American Express teams up with Verizon Wireless

American Express will be launching its new app called Serve on Verizon phones. This app claims to be the "grease on the wheels" for mobile commerce, allowing multiple functions all from a single device. Serve will allow users to spend, send, and swipe while online, offline, or even mobile with efficient speed. Serve's goal reaches farther than building a strong customer clientele, but to try and eliminate the need and dependence of plastic forms of payments. Serve will also combine the benefits of a Digital Wallet and somewhat of an online-social-network atmosphere. Rather than using a card or having your phone swiped at an EMV terminal, Serve will allow you to punch the information into your device and charge strictly to your account. It also will allow you to transfer between accounts or even split bills with friends and family without the hassle all through email.  Little messages may also be sent with your transactions, depending on how your using the app. Finally serve will be able to analyze your transaction history, and send you special offers that might interest you. If you are interested you can buy it right on the spot if not you can delete the offer.

http://venturebeat.com/2011/08/01/american-express-teams-up-with-verizon-wireless-on-serve-digital-payment-accounts/

Could Credit Cards Be Replaced As the Primary Method of Online Payment?

     As we all know, credit cards are the dominant method of making online payments. However, recent studies suggest that credit card use for online purchases may be on the way out!
     Credit cards have been in use in some form for around two hundred years. As of late, credit card use  has skyrocketed for both physical and online purchases. Although they have been the premier method of online payment, several short-comings are becoming ever so evident to consumers and retailers. Issues such as high transaction cost, high risk of identity theft, and convenience issues are starting to become more prevalent as alternative payment methods have emerged.

     Experts suggest that mobile wallets and credit services specifically designed to be used online are going to surpass credit cards in frequency of use in the coming years. This is evidenced by the massive jump in dollar amounts of alternative purchases from 2009 to 2010. In 2009 there were approximately thirty-four billion dollars in alternative payment method purchases, followed by a nine billion dollar jump to forty-three billion dollars in 2010. By 2015, it is estimated that alternative payment methods will account for over eighty-five billion dollars of online sales. Multiple consumer reports show that forty-six percent of consumers have used an alternative payment method within the past year. These are large numbers show the potential for alternative payments to overtake the almighty credit card.
     Only time will tell if digital wallets and other alternative payment methods will surpass credit cards as the dominant method of online payment. Have you/would you use an alternative payment method? What is your opinion on this information?Would you consider using an alternative payment method in the place of a credit card?

http://mashable.com/2011/03/02/credit-card-decline/
http://www.sarahbundy.com/wp-content/uploads/2013/03/Digital-Wallet1.jpg

Dynamics changes the way we use plastic

     Dynamics Inc. was founded in 2007 by CEO Jeffrey Mullen. This company is responsible for producing and manufacturing "intelligent-advanced payment cards". I bring this company to your attention just to enlighten everyone on how the traditional form of credit and debit is being transformed thanks to the new technology everyday. Dynamics offers a wide variety of innovated cards which has led them to win many of the worlds most prestigious awards (Rice Business Plan Competition, Carnegie Mellon McGinnis Venture Competition, and The University of San Francisco Business Plan Competition), and the coolest part is their cards are battery powered. These cards include the MultiAccount, Hidden, Redemption, Dynamic Credit Card, and the ePlate.

MultiAccount:
     This card has two buttons on the face, and next to each button is an account number. Pressing each button not only changes the account you wish to use, but also quickly changes the programing of the magnetic stripe info. Lights are also used to indicate which account is currently set as the primary.

Hidden:
     This card has five buttons above your account number labeled 1 through 5. There is also a flexible thin display which hides a portion of the cards account number. The buttons are used to unlock the card, make the portion of card numbers visible, and populate the magnetic stripe with data is usable by readers (while locked the cards magnetic stripe holds no data). After a portion of time the account numbers once again are hidden.

Redemption:
     Like MultiAccount, Redemption also has two buttons, but instead of using two accounts, you use them to decide whether you want to pay by credit or by using reward points at the point of sale.

Dynamic Credit Card:
     This card helps secure your account information. After each purchase a unique security code is written to your magnetic stripe. It also contains a screen that changes the security code on the back of your card after a certain period of time.

ePlate:
     The ePlate will be the newest addition to Dynamics card line-up. Utilizing its button system, each "smart card" will utilize downloadable apps just like smart phones. Before each use you can choose which app you want to use for your purchase, and they will help you gain discounts, cash back, reward points, and more.

The real question is how will these cards find there way into present day society, and do you think they are "fool proof" enough to be implemented?
(http://venturebeat.com/2012/10/22/dynamics-launches-its-eplate-battery-powered-credit-card-to-create-payment-apps/
http://www.dynamicsinc.com/Corporate/products_dynamic_cc.php
http://www.dynamicsinc.com/Corporate/history.php)

Cashless= Crimeless?

Cash fuels most black market activities because it changes hands without leaving a trace. So what will happen if or when all that cash is converted into global digital currency?

 

 

 

 

 

 

 

One hypothesis states that crime rates will remain the same due to tax evasion and offshore bank accounts to name a few. A cashless society may even increase financial crime, according to Ellen Zimiles, a lawyer and expert on fraud and money laundering. Waldman states, "She suspects that financial crime would increase in a cashless society, since it’s easier to move electronic currency fast." This is a great point. This faster future of transactions would spill over into major crimes that could possibly be more difficult to detect than the normal briefcase of money exchange. Also, a good point that was made that the black market would simply switch to another form of value such as precious metals.

 

The other theory suggests that a cashless society would indeed reduce fiscal crimes solely due to the fact that it is traceable. The inevitable trails allow law enforcement to detect and put a stop to suspicious activity just as fast as it is committed. The black market would fall weak because without cash, it would be deemed less trustworthy than it already is.

 

My opinion is that I do believe that civil crimes would reduce in a cashless society, but criminal activity would remain the same. Nations are already on the road to becoming coinless(Canada) so of course one day it will be completely paperless. Cashless, yes. Crimeless, never.

 

 

 

Reference:

Would a Cashless Society Have Less Crime? by Katy Waldman

Mobile Wallets: Security, Privacy, and Credit Score

     The amount of purchases made through smartphone devices are increasing at an alarming rate.  These payments are expected to exceed $90 billion by 2017, a towering number compared to the roughly $12.8 billion spent in 2012. Much of this increased spending will be accompanied by the emergence and increased used of E-Wallets. Some fear is that this will put themselves at an all-time high risk of identity theft and fraud, but is that necessarily true? The answer might be yes. Depending on the app providers security, you be the difference between secure information and easily hack-able information. The other concern is what these companies will do with your information. Providers like Google have been known to auction off information of its users for the right price and you can even be tracked through your phone. With all of your transaction history, advertisers, retailers, operating systems manufactures, and app developers can build more in depth comprehensive consumer profiles. This being said your phone will know where and whenever you go somewhere, your geographic history, your social media connections, and your financial behaviors. The final concern I bring to your attention is the risk of losing your phone. Rather than being responsible for contacting your service provider, you will also need to make sure you contact your bank immediately as well. (http://www.thestate.com/2013/03/22/2689348/mobile-wallets-raise-privacy-security.html)

     A small concern to consider is how your credit score will be impacted. Through increased advertising on your phone and constant "special offers," impulse buying will be at an all time high.
(http://blog.credit.com/2012/11/how-the-mobile-wallet-might-impact-your-credit-score/)

SAFETY TIPS

•  Protect your smartphone the same way you would protect your laptop computer or your real wallet. In other words, don’t leave it out where somebody might run off with it.

•  If you do use mobile payment technologies, link a credit card rather than a debit card because legal protections are much stronger. Never link directly to your checking account.

•  Set password protection for unlocking your phone and a second password for any payment apps.

•  If a phone is stolen, let your mobile carrier know immediately so the phone and all apps on it can be disabled.

(http://www.thestate.com/2013/03/22/2689348/mobile-wallets-raise-privacy-security.html)

Read more here: http://www.thestate.com/2013/03/22/2689348/mobile-wallets-raise-privacy-security.html#storylink=cpy

Recent Agreement Between Discover and PayPal Makes Mobile Payments Even Easier

     Last summer PayPal and Discover joined forces to help making mobile payments even easier. In the coming months, companies that accept Discover Card will begin accepting PayPal.
     This agreement will allow PayPal users to make mobile payments at millions of new locations. Users will be able to pay by giving the payment clerk their phone number and entering a four digit code into the card terminal. Given the transaction is approved, the amount of the sale will be deducted from the customers digital wallet. PayPal will issue users a card linked to their accounts on PayPal which will record frequent flyer miles, reward points, discounts, and other promotional information.
       PayPal's digital wallet is planned to launch in May. All of the payment features of PayPal will be available in many new locations. PayPal's expansive user base makes for a competitive advantage from the start, and a big reason for Discover to strike a deal. The agreement between the two companies was designed to "decrease friction" in the retail spending process and increase PayPal's physical sales transactions.
      Will PayPal users fully utilize all of the offer's features or will the system prove to be impractical? Is this bold move going to spark a surge from other digital payment providers to keep up?

http://business.time.com/2012/08/23/paypal-discover-deal-ups-the-mobile-payments-ante/   
http://techcrunch.com/2012/03/09/paypals-new-digital-wallet-will-offer-personalized-deals-flexible-payment-spending-and-more/

British and Americans Skeptical of Digital Payments

 Lately there has been an exponential growth in the mobile payment industry. From online shopping on a mobile device to paying for gas with mobile payment services, there are very few payments that can’t be made on a mobile device. Yet, with all of the features and convenience that go along with making mobile payments, Americans are still not sure about the mobile payment system. However, many other countries have already adopted mobile payments as a new standard in disbursing funds.
            For many British and American mobile payment skeptics, security is a main concern. In fact, over twenty percent of Americans who have access to mobile payment services site security concerns as one of their top reasons preventing them from being used extensively. Security is far less of a concern in countries such as Singapore and Thailand, having only around fifteen percent of individuals with concerns about security keeping them from using mobile payments more often.
            Most mobile payment services such as LevelUp are far safer than traditional credit and debit cards. These services do not let anyone but the user see credit card numbers, personal information, or payment histories.
 If you use mobile payment services, are security threats as big of a deal to you as the average American? Why do you think that British and American users are still so skeptical? Is there any reasonable way to clear the air of these concerns?

http://www.fastcompany.com/3001646/us-lagging-mobile-commerce-far-east-lead

Digital Payment Types

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Digital payments defined as an electronic payment system used to satisfied consumers convenience  by making payments over an electronic network such as the Internet

This video shows how digital payments could be beneficial  in our daily life

The success of mobile payments would not have been possible without the massive growth in the number of smartphones and the falling cost of computing power, both of which are lowering the barriers to new entrants in parts of finance. Smartphones are vital to this, because by providing consumers with powerful computing devices and internet connections that are always on, they open the way to all sorts of other innovations.

The evolution of payment technology has moved fast. Consumers today are less likely to use cheques as a means of payment. While there is a segment of consumers that prefer to use cash, there also appears to be a growing preference to use direct card payments, even for micro payments, if this is delivered in a way that is simple and convenient for the consumer.

Mobile technology is creating a major disruption in the way we shop. mCOMMERCE, mPAYMENTS and mWALLETS are happening contactlesslly  through mobile apps

mCOMMERCE: M-Commerce is the use of devices to communicate, inform transact and entertain using text and data via a connection to public and private networks. It is basically the usage of the internet to pay for your purchases using your bank account.

mPAYMENTS:  M-payment is a real-time payment that is made with the use of a mobile device. Formally known as a mobile payment, the m-payment involves submitting an electronic remittance for an outstanding bill. Which means that you can use your phone and swipe it as a credit cad. It differ from mCOMMERCE by providing the consumer  to physically swipe their phones.

mWALLETS: m-Wallets (Mobile Wallets) are much like Prepaid Cards. They need to be loaded with money prior to use. However, funds held by the m-Wallet are securely accessed directly from the mobile phone. Although m-Wallets are still relatively new and hence not yet widely spread, MFSL believes this will change in the near term with subscriber education and competitive pricing. m-Wallet usage is growing very quickly and it is only a matter of time before they become a standard payment instrument

A Different Perspective

I remember growing up and learning the concept of money. Crisp green bills and shiny coins always caught my attention. My parents got me my first piggy bank when I was 8 years old and since then, saving money has always been a habit of mine. It is important for parents to teach their kids how money works, and the importance of saving so that when they get older they are able to manage and budget their money efficiently.

Digital payments has been becoming increasingly popular because it is quick and convenient. And it is also pretty cool when you use mobile payment apps like Square where you can process a transaction almost everywhere and at any time using a mobile device. However, with the use of digital payments, less physical money is being used. Kids nowadays have games on their Ipads and phones that require them to pay for a subscription, to unlock a better character or weapon, or to purchase game coins. ( A very popular MMO is Club Penguin).When children get a hold of games like this, it is difficult for them to understand what they are actually doing. When they go to buy something off of a mobile game, they do not have to go open up their piggy bank and take out one dollar and  give it to a cashier. They do not see how their savings are slowly declining through time. All it takes is one tap on the screen, and if they are heavy gamers, these purchases can accumulate and leave parents with enormous bills at the end of the month. What I am trying to get across is that parents should watch over how much time kids are playing with these types of games, and how much they buy on mobile devices. Parents should encourage kids to keep a savings account or a piggy bank so they can physically see what is theirs, and when they want to buy a toy, they know they will have to lose some of that earned money in exchange. Habits like saving money prepare teenagers when they get their first job,while they are in high school, and when they enroll in college, teaching them responsibility and self-control.

Should digital payments be completely avoided by consumers? Should parents completely disallow their children to visit mobile gaming apps that are linked to bank accounts?

EMV Technology: Changing the system

EMV is a global standard that defines the interaction at physical, electrical, data and application levels between IC cards (integrated circuit cards) and the devices that process their transactions. This move to an EMV or "smart card" payment system does offer some benefits. Improved security, fraud protection, finer control of offline transaction approvals, and multiple applications to be held on a single card to form an e-purse. To move the United States from a magnetic stripe based card to one that is chip based would take a very long time integrate. So on August 9th, 2011 Visa announced its three part accelerated plan to migrate the chip system:

1. Expand the Technology Innovation Program to U.S merchants. (TIP eliminates the requirement to validate their compliance with the PCI Data Security Standard.)

2. Build Processing Infrastructure that will Accept the Chip.

3. Shift the Counterfeit Fraud Liability. ( Currently point-of-sales counterfeit fraud liability is received by card issuers; liability will shift to the merchant's acquirer)

This EMV technology is the base for these new developing e-wallets. EMV terminals will be used to read data from your smart phone (pre-loaded with all your card information through applications) and charge the "best-fit" card from a storage cloud. The real question is how safe is it to keep your cards on your cell phone, and even more importantly how safe are your cards sitting in a massive cloud? What are your thoughts on this new card based system?




Citations:



http://www.gemalto.com/emv/

http://en.wikipedia.org/wiki/EMV#Differences_and_benefits_of_EMV

LevelUp Levels Up Mobile Payment Technology

LevelUp, a centralized payment system based in Boston, has recently adopted a radical new strategy in accepting digital payments. Before I delve into this strategy, let me explain what LevelUp is, and how it works. LevelUp is a payment program which requires a user entering credit card information manually or by taking a snapshot of the card. Then, the program generates a unique Quick Response(QR) code for each card. This code is scanned at checkout, allowing for a quick and easy payment experience.

            The unique strategy that LevelUp corporate has adopted totally eliminates per-swipe charges for business owners. Instead, LevelUp generates revenue based on promotion programs. In an effort to increase sales, merchants can offer promotions to new and loyal customers. Typical promotions give customers discounts for initial purchases and additional discounts for loyal patronage. LevelUp collects a 40% promotion charge each time a purchase is made. For example, if there is a $5 discount for initial customers, LevelUp receives $2 of the discount.

            Could this make paying a smoother process? More importantly, will a substantial number of customers and businesses use it?

Currency Just Got More Current

Since taking its first form in the early 1950's, Electronic Funds Transfer (EFT) systems have been becoming more integrated into wireless technology and the internet, rather than remaining in its traditional physical form. Even in today's fast paced environment the preference of swiping a card has been increasingly growing over using means of cash. The main question that lies now is what if you didn't have to even swipe your card anymore? Present day technologies that are in developement include Intuit GoPayment Phone Card Swipers, digital wallets such as PayPass, and many more that are replacing traditional forms of payment. Businesses are pressured to invest in the technology to allow global consumers and suppliers to process transactions with just a click and swipe.

Mobile technology is creating a major disruption in the way we shop. mCOMMERCE, mPAYMENTS and mWALLETS are happening contactlesslly  through mobile apps, WEB and SMS/USSD. According to Pyramid Research Global Telecom Insider, right now there are approximately seven millions NFC-Enabled phones, by 2015 NFC-Enabled phones expected to be around 203 millions. Consumers use digital payments to buy almost everything, from entertainments and electronics t o plane tickets and travel services, there is almost no limits for the consumer using the phone to purchase. Its becoming clear that mobile payments will radically change the way we spend.

mPAYMENTS will transform customers lives! Providing a smarter, richer and more rewording reality, and this new age of mPAYMENTS retailers, financial institutions, technology companies, and wireless providers will have the power to deliver it. Future digital payments will generate a different world full with new possibilities. With flexible payment options, customers will have the opportunity to complete their purchase with many different payment options, for example Visa, MasterCard, AMEX, PayPal and even Facebook Credit, payment terms can be completely redefined.

Financial institutions will have the ability to personalize terms for every single purchase, for every single customer. Retailors and credit card companies may just have to compete for customers’ payment selection for every individual purchase. Now with the absents of physical credit cards, card marketing as we know it  may have to evolve. Empowered by personal financial management, customers will have more control of their financial health.

Questions and concerns :

-       What happens to the cash customers, the unbanked,  and the non-smartphone users  ?

-       What happens to actual stores and bank spaces?

-       Will ATMs even exists?

-       Are we ready for the revelation ?