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Avoid being hit by the Government’s credit card surcharge ban with Cheaper Pay!

As of January 2018, businesses will be stripped of their ability to add any surcharges to their card transactions.

Airlines, fast-food chains and small businesses will be those who suffer most from the ban, but there are ways in which these companies can make up for this potential loss of capital.

Cheaper Pay’s industry-leading payment solutions come in at a staggering 40% cheaper price than the likes of WorldPay, Barclays and Lloyds – offering terrific value for money, as well as bearing the costs that may be lost in profit once these government changes come in to fruition next year.

Having provided UK businesses with the crème de la crème of payment technology for over a decade, Cheaper Pay are well placed to install the ideal payment system that is perfect for your business’s needs.

For a FREE no-obligation quote, get in touch with one of our specialist advisers today on 03301 242 537.

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Tech note, everyone – wearable technology is on the move!

We have often associated wearable technology with the fitness industry. Companies such as FitBit have produced spectacular results in this field, harnessing the ability to track and manage anything from distance run to calories burned over a certain period of time.
However, wearable tech is now leaving the wellbeing scene behind and advancing on to a period of world domination.
Advanced wearable biometrics can be used as a form of authentication for a number of things.
NEC corporation has recently adopted the software to identify people placed on ear readings – something previously unprecedented in the industry.
“The system enables biometric authentication via the otoacoustic emission, a sound made by the inner ear when the cochlea is stimulated, arising from the vibration of hair cells,” reports mobileidworld.
“According to a statement from NEC, its earbud device’s “otoacoustic authentication technology… recognizes the characteristics of a user’s ear”, suggesting that the emission is used to map the shape of the inner ear, which is presumably unique to the individual.”
The advancement of contactless, wearable technology is a clear indication of the continued progress of our industry.
The technical possibilities are endless – and NEC confirms this with future plans to commercialise the technology soon.
NEC plans to offer “services that combine individual authentication, indoor positioning, acoustic AR (augmented reality), vital sensing and other technologies”, according to NEC Business Development Division General Manager Tomonori Kumagai.
The contactless revolution has only just begun – don’t get left behind.

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Reasons why your Business NEEDS to make the switch to contactless payment solutions

More than just a saying or statistic, it has become reality that ‘Businesses that decline card payments are losing out’.

Sorry, we don’t take card payments’ should be a thing of the past as Britain quickly converts to a cashless society, not taking card payments should be something rarely heard of by now. Unfortunately, this is not the case just yet. 75% of all UK retail purchases are made by card; and yet still, more than two thirds of British small to medium sized businesses (SMEs) still don’t accept card payments.

With Cheaper PAY’ment solutions you can:

  • Accept Payments over the phone
  • Accept online Payments
  • Accept smart phone payments
  • Accept Chip ‘n’ Pin payments

How will these benefit your business?

  • Never miss a sale – Customers are able to buy your products anywhere at any time with secure online payments which means more sales for your business.
  • Beat your competitors – Customers are more likely to shop at a store that offers card payments.
  • Happier customers – Card payments are processed in a matter of seconds so customers can quickly continue with their day and you can get on with serving the next customer.
  • Lower bank fees – Handling less cash means fewer trips to the bank and more money back into your business.
  • More security – Extra features protect your business from fraudulent transactions and tell you immediately if a customer’s funds have not yet cleared.

Our low transaction costs are what make Cheaper Pay one of the most affordable merchant service suppliers available. Many card machine companies will charge you for a service that is designed to benefit growing businesses rather than hinder them.

At Cheaper Pay, we believe in supporting and innovating businesses with evolving technology. That is why we offer FREE quotes and a 3 months’ free trial to ensure that the payment solution you have chosen is compatible for your business.

To begin your journey to contactless payment get your free quote HERE.

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Could you be the next victim of identity fraud?

We explain the different types, how they are committed and ways to keep your money safe.

  • ID fraud claimed more than 148k victims last year – a 57% annual rise
  • One couple had £8k stolen from their joint account by criminals
  • We explain all of the ways you can fall victim – and how to prevent it

The rate at which individuals’ personal details are being stolen by criminals is rising fast. Fraud experts say the public need to be more vigilant than ever.

Laura Shannon explains the different fraud types, how they are committed, and explains ways to keep your money safe.

Identity fraud claimed more than 148,000 victims last year – a 57 per cent rise compared to the year before. Cifas, the financial crime prevention service, says every demographic is being targeted – with fraud affecting all age groups.

But how it happens remains a mystery to many victims.

This was the case for retired couple Mike and Sheila Fairholm, both 67, who had £8,000 looted from their joint account with NatWest while they were on holiday in Berlin last December – and where they had not used their cards and only took cash.

When they returned to their home in Wallsend, Newcastle upon Tyne, they found Mike’s log-in password for online banking had been changed.

After using Sheila’s log-in, which was unaffected, they discovered £8,000 had been spent at a spread-betting company. Curiously the sum was returned to them in three instalments – all while they were still away.

The Fairholms also noticed £1,000 had been transferred from their savings account to their current account.

Despite not having lost any money, the couple are concerned about how this could happen and keen to get answers. Sheila says: ‘The bank cancelled my husband’s debit card, which had been compromised.

Mystery: Mike and Sheila Fairholm had £8,000 ¿looted¿ from their joint account while they were on holiday

Mystery: Mike and Sheila Fairholm had £8,000 ‘looted’ from their joint account while they were on holiday

‘But it seemed unconcerned that someone had been able to access our online banking details, change passwords and spend a huge amount of money leaving us overdrawn for a couple of days. We were astonished at its reaction and worried it was not taking the fraud seriously.’

It was suggested to the couple there was a virus or malware on their home computer. But they took it to PC World to be checked over, at a cost to themselves, only to be told the device was secure.

The Fairholms also use F-Secure software to help keep their information protected.

 Mike visited his local NatWest branch to discuss the fraud with a manager, only to discover the couple also had a £10,000 overdraft on their account, which they weren’t aware of and did not ask for. This has now been reduced.

The manager suggested Mike’s card had been compromised in the run-up to Christmas when he had bought items online, but Sheila says this does not explain how someone could access their account and change passwords.

NatWest says: ‘We take fraud extremely seriously. We are working with the Fairholms to ensure their accounts are kept secure.’

The couple took the computer to PC World to be checked over only to be told the device was secure

The couple took the computer to PC World to be checked over only to be told the device was secure

The different types of fraud: 

Identity fraud 

Criminals glean personal information about an individual to open accounts in their name, order a mobile phone contract, request other goods in their name or empty their current account.

Investment fraud 

Sometimes known as ‘boiler room’ fraud.

Savers are convinced by phone or email to invest in ‘unbeatable opportunities’ and with high yields ‘guaranteed’.

The fraudsters will try to build a rapport with their victims over time, and may even produce sham brochures and make false claims about how the company is regulated.

The investment itself will often be a high-risk unregulated product – such as wine, art or diamonds – if it exists at all.


This is a general term covering a broad number of rip-offs affecting people in the UK on a daily basis.

They range from bookings for holiday homes advertised by fake landlords, a sham adviser promising to unlock money from a pension before the age of 55, or demands for payment by doorstep tradesmen for ‘urgent’ property repairs.

Scams can include demands for payment by doorstep tradesmen for 'urgent' property repairs

Scams can include demands for payment by doorstep tradesmen for ‘urgent’ property repairs

All scams and frauds combined are thought to cost individuals nearly £10billion a year – the equivalent of £202 for every UK adult and more than £300 per second.

This figure comes from the UK Fraud Costs Measurement Committee, and is based on academic research by the University of Portsmouth’s Centre for Counter Fraud Studies.

Consumer group Citizens Advice is running Scams Awareness Month throughout July to help people learn more about common scams and how to spot them.

For more information visit citizensadvice.org.uk or call the charity’s consumer helpline on 03454 040506.

The methods used 

Social engineering 

Specific details about victims are taken from information freely available online, such as addresses and ages posted on social media.

Often this will be all that is needed to open an account in that person’s name or to tease more information needed from an account holder.


People are tricked into clicking on links in emails or texts – perhaps because it looks to be from an official source, such as Revenue & Customs, a popular shop or someone they know.

Clicking on the link downloads ‘malware’ on to a computer or phone. This is software that lets crooks see account numbers and passwords that have been used on that device.

Pressing issue: Clicking on a dodgy link downloads 'malware' on to a computer or phone, which is software that lets crooks see account numbers and passwords that have been used on that device

Pressing issue: Clicking on a dodgy link downloads ‘malware’ on to a computer or phone, which is software that lets crooks see account numbers and passwords that have been used on that device

Phone fraud 

Skilled scammers impersonate bank employees or police to find out a person’s account PIN or password.

The caller will suggest there is evidence of fraud on an account and recommend the person phones their bank’s fraud department.

When the account holder hangs up and dials the number, the original call is never disconnected.

The fraudster then plays out a script pretending to be a bank employee and once they have the householder’s trust, will ask for a PIN or password.


Customer data, such as debit or credit card details, are traded by criminals in hidden corners of the internet not visible to the average computer user.

This information is available because of data breaches by companies or hackers targeting businesses – such as what happened with TalkTalk last October.

Hackers can also tap into public wi-fi hotspots.

Wi-fi hotspots are not secure and a fraudster would be able to see whatever other users are looking at

Wi-fi hotspots are not secure and a fraudster would be able to see whatever other users are looking at

Stephen Proffitt, deputy head of Action Fraud, the UK’s national reporting centre for fraud and cybercrime, says: ‘These internet connections are not secure and a fraudster would be able to see whatever other users are looking at – such as internet banking and passwords. It is better to use your mobile phone’s data allowance for this as it is more secure.’ 

A flaw in NatWest’s security was highlighted earlier this year by BBC Radio 4 programme You And Yours, which found it was possible to hack into a person’s account using a stolen mobile phone, with no need for log-in or password information.

The programme demonstrated how a criminal could take a victim’s phone, contact their bank claiming to have lost log-in details, and then be sent a unique activation code that gives access to the account.

The fraudster was then free to change the account password and PIN so only he or she could access it. NatWest consequently made changes to its security to address these concerns.

Card skimming and shoulder surfing 

Cloning technology on debit and credit card terminals or on cashpoints copy a user’s card details. A camera or someone hovering over a customer’s shoulder at a till or ATM will then pick up what PIN is entered – giving them easy access to the account and its contents.

Proffitt says: ‘There may be a device on a cash machine that you are unaware of. Always cover your hand when entering your PIN.’

Customer fraud and failure

Customers are often blamed for fraud as a result of being careless about their details. But sometimes the bank’s lax security and crooked employees are responsible.

The Mail on Sunday has been told privately by a bank employee that staff need to be trained about the dangers of ‘phishing’ just as keenly as their customers.

In other words, customer details have been or could be compromised just as easily by bank employees falling for fraudsters’ tricks.

Insider fraud is another problem, where rogue employees drain customer accounts.

Less than a fortnight ago a Barclays apprentice cashier working at the Kensington branch of the bank in London was sentenced to 33 months in prison at the Old Bailey for using details of 25 customer accounts to open new accounts, take out loans and request new cards and PINs.

He intercepted the post and used these new cards to empty customer accounts. Victims all received refunds but the loss to Barclays was £167,370.

Meanwhile, two bank insiders at Halifax and Lloyds were jailed on June 8 after working with a wider gang on a series of frauds to steal more than £400,000 from customers.

Shannon, L. and Laura+Shannon+For+The+Mail+On+Sunday (2016) How to spot an ID thief. Available at: http://www.thisismoney.co.uk/money/guides/article-3682199/Could-victim-identity-fraud-ways-spotting-ID-thief.html (Accessed: 11 July 2016).


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Card fraud up 20% – you’re at risk without even leaving the house

How fraudsters take your money without touching your cards.

You may think you’re taking all the right steps to protect yourself from card fraud. You might guard your PIN at the cashpoint, keep your wallet in a bag worn across your body, and never let your card out of your sight. However, while these are sensible steps, they are only protecting you from the risk of having your card stolen, and a new study has highlighted that thieves don’t need to snatch your card from you in order to take your money.

It’s not just the theft of your card you need to guard against – it’s stolen phones and tablets too. Matt Sanders, from Gocompare.com Money explains: “Fraudsters continually seek new ways to scam unsuspecting people. Our increasing use of technology to do everything from holding our address book and diary to online shopping and banking means that criminals are also logging-on to find new ways to steal our personal information and raid bank accounts. To thieves, the personal data held on a smartphone or tablet can be more valuable than the device itself.”

This means we need to protect our devices, not only by keeping them close when we’re out and about, but also by PIN protecting them – to make them less useful to thieves who steal them.

The other theft risk to be aware of is your documents. If you have thrown out statements, letters or receipts without shredding them, or have a driving licence taken from your wallet, then a thief can use this information to apply for cards and loans in your name.

Alternatively, they might steal your card while it is transit, and spend before you even know you card is missing.

Reaching into your home

Fraudsters also have a number of ways of reaching into your home. One common approach is to use a number of tricks to get you to reveal your card details. This includes phone and email scams where they contact you, pretending to be from a legitimate organisation, and asking you to ‘verify your details’.

In some instances they will cut straight to the chase and get you to reveal your account number, password and PIN. In other cases, they will ask for personal information, and use this to take over control of your account or card.

Your computer use can also open you up to risks. Fraudsters may send an email with a link in it – this contains a virus, which downloads to your computer and will recognise whenever you access internet banking. It will then automatically send back any information it gleans to the fraudsters, who can raid your account.

Sanders says: “Social media sites can also provide a rich seam of personal information which can be used for identity theft and financial fraud. Social media platforms encourage users to provide as much personal information as possible, including users’ full names, birth dates, relationship status – even pet names. Crooks can use this information to build up a personal profile and guess the answer to bank and payment card provider security questions. So, we would recommend users of these sites to use privacy settings to protect their personal information.”

Protect yourself

Sanders suggests five vital steps to protecting yourself.

1. Protect your personal information
Never provide personal information in response to an unsolicited email, online or telephone request. Genuine banks and card providers never request information in this way.
Protect your personal information on social media, use privacy settings and don’t accept friend requests from people you don’t know.
Don’t use the same passwords for social media sites and online banking.
Buy a shredder to dispose of card statements and other documents containing personal or financial information you no longer need.
Always PIN protect smartphones and other mobile devices.

2. Protect your PIN
Choose a strong PIN. Don’t use obvious numbers, for example, the year you were born, your wedding anniversary, telephone or house number.
Memorise your PIN – don’t write it down or disclose it to anyone else.
Don’t use the same PIN for all your payment cards.
When using an ATM or other card reader always shield your PIN with your hand.

3. Take online safety measures
Regularly update your computer’s firewall or antivirus software.
When shopping online, always look carefully at the site for secure transaction symbols. The web address should start ‘https’ and the page should display the secure payment ‘lock’ logo.
Always log-off from a site once you’ve completed a transaction.

4. Regularly review card and bank statements
Check statements on a regular basis and look out for unusual or unauthorised transactions, and contact your card provider immediately if you suspect fraud.

5. Pay attention to card delivery
Note when you should be receiving a new payment card. If it doesn’t arrive when you expect it, contact the card provider as soon as possible.


Coles, S. (2016) Card fraud up 20% – you’re at risk without even leaving the house. Available at: http://money.aol.co.uk/2016/06/20/card-fraud-up-20-you-re-at-risk-without-even-leaving-the-hous/ (Accessed: 21 June 2016).

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Google to ban payday loan ads

Google is banning payday loan ads in a move it claims will protect users from “deceptive or harmful financial products”.

The ban will come into force on 13 July and will not impact mortgages, student loans, car loans, commercial loans and credit card companies.

A blog from Google reported: “We will no longer allow ads for loans where repayment is due within 60 days of the date of issue. In the US, we are also banning ads for loans with an APR of 36% or higher.

“When reviewing our policies, research has shown that these loans can result in unaffordable payment and high default rates for users so we will be updating our policies globally to reflect that.”

Google explained that it is “vigilant” on ads for financial services because they are “core to people’s livelihoods and well-being”.

Payday loan ads on TV have long been debated in the industry. The Broadcasting Committee of Advertising Practice launched a consultation on whether payday loan TV ads should face scheduling restrictions in October last year.

The responses are due to be announced in the next couple of months.


Google to ban payday loan ads (no date) Available at: http://www.campaignlive.co.uk/article/google-ban-payday-loan-ads/1394646 (Accessed: 13 May 2016).

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Small businesses “don’t trust” alternative payment providers

59% of small business owners favour banks for payment services compared to online services (40%) and telecoms companies (11%).

Many small businesses are still sceptical of using alternative payment services but retain confidence in banks, according to new research from Visa Europe.

The survey of 750 UK small business owners found that 59% trust their bank or building society as their payment provider, with alternative providers such as telecoms companies (11%), social media providers (6%) and online payment services (40%) lagging behind.

Only 30% of respondents claimed to be “completely satisfied” with the range of payment options available, increasing to 40% amongst sole traders.

Sole traders are the most comfortable with alternative payment methods, with 56% using online banking and 32% using their debit card online to make online payments.

Despite this, just 9% of these sole traders said they accept online card payments from customers, with 36% of all small businesses using debit cards to make payments but only 22% accepting such payments in return.

Kevin Jenkins, managing director of Visa UK, said: “The banking and payments proposition for small business is different and has to be treated so. Resources are scarcer and the time to invest in and consider these kinds of issues is typically less.

“Given the top three barriers to change are cited as perceived cost, risk, and other priorities being focused on, that suggests we need to start with making these products as accessible and useful for this audience as possible.”


Williams, H. (no date) Small businesses ‘don’t trust’ alternative payment providers – startups.Co.Uk: Starting a business advice and business ideas. Available at: http://startups.co.uk/small-businesses-dont-trust-alternative-payment-providers/ (Accessed: 10 May 2016).

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Co-op Food places focus on payments and security

Ten days after Co-op predicted card and mobile payments will outstrip cash transactions in its stores over the next decade, the food retailer has increased its invested in electronic payment security.

A Co-op Food report published last week predicted the demise of cash payments over the next decade, with the retailer saying it expects that 65% of transactions to be conducted via mobile by 2025.

Coming in the wake of last summer’s Apple Pay launch and ahead of Google’s Android Pay and Samsung’s mobile commerce equivalent arriving in the UK later in 2016, the report highlighted how the emergence of NFC technology has led to Co-op stores seeing contactless payments hit almost 11 million transactions in the space of one month.

It is widely predicted in industry circles that consumers’ growing confidence about using contactless cards will be a precursor for mobile payments to take off, especially as it functions using the same technology.

In what was an in-depth research piece, the Co-op said despite its growing prevalence there are still consumer concerns over security. A survey of 2,000 shoppers showed a reluctance by some to use the method, with people more likely to use Chip and PIN than the contactless pad for transactions over £10.

The average basket spend for contactless in convenience stores is £8.66 compared with an average of £18.16 when using chip and PIN. The Co-op also revealed that the average spend on customers buying fuel using contactless is £9.38, compared with £23.28 for a chip and PIN purchase – despite the £30 limit which was put in place at the end of summer 2015.

Against this backdrop, and with retailers nervous about the seemingly growing levels of high-profile data breaches around the globe, Co-op has this week announced an investment in its payments security.

The retailer has selected ACI Worldwide to run its card payments processing operations and maximise security across all of its UK food stores and fuel sites, using the latest version of its point-to-point encryption (P2PE) and tokenisation capability.

P2PE converts a consumer’s confidential credit and debit card data into indecipherable codes when the card is read by the payment terminal, which renders the sensitive data invaluable while in the possession of the retailer, and is viewed as a way of preventing theft and subsequent fraud.

ACI’s system is expected to go live across all stores in early 2017, with the vendor running the service from its European data centre. ACI promises that the service has “scalability and flexibility”, meaning it can be adjusted to meet the Co-op’s evolving needs.

The move to invest in payment security comes after the Co-op was forced last year to blame “a processing error” for some customers being charged twice while paying for goods and petrol at its supermarkets on 7 July 2015. Shoppers who used a credit or debit card to transact on that day received a double bill.

Cheryl Marshall, retail chief information officer at the Co-op, said this week: “The security of our customers’ data is of paramount importance to us.

“We believe ACI Worldwide’s UP Merchant Payments solution offers us not only the payment processing power we require, but also the flexibility to meet our needs in the future.”


2016, L.E.L. (2016) Co-op food places focus on payments and security. Available at: http://www.essentialretail.com/news/article/5721d9563a05f-co-op-food-places-focus-on-payments-and-security (Accessed: 29 April 2016).

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PayPal brings its virtual credit card to the UK with an interest-free offer

PayPal is, in many ways, the primary choice for making online payments. The company is keen to build on this and has launched a new product in the UK to widen its appeal. PayPal Credit is a virtual credit card that can be used online, and as an incentive to sign up, there’s a four-month interest-free offer.

As this is an online credit card, applying for it takes a matter of moments, and PayPal is quick to point out that there’s no hanging around waiting for a card and PIN to arrive. Apply online and you could be approved for a credit extension to your PayPal account.

Just as with any other form of credit card, making an application for PayPal Credit involves a credit check – something to keep in mind if you’re concerned about your credit score. Once signed up, you’ll be able to make purchases via PayPal even if you don’t have funds in your linked bank account, or if you just fancy the idea of spreading the cost of a larger purchase.

PayPal describes the new virtual card: “PayPal Credit is like a credit card you can use for your online purchases, it takes minutes to apply and if you’re approved you’ll have a credit limit in your PayPal account right away.”
The interest-free offer is… interesting. PayPal bills it as “0 per cent for 4 months to use again and again”, going on to explain that “every time you spend £150 or more in one go using PayPal Credit, you’ll get 0 per cent interest for 4 months on that purchase”. After four months – and for purchases over £150 – the interest rate jumps to a fairly standard 17.9 per cent p.a (variable).
If you want to apply for a virtual card, head over to the PayPal Credit website.


ITProPortal. 2016. PayPal brings its virtual credit card to the UK with an interest-free offer | ITProPortal.com. [ONLINE] Available at: http://www.itproportal.com/2016/04/15/paypal-brings-virtual-credit-card-to-uk-with-interest-free-offer/. [Accessed 28 April 2016].


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Liam Patterson – ‘Programming’

I started my employment at CheaperGroup as an Apprentice in the IT Department. It was a tough year balancing both my college assignments and tasks at work but I have been able to learn a massive amount in such a short time so it was well worth the effort.

I had previously spent 2 years at college gaining a level 3 IT qualification but I was unable to secure an IT focused position and instead spent 2 years working various Admin jobs in the Public Sector, but my ultimate goal has always been to find an IT focused role.

When I joined I was primarily working for CheaperWaste, helping the IT Manager Matt with various tasks, from data management to developing systems for our CRM used by the entire company. There was a lot to learn, not only about the company but the waste industry as a whole; I had no idea there was so much to it – luckily for me the team has made it very easy to understand the ‘ins’ and ‘outs’ of it all.

The biggest hurdle I have had to overcome while working here was gaining a good understanding for programming concepts and how to use them in a real working environment. I have had some experience in the past making websites using HTML/CSS and have written a few basic programs in Visual Basic but I have had to learn a whole set of new languages to create systems for CheaperGroup. The main language I am focusing on now is JavaScript which is perfect since a lot of our systems are web based and JavaScript can be used in many ways to create all kinds of powerful applications. My biggest accomplishment so far is putting together an internal system to track job requests between staff members which is able to send email alerts between all relevant people, making it easy to track tasks that are in progress around the entire company. I have also implemented a system that is used to track allowances and handle requests for annual leave for the whole company.

As you can probably tell, my role is mainly centred around writing code, and I believe it is quickly becoming an essential skill to anyone working in IT as there are near unlimited uses for it. For example we are able to automate processes that would take a human hours to complete, all by writing a few (or a few thousand) lines of code. Matt, the IT Manager, and myself are also attending an event in London next month which is centred around one of our core systems used at CheaperGroup, which will be a fantastic opportunity to learn more about the platform we develop on and should hopefully give us a few good ideas to bring back and use in our own systems.

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Atom becomes UK’s first digital-only bank

With no branches or call centres, all contact is via an app through which customers can talk to a 30-strong service team.

Your iPhone can now be your bank branch as a result of a new digital banking service that launched on Tuesday.

Based in Durham, Atom Bank has become the first of a number of aspiring digital-only banks to start offering products. It has no branches or vast call centres. All contact is via an app, through which customers are able to talk to a 30-strong service team.

Its first products are a one-year fixed saver offering an interest rate of 2% and a two-year savings product with a 2.2% rate, but if you want to put your money away you need to have signed up already. New customers will need to register and wait to sign up.

Anthony Thomson, Atom’s chairman, says savings might not be the most obvious start for a bank likely to be aiming at young users, but he believes older people are also interested in digital banking.

Current accounts, loans and mortgages should be launched by the end of the year and a service for Android users is also in development. Loans for small businesses are being provided through intermediaries for now.

It is far from clear how quickly digital-only banking will take off. “With Britain’s banking habits becoming increasingly digital, smartphones are fast becoming the new local branch for many consumers, and the 2% offered for Atom Bank’s one-year fixed savings account could be competitive enough to persuade those still on the fence about controlling their finances from their phones to take the plunge,” said Matt Sanders, Gocompare.com’s money spokesperson.

Thomson also launched Metro Bank, which was heralded as the first new high street bank for a century when it opened six years ago. Opening a bank with branches now though would be like BT installing phone boxes, he said.

Metro recently floated on the stock market and Atom – backed by the veteran City investor Neil Woodford and in which the Spanish bank BBVA has a 29.9% stake – could follow suit in three years’ time. Thomson says, though, that he will not be involved in any new banking startups..


Atom becomes UK’s first digital-only bank | Money | The Guardian. 2016. Atom becomes UK’s first digital-only bank | Money | The Guardian. [ONLINE] Available at:http://www.theguardian.com/money/2016/apr/08/atom-first-uk-digital-only-bank. [Accessed 08 April 2016].


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Online banking refunds ‘reward’ careless customers – Met chief

Banks should not refund victims of online fraud because it “rewards” them for being lax about internet security, the Metropolitan Police commissioner has said.

Sir Bernard Hogan-Howe said customers were being “rewarded for bad behaviour” instead of incentivised to update anti-virus software and improve passwords.

Police needed to focus on preventing online thefts, he told The Times.

Discussing how banks could make people more security conscious, Sir Bernard said: “That’s one thing to consider. If you are continually rewarded for bad behaviour you will probably continue to do it but if the obverse is true you might consider changing behaviour.”

He added: “The system is not incentivising you to protect yourself. If someone said to you, ‘If you’ve not updated your software I will give you half back’, you would do it.”

His comments come as police prepare to include cybercrime estimates in official crime statistics for the first time in July.

Sir Bernard said that the figures are set to double with the change.

Two in five (44%) UK consumers have been subject to cybercrime in their lifetime, according to a survey released last year.

However two of every five (42%) do not take the time to change their account passwords after a security compromise or break, the Norton Cybersecurity Insights Report found.

Home Secretary Theresa May warned the International Crime and Policing Conference on Wednesday that faceless crime was being conducted over the internet on an “industrial scale”.

But according to The Times, police follow up fewer than one in 100 frauds and there were fewer than 9,000 convictions out of more than three million frauds in 12 months.

GCHQ estimates that 80% of cybercrime, which is thought to cost £1 billion a year, could be prevented by tougher-to-crack passwords and regularly updated security software.


Online banking refunds ‘reward’ careless customers – Met chief – AOL Money UK. 2016. Online banking refunds ‘reward’ careless customers – Met chief – AOL Money UK. [ONLINE] Available at:http://money.aol.co.uk/2016/03/23/online-banking-refunds-reward-careless-customers–met-chief/. [Accessed 24 March 2016].

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Banking scams push up UK financial fraud ‘by more than 25%’

Remote banking fraud increased the most in 2015, costing consumers more than £168m, according to Financial Fraud Action UK.

Fraudsters managed to steal £755m from British consumers and financial institutions during 2015 – a 26% increase on the year before.

Financial Fraud Action UK said the biggest growth area was remote banking fraud, which typically sees fraudsters posing as bank staff in a bid to con people into sending them money via online banking.

The figures published on Thursday show this type of fraud leapt by 72% in 2015 and more than £168m was stolen from unsuspecting consumers.

In most cases the banks involved would have refused to refund the customer on the basis that they had made the payment voluntarily. Victims of such fraud have told the Guardian that the police have not been interested in investigating such cases even though the losses have been as much as £25,000.

Internet banking fraud rose 64% to £133m during 2015, while losses due to telephone banking fraud rose 92% to £32.3m, Financial Fraud Action UK said.

In recent years, Guardian Money has highlighted the increasingly sophisticated tactics being adopted by scammers to steal consumers’ cash. As security systems have improved in other areas of banking, fraudsters have opted to target consumers directly by phoning them up, or using online vulnerabilities.

Scammers have pretended to be bank staff, police and from firms such as TalkTalk, and persuaded consumers to send money to their bank accounts, aided by the faster payments system and previously lax account opening requirements at banks.

Fraudsters have also increasing been hacking emails and then posing as builders, for example, to ask for deposits to be sent to them.

Katy Worobec, director of Financial Fraud Action UK, which represents all the major banks and bank card issuers, said: “With the continued rise in impersonation scams and data breaches it’s vital that all customers are alert to the dangers. Everyone should be cautious about giving out personal or financial information, and organisations holding data need to do all they can to protect people’s private details.”

She said fraud losses on UK payment cards remain the biggest area of fraud. Losses in 2015 totalled £567.5m, an 18% increase on the previous year. A total of £843.6m of attempted card fraud was prevented by banks and card companies, equivalent to £6 out of every £10 of fraud being stopped, it said.

The figures showed bank and card company security systems detected and prevented a total of £1.76bn worth of fraud from occurring in 2015 – equivalent to £7 in every £10 of potential fraud being stopped.

Overall, cheque fraud losses totalled £18.9m , a 6% fall on the 2014 figure as cheque usage declined. Just over £2.8m were lost to mobile banking fraud last year.

Last month, the home secretary, Theresa May, announced the creation of a new taskforce to crack down on fraud in the UK, saying that “fraud shames our financial system”.

The Joint Fraud Taskforce will be comprise key representatives from government, law enforcement and the banking sector, but has a long way to go to restore confidence among victims, who have repeatedly been told by the banks and police that there is nothing they can do to help them.

Detective chief superintendent Dave Clark, who heads the City of London police’s economic crime unit, said: “Criminals are continually looking to exploit old and new technology alike to deceive both individuals and organisations into revealing private information that will enable them to commit fraud, sometimes on an industrial level. The only way this problem can be fully addressed is by having a multi-sector response focusing on prosecution, prevention and protection.”


Banking scams push up UK financial fraud ‘by more than 25%’ | Money | The Guardian. 2016. Banking scams push up UK financial fraud ‘by more than 25%’ | Money | The Guardian. [ONLINE] Available at:http://www.theguardian.com/money/2016/mar/17/banking-scams-uk-financial-fraud. [Accessed 18 March 2016].



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How Payments Will Save Retail

How Payments Will Save Retail

I, Shopper, take thee, Online Retailer, to be my faithful partner in commerce. To have and to hold from this day forward — for better, for worse; for richer, for poorer; in sickness and in health — to love and to cherish, till death us do part.

Shoppers just aren’t as loyal as they once were.

Today, fewer than a third say that membership in loyalty programs drives their choice of retailer. That’s down 13 percent in just 5 years.

Fewer than half say that they even use their loyalty benefits when they shop. In today’s competitive retail environment, discounts are abundant, and the benefits of loyalty programs don’t necessarily afford those shoppers any better deals than they can get by simply showing up at another retailer’s physical or virtual storefront. What, instead, drives consumer choice more than anything else these days are those discounts — and free shipping.

It’s not surprising, then, that Amazon rules the roost. It was they, after all, who redefined the retail playbook by bundling free shipping and low prices around a loyalty program that consumers paid to join! Who’da thunk it?

But that’s only the half of it. There’s another reason why Amazon rules the retail roost and shoppers are unfaithful to many of its competitors.


Consumers are increasingly moving their shopping and buying not only online, but online via the mobile devices. Small screens and shoppers on the move require a checkout process that’s efficient and void of friction if a merchant actually wants to convert those shoppers to buyers.

As friction-free as it used to be in the physical store in the good of days before EMV when swiping was easy and fast.

As efficient as one-click checkout has always been on Amazon.

Something that most online retailers don’t have – or even come close to having.

Here’s the evidence.

Just took a look at our second Checkout Conversion Index (CCI) – a collaboration between PYMNTS and BlueSnap. We’ll release the full results on Thursday, March 3. What it shows is that, if anything, the friction involved at moving through the online shopping and buying process at online retailers is getting worse, not better.

And that’s a pretty troubling state of affairs since retailer after retailer has declared publicly that digital is their future. And what’s needed to save their bottom lines.


CCI scoring is the result of shopping 657 sites and applying 55 attributes to those sites to determine how easy it is for consumers to shop online. And guess what? If it’s friction-filled to shop online, then it’s a total nightmare on the mobile device.

These 657 sites exclude Amazon but account for 70 percent of all online sales in the U.S. We examine the entire process – what happens before and after a consumer hits the “buy button.”

When we published our first report on Cyber Monday, even the dismal scientists who built and ran the model were stunned at just how badly these 657 online retailers scored overall.

On a scale of 0 to 100, the average Checkout Conversion Index score was about a 55-54.8 to be precise. That meant that most online retailers almost set themselves up for a retailer/shopper breakup – aka checkout abandonment – at the start. Using regression models and calculating conversion rates to sales, we then estimated the cost of that breakup with consumers cost retailers, overall, about 42 percent of their sales.
But believe it or not, in just three months, things have actually gotten a bit worse.
We shopped those 657 sites again in January and now have 36,000 data points that support this conclusion. Once again, our dismal scientists were totally bummed out.

The overall Checkout Conversion Index score dropped 3.1 percent to 53. Now that may not sound like a big deal or even enough to push the panic button. But this decline happened  in the space of just three months.

For kicks this time, we decided to implement a grading system for all 657 sites we shopped – and we even graded on a curve. So, if a site scored a 75 or above, they got an “A.” (Hey, our dismal scientists were doing their best to spread some sunshine on this situation.)
Even that didn’t help.
Only four sites of the 657 got an A. Yes, FOUR! And that’s three fewer than did in October – even when we graded on a curve.

Another 110 got a B, scoring between 65 and 75.

But here’s perhaps the biggest disappointment: 48 percent of the 657 sites got a failing grade – a “D” or an “F,” scoring 55 or below.

(BTW thankfully we didn’t have this curve when we were in school or the payments industry would be real mess. And you better hope your kids don’t now either. Otherwise, kiss goodbye any chance that they’ll do well enough to support you in your golden, olden years.)

Only 133 sites, overall, improved their scores, but 211 saw their CCI scores decline by more than 5 points. Hey, when the average CCI score is a 53 and the score drops 5 points, that’s alarming.

This time we estimated the hit to sales to be worse, too, increasing from 42 percent to about 44 percent.

That’s about $158 billion in sales this year.

That means that an online retailer that clocks $6 million or $7 million in annual sales could stand to lose between $3.3 million and $4 million in 2016. And probably even more in 2017 as those shoppers just never come back to try again. And worst of all, maybe not even know it.

Of course, those aren’t dollars that are lost forever; someone gets the benefit of those sales. Like, say Amazon, for instance.


Interestingly, the size of merchant had nothing to do with who got the A’s and who got the F’s. In fact, some of the largest retailers scored the worst. I’ll tell you why I think that’s the case in a minute.

Those who did best actually tried to make the online process via mobile as easy and efficient as it used to be to shop and checkout in a physical store.

  • They minimize the number of steps it takes to start and finish the checkout process.
  • They pay attention to the little things that make for a better shopping experience – like having a check box that makes the shipping address the same as billing, or offering discounts at checkout and live help – just like one would have access to while shopping in a store.
  • None of them require a profile to checkout. Can you imagine how many consumers would just walk out of a physical store if they had to fill out their name, email and phone number before they paid for the stuff that they had in their baskets and put on the counter to pay for? Sure, some stores now ask for all or some of that stuff at the end of the checkout process. And sometimes it is positioned as a way to get an electronic receipt – which is frankly a value-added benefit. Or whether a customer would like to enroll in a loyalty program or be added to the retailer’s mailing list – but never is that a condition upon which payment and checkout is predicated. Shoppers have the option to grab their bags and run away if they’d like, but with their purchase in hand.
  • And the very best sites offer payments options that reflect the preferences of the shopper.

Which is why payments could now save retail – since the preferences of those shoppers is to shop and buy online and increasingly use their mobile devices to do that.


It wasn’t always that way. Actually for the last five or more years, the retailers themselves and the payments industry got retailers off track.

The payments industry got behind a narrative that smartphones with NFC- enabled wallets is what consumers were dying to use in-store to pay for stuff. That it would reinvent the retail and checkout experience in the store. You remember that, right? The industry tried very hard to convince the retailers that consumers needed this thing called a mobile wallet that was the digital version of their physical wallet. It could aggregate payments cards, loyalty cards, store coupons, and maybe even convert a consumer’s physical identity into something digital so that a consumer could literally leave home without her wallet.

And since the argument was that 96 percent of shopping still happened in physical stores, giving consumers that option would help retailers move that consumer to a mobile-enabled digital checkout experience.

Except there were a few things wrong with that narrative. 

First, as we know, have written about extensively and started a war with the Census Department over, the Census Data reporting on the mix of physical and online sales is flawed – massively – and has been for years. They today say that 95 percent of sales still happen in a physical store.

We believe that’s too low.

Large physical retailers apparently don’t report all the online sales, although it is pretty much impossible to get the Census to provide any insight into how big their data error is. But beyond that, whether the right figure is 95% or 90% (what our calculations show), it’s an average across all retailers. That’s also like saying the average winter temperature in Boston is 37 degrees. We’ve had days this season where it was -11 degrees Fahrenheit and multiple days where it was +65 degrees. In retail, in some categories like electronics and apparel, the percentage of online to physical retail sales is probably much, much higher than any “average” and quickly moving north.

Now the big retailers like Walmart, Target, Kohls, Macy’s, Gap and JC Penney don’t need the Census’ bad data to tell them that their shoppers are now shifting to online and going online via the mobile device. Their sales numbers show that. Yet, for the last five years, our industry had retailers focused on solving a problem that didn’t exist for any shopper walking up to checkout to pay for stuff in their physical stores.

In fact, outside of Starbucks – still the single greatest in-store mobile wallet success story in history that really wrapped loyalty around digital payments — consumers with mobile wallets encountered more friction than a benefit when they tried to use a mobile wallet in a store. Nearly 100 percent of these wallets were NFC-enabled for the most part, a technology that merchants didn’t support nor want to invest to support.
Then, the retailers distracted themselves.
Not wanting their digital futures to be tied to third party-branded wallets, retailers set off to develop their own mobile wallet solution – MCX/CurrentC – which turned out to be a complete dud.

I wrote in 2013 in that MCX would go nowhere. In the MCX Fairy Tale that I wrote that year, I said that this story could never have a happy ending. And it doesn’t. After years of struggle, MCX is floundering and breaking apart at the seams, with even the biggest of the big founding partners, Walmart, pursuing its own solution. No one in MCX-land is living happily ever after now and it’s debatable that they ever did.
Those two things independently and collectively contributed to the lousy Checkout Conversion Index scores for retailers that we see today — and that we’ve watched decline over the last three months.
Retailers simply focused on where there wasn’t a problem – in-store – instead of where there is a real problem – checking out online, especially when that’s happening via a mobile device.

So now, merchants – especially the big ones — lost years of making the digital shopping and buying environment every bit as good as what they have (or maybe had) in the physical stores that consumers now don’t want to visit as often as they once did.

It’s also why pure-play etailers score higher overall in our Checkout Conversion Index. It’s why the smaller guys who knew that they had to get it right online or lose a customer score highly, too. It’s why the big guys, who’ve been focused on the wrong thing for way too long, have the worst performance and such a long road to hoe to make things better.

And why the payments players that can help retailers save their marriages to consumers by reducing checkout abandonment – and help save retail.


Take PayPal for example.

As a payments player that grew up digital. PayPal had to – and has to – get it right. They exist only because they removed the friction from checking out online and really blazed the online digital trail for all of the online retailers that weren’t Amazon. Today, they have 1 million merchants enabled to checkout via PayPal — including 50 percent of the top 1000 online retailers — and are powering marketplaces like Pinterest. Its new partnerships with telcos provide distribution for PayPal to hundreds of millions of those telco subscribers. One Touch and a variety of user enhancements now make one-click checkout more streamlined for its merchants and 180 million accountholders. They are adding tons of value online – offline in stores, not so much. Which, right now, isn’t where retail’s house is burning to the ground.

Then there’s Visa.

Visa ditched its mobile wallet ambitions (V.me) a couple of years back too, recognizing that the most important thing for retailers online was making it easier to get their customers through checkout as quickly as possible. Visa Checkout, which launched in 2014, has 11 million users now and will expand to 16 markets. A variety of user enhancements will launch next month, further reducing checkout abandonment and making the underlying payment account a more efficient platform for applying offers, coupons and loyalty without the consumer having to remember to. Fixing how their plastic cards or mobile wallets work in a store isn’t solving a big retailer pain point right now.

MasterCard is doing the same thing. It announced a variety of partnerships last week with telcos that will expand the reach of its MasterPass mark. MasterCard is also using its Developer platform to give the innovators who are trying to solve checkout problems for retailers a way to more easily embed its checkout function in that app or online experience. Making it efficient for consumers to use mobile devices to buy online is the biggest help they can provide merchants right now.

Of course, Amazon is working hard to get Pay With Amazon outside of Amazon – banking on the trust with their consumers and one-click checkout to boost online conversions.

And why Android Pay is focusing in-app.

Why Samsung Pay has announced that it will also offer an online solution and is tucking payments into a lot of connected commerce experiences like fuel via the car.

Why LevelUp helps physical QSRs solve more problems far bigger than checkout problems – like cost of labor and margin problems — by enabling mobile order ahead via their app.

Why Walmart Pay recognized that the power of their physical store mobile checkout was to take every single walmart.com customer – the 22 million each month who shop in their stores — and make them capable of using those accounts to shop in the physical store.

And what every single online checkout mark with a critical mass of customers can do, too.

That’s, of course, just the beginning.

Retailers have to be open for business for the consumers with mobile devices all over the world searching for places to spend their money. Being able to accommodate those shoppers means presenting the payments methods that those consumers want to use, including the buy buttons that make it efficient to quickly pay and be on their way. And checkout pages that denominate the basket in the currency of the shopper. And acquiring relationships that can fall over to an acquiring bank that is better situated to authorize the transaction.

Basically paying attention to all of the payments things – domestic and cross- border — that contribute to checkout abandonment and the 44 percent sales leakage that introducing friction online pre- and post-checkout delivers.


So can this marriage of online retailers and consumers on mobile devices be saved?


And happily, for retailers, there are payments innovators with robust platforms that can help them maximize the opportunity for checkout conversion.  Whether a retailer is purely online or a mix of clicks and bricks, it’s simply not the case that retailers have to go it alone or struggle to figure all this out alone.

But, given what we are measuring with CCI quarter after quarter, retailers better hop to. Solving the online checkout via mobile device first will make the shift to mobile checkout in-store a whole lot more efficient – and happen a whole lot faster than we’ve seen to date. That doesn’t mean simply mobile-optimizing a friction-filled merchant website. Or just addressing mobile checkout in-store, or even arguing over the cost of payments acceptance. After all, the fastest way to zero interchange, is zero sales. And judging by our numbers, many online retailers are well on their way there, probably without even knowing it.


How Payments Can Help Retail From Tanking | PYMNTS.com. 2016. How Payments Can Help Retail From Tanking | PYMNTS.com. [ONLINE] Available at: http://www.pymnts.com/news/payment-methods/2016/how-payments-will-save-retail/. [Accessed 16 March 2016].


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Why consumers get a raw deal from internet banking

Around the world, and across different industries, the internet has cut the cost of doing business.

On everything from music to microwaves, and taxis to train tickets.

Consumers save money by doing their transactions on a computer or mobile phone.

But not when it comes to banking.

Customers of UK banks who use the internet pay just as much for overdrafts and fees as everyone else.

These low-maintenance customers rarely need to call their bank, let alone visit the local branch. From the bank’s point of view, they are cheap to look after.

Yet they get no price reductions.

On the face of it, digital customers are getting a raw deal.


Lloyds – the UK’s biggest retail banking group – boasts that is has 10 million customers who access its services via the internet.

In effect, those 10 million are paying for the other 12 million customers who still want a premium and personalised service; namely the ability to go in to a centrally-heated, business-rate paying, well-decorated and well-staffed High Street branch, to speak to a human being.

“If I’m just using online, and never go into a branch, or never ring a call-centre, I would expect to get a better price, because otherwise I am subsidising those people who go into a branch,” says Kevin Mountford, head of banking at MoneySupermarket.

Lloyds Bank branch

No bank will say how much its branch network really costs them. But Lloyds has no fewer than 1,300 such branches in England and Wales alone. And Royal Bank of Scotland (RBS) spent £400m last year on refurbishments.

Either way, transactions on the internet cost banks a tiny fraction of those in-branch, or compared to the cost of processing a cheque.

“As a customer, if I am seeing that my behaviour brings down the operational cost, what’s in it for me?” says Mr Mountford.

“I would expect something back. But unfortunately it doesn’t happen.”


None of the big High Street banks offer their customers separate internet banking directly. However HSBC and The Co-operative Bank do so under separate brands.

One of them is Smile, the first full internet bank to be set up, in 1999, and owned by the Co-op.

Smile customers borrowing £500 for a month benefit significantly. The cost is just £7.34, as opposed to £17.40 with the Co-op.

The other is First Direct, which – as a telephone and internet bank only – has much lower running costs than its parent brand, HSBC.

Yet First Direct charges £83.05 to fund a £500 overdraft for a month, only marginally cheaper than HSBC’s £87.52.

Are internet banks cheaper?
Bank Cost of £500 overdraft for 30 days Cost of £1,000 overdraft for 60 days
Co-operative Bank £17.40 £48.25
Smile (owned by Co-op) £7.34 £48.25
HSBC £87.52 £110.06
First Direct (owned by HSBC) £83.05 £98.41

Source: HSBC/ Co-op

Mark Mullen, the former chief executive of First Direct – and now boss of Atom Bank – is not impressed.

“I think it is astonishing that you can have banks with very different cost bases, very different sizes of banks, and very different histories of technology, yet somehow miraculously they price just about the same.”

Others might wonder why, if Smile charges £7.34 for an overdraft, and HSBC charges £87.52 for exactly the same thing, more customers aren’t switching; or why the self-evident benefits of internet banking aren’t available more widely.

The banks concerned argue that customers are unlikely to be charged the amounts listed above, as they would be advised to take out a personal loan instead of the more expensive overdraft option.

different generations

Social responsibility

In any case, the mainstream banks believe consumers should not be getting lower prices for banking online.

They are acutely aware that differential pricing would make life more expensive for older and vulnerable customers, who rely on a branch network, and often still use cheques.

James Daley, the managing director of Fairer Finance, and a former campaigner with Which? believes that banks have a social responsibility to provide an equal service for everybody.

“You start telling pensioners that they’re going to have to pay twice as much for their banking services because they aren’t comfortable with the internet – I don’t think that would be the right solution.

“I wouldn’t want to advocate a world where people who bank predominantly online end up with significantly better deals than those customers who have to use branches.”

‘Lump it’

So are online customers going to have to continue tolerating paying over the odds for banking?

The answer to that could depend on the launch of Atom, the UK’s first truly internet-only bank, sometime before Easter.

Built from scratch, with just 150 staff at its Durham headquarters, Atom will only offer access via the internet or an app. No branches, no call centres.

As a result of its low cost base, it is promising cheaper prices.

“We would expect to be more competitive when it comes to some – not all – of our charges, and some of our costs,” says Mark Mullen.

For example, customers will not be forced to pay both an interest charge and a fee for an overdraft.

And there will be no distinction between an authorised and an unauthorised overdraft. “That’s just nonsense”, says Mr Mullen.

But even if Atom does offer its users a significantly better deal, the rest of the industry may not feel obliged to follow suit. In this market, competition does not work as it should.

So without a significant shift in banks’ attitudes, digital customers may continue to argue they’re not getting a good deal.

But they may just have to lump it.