its affiliate Ant Financial.

Observers quoted in the Indian press this month have wondered if the suit represents a tactical move by PayPal to put a hurdle in front of a competitor. “Whilst filing of oppositions is fairly normal in the industry, in the present case it may also be a competitive move,” Samuel Niranjan, an intellectual property lawyer with the law firm Khaitan & Co. told the Economic Times. Neither PayPal or Paytm offered comment by press time.

No matter the reason, more consumers in India are going digital to make purchases and perform other transactions, according to research from Google and A.T. Kearney. By 2020, payment via mobile wallets will account for 15 percent of digital transactions in that country, up from 8 percent now. Cash on delivery, meanwhile, will decrease to 45 percent from 57 percent. Debit card payments will increase to to 17 percent from 15 percent; credit cards to 13 percent from 11 percent; and online bank transactions to 10 percent from 9 percent.

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Image Credits: Piotr Adamowicz/Shutterstock

Questions about Your Finances? Ask Varo Money’s Val

robot_iconVaro Money announced it’s developing a chat bot for its mobile app. The San Francisco-based mobile-only banking startup, which is offering private-label banking services via The Bancorp, expects to launch “Val” early next year. “She” is part of a steady stream of chat bots that have been announced in 2016 by banks, merchants, tech companies and handset makers to improve customer loyalty, reduce costs and boost revenue, among other benefits.

With Val, Varo Money’s chat bot will serve as a digital money coach to help its customers gain greater control of their finances by providing them with personal recommendations about positive spending, savings and borrowing habits. The bot also can assist customers with account information, transactions, payments, budgets and goals. “Traditional banking practices do not offer customers financial education, whereas Val will provide 24/7 expert guidance in the privacy and convenience of a mobile app,” according to the announcement.

Varo Money partnered with New York City-based Kasisto to use its KAI Banking platform. Chat bots are artificial intelligence (AI) that respond like humans and Kasisto’s platform has been programmed to understand thousands of banking tasks and millions of banking sentences, according to the company. Kasisto also recently partnered with Mastercard, which announced in October that it’s launching a bot for client banks’ and merchants’ customers.

“The common thread here is ‘empowerment.’ We are transforming banking to improve the financial lives for a generation of consumers often overlooked by traditional banks,” said Colin Walsh, Varo CEO and cofounder.

Varo Money announced several partnerships for its mobile-only bank earlier this year, including The Bancorp, which supports its mobile checking and savings accounts, Galileo Processing Inc. to process transactions, Cachet Financial Solutions Inc. to provide mobile check deposit and Socure Inc. for digital ID verification.

In related news, India-based mobile services provider Mahindra Comviva announced a new version of its mobiquity Wallet to include a chat bot that will help banks that offer the wallet provide interactive and personalized service for customers. Initially, the wallet will offer chat bot-assisted payments services, with additional functions, such as context-driven interactions, to be introduced later, according to an announcement. Mahindra Comviva’s mobiquity Wallet could likely see a spike in popularity as the transaction volume of digital payments has increased since the Indian government outlawed two popular currency notes in November.

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On the Wire: Mastercard, Wari Fight Cash in Africa; Marcus Theatres, CashStar Premiere eGift Card; More

handshake_201595802A snapshot of payments-related press releases is available to you throughout the week. Click below for more details on the following headlines:

On the Wire: Deposit Automation a Key Part of Banks’ Cost-Saving Strategies

Banks see deposit automation as a means of increasing the use of self‑service channels, saving both time and money

Banks and their customers say that more automated deposit terminals are needed

London, 21st December 2016 — Everyone knows that if you want to withdraw cash, you go to an ATM – but how many people know that if they want to deposit cash, they may be able to use the same terminal instead of queueing at the counter? According to RBR’s Deposit Automation and Recycling 2016, an increasing number of bank customers not only know this but want to see more of it; the number of automated deposit terminals (ADTs) installed worldwide rose by 10% to 1.2 million in 2015, and banks cite customer demand as a major driver.

The benefits for the customer are clear; extended-hours access (90% of ADTs are available outside normal branch hours) and quicker account crediting are especially popular. So what’s in it for the banks? Budgets remain tight for many banks, and shifting more transactions from the teller counter to self-service can significantly reduce costs. With ATMs already well established for cash delivery, automated deposit is now coming into its own as a way of cutting cash-handling costs further.

Recycling takes centre stage

The vast majority of ADTs are deposit-capable ATMs, which both accept and dispense cash. Many banks are taking this a step further, and installing recycling ATMs which redispense deposited notes.

Cash-recycling technology has been around for more than three decades. The first ADTs were deployed in Japan in 1982, and the first recyclers followed in 1983; but many banks still consider recyclers to be too expensive or too complex. Attitudes are changing, however, as familiarity with the technology increases, and prices fall.

A third of ADTs are located away from bank branches, and replacing these machines with recycling ATMs has the potential to alleviate some of the costs and inconvenience of CIT experienced by deployers.

Number of automated deposit installations by type


Source: Deposit Automation and Recycling 2016 (RBR)

Automated deposit will become a standard feature at ATMs

Customers in a number of markets now expect their banks to offer automated deposit as a standard ATM facility, and RBR forecasts that automated deposit will be available at 1.7 million terminals worldwide by the end of 2021. Recyclers will gain share in most markets, while the number of stand-alone deposit terminals will decline.

Rowan Berridge, who led RBR’s Deposit Automation and Recycling 2016 research, remarked: “Automated deposit terminals are becoming a standard feature in more and more markets, and I now expect the focus to shift towards recyclers, as banks become more familiar with the technology, and look for further cost savings”.

Notes to editors

These figures and insights are based on RBR’s study, Deposit Automation and Recycling 2016. For more information about this report or to discuss the findings in more detail please email Rowan Berridge ( or call +44 20 8831 7311.

RBR is a strategic research and consulting firm with three decades of experience in banking and retail automation, cards and payments. It assists its clients by providing independent advice and intelligence through published reports, consulting, newsletters and events.

The information and data within this press release are the copyright of RBR, and may only be quoted with appropriate attribution to RBR. The information is provided free of charge and may not be resold.