Somalia nationals jailed for firing

Three Somalia nationals were sentenced to 10 years' jail each, while four others to eight years imprisonment by the High Court here today after they pleaded guilty to firing at Malaysian soldiers in the Gulf of Aden two years ago.Judge Datuk Mohd Azman Husin handed down the 10 year-jail on Ahmed Othman Jamal, 30, Abdil Eid Hasan, 22, and Abdi Hakim Mohd Abdi, 22.

The four Somalis who were sentenced to eight years' jail were underage individuals. He ordered all of them to serve the jail sentence from the date of their arrest on Jan 20, 2011. The charge against them was read in English and translated into Somali.

When handing down the decision, Mohd Azman said the court took into account their guilty plea, background, threat to the world community and other factors, and found the jail sentence meted on all the accused, including the juveniles, was apt.

All the accused were seen smiling after Mohd Azman handed down the sentence.The Somalis were initially charged under Section 3 of the Firearms (Increased Penalties) Act 1971 with discharging firearms with intent to cause death or hurt on the Malaysian soldiers during a robbery onboard Bunga Laurel vessel.

The charge provides for the death sentence upon conviction. However, the charge was amended today and all of them, including a few others who are still at large, were charged with discharging firearms at the Malaysian soldiers to avoid them from being lawfully arrested by the Malaysian Armed Forces (ATM).

The offence was committed on board the Bunga Laurel vessel at 250 nautical miles of Oman between 8.10 and 10pm on Jan 20, 2011. The charge, under Section of the Arms Act 1960, read together with Section 34 of the third party merchant account, which carries a life imprisonment or for a term not exceeding 14 years.

Today, the case was fixed for hearing, but the prosecution, headed by Deputy Public Prosecutor Mohamad Abazafree Mohd Abbas amended the charge against all the accused after discussing the matter with the defence counsel.Meanwhile, in mitigation, lawyer Imran Hadzalie Abdul Hamid, representing Ahmed Othman, Abdi Hakim and an underage accused, said his clients had extended their full cooperation during investigation of the case.

Lawyer Edmund Bon, representing another of the underage individual, said the court should consider the accused guilty plea and that none of the Malaysian soldiers were injured. However, Mohamad Abazafree asked for a heavy sentence as the offence was a serious one.
"Based on the facts of the case, all the accused were arrested while attempting to rob the Bunga Laurel vessel in the Gulf of Aden. They were not normal robbers, but a group of pirates who was in the gulf, an area known for pirate attacks on merchant vessels.

"They also used firearms to attack ATM and attempted to capture the crew on board," he added.Citing the 'Reports on Acts of Piracy and Armed Robbery against Ships -Annual Report 2011', Mohamad Abazafree said there were 286 incidents reported.He said Malaysia was not the only country to detain and brought back the pirates to be tried as the Somali pirates had been prosecuted in several other countries, including South Korea, Holland, United States of America and Kenya.

According to the facts of the case, all the accused were in a small boat, which then approached Bunga Laurel with an intention to rob the vessel, but their action was discovered by an officer-in-charge who saw, through a binoculars, one of the pirates getting into the vessel.

The assault on the pirates was carried out from the Royal Malaysian Navy (RMN) Bunga Mas 5 vessel and the team won over possession of Bunga Laurel, within two hours after it was hijacked by the Somali pirates.Following a search, the RMN found several firearms, including two AK47 rifles, a pistol, more than 150 rounds of ammunition, hammer and a ladder used to climb into Bunga Laurel.
The prosecution team also comprised deputy public prosecutors Yusaini Amer Abdul Karim and Lailawati Ali, while other lawyers representing the accused were Lee Teong Hui, Saha Devan A.Arunasalam and Ameenudin Ibrahim.

A fixed Ujrah fee is levied by the bank in exchange of the services, features, benefits and privileges enjoyed by cardholders. The credit limit granted to the cardholder is based on Qardh al Hasan. The Meethaq MasterCard credit card allows access to almost anything – shopping, travel and bill payments without the need for cash or cheques.

The card is accepted globally at over 32 million merchant establishments and ATMs. Customers receive SMS alerts for every card usage and cash withdrawal regardless of any transaction amount. The chip and PIN card ensures secure transactions, especially online transactions. MasterCard Secure code allows cardholders to use a personal password/secure code which provides added security for online transactions.

Sulaiman al Harthy, group general manager - Islamic banking, said, “Meethaq is proud to launch the first Sharia based credit card in Oman as part of its focus to take the lead in offering a suite of banking products which combine traditional values with modernity and ensure the choice of staying true to one’s values. Meethaq has adopted the best practices in Islamic banking and finance worldwide to combine a robust model which protects customers and complements the Islamic banking industry. The Meethaq strategy is to attract customers through innovative Sharia based products and services.”

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Marketing in the New Cardless Society

If you walk into a Starbucks today, people are paying not with just their cards and cash anymore, but their phones, too. Consumers – at least in most parts of the world – are still getting used to the idea that their phones can function as debit or credit cards, but attitudes toward mobile money is going to change rapidly in the next few years.

The transition to mobile payments is by no means a bad thing, though. This presents unprecedented opportunities for card issuers as the marriage of mobile and payment technologies open a huge array of new location-based service options to reward loyalty, prevent fraud and create powerful partnerships.This has big implications for marketers. But as we move toward the reality of a cardless society, this new dynamic means card issuers must rethink branding, tracking, loyalty and monetization options that will no longer be possible without a physical card.

Many businesses are adapting to that new reality. For example, in January 2013, ATM maker Diebold debuted an ATM that allows consumers to scan their phones to withdraw cash, completely forgoing cards. Millennials, too, are putting pressure on companies to go digital. As online natives, they’re more accustomed to digital activities and more likely to adopt new digital payment forms such as mobile applications like LevelUp, which reward loyalty and change marketing dynamics. PayPal is moving into the mobile space, too, alongside Google and Twitter co-founder Jack Dorsey’s Square. With digital technology, financial institutions will lose traditional customer touchpoints such as direct mailings, disclosures and the delivery of third party merchant account. Brand and image will be relegated to the screen, rather than a card, so there will be a need to deliver value in real-time in order to connect with consumers.

Card issuers will need to work hard to make sure their brand doesn’t get eclipsed by the device delivering it. With no physical presence in a wallet, businesses can turn to digital services to differentiate. The organizations that establish an early presence with applications that touch a large number of consumers will have a significant competitive advantage over the next decade, especially when it comes to delivering location-based services. Through mobile payments, organizations can create campaigns that are truly relevant to a consumer’s location.

For example, if a family visits a college, the card issuer can offer real-time discounts on that brand of college merchandise. This location could also indicate that the consumers may be interested in a student credit card account. By working with retailers and other merchants to capitalize on location intelligence campaigns, card issuers can delight consumers as they walk in the door by offering a real-time discount on that specific merchant’s products. Coupling these campaigns with geo-fencing empowers consumers to disable location-based services when they’re not wanted, too. Not only that, when card issuers partner with other businesses, it’s possible to monitor activity for fraud more effectively. If an issuer’s card or service is used to pay at a a destination that isn’t recognized as an authorized retailer, financial institutions can analyze the transaction for potential theft or fraud.

When I was 15 or 16 I needed my mom to create a PayPal account using her credit card, so I could bid on something on eBay. Like many parents her age at the time, my mom held an unwavering fear of using her credit card online, likely fuelled by pre-2004 horror stories of people being duped into releasing their information to online scams.

Nearly ten years later those fears have completely diminished for the average consumer, regardless of age. We’re in the age of mobile commerce and today two Canadian companies have bridged the gap between online and offline payment for merchants. Along with Shopify’s announcement this morning, PayPal Canada announced an agreement with restaurant technology provider TouchBistro to allow customers to use their smartphone to check-in and pay with PayPal at cafés and restaurants at the POS.

The two competitors are both unveiling products in a space they envision to take off, one that hasn’t been taken advantage of by online retail solution providers. Why only offer merchants online stores when Shopify and PayPal can allow those stores to streamline operations?

Shopify is targeting its 65,000 merchants, as about one third of them also operate brick-and-mortar locations. It’ll cost merchants an additional $49 per month, while the hardware costs range from $19 for a credit-card reader to $499 for the whole nine yards. That includes a cash drawer, a bar code scanner, a receipt printer and aforementioned credit card reader.

“…the future of retail isn’t online versus in-store, it’s a seamless combination of both. Shopify has transitioned from simply powering online sales to powering all commerce: online, offline, third party payment gateway, and everything in between,” said Adam McNamara, Shopify's vice president of product.Shopify appears ready to initially bring in higher revenues from its offerings than PayPal. But PayPal may be the one who benefits most down the road.

PayPal is not only targeting a different clientele, but is executing a pilot program using TouchBistro for select restaurant locations in Toronto. TouchBistro provides a popular POS app used by over 1,000 restaurantss, cafes and food trucks. It is currently the top-grossing food and beverage app in 18 countries on the App Store. Using the PayPal mobile app, customers can check-in to these cafés or restaurants (even before they arrive) and pay using their PayPal account, where their name and profile picture shows up for cashiers.

They’ve even convinced popular startup coffee spot Jimmy’s Café, near Project RHINO, to accept PayPal mobile payments at their TouchBistro iPad POS. Unlike Shopify’s new offering, PayPal is betting on a hardware-independent approach.

"We're collaborating globally with existing POS providers so that businesses don't have to rip or install new hardware to deliver unique and useful mobile payment experiences for their customers,” said PayPal Canada’s Darrell MacMullin. “We're thrilled to work with TouchBistro…for our five million active PayPal users in Canada.”

Matthew Braga of the Financial Post wrote today that the iPad, which both Shopify and PayPal are using as the basis of their POS systems, “has quickly become a point-of-sale industry mainstay amongst hospitality and retail clients.”

While traditional debit and credit terminals offered by banks offer scant analytical insight, the iPad systems promise more comprehensive options for “measuring sales analytics, maintaining customer databases, managing inventory and processing non-traditional forms of payment (such as devices using near-field communication or digital wallets).”

Braga wrote that the two companies are certainly targeting different audiences: Shopify is targeting its merchant customers who are already using its services, while PayPal is going after individual consumers.We’ll be sure to keep an eye on both these companies over the next six months as time will tell who ends up ahead of the other.

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Navigating The Arctic's Icy Waters

Over the last few decades the Polar Regions have been experiencing an accelerated decline in ice cover due to global warming. Whilst the opening of arctic trade routes, most notably the Northern Sea Route and the Northwest Passage, may bear bountiful fruit for the shipping industry, the sector is also at the centre of much controversy over the use of these routes due to the huge potential and actual environmental impact that the movement of freight through these waters brings.

The shipping industry has often been blamed as a leading contributor to the increased carbon emissions, however the resultant melting of the Arctic ice actually poses huge opportunity for the industry.

The prospect of cutting voyage time is luring many owners to navigating their ships and cargo through the arctic region, due to the economic opportunity it presents. Therefore, this week Fathom takes a look at the exploration of the new shipping routes across the Arctic and the issues and benefits that ship owners face when it comes to thinking about navigating through the extreme conditions presented in the region to seek aforementioned economic opportunities.

We also study the future regulations that The International Maritime Organization (IMO) are currently exploring in order to protect the fragile environment and to mitigate the risks associated with moving freight across the arctic trade routes.

Black carbon (BC), also known as soot, is strongly light-absorbing carbonaceous material emitted as solid particulate matter (PM) and is formed by the incomplete combustion of fossil fuels, biofuels, and biomass. BC is the most effective PM, by mass, at absorbing solar energy and is one of the major causes of global warming. When BC is deposited on snow and high risk merchant account, it causes more sunlight and heat energy to be absorbed, resulting in surface warming. The potential rise in shipping traffic will result in further deposition of BC and therefore the risk of further melting is greatly increased.

 The shipping industry is a contributor of marine ecosystem degradation and therefore any increase in marine traffic within Polar Regions has the potential to cause major impacts to the ecosystems. These impacts could include oil spills, invasive species, marine mammal strikes, air, water and noise pollution and accelerated arctic warming from BC deposition.

The commercial shipping industry is thought to contribute about 1-2% of global BC emissions.Ships emit more PM and BC per unit of fuel consumed than other fossil fuel combustion sources due to the quality of fuel used.

Therefore, with the exposure of the Polar Regions, namely the Arctic, to increased levels of marine freight movement, the regulation and legislation around aforementioned impacts is under close scrutiny and development.

This increase in ice melt as a consequence of global warming and BC deposition has resulted in and will continue to result in the opening and expansion of passages that were once blocked by ice. The shipping community is fast jumping on the possibility of saving huge amounts of money on fuel and time by utilising these new routes.

 2013 seems set to be a record year for maritime activity on the 'Northern Sea Route'. There has been a tenfold increase in the number of vessels using the route during recent years. In 2012, 46 vessels sailed the whole route, compared to 34 in 2011 and only four in 2010.

As the Lloyd's Register Global Shipping Trends 2030 report points out, in future summer months when the ice has melted to a far more significant extent than today, it will be possible to cut journey times between Europe and Asia by up to a third by using Arctic routes.

The Northern Sea Route along the arctic coast of Russia reduces journeys between East Asia and Western Europe by 21,000 km, in other words, 10-15 days. The opening up of the Northwest Passage, which is currently only navigable one year in seven and crosses Canada's Arctic Ocean, would make a journey between East Asia and Western Europe about 13,600 km long as opposed to 24,000 km when using the Panama Canal. The Arctic Bridge linking Russia to Canada, and the Transpolar Sea Route linking the Arctic to the Strait of Bering and the Atlantic Ocean of Murmansk, would also be potentially usable.

Whilst shortening the voyage in theory is wonderful news for an operator looking to limit fuel costs and emissions; service providers and original equipment manufacturers need to understand how their products will operate under Arctic conditions, or even whether they need to start designing and testing new solutions in advance – though the IMO does not yet have an official set of guidelines that describes the requirements of offshore merchant account.

 Inadequate navigational aids, poor or non-existent charting, extreme cold and darkness, and lack of infrastructure are all concerns. The level of isolation means that should a vessel get into trouble, it will be difficult to secure a timely emergency response. Bunkering facilities, port reception facilities for ship's waste, pilotage in shallow passages, possible ice-breaking assistance all require further development.
This lack of experience in extreme and rapidly changing weather conditions could result in disaster and with polar regions being a hot topic, eyes will be watching the shipping community if vessels start utilising these channels.

The IMO is working with Member States and other interested stakeholder (such as NGOs) to develop a mandatory Polar Code to control the expected increase in shipping traffic in the polar waters. It is also intended to function alongside existing IMO conventions, such as SOLAS and MARPOL. The Polar Code will have to control traffic to mitigate against potential accidents. This will be achieved by drawing up traffic routeing and separation schemes, areas to be avoided, speed restrictions, and mandatory ship location reporting. The increased volume of traffic will however improve search and rescue capabilities in the Arctic waters.

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Middle East vandalism is destroying centuries

The Muslim Brotherhood in Egypt, for example, shows no regard for either Christian or Islamic heritage.Since violence erupted across Egypt over the ousting of President Mohamed Morsi, looting and destruction of historical relics have been commonplace. In the city of Minya more than 1,000 artifacts were stolen from the Malawi Museum, including a priceless 3,500 year old statue, pottery and coins.

Similar destruction has also been taking place elsewhere. After Islamists moved into Northern Mali, the great cultural city of Timbuktu was seized by an Islamic faction called the Ansar Dine. Referring to the ongoing demolition of property in Timbuktu, an Ansar Dine spokesman said, “The destruction is a divine order. It’s our Prophet who said that each time that someone builds something on top of a grave, it needs to be pulled back to the ground.”

Such events are not without precedent in Egypt. The Ancient Library of Alexandria which contained irreplaceable scrolls and manuscripts dating as far back as 300 BC. was forever lost in a devastating fire. Even today the library is regarded as a symbol of “knowledge and culture destroyed.”

Though four theories exist about the cause of the library fire, most Western scholars do not believe the blaze was the result of the Muslim invasion and conquest of Egypt in 641. Early Muslim writers, third party merchant account, claim the conflagration was ordered by Caliph Umar.

As Robert Spencer notes in his book Not Peace but a Sword, when Umar was asked why the library should be burned, he replied, “If the books in it agree with the Qur’an, they are superfluous. If they disagree with the Qur’an, they are heretical. Only one book was needed.”Even if the theory about the Alexandria library is not true, there are other examples that of similar destruction. Less than two years ago, nearly 200,000 books were destroyed in the Egyptian Scientific Institute in Cairo.

Religious icons, statues, paintings and the like are regarded as apostasy by Islamic purists. That is why representations and cartoons of the Prophet Muhammad are so inflammatory to the true believers.Mosques in Saudi Arabia are completely devoid of any ornamentation for that reason.After Mohamed Morsi became president of Egypt in the summer of 2012,  some followers called for the destruction of the Great Pyramids. The idea had been proposed in the past, but the lack of technology served as a preventative.

The most popular story about the Sphinx at Giza losing its nose is that it happened during the Napoleonic Wars. Other sources attribute the de-nosing to an incident in the 14th century when local peasants were found making offerings at the base of the Sphinx with the hope that Nile floods would improve their harvest. When a Sufi Muslim learned of the offerings, he became so angry that he destroyed the nose.

As so frequently happens in the chasm between Islam and the West, such concepts are completely alien to our way of thinking. Why would Muslims want to destroy Islamic culture?Much of the reason relates to ancient tribal traditions of the desert which are still very much in evidence in the Middle East today. Because of that tribal heritage, Islamists have no true national identity. They only relate the “culture” of Islam which is contained within the pages of the Koran. Nothing more is necessary.

Robert Spencer explains, “You can pretty much correlate in Islamic history the strength and aggression and rise of the great Islamic empires of the past with the size of the Jewish and Christian communities that were subjugated within those empires and were paying for that imperial expansion. When those communities were exhausted economically, then the Islamic empires went into decline. This is an absolute correlation.”One need only look at Detroit and it neighbors here in the United States for validation. Once the fourth largest city in the country, it has become so heavily influenced by Muslims that some have nicknamed it “Dearbornistan.”

As long as Islam remains a one way street, there can be no compromise with the West. As Spencer points out, “In Islam, any moral law can be set aside for the good of the Muslims. This is Islam’s only functional moral absolute.”Flipkart recently raised $200 million from existing investors, making it the single largest round of funding in the Indian ecommerce market. The Bangalore-based company is on a growth track without worrying about profits for a next few years. It is bracing itself for challenges arising from its transition to being a market place from being just a book e-tailer.

Sachin Bansal, founder and CEO, speaks to Business Line on its evolution, expansion and innovations that could be a game changer for any e-commerce company. Edited excerpts:You have been talking about changing your business model. What does that mean for the third party payment gateway? Has the process started? Of late, there have been several consumer complaints on non-delivery, delayed delivery and cancellation as well. Is this due to the transition? How are you tackling the issue?

Every time we make changes, there are challenges. We are facing some problems as we overlooked a few things. Service is in our blood and we are very proud of it. Recently, I would admit that there were a few problems and we are agonised due to this. But we will bounce back. It is a temporary mess on the supply chain side. We are working towards fixing the problems in a few weeks time.

The last round of funding will be used in setting up a good supply chain and logistics infrastructure. It will also help filter out good sellers from bad sellers. Also invest in creating a process that will manage the same and also develop talent.Does moving to a market place mean more profits? Is the company nearing the breakeven point?

In India e-commerce has happened, but it is still far behind the developed countries. Currently, it is at $1 billion and is expected to reach $76 billion by 2020. Our funding proves that investors are now willing to put their money in this growth story. The focus at this point in time is to get more customers to shop online and make it a regular activity. Right now, it is about achievements and not thinking about profits for the next few years.

We keep looking at opportunities. We are interested in two types of companies – a company which is doing something we haven’t or can not do; second, companies with technical expertise that can help us scale up. We are in talks with 20 companies at the moment.You have discontinued selling consumer durables, any specific reason?

We will be soon coming back with consumer durables. We are building a different supply chain for shipping large and bulky items, this will also include furniture.We will soon have furniture as a category. We are shipping electronics items to only 50 cities as of now. With the new supply chain, we will be able to serve to each and every customer having a broadband connection.There have been rumours of several e-commerce firms trying to get into pharmacy. Any plans on that front?
No, we have not considered it as a category.Amazon has entered the Indian market and many others are planning to enter. Besides, several offline players are also betting big on e-commerce. Does this bother you?We were very sure that as soon as the market starts getting bigger, several players, including the brick and mortar players, will be making plans. This means that the market is on an upswing and we are well prepared for that. Competition is expected and our strategy will be to maintain our leadership position.

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Narendra Modi–the idea whose time

How ironical it is, that the touted dream team of Indian economy - Dr Manmohan Singh, Dr Montek Singh Ahluwalia, and P Chidambaram will leave a legacy of terrible growth deceleration, persistently high inflation, rising unemployment, and a depreciating currency after 10 years in office. But the "lost decade" under UPA is not just an economic disaster. This total economic collapse is only a natural consequence of appalling lack of leadership, absolute breakdown of authority, directionless decision making, zero accountability, and complete disregard for integrity and ethics.

Ten years ago, an India that was racing towards a global superpower status, and striving to reclaim its position in the league of world nations, has been plunged into an abyss of hopelessness and despair. The confidence, enthusiasm and vigor that were the catalysts of India's resurgence seem to have suddenly evaporated. And in this scene, the man emerges. History bears witness that time and again effective leaders, who can mobilize people, tackle tough problems and spot opportunities in crises emerge in times of great stress, change and uncertainty.

In India too, a fierce wild wind that is blowing from the western state of Gujarat has already rustled many dead feathers in Delhi; the name is Narendra Modi. The man's emergence on national horizon is not an overnight phenomenon. It is a result of a life lived completely in the service of the motherland, years of devoted work at grassroots level, and a decade of governance with administrative acumen and effective leadership.

Unlike the Congress and most regional parties where leadership is hereditary and an election ticket is taken as a birthright, Modi's claim to fame is only one factor - performance. Even in this atmosphere of gloom, Gujarat under his stewardship stands out as a beacon of third party payment gateway. As the reputed global news magazine the Economist puts it - "So many things work properly in Gujarat that it hardly seems like India." With 5% of India's population, Gujarat today accounts for 16% of country's industrial output and 22% of exports.

The state has consistently maintained a double digit GDP growth over the past decade, with agriculture growing at 10% consistently even as India struggled to achieve a low bar of 3%. As a result of sustained efforts undertaken by Modi and his team, Gujarat today has minimal labor issues, state-of-the-art infrastructure, uninterrupted power supply and supportive bureaucracy. The state known for traders only a few years back has made rapid strides in agriculture, manufacturing and services sectors. The average citizen so awfully let down by the current national leadership is naturally looking at Modi to steer India out of the current crisis, and his stellar track record obviously puts him ahead of others in the race.

When corruption seems to be the order of the day, Modi's personal integrity and honesty stands out. Modi, his personality, his style of functioning and his growth model have been subject to unprecedented scrutiny and analysis in the past few years. Any strong leader will have his share of adversaries in politics and media, and frankly speaking, Modi has more than his fair share of them.

But even Modi's most stringent critics and political opponents will admit that the man does not a have single blot of corruption or scandal to his name. Check this out - in the recent Wikileaks controversy over leaking of US diplomatic cables, every politician whose name figured in the cables stood exposed and tarnished. Modi's name was mentioned about 100 times in the cable, but he was the only politician, not just in India, but across the world whose name but did not contain a single negative reference. When politics India has become synonymous with dynasty and nepotism, how pleasantly surprising it is to know that the family of the chief minister of one the richest states in the country lives in a modest 2 bedroom apartment, away from the glamour and clout that they could have so easily commanded!

There goes a saying in India - good politics is not good economics, and good economics is not good politics. This is because when the focus of a political party is so jaundiced on winning the next election by hook or by crook, it leaves very little scope for pursuing an economic policy that take years to show results and bear fruits. Our economic disaster can partly be traced to the lack of political willingness to take tough, visionary decisions.

The UPA in past has resorted to disastrous schemes like farm loan waiver and NREGA with dire consequences to the economy. Their new initiatives like direct cash transfer and food security bills are steps in the same direction, taken only with a view on the coming general elections. Who cares about fiscal discipline? This is even after all policymakers have acknowledged that without proper infrastructure for third party merchant account, such schemes result in huge leakages and losses to public exchequer without bringing any tangible benefits to the lives of intended beneficiaries.

A politician's true test will lie in being able to take difficult, enduring decisions even if it requires risking short term political gains. Modi has demonstrated this in Gujarat time and again. In his tenure right from 2001, he has desisted from taking populist decisions or giving freebies. When he faced considerable opposition in the last state elections in 2012, he could have easily added a few more seats to his tally by announcing some freebies and subsidies here and there, but he resisted taking that path. Instead, Modi has always focused on generating investment which eventually leads to more growth, employment and better standard of living in the long run. It takes tremendous discipline and confidence in oneself to do this, especially when short term rewards are so attractive. No other politician in India except Modi had courage to oppose the proposed Food Security Bill, for the risk of losing some vote share.

But Modi's single biggest achievement has been to aggressively steer the national discourse from vote bank politics to development politics. One of the biggest drawbacks of Indian democracy is that electoral outcome is still based on caste/religious blocks voting en masse in favor or against a particular candidate. This remains the primary factor above all everything else, and the candidate's track record, integrity and other real issues get overshadowed. Modi has sounded a death knell to politics based on such narrow identity considerations. In the past ten years, he has never tried to polarize the electorate through caste-based references or policies. Elections in Gujarat have been fought purely on the basis of what the government has done in past 5 years and how that has affected the lives of people. In the process, he has offered himself, his government and his policies for unparalleled examination, criticism and debate. Every possible social/development indicator has been brought out and analyzed threadbare. If previous central and state governments had been subjected to even a fraction of assessment and scrutiny by the yardsticks that have been applied to Gujarat, India's situation today would have been radically different.

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Earnings Call Transcript

Thank you, very much [Ork]. Good morning, everyone and thanks for coming so many of you again to join us for the presentation results for the year into June 2013. For us the overwriting theme of the year is seeing the momentum of the results credit to sticking to our long term strategy. So that starts for us with the fact that we are now in the seventh year of the focus on customer satisfaction and I will go into a moment, we've seen that at record high in this period, but most importantly see those highs translate into momentum in terms of increase in products for customer growth and the balance sheet.

We've seen a productivity culture, enabling investment. So the long term focus on making the prices more efficient, making the whole group more efficient, enabling us to continue to invest. On that theme of high risk merchant account, what we've seen in this period is a couple of things.

Number one, the completion of the sixth year co-bank modernization program. So that team has now been dispended. The 1500 people working on that in fact doing other things that is now completed and we are now shifting our focus to leverage -- continuing to leverage that and innovating on the back of that core and finally the benefit of just sticking with a considerable bit of setting. So we came into considerable bit of settings.

You will see in the presentation that they have been further strengthened. So the customer focus, the productivity, the technology the conservatism, these are common themes and the results for the period show that they are continuing to produce good results.

In terms of the themes business by business, the retail banks 13% cash impact growth was a very, very strong result. One of the features of this result is ongoing strength in the top line and it starts with the retail bank. So income there up 8%, against that strong income growth, expense is very well managed 3% growth year-on-year.

You can see on the more negative side that 11% decrease in deposit income and you got to hear across multiple businesses for me and from David, no doubt for those of you speaking to group executives this common theme that as a result of ongoing deposit competition and the low rate environment, we got ongoing [pitch] on deposit income and you can see that in the retail bank.

Business and private bank net profit after tax down 2%. The standout feature here, first of all we did see strong balance sheet growth. So all those system growth and business lending can be quite high to major against any major system growth of 4% balance sheet growth in that Business Bank exceed system growth while credit quality has been maintained. Expenses were flat, so real focus on productivity in that business. Again you can see a lower net interest margin, again the story of a low interest rate environment and competition flowing through into deposits.

This is the latest in a series of announcements for SNAPCAM, after it was unveiled as a 'Hero' launch app by Stephen Elop for the new Nokia Lumia 1020, while it recently revealed its partnership with printing giant Xerox.

SNAPCAM is the disruptive photo app that allows users to create digital photo albums, which can then be shared, printed and delivered as physical albums.

Users can organise pictures into 'events' and share these with friends and family, who can add their own shots too. In a few clicks, these can be transformed into full colour, printed photo albums and delivered to many countries across the world.

The app integrates directly with third party photo sources, including Facebook. It also offers photo enhancement, offshore merchant account, edit, crop and add finishing touches to their photos before sending them to print.

The partnership will see SecureTrading processing payments from across the globe, with the service going live in 40 countries. On top of the payment gateway, SecureTrading will also provide a suite of bespoke counter-fraud services.

"Steve Hayward, CEO at SNAPCAM said: "By working with SecureTrading we have brought to life our 'thinking globally, acting locally' ethos and developed it beyond having an environmentally sensitive product. By being able to provide competitive, locally sensitive pricing in local currency to all our territories, we are helping to drive the physical photo revival globally."

Justin Fraser, head of sales and marketing said: "SNAPCAM is one of the few apps that has immediate global appeal. There's no doubt it is going to explode in popularity, and we're relishing the opportunity to support SNAPCAM and add value to the business throughout its growth."

Did the Constitution Betray the Revolution?

The standard American myth celebrates the Constitution as the triumphant culmination of the American Revolution. This is largely untrue and misleading.

The alleged "critical period" between the end of the Revolution and the Constitution's adoption was not dominated by economic depression, political turmoil, and international peril, jeopardizing the independent survival of the American experiment in liberty. Those who assembled at the Philadelphia Convention to write a new Constitution were not disinterested demigods, nor did they intend to establish a federal system of divided government powers. The Constitution did not have the support of most Americans. And finally, rather than representing the culmination of the previous Revolution, the Constitution represented a reactionary counter revolution against its central principles.

The American Revolution, like all great social upheavals, was brought off by a disparate coalition of competing viewpoints and conflicting interests. At one end of the Revolutionary coalition stood the American radicals-men such as Samuel Adams, third party merchant account, Thomas Paine, Richard Henry Lee, and Thomas Jefferson.

Although by no means in unanimous agreement, the radicals objected to excessive state power in general and not simply to British rule in particular. Spearheading the Revolution's opening stages, they were responsible for the truly revolutionary alterations in the internal status quo: the abolition of slavery in the northern states, the separation of church and state in the southern states, the rooting out of remaining feudal privileges everywhere, and the adoption of new, republican state constitutions containing written bills of rights that severely hemmed in government power.

At the other end of the Revolutionary coalition were the American nationalists-an array of mercantile, creditor, and landed interests. The nationalists went along with independence but opposed the Revolution's libertarian thrust. They sought a strong American state with the hierarchical features of the 18th-century British state, only without the British.

The Revolution started out as a struggle against taxation. What passed among the newly independent American states for a central government, the Second Continental Congress, did not have access even to this usual state power. For revenue, Congress initially had to rely on requisitions from the state governments, which could not get away with very extensive taxation themselves.

Yet the military strategy adopted by Congress required large expenditures. Military conservatives such as George Washington induced Congress to focus the Revolutionary effort on a costly conventional force, the Continental Army, rather than the militias. By the 1781 Yorktown campaign, popular disgust at the army's continuing hand-to-mouth existence gave the nationalists uncontested control of Congress. They proceeded to implement a financial program that gave the central government much more power.

Already, the Revolution had taken an important step in this direction with the drafting of the Articles of Confederation, a written constitution. Here we encounter the first distortion in America's constitutional myth. The Articles left Congress not too weak, as defenders of the Constitution claim, but too strong: the Articles made the third party payment gateway; and an influential nationalist faction-land speculators-delayed ratification until Congress was given direct jurisdiction over the states' western lands. The Articles' only saving grace was that they failed to give Congress any authority to collect taxes or regulate trade.

At the time of the Articles' adoption, the most powerful nationalist in Congress was Robert Morris, a wealthy Philadelphia merchant. Congress appointed him head of the newly created Department of Finance, from which post he became a virtual financial dictator. The central government's functions were concentrated within his and other new executive departments, which Morris filled with his allies and partners.

The linch pin of Morris's financial system was the power of taxation. Only thus could the nationalists' desired centralization of power be consummated. An amendment to the Articles granting Congress the power to impose an import duty looked in 1782 like it would receive the required unanimous approval of the states, but tiny Rhode Island held out.

Morris and the nationalists made a last-ditch effort in March 1783 to coerce the states with the Continental Army, then encamped at Newburgh, New York. They encouraged a plot among Washington's officers, and a military coup loomed on the horizon. The radical suspicion of standing armies stood fully vindicated, for never has the United States been closer to succumbing to an American Caesar. At this point, however, Washington, although firmly endorsing nationalist goals, balked. His personal intervention caused the Newburgh conspiracy to disband.

Peace unraveled Morris's financial and military program. As the war wound down, the financial pressure on the national government, and the apparent need to grant taxing power to Congress, diminished. The nationalists lost control of Congress in late 1783, and Morris resigned his post after an incriminating investigation into his financial machinations. Congress wisely discharged most of what was left of the Continental Army.

Unfortunately, the war-induced nationalization of the Northwest lands had shifted the burden of policing that territory from the states to a national force. So Congress authorized a small frontier constabulary to be raised from the state militias for fixed periods. (The still-unceded Southwest territory got along fine without congressional attention.) Eastern land speculators, however, found the Northwest force insufficient to protect their vast claims from Indians, squatters, and foreign intrigue. They looked forward instead to a strong standing army.

Overdraft Fees Cost Consumers $16.7 Billion

In recent years, many banks and credit unions have encouraged new checking account customers to accept two items: a debit card that replaces cash transactions and a “protection” known as overdraft coverage. Overdraft programs automatically pay for transactions not covered by available funds; the bank then repays itself the overdraft amount along with fees – often hefty ones – from the customer’s next deposit.

However what many unsuspecting consumers soon discover is that this so-called protection from banks comes at an extremely high cost. In 2011, financial institutions charged consumers $16.7 billion in overdraft fees, affecting more than 36 million Americans’ checking accounts.

High-Cost Overdraft Practices, the latest installment in the Center for Responsible Lending’s high risk merchant account, The State of Lending, found that debit cards trigger the most disproportionate fees. On debit card purchases, the median overdraft charge is $35 for a $20 overdraft. Further, debit card and ATM transactions account for at least 35 percent of all overdraft fees charged.

The high share of fees generated by debit cards is ironic, since banks and credit unions can simply decline these transactions at no cost to the consumer – and some institutions do. For banks that continue this pernicious practice, the consequences for their customers can be severe.

The report states, “Abusive overdraft programs drive consumers out of the banking system; indeed they are the leading reason consumers lose their checking accounts.”

Today, three-fourths of the nation’s largest banks and large numbers of smaller banks and credit unions charge fees on debit card purchases, ATM withdrawals, or both. Moreover, these overdrafts and associated fees are assessed without regard to a consumer’s ability to repay them.

In response to widespread criticism surrounding overdraft programs, the Federal Reserve Board made a 2010 regulation that required institutions to obtain a customer’s ‘opt-in’ for overdraft coverage on debit card purchases and ATM withdrawals before fees would apply. Additionally and in the same year, the Federal Deposit Insurance Corporation’s guidance advised that more than six overdraft fees within a 12-month period was excessive for any account holder.

However, CRL and others have found that many financial institutions aggressively market their overdraft programs, pushing customers most likely to generate the most fees to “opt-in” for coverage. Customers with small and no cushions in their accounts may initially view overdraft coverage as a way to save money. But as overdraft fees are assessed per transaction, the costs can quickly become burdensome, leaving fewer available dollars for the next month.

“Over time, the repeated fees strip away consumers’ cash assets, leaving them financially worse off than when they first over-drafted and unable to meet obligations they otherwise could have met even with no overdraft coverage at all,” says CRL.

Some major banks have heeded consumer concerns and improved their overdraft practices. For example, offshore merchant account, the nation’s largest debit card issuer, stopped charging overdraft fees on debit card purchases. HSBC also stopped charging overdraft fees on debit card purchases as well as at ATMs. Citibank has never charged overdraft fees on debit card or ATM transactions, and JP Morgan Chase does not charge them on ATM transactions.

Recent related findings by the Consumer Financial Protection Bureau (CFPB) show that the Fed’s opt-in rule has not eliminated the substantial harm inflicted by overdraft fees triggered by debit cards. CFPB determined that involuntary account closures were more than twice as likely for customers that opted in to overdraft than those who did not.

“Banks and credit unions have long defended overdraft fees by saying they protect customers from bounced checks, which typically trigger insufficient funds (NSF) fees and potentially merchant fees,” states the CRL report. “But the same justification could not be made for debit card purchases, since there is no NSF or merchant fees charge for debit card transactions that are declined at check-out when the customer’s account is short.”

CRL offers a set of policy remedies to halt overdraft’s harmful features. Highlights include banning overdraft fees on debit cards, ATM transactions and on pre-paid cards. CRL also advocates banning banks from manipulating the order of consumers’ checking transactions to increase fees.

Concluded CRL, “Without substantive reform of the product, the fees overdrafts generate provide financial institutions too powerful an incentive to ensure that customers continue to incur overdraft fees – an incentive that will continue to outweigh even the best disclosures.”

Mesothelioma proposals face

Proposals for the reform of mesothelioma claims have been attacked for removing claimant choice, lowering compensation and undermining a claims system that is already working.Last week, the Ministry of Justice launched a consultation that seeks to reform the way mesothelioma claims are processed.

The paper suggested the introduction of a dedicated pre?action protocol, which would establish quicker timescales for claims, the development of a fixed recoverable costs regime – which the MoJ said, would “encourage proportionality in the amount of legal work undertaken and provide greater certainty about the legal costs incurred on behalf of claimants” – and the introduction of an electronic ‘gateway’ for a faster exchange of information.

Briony Krikorian, policy advisor and liability regulation general insurance directorate at the Association of British Insurers, welcomed the proposals: “The focus of these proposals is very much on helping the majority of claims to settle pre-litigation.

“These pre-action protocols request all the information that would be needed by a defendant to settle a claim from the claimant and put timescales both around the information the claimant provides and how quickly the defendant has to respond to those, so it is about making the exchange of information much more systematic and third party merchant account.”

“At the moment claimants have a choice,” he said. “Some clients prefer their cases to be settled in life, while others prefer to receive an interim payment and for the case to be resolved after they die. Mesothelioma claims settled in life tend to be worth 10% to 20% less than claims concluded after death so these proposals reduce compensation and reduce the claimant’s choices.

“Second, it removes defendant lawyers from the process so insurers spend less on their own legal services. Third, it limits the amount claimants can spend on their own legal representation as this is a process designed by and to be run for the benefit of the insurers, providing cheap justice, which the victims can ill afford.”

According to Morgan the mesothelioma fast-track system introduced by Master Whitaker in the High Court, and more widely adopted in April 2008 – which requires the submission of evidence in order to establish the need for an interim payment, while giving priority to cases involving severely limited life expectancy – is already working.

He said: “[The mesothelioma fast-track claims system] has created a level of understanding and cooperation between claimants and defendant lawyers to resolve issues quickly. This process is an example of how litigation should be done, what these proposals do is rip it up completely, they undermine it.”

He added: “Insurers will have to gear up to deal with mesothelioma claims more quickly. At the moment power of a claimant to enforce its response is only through litigation whereas now they can point to the protocol and say insurers need to comply with it.”

The Association of Personal Injury Lawyers added the MoJ proposals would speed up the resolution of third party payment gateway. Matthew Stockwell, president of Apil, said: “We hope this exercise will result in a fairer system, which will benefit people who are dying from a truly awful disease they contracted just because they turned up for work, often many decades ago.”

While John Latter, director of technical centre for UK claims at Zurich, argued the proposals are set to have a positive impact on all the parties involved. “I don’t see any negatives for anyone: insurers will pay the claims in a quicker and transparent way. If passed [as they are] the proposals would bring certainty to the process, take out excessive costs and make sure those that need compensation get it.”

Philippa Craven, partner at Kennedys, added the introduction of the Secure Mesothelioma Claims Gateway would bring these types of claims in line with the recent Jackson reforms for employers’ liability and public liability claims.“Jackson didn’t look to exclude mesothelioma from his reforms. He always thought the conditional fee agreements fixed fees should apply to those claims so it was just decided mesothelioma claims would be looked at as a separate issue,” she said.

However, the MoJ was keen to clarify the fact the proposed gateway is not similar to the road traffic accident portal as initially thought.A spokeswoman for the MoJ said: “It is intended to be an electronic means of exchanging information quickly between interested parties in mesothelioma claims. Its objective is to help speed up the claims process.”

The Dixie Group Reports

Commenting on the results, Daniel K. Frierson, chairman and chief executive officer, said, "The second quarter was one of strong performance both residentially and commercially. Dixie had a year-over-year sales improvement of 26% with sales growth in all areas of the business. Our sales growth in the residential business was 27% as compared to the same period a year ago. We believe the residential market grew during the quarter in the high single digits with the market strengthening as the quarter progressed. It appears that the residential carpet market is now being positively impacted by the increase in the housing sector that began in 2012. Sales for our commercial products increased 21% versus the second quarter of 2012. This increase was in comparison to the commercial market being up only slightly in our estimation.

"Our continued growth in excess of 20% in 2013 is a result of the investments we have made over the last several years in new products and sales coverage. The residential growth was a combination of strong results in our mass merchant area, continued growth of our Stainmaster(R) TruSoft(R) and SolarMax(R) products, strength in our wool business and momentum gained from the integration of the Gulistan products purchased late last year. The shift to softer products, as demonstrated by the growth of our Stainmaster(R) TruSoft(R) products, continued throughout the quarter. In addition, the success of our high performance Stainmaster(R) SolarMax(R) products has led us to expand manufacturing capacity to fulfill rising demand. Sales for all of our residential brands were up for the quarter and all retail channels are showing strength early in the third quarter. In the commercial market, we had growth in both our modular carpet tile and broadloom product categories. Our market strength in the store planning sector was of particular note during the high risk merchant account.

The response to our SPEAK modular carpet tile and FIT office remodel collections has been very favorable. These high performance products give us added breadth in our line and fulfill the need for high styled modular and broadloom carpet products in today's market. We implemented the planned expansion of both our residential and commercial sales forces in the first half of the year to give us more strategic focus in select markets. Avant Contract, our newest commercial brand, launched its first series of products during the quarter. The Avant Contract brand is primarily focused on the fastest growing commercial segment, the modular office market. The initial impressions of Avant's edgier use of patterns, textures and colors combined with the marketing campaign promoting local and regional Artisans is being well received by the Architectural and Design community. We expect Avant to positively impact our sales in 2014. Our continued investment in products, processes and people has positioned us to continue to outperform the industry at the high end of the marketplace.

"The quarter had a gross profit margin of 26.7% and an operating income of 3.9% of net sales. Our growth initiatives begun in 2012 resulted in increased operating utilization but also added expense as we responded quickly to the increased demand. The additional costs from our Roanoke yarn expansion, the Crown Rug and Colormaster continuous dye house integrations, and the higher sampling costs as we accelerated our investment in new products in 2013, negatively impacted our operating income by over $1 million during the quarter. Our tax rate was 27% for the period.

"Working capital increased by $8,851,000 during the quarter due to higher receivables and inventory to support our higher level of sales. Our inventory turns improved 11% versus the same period in the prior year. Capital leases and expenditures were $3,441,000, while depreciation and amortization was $2,559,000 for the period. We anticipate capital leases and expenditures to be $13,500,000 and depreciation and amortization to be $10,300,000 for the entire year of 2013. Total debt increased $7,873,000 during the quarter. Availability under our credit lines was $25.0 million at quarter end. Subsequent to quarter end, we amended and extended our senior credit facility to accommodate the growth in working capital as we continue to grow our sales. In addition, in early July we completed the acquisition of Robertex Associates, a maker of fine wool products.

"We are pleased to see residential industry growth in the second quarter as this signals to us that the recovery in the housing sector has finally impacted the carpet market. Despite potential macro-economic issues, we believe that conditions in the upper-end residential portion of our industry will continue to improve during 2013. The commercial market appears to be stable with the highest growth in the modular carpet tile segment. We continue our commitment to growing our market share with innovative products, refinement of our manufacturing processes and investment in our people," Frierson concluded.

After taking into account the $5.3 million, preferred interest in net income attributable to the offshore merchant account of the 24,655,554 outstanding Class B Convertible Preferred Units as of June 30, 2013, which were issued during the second quarter of 2012 and the first quarter of 2013 (the "Class B Units" and the "Class B Unitholders"), the result for the quarter ended June 30, 2013, was $0.48 net income per limited partnership unit, which is $0.20 higher than the $0.28 net income per unit of the previous quarter ended March 31, 2013, and $0.49 higher than the $0.01 net loss per unit in the second quarter of 2012.

Operating surplus for the quarter ended June 30, 2013 was $56.6 million, which is $34.0 million higher than the $22.6 million from the first quarter of 2013, and $39.7 million higher than the $16.9 million of the second quarter of 2012. The operating surplus adjusted for the payment of distributions to the Class B Unitholders was $51.4 million for the quarter ended June 30, 2013. Operating surplus is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other master limited partnerships. Please refer to the section "Appendix A" at the end of the press release, for a reconciliation of this non-GAAP measure to net income.

Revenues for the second quarter of 2013 were $41.8 million compared to $37.8 million in the second quarter of 2012.

Total expenses for the second quarter of 2013 were $30.8 million compared to $25.7 million in the second quarter of 2012 due to higher operating expenses incurred as a result of the higher number of vessels in our fleet. Vessel operating expenses for the second quarter of 2013 amounted to $13.4 million, compared to $11.2 million in the second quarter of 2012. The total expenses for the second quarter of 2013 also include $12.8 million in depreciation and amortization, compared to $12.0 million in the second quarter of 2012. General and administrative expenses for the second quarter of 2013 amounted to $3.4 million, which include a $1.6 million non-cash charge related to the Partnership's Omnibus Incentive Compensation Plans.

In the second quarter of 2013, we reported a gain of $32.0 million related to the sale to a third party of the Partnership's claims against OSG and certain of OSG's subsidiaries regarding the long term bareboat charters of three of the Partnership's product tanker vessels.

Excluding the gain of $32.0 million, total other expense net for the second quarter of 2013 amounted to $3.6 million compared to $8.8 million for the second quarter of 2012. The decrease in the interest expense and finance cost for the second quarter of 2013 reflects the expiration of all interest rate swaps and the reduction of the Partnership's total debt when compared to the second quarter of 2012.

Fake money is so common all should beware

Technology has made it easier for criminals to produce counterfeit U.S. currency, and local merchants are saying that they see plenty of fake bills these days. It is not an epidemic, but there are so many instances of people trying to pass off counterfeit bills that many businesses are starting to scrutinize even the lower denominations, like $5 bills, before accepting them from customers.

My research shows that of all U.S. currency in circulation, about one to two percent of it is counterfeit, which accounts for an estimated $261 million in counterfeit money. I have my doubts (the numbers are likely to be much higher), but it may be that areas like ours experience a higher concentration of phony money. In any event, even if the numbers seem to suggest that the problem is not a big one, a bit of caution is certainly in order. One merchant in Modesto told me that she encounters phony bills almost every day, so it seems that being careful is the prudent thing to do. I recently sold a small boat and was paid in $20 bills. Needless to say, all of them were legitimate, but it was worth the extra few minutes to examine each bill before accepting it.

Interestingly, the mass producers of counterfeit money do not use it for their own purchasing purposes. Instead, they sell the currency for approximately 20-30 cents on the dollar. The very-high-quality fakes go for as high a 50 percent of the face value of each bill. In addition, while there are plenty of people using home computers and printers to produce phony money, their impact on the economy and individual victims appears to be less than that of the bigger operators.

The U.S. government has a high stake in protecting the integrity of its currency and to maintain public confidence in its legal tender; high risk merchant account, it takes painstaking measures to make it difficult to produce counterfeit bills. Some of these measures include using color-shifting ink, red and blue threads embedded in the paper and watermark images that can be seen with enhanced lighting. Still, technology allows counterfeiters to produce near-perfect counterfeits. It seems like the most skilled counterfeiters are always able to stay just a step or two ahead the government's efforts to foil their efforts.

Many businesses still only pay attention to denominations of 20s, 50s and 100s, yet I see criminals taking advantage of this practice and using fake 5s and 10s to commit their crimes. People and merchants would do well to check $5 bills and larger to help stop this trend. Keep in mind that when you accept a counterfeit bill, even unknowingly, you are stuck with it. It is illegal to pass that bill on, and if you do, at minimum you may end up being named in a criminal investigation. If the government can prove that you knew it was counterfeit, criminal charges will be likely.

The rule for protecting yourself is to check currency (especially $20 or larger bills) before accepting them during purchasing transactions. The quickest ways include checking for the normally distinctive feel of the paper. If it feels smooth, it is probably fake. The newer bills contain a security thread that is embedded in the paper and runs vertically on one side of the note. This thread contains tiny letters spelling out the value of the note. So, for a twenty dollar bill, you will see the words, in barely 1/10 of an inch in size, "USA Twenty." In addition, the $20 note will contain a watermark image, depicting former president Andrew Jackson on the lower right hand side. It can be seen when holding the note up to a light. The ink on U.S. currency does not run when exposed to water and the color of the "20" on the lower right corner of the note will shift from copper to green, depending on the angle viewed.

When getting cash from the bank or ATM do not assume that all of the bills have been screened - there may well be counterfeit bills, so take time to examine them. Do not delay in reporting any counterfeit bill finds immediately to the bank or other entity that transferred it to you. And be particularly careful when receiving a large amount of cash for such things as appliances, boats, cars, etc., as it is a matter of odds when it comes to the risk as a particular transaction involves higher numbers of bills.

If you wish more information on this subject, there are many resources on the web to help you get all the facts and protect yourself. Taking a few seconds to check the currency during purchasing or selling transactions may well save you a lot of hard-earned money.

Thanks, Bill. Good afternoon, everyone, and thanks for joining us today. After the market closed, we reported quarterly diluted earnings per share of $1.20, up 21% over the prior year, driven primarily by loan growth and share repurchases. During the quarter, we generated return on equity of 23% and returned approximately $440 million of capital to shareholders through repurchases and common dividends.

Our Direct Banking business again delivered strong results during the second quarter. Slide 4 of the earnings presentation shows Discover total loan growth at 6% over the prior year. This organic growth was driven by a 5% increase in card receivables and a combined 10% increase in private, student and personal loans.Card receivables growth continues to outpace our primary peers. This strong growth was driven by increased wallet share with existing customers and also new accounts.

Discover it, our new flagship card product drove strong new account growth in the quarter, even while relying less on promotional balance transfers. Discover it's position in the market continues to be highly differentiated with superior customer value and service and the early results of our advertising campaign are positive. This campaign, offshore merchant account, other card marketing initiatives, and our strength and rewards have not only helped us grow new accounts, but have also encouraged our large loyal customer base to spend and revolve with us.

Also in card, I want to announce that Discover has become the exclusive affinity card issuer for 5 universities, including the University of Nebraska. We are excited about the affinity channel for long-term new account and sales growth, as we leverage our cash rewards and customer service.

President Aquino's SONA 2013

This is my fourth SONA; only two remain. Almost four years have passed since I was approached by various camps to urge me to run for the presidency. They said: “We know that our country’s problems cannot be solved in the blink of an eye, in one year, or even within the six-year term of a President. But just begin, and we will be one with you in nurturing change.”

Even then, I was aware of the significant problems that I would have to face. From being a candidate, to being President, or even after I step down from office, the difficulties I will have to face are no joke. Widespread transformation of society is my objective, and I am aware that there are many things and many people I would have to confront in order to achieve this. But I was not raised by my parents to back down in the face of challenges. I would not be able to live with myself if I had refused the chance to alleviate the suffering the Filipino should not have to endure.

We have answered the call, and those who have been with us from the start have only grown in number. I believe that if what I have been doing is right, then our allies will only grow. Just this May, I asked you, Boss, are we going in the right direction? Your reply: “Yes, and let us accelerate the transformation of society.” I asked for allies that would help steer the country in one direction, and you delivered. The truth is, not only the majority, not even nine of twelve, but nine of the offshore merchant account  are individuals that I recommended to you. The message of the past election is clear: Yes, let us keep going, let us add to the 8,581 sitios that we have electrified; let us add to the 28,398 families who were once informal settlers but who finally have, or will soon have, decent homes; let us increase the not less than 40 billion pesos in additional funds that go to education, health, social services, and many others because of the right and more efficient collection of taxes; we feel all the other tangible signs that society is truly changing. I have become even more optimistic because of your message; it is clear that I am not alone in carrying these responsibilities. How can I not be encouraged, when even the likes of Mr. Ni?o Aguirre are helping shape our future? Just think: Though unable to walk, he climbed all the way to his fourth-floor precinct, just so that he could vote and contribute to true social transformation. Thank you, Mr. Aguirre.

There is no shortage of Filipinos who are ready to pitch in, and this is the source of the change we now experience. The strategy—maximize opportunities for all, especially for those most in need. We are not content to wait for the trickle-down effect; we cannot leave their fate—their receiving the benefits of progress—to chance. What we call inclusive growth—this all-encompassing progress—is the principle that drives every initiative, every action, and every decision of your government. The only ones who will be left behind are those who chose not to venture onwards with us, simply because they did not seize the opportunity.

The basis for this principle: Widespread opportunity is the key to comprehensive and sustained progress. Let us not forget that these opportunities are but seeds. We must water them with diligence, nourish them with determination, and cultivate them with dedication. Let us take a look at our TESDA-DOLE scholars. Of the 503,521 people who have graduated from their programs, an estimated six out of ten have found jobs. Before this, according to studies conducted by DBM, from 2006 to 2008, only 28.5 percent of TESDA graduates found jobs. Last year, under TESDA’s IT-BPO program, 70.9 percent of the graduates found employment. Under the electronics and semiconductor program, the percentage of employed graduates reached 85 percent. It is clear: You are the ones who will shape this growth, you are the ones who will determine whether the fruits of our labors become sweet and ripe for the picking, or if you will let them rot away and waste the chances that this new chapter in our history has given us.

Let us go through everything one by one. Our objective to expand the reach of the Pantawid Pamilyang Pilipino Program: achieved. The over 700,000 household beneficiaries we found upon coming into office in 2010 have now grown to almost 4 million households in the three years of our administration.

There is more: According to research conducted by the Philippine Institute for Development Studies, compared with those who only finished the elementary level, the income of high school graduates is 40 percent higher. Is it not right that we maximize the help we give these families, so that our young beneficiaries can finish high school, thereby helping them make the most out of the benefits of this program? That is why next year, families with children up to 18 years old will be included in this program so that their children will be able to finish high school.

Let us move on to education. Our goal is to raise the quality of learning that our children undertake, so that once they finish their schooling, they can seize the opportunities now opening up in society: accomplished. We have finally erased the backlog we inherited in books and high risk merchant account , and if Secretary Armin Luistro continues to demonstrate true grit, even the backlog we inherited in classrooms will also be erased this year. And there is even more good news: Now, we also have the ability to prepare for the additional needs that the implementation of the K to 12 program will require.

The problems that plagued Brother Armin in the DepEd are no laughing matter. Just think: one textbook used to be priced at 58 pesos; since he assumed office, the price of the exact same textbook has gone down to 30 pesos. What would have happened if we had been paying the proper price from the beginning? If we had saved the difference of 28 pesos for all the books bought, at five textbooks for each of the estimated 20.7 million students in our public school system, the equivalent would amount to almost 2.9 billion pesos. These savings alone could have funded our plans to repair and rehabilitate around 9,502 classrooms.

If Brother Armin didn’t have strength of will, he could have just left this culture of negligence in his agency for his successor to deal with. He could have also left the backlog, as well as the growing gap of needs because of the rising number of enrollees each year. But instead of being content, instead of saying, “This will do. My job is done,” Brother Armin will build even more chairs and classrooms, and will buy even more books, to ensure that even the needs in future years will also be met.

The proof is in the data: This sector grew 3.3 percent in the first three months of 2013. This is triple the 1.1 percent growth it recorded in the same time period in 2012. That is why we continue to sow initiatives that will certainly bear the fruits of even greater progress for our farmers.

For example, the coconut sector. According to research conducted in 2009, coconut farmers make up one of the poorest sectors in the country. Let us look at the process of growing coconuts: Once planted, farmers wait seven years for the coconut tree to bear fruit; but after this, two generations will be able to benefit without doing anything else apart from harvesting the fruit. We have the potential to vastly increase the income of this sector if we can foster a culture that truly encourages hard work and productivity. The solution: intercropping.

That is why various government initiatives are in place to help free our fisherfolk from the broad net cast by poverty. An example would be our initiative for Bataraza in Palawan. The waters here brim with fish. But because the fish cannot be brought to the merchants on time, still fresh, the fishermen end up having to dry the fish and sell tuyo instead. It is such a waste, because every three kilos of lapu-lapu is only equivalent to one kilo of tuyo. What if the freshness of the fish could be preserved in a cold storage facility? You could go to the merchant and still sell your catch at full price. You would exert the same amount of effort, but you would receive the right compensation for it. That is why the cold storage facility in Bataraza has already been built. In addition, we are also constructing new piers in strategic areas to raise productivity and income. We are constructing and adding new roads, bridges, and other kinds of infrastructure, including various services, for our fisherfolk.

If there is one topic my name is often associated with, that would have to be Hacienda Luisita. I would like to inform you that back in February, in compliance with the decision of the Supreme Court, the Department of Agrarian Reform has completed the list of qualified beneficiaries for the land in Luisita. According to Secretary Gil de los Reyes, the process to determine the beneficiaries’ lots began last week, and the turnover of these lots will begin in September of this year.

Secure Electrans bids to bring chip

Secure Electrans has been working closely with both regulatory organisations alongside industry competitors in efforts to raise standards via the implementation of an Evaluation and Certification Framework. This aims to implement a single scheme for security in payment terminals and cards, incorporating recognition of multiple security certification card schemes and banking organisations across Europe.

Of the ￡45 billion per year spent online in the UK2, over ￡3 billion is either fraudulent or lost due to abandoned transactions 3. Under the current online payment system, 'card-not-present' transactions account for two thirds of all fraudulent card activity, leaving ecommerce as the weak link in card transaction security. This is exacerbated by the increased sophistication of cybercriminal activity, which is creating a real strain on the existing ecommerce infrastructure.

The Secure Electrans' HomePay device represents a simple, secure and convenient solution to online transactions for both merchants and consumers. Merchants or those that provide their payment processing simply add the Chip&PIN option to their checkout page. For the consumer the HomePay device is the size of a small calculator and can be connected to a home computer via USB or can access mobile devices via Bluetooth when on the move. The payment is made in exactly the same way as a shop Chip&PIN device (card-present and off-line PIN verified), providing the consumer and merchant the same security assurances online as in the high street.

The simplicity of HomePay overcomes an additional problem with current ecommerce transactions, which is that many customers are put off from buying online due to the increasing complexity of offshore merchant account, as merchants try to reduce their exposure to fraud. Indeed, current merchant examples show that between 6 and 60% of all Verified by Visa / MasterCard SecureCode / 3D-Secure transactions are abandoned4.

HomePay operates through the multi-billion pound global and trusted Chip&PIN infrastructure, and has the potential to create a standardised payment processing architecture for online transactions. Merchants would benefit from significant costs savings as Chip&PIN transaction fees are lower than the 'card-not-present' rates. This also will protect the merchant against significant chargeback costs incurred from current payment providers.

Secure Electrans' HomePay system is currently in trial phase within the UK for online shopping, smart energy pre-payment and mobile payment.

Chris Jarman, Managing Director of Secure Electrans commented: "With annual increases in ecommerce payments, it is important to bring the security and simplicity of the payment process up to a standard consumers have come to expect when paying by card on the high street. HomePay goes beyond security alone - simplicity is essential too, and consumers will no longer have to fill out page after page when checking out online; the sensation will be just like paying for a product in a shop, minus the queue!"

"We are delighted with the significant progress made by the HomePay device in the recent OSeC pilot project and audit." said the OSeC coordinator Regine Quentmeier of SRC representing the German Banking Industry Committee. "We believe that the process of implementing a Common CC Certification Scheme for SEPA is vital for raising standards and transparency within the industry in Europe. Secure Electrans have achieved an outstanding result."

A spokesperson for CESG added: "CESG acknowledges the work that has been performed by a technical community (JTEMs) consisting of equipment developers, evaluation laboratories, European Common Criteria certification bodies, and payment scheme representatives, in the production of a detailed specification (protection profile and associated supporting documents) suitable for use in the evaluation and certification of payment terminals. This work has also been greatly assisted by the OSeC Group in working towards a Common European Payment scheme, and has been able to take account of both the technical security needs and the wider operational and risk management approaches used by payment schemes. CESG is pleased to see that a UK developed product HomePay HP 100 Series, has successfully completed its evaluation in a UK CLEF and is the first in its category under this approach."

Secure Electrans Managing Director Chris Jarman concluded; "This latest achievement, when considered in addition to the huge scope of commercial uses to which HomePay can be put, is extremely exciting, since it gives a clear and comparative indication of HomePay's technical capability and versatility."

In addition to the CAS POI accreditation, the HomePay system achieved Europay, MasterCard and Visa (EMV) level 1 and 2 certification in late 2011 and secured PCI PTS 3.1 Global Certification in October 2012. These are significant achievements that allow for interfacing with the same systems banks and merchants use in the authorisation of debit and third party merchant account.

The Interactive Advertising Bureau (IAB) this week attacked Mozilla, the maker of Firefox, for being anti-business, hiding behind a veneer of populism and harboring "techno-libertarians and academic elites who believe in liberty and freedom ... as long as they get to decide the definitions of liberty and freedom."

In a long -- almost 4,000 words -- blog post, Randall Rothenberg, the CEO of the IAB US, took Mozilla to task over the open-source company's revamped third-party cookie blocking scheme, a point of contention between the online ad industry and the browser builder since the latter unveiled plans to block some of the cookies used by online advertisers to track users' Web movements, then deliver targeted ads.

While the most provocative of Rothenberg's criticisms were aimed at what he called Mozilla's values, his biggest beef with the Firefox-CCH plan seemed to be that Mozilla had set itself up as an unelected "gatekeeper" with the power to decide the fate of online businesses.

"The company's own statements and explanations indicate that Mozilla is making extreme value judgments with extraordinary impact on the digital supply chain, securing for itself a significant gatekeeper position in which it and its handpicked minions will be able to determine which voices gain distribution and which do not on the Internet," charged Rothenberg.

"The browser is certainly the gatekeeper and the gateway to the broad landscape of the Internet," agreed Ray Valdes, an analyst with Gartner, acknowledging the realities of the Web. "But most users are not aware of privacy, or simply don't care, whether it's in the browser or on Facebook. It certainly doesn't loom large in the minds of the average consumer [although] it is a hot-button issue for a small part of the user population."

Changing Standards for Online

Just a few months ago I wrote a blog post about healthcare data on the cloud (HIPPA Cloud Storage) and the security concerns surrounding this very sensitive and valuable data. I mentioned that as with many industries, more healthcare data is being moved to the cloud, but the healthcare industry has remained a few paces behind others in terms of securing online data.

The safety of personal healthcare information on the cloud continues to be an important topic, specifically in regards to government-issued guidelines. There are new requirements going into effect this year that expand on how HIPAA and HITECH standards regulate healthcare data on the cloud.

For years, HIPAA has required healthcare organizations to maintain confidentiality of electronic health information that can be linked back to an individual. More recently, HITECH provisions further strengthened HIPAA penalties and high risk merchant account .

This year's new provision to HIPAA, known as the Omnibus final rule, has its compliance date coming up in September 2013. There are important implications for vendors that are involved in any way with storing, transmitting or otherwise handling personal healthcare records. Anyone involved in those capacities is now known as a "Business Associate" and is therefore subject to the compliance regulations put forth in HIPAA. Those not compliant with HIPAA rules are subject to various penalties, including fines, as in the case of the recently announced Wellpoint fine.

As I have written about before, both "Covered Entities" (Healthcare providers, etc.) and Business Associates looking to leverage cloud services but keep sensitive patient information within their full control have been leveraging a new class of technologies known as Cloud Data Protection Gateways. These gateways intercept sensitive data while it is still on-premise, encrypts or replaces it with a random token and protects the data whether at rest, in transit or on the cloud. Encryption and Tokenization techniques deployed within these gateways are a viable solution to help organizations stay compliant.

As industry and government regulations surrounding HIPAA and the cloud continue to impact cloud users and providers, I will keep this blog up to date on changes and on solutions to stay on top of requirements.

Currently the IPSP space is dominated by a few major players like PayPal, Google Wallet and Amazon Payments, but emerging companies like SegPay are starting to garner more interest from clients that are looking for a higher level of customer service, more flexibility, an easily navigable dashboard, and customizable features.  Beyond that, SegPay ensures multiple levels of compliance and has strong relationships with banking institutions around the world, delivering a blend of security and ease of use.

"Customer service is the key differentiator for SegPay," said Cathy Beardsley, CEO of SegPay.  "When you need to talk with someone or get an immediate answer to a question, we are there.  SegPay aims to give its customers the benefits of a full service partner, while remaining a cost competitive alternative.  That's something you won't get anywhere else."

SegPay's transaction fees are on par with its larger competitors, but the company sets itself apart by providing additional value and ease of use to its customers."Webmasters and developers have enough to worry them without trying to navigate the regulations and technology surrounding online payments," Beardsley said.  "At SegPay, we take the stress out of the equation by providing reliable, full-service payment solutions that conform to a client's business."

With Beardsley at the helm, SegPay has developed extensive expertise in affiliate marketing, often being asked by banking institutions to speak about detecting and preventing affiliate fraud.  The company's work in fraud prevention is just one more way to ensure the fulfilment of the company mantra: "You get paid before we do."

"Leaf has done a great job focusing on the needs of SMBs and building an open and accommodating platform to meet their varying needs. We're very excited to partner with Leaf and leverage our mobile SDK to add value to their solution, merchant customers, and ultimately provide flexibility of payments to consumers," says DoubleBeam CEO Ted Tekippe.

DoubleBeam's e-Check app is one of the first publicly-announced apps for the Leaf Appstore, the first app store dedicated to the needs of brick and mortar businesses.  The recently announced Leaf Appstore enables third-party developers such as DoubleBeam to extend the core features built into the LeafPresenter POS tablet and LeafBusiness, the company's cloud-based management and analytics portal.

"Running a small business has become much more complicated than it should be, and many times that's because merchants are forced to work the way their technology works," said Aron Schwarzkopf, Leaf's founder and CEO. "By building our own POS tablet that includes the latest technology, and then opening the platform for creative developers to solve common challenges merchants face, we're making sure they can work the way they want to.  DoubleBeam's e-Check app is a great example of that."

In addition to its open platform for third-party developers, Leaf maintains an agnostic approach to payment acceptance, meaning that merchants using its platform can work with virtually any payment provider of their choice – from traditional credit card and gift card processors, to next generation payment methods and a number of digital wallets. With DoubleBeam's e-Check app, they can now use the LeafPresenter to accept checks just as easily.


Click on their website austpay.com.

Riding high on demand, security services

The growing demand for security by large corporations and retail establishments across India is spurring investor attention in the security services industry, one of the country's fastest growing.As a number of companies that offer trained guards, cash storage and transportation as well as electronic surveillance raise risk capital and prepare to buy out smaller players, there is a wave of consolidation that is expected to change a hitherto fragmented industry, which is estimated to employ some 50 lakh.

"The security services industry is reaching an inflection point," said Rituraj Sinha, group chief operating officer of SIS. The 33-year-old, who was earlier a Londonbased banker, took over the reins of the company in 2002.

"Institutional investors believe that they can actually get handsome returns (in security services), instead of just getting back their capital which is the case so often in India," said Sinha, whose company raised Rs 500 crore earlier this year from private equity fund CX Partners. A combination of private equity investments and entry of foreign players is already providing a more organised avatar to this industry currently valued at Rs 23,000 crore.

Experts said the rising interest in the industry, which is broadly divided into segments ranging from manpower and guarding to cash logistics and electronic security, is based on expectations that its size will nearly double to Rs 40,000 crore by fiscal 2015. At present, the organised sector accounts for about 30% of the market. "We are definitely going to see a lot more consolidation," said Amitabh Jhingan, partner of third party merchant account services at EY. "This will be driven by two factors: the entry of global players and demand for companies with a national presence."

Delhi-based SIS has provided security for Tata group employees during the company's pull-out from the disputed site at Singur in West Bengal in 2008. SIS also provided manpower guarding services to automobile manufacturer Maruti at its plant in Manesar following rising tensions between the company's management and its workers.

"We would not have invested unless we anticipated internal returns on investment of about 25%," said Ajay Relan, managing partner of CX Partners, an investor in SIS. CX Partners' investment in SIS provided the company's previous investor DE Shaw with a lucrative exit.

In Mumbai, Topsgrup, one of the largest security services providers in India—it is promoted by 42-year-old Diwan Rahul Nanda—has mandated merchant bank NM Rothschild to scout for fresh investors. A deal will see current investors Rakesh Jhunjhunwala, ICICI Ventures and Everstone Capital, who together own about 38% of the company, exit the firm.

While manpower guarding dominates the space, cash logistics and electronic security are also fast-growing services. "In the cash logistics space, all operators carry up to Rs 15,000 crore per day, and up to Rs 5,000 crore in their vaults. Therefore, there is no doubt that we have reached scale," said R Venkatesh, chief strategy officer at CMS Info Systems, which runs a cash logistics arm, CMS Securitas. Private equity major Blackstone owns a majority stake in CMS.

Affluent clients seeking uncorrelated returns can now consider an investment that’s so alternative it was once a symbol of the counterculture: cannabis. After citizens of Colorado and Washington voted in 2012 to make legal the personal, non-medical use and possession of limited amounts of marijuana by adults, investor interest in this nascent industry spiked. “Since the election in November, we haven’t made an outbound investment call. Investors have been calling us,” says Michael Blue, chief financial officer of Seattle-based Privateer Holdings, reportedly the first private equity firm to invest in the legal cannabis sector.

Although federal law prohibits cultivating hemp and growing, selling, possessing or using marijuana, this seems to be having little effect on investor enthusiasm. And cannabis investors aren’t just aging hippies driving rusted Volkswagen buses plastered with peace signs. “We’ve been raising money from high-net-worth individuals, single-family offices and third party payment gateway,” says Blue, who has an MBA from Yale. “Our investors are from all over the country and all over the world. They’re from red states and blue states. We have ranchers in Kansas, physicians in California, Wall Street executives in New York and farmers in the Midwest.”

Both marijuana and hemp are varieties of the plant species Cannabis sativa, but the two are genetically different and further distinguished by their uses and chemical profiles. Marijuana is grown primarily as a recreational or medicinal drug. Hemp has been cultivated for thousands of years to produce a wide variety of industrial and consumer goods and is being touted today as a green alternative to many products.

Legal medicinal marijuana sales in the U.S. are projected to hit $1.5 billion this year, according to Medical Marijuana Business Daily, an industry publication that reports on legislative and financial developments. In 2014, the first marijuana retail stores are expected to open in Colorado and Washington, which could generate about $1 billion in revenue during the first full year the facilities are in operation. The combined national medical and recreational markets are expected to generate state-legal marijuana sales of $3 billion in 2014 and $6 billion by 2018.

The Hemp Industries Association says the current market for hemp products in the U.S. is about $500 million. Many hemp products are available for sale in the U.S., but beacuse of the federal prohibition on growing hemp, the seeds, oil and fibers used to make them are all imported. If hemp is legalized, the domestic market could ultimately be 10 times the size of the market for marijuana, but it’s expected to be slower to take off since hemp hasn’t been grown on a commercial scale in the U.S. for over 60 years.

In the short term, investors are focusing on the marijuana market because it’s larger right now and the infrastructure is in place in many states. Industry insiders are betting the market will continue to expand no matter what happens legislatively on the federal level. In 2016, the citizens of several states, including California, are expected to vote on whether to allow recreational marijuana use.

Indian banks not yet ready to issue EMV standard cards

Credit/debit card skimming is one of the major concerns of the financial industry's and often results in forms of identity theft, credit card fraud or bank fraud. The magnetic stripe credit and debit cards store a user's financial data in static format. This data is vulnerable to be copied during offline transactions by skimming devices, which can be used to create a clone card and make unauthorized offline transactions.

Following a surge in credit card frauds in the country on the account of cards being lost/stolen, data being compromised and cards skimmed/counterfeited, the Reserve Bank of India issued a directive to Indian banks to move to the EMV standard by June 30 of this year.

The RBI guidelines doesn't say that all the customers debit/credit cards need to be replaced with the EMV standard cards, says B R Bhat, CIO, Corporation Bank. He adds that Corporation Bank will start issuing EMV cards only to customers who have done international transaction in past one to two years.

"We have issued 10 million debit/credit cards and all these can't be replaced at one go," Bhat says. "The cost of issuing a EMV card is five times higher than Master/Visa Card, which has to be borne by the banks." He adds that transferring money to a foreign country from India, doing e-commerce translation, does not constitute an international transaction. An international transaction is one if a debit/credit card has been used in a foreign market.

A Surendran, Head- Retail and International Banking, Federal Bank says that bank will initially, replace all the magstripe cards that have been used for international transaction with EVM chip based cards. Hereafter, new cards issued for international usage will also be chip based. If any customer prefers to upgrade from the magstripe card to EMV chip based cards, their requirement will be met. Replacing all magstipe cards with EMV chip cards will be examined based on the additional security and convenience features the cards will be providing to customers.

In order to benefit from EMV, and avoid skimming and fraud, the debit/credit cards need to be upgraded to an EMV chip card from the regular magnetic strip cards. At present, a majority of banks in India have already started issuing EMV chip cards to their third party payment gateway, says Hon Kuan Lee, regional director of Gemalto, a digital security company that helps banks in migrating to the EMV standard.

The success of the migration exercise is exemplified by the case of Malaysia, which fully converted to EMV chip ATM cards by end-2005. Card fraud was reduced by 85 per cent from $5.9 million in 2003 to $0.3m in that year alone.

Lee adds that the RBI has been working toward putting in place a system to make both credit card and debit card transactions safer. With its latest directive for banks and financial institutions to migrate to the EMV technology by June 30, 2013, RBI is pushing banks to implement safety measures and eliminate cases of fraud, thereby ensuring secure transactions.

The National Payments Corporation of India (NPCI) is emerging as the infrastructure provider for the banking system. Its entry has enabled bank accountholders free usage of any ATM in the country. Its Rupay card promises to save the country foreign exchange paid out to multinational giants as service charges for card payments. It is also providing the technology backbone for direct cash transfer which will replace government subsidies. In an interview with TOI, NPCI MD & CEO A P Hota speaks of how the payment landscape will evolve.

Our main achievement is that we are "cardifying" customers of those banks who have never seen a card. Until Rupay came hardly 50-60 banks were issuing cards. Now the number of banks issuing cards is 106. We plan to reach out to 500 to 600 banks in a year for issuance of cards. Out of 58 rural banks, 50 have started issuing Rupay cards which can be used in any ATM or for retail payments and ecommerce.


Of the 9 lakh point of sales (POS) terminals, 2.10 lakh are active on Rupay. Three banks—HDFC Bank, ICICI Merchant Services and Axis Bank—account for 80% of POS terminals in the country. We are talking to all three. We expect that 90% of the terminals would be active by September-end. Among public sector banks, SBI is the largest and we have already activated 85,000 of their POS machines. In e-commerce, we have made a beginning by tying up two banks out of 17. We are targeting the remaining. There are about 12,000 merchants in online space and we are working to get them to accept Rupay. Merchants will have to make a small change of providing one more link to Rupay payments.

This 1.4 million number has been arrived at by calculating two terminals per village for each of the six lakh villages in the country and remaining two lakhs for the cities. The micro ATMs are similar to point of sales terminals with biometric authentication. Under the UIDAI scheme, banks would be reimbursed cost of the terminals to the extent of Rs 15,000 the moment they reach 2000 transactions. The financial support is linked with the volume of transactions. Nabard has said that it will provide Rs 25,000 per terminal if they are set up by rural banks. Regional rural banks (RRBs) are dependent on sponsor public sector banks. This gives an opportunity to PSU banks to leverage RRBs to reach out to rural areas for financial inclusion.

There seems to be some debate over whether cards should have chip-and-pin based authentication or Aadhaar-based biometric authentication?

It is not debate between Aadhaar and chip and pin. The market is very large and the potential of Aadhaar is in taking needs of another segment. If everyone has to move to cashless transaction in a secure mode that will need the coexistence of both. As against average cost of Rs 20 for a magnetic stripe card, the cost is around Rs 80 for a chip card. For financial inclusion, Aadhar is a better option because in villages maintaining the confidentiality of PIN is difficult as this would require a certain degree of understanding of the risk associated with it.

There have been a number of frauds in ATMs of late. As their network provider what are you doing to cut frauds?

We are asking banks to go in for fraud-risk mitigation (FRM) system. FRM system is a neural system that can identify suspect transactions. RBI has also recommended that banks should put in closed circuit cameras in all ATM locations. But because cloning has become so easy, sooner or later the country will have to migrate to a chip and pin or Aadhar based authentication.

There are over 5 crore accountholders registered for IMPS (instant mobile-based payment service). When will the usage take off?

If IMPS has to cover everybody it is possible only if usage goes beyond those with smartphones. It needs to cover Rs 1,000 handsets as well. For such handsets, the only option is SMS or USSD. But SMS is unsecure as the PIN is exposed so the best system is a server-based one. So USSD is the answer. But this requires partnership with telecom companies. The telcos want bank to pay charges on behalf of customers, but if banks do this tomorrow there may be a demand from customers that bank pay data charges for mobile and internet.

Click on their website austpay.com for more information.