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PayPal’s Schulman Not A Bitcoin Fan

Digital payment company PayPal is not betting on bitcoin as of now. In an interview with TheStreet.com, PayPal chief executive officer Dan Schulman said that while PayPal is focused on innovating in the payment market, it’s not focused specifically on the digital currency.

“I think right now, and we’re seeing this maybe more than ever, the volatility of the cryptocurrency makes it actually unsuitable to be a real currency that retailers can accept,” Schulman said in the interview. “[That’s] because retailers have very narrow margins, and when you have a bitcoin bouncing up and down by 15 percent over a couple weeks period, that can be the difference between profits and losing money on every sale.”

While Schulman is skeptical about bitcoin, he did says blockchain technology is a “real breakthrough” for any technologies that are founded on distributed trust. PayPal has a lot of room to innovate with blockchain technology.

“I think you need to separate out the bitcoin or cryptocurrencies as currencies and the underlying protocol called blockchain,” he said.

The executive also noted that blockchain isn’t being viewed as a competition to PayPal or to other financial services firms, but rather as a technology that enabled innovation to be created on top of it.

Schulman’s comments come at a time when bitcoin is garnering a lot of attention on the part of investors, something that has sent its value skyrocketing. The cryptocurrency began 2017 at approximately $1,000 per coin and was recently valued at $14,800 per coin.

The fact that the virtual currency is unregulated and extremely volatile has led regulators around the globe to warn about the risks associated with investing in bitcoin. China and South Korea have banned bitcoin exchanges and initial coin offerings (ICOs) altogether. Meanwhile, JPMorgan Chase chief executive Jamie Dimon called bitcoin a “fraud” last year and said he would fire any trader who traded in it.

Source: (Pymnts, 2018)

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SECURITY & FRAUD Consumers Want Biometrics – How Will Payments Respond?

With the holiday shopping season behind us, most shoppers can probably say with confidence that the worst part of the whole experience was trying to remember passwords for the eCommerce sites they shopped.

It’s not just the holiday season, either.

recent study by Visa showed that, unsurprisingly, consumers are ready to say goodbye and good riddance to passwords, both because of the friction they create when trying to remember them – and the inevitable stutter step that the “forgot password” prompt creates – and because in the aftermath of the Equifax breach, the public has never been more conscious of how far passwords fall short in preventing fraud and keeping their data secure.

“Everyone knows they have to move away from knowledge-based authentication,” said Mark Nelsen, Visa’s SVP of risk products and business intelligence. “It’s not sustainable.”

However, despite consumer and issuer enthusiasm for more secure authentication technology, industry movement around what consumers say they want instead – biometric authentication – has been slower to get off the ground than everyone would like. A lack of understanding of how to integrate and use this new technology within their financial institutions – and then what it will take in terms of cost and manpower to implement it – may be to blame, Nelsen said.

In a recent interview with Karen Webster, Nelsen explained where he’s starting to see momentum building – and how he views Visa’s role in helping issuers accelerate the journey to deploying a technology that all players across the payments ecosystem, especially consumers, are ready to embrace.

Getting Comfortable With Biometrics

Nelsen acknowledged that issuers and merchants have no higher priority than keeping consumer account credentials safe and in securing the transactions in which they are used. But knowing where to start, in the face of so many options for securing customer account data, can be complicated. So too, Nelsen said, is knowing how to align point fraud solutions at an issuer who now sees the value of taking a holistic – and enterprise-grade – approach to delivering a great consumer experience across all touchpoints with the bank: the retail bank, online and mobile channels, and payments.

As attractive as the prospect of having a single, enterprise-scale authentication platform can seem to an issuer, Nelsen said that it also becomes a little bit like boiling the ocean: “It’s a good long-term vision, but hard to get off the ground in practice.”

It was one of the big drivers, Nelsen said, behind the development of Visa ID Intelligence. Nelsen said that ID Intelligence is an ecosystem of authentication solutions to which issuers connect via a single API. Not only does ID Intelligence make a portfolio of vetted solution providers available to issuers, Nelsen said, it streamlines the integration of those solutions within the issuer’s environment. Solution providers assume the burden of integrating with Visa’s ID Intelligence API, enabling issuers to do a single integration. That, Nelsen said, makes the notion of a holistic and enterprise-grade authentication solution across all issuer touchpoints a little less daunting.

And more suitable to getting pilots off the ground, so that issuers can start to experiment with how to use biometrics in a way that adds value for their customers and their institutions.

Greasing The Gears

According to Nelsen, one of the areas in which he’s seen issuers express growing interest in getting biometric authentication pilots off the ground is account origination.

When you look at the stats, it’s not hard to see why.

Over the last four years, Nelsen said there’s been an enormous increase in credit applications – a healthy portion of which are from fraudsters who’ve stolen legitimate credentials and have attempted to use them to open new accounts. Banks now recognize that the best way to combat new account fraud is to put knowledge-based authentication in their rearview mirror, in favor of using tools like identity documents and device data to help determine whether an identity is legitimate, stolen or synthetic.

Value Proposition

Three years ago, said Nelsen, the payments world wasn’t ready for biometric authentication. Now, consumers are used to – and comfortable with – such biometric authentication as Touch ID, and even Selfie Pay – and  are impatiently waiting for the payments ecosystem to provide an authentication solution that makes passwords a relic of payments authentication history.

It’s a nudge that Nelsen said has become a call to action for issuers to do more to protect consumer data.

“Authentication and protecting consumer data is at the level it needs to be across the entire bank,” said Nelsen.

Like most things in payments, change on this scale can’t and won’t happen overnight, but the wheels of progress are starting to turn. Nelson said that’s why Visa felt it was so important to make it easy for issuers and merchants to quickly connect their systems to proven authentication technologies using Visa ID Intelligence. It’s one way, he said, to give them a running head start on keeping customer data secure, while simplifying the process of giving consumers the authentication methods they want.

 

Source: (Pymnts, 2018)

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BITCOIN A Cryptocurrency With “No Purpose” Has Raised $700M

According to The Wall Street Journal, this is the largest initial coin offering to date, with block.one’s market value now at around $4.5 billion. The sale of the token, called EOS, has benefited from a boom in ICOs – overall, 165 firms have raised more than $4 billion in 2017 through coin offerings.

Launched in late 2016 and registered in the Cayman Islands, block.one is a software company that writes code for its main project: a bitcoin-like operating platform that hosts any variety of applications.

EOS is the idea of Brendan Blumer, a 31-year-old internet entrepreneur in Hong Kong, and programmer Dan Larimer. Brock Pierce, a prominent bitcoin investor, is a minority partner and adviser.

Block.one is planning a full rollout of the software next June, which Pierce recently predicted would be “like Windows launching, but much bigger.”

But unlike Microsoft, block.one plans to only write the initial code for EOS and then release it publicly. Instead of building or developing the platform itself, the task will be left to unrelated third parties. As a result, the EOS tokens have no relationship to the software. In fact, a purchase agreement that investors must sign states the tokens “do not have any rights, uses, purpose, attributes, functionalities or features.”

Despite the reveal that the tokens have no real purpose, investors have been eagerly bidding for them. Investors in many countries, excluding the U.S. and China, can participate in a daily auction where block.one sells two million new tokens to investors.

Mosala Sehloho, a 32-year-old media producer in Johannesburg, said he understands the EOS tokens made no contractual promises, but he thinks the $10,000 worth of tokens he bought will rise in value. “I’d buy more” if the price dropped enough, he said. “This will be the technology that will be the best of its kind.”

And Matthew Roszak, one of block.one’s early investors, isn’t worried about the tokens. “I don’t think it’s fair reading into that language too tightly,” he said. Given the “regulatory environment is as clear as mud,” he said block.one needed to write something to provide the broadest protection possible.

Block.one’s EOS deal is now about three times as large as the next biggest coin offering. It plans to keep raising money until next June, and is on pace to raise “well north of” $1 billion, according to Pierce.

The company will use that revenue to invest in companies that could develop the EOS code into products.

 

Source: (Pymnts, 2017)

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Payments Testing One, Two, Three

Modern consumers have high expectations for technology. If something doesn’t work perfectly, they’re quick to grow frustrated and abandon it as junk.

“Our generation is a little bit spoiled,” said Bart van Hoek, head of Innovations with UL Transaction Security — and he said that is all the more true with payments tech.

Imagine going out for breakfast only to find that the point-of-sale (POS) terminal isn’t working. Without it, how will you pay for your meal? Maybe you happen to be carrying cash that day, but even if you’re able to hand over a crisp $20 bill to cover the cost, the experience has certainly created friction.

Online, there’s no cash to fall back on. If the payment doesn’t work the first time, said van Hoek, that sale is as good as lost. Nobody wants to see a box that says the website is experiencing technical difficulties; please try again later. The customer likely won’t even remember to try again later, and if he does, he may not return to the same site. Most shoppers just give up on the faulty site and head to a competitor to complete the purchase instead.

Perfection, however, is not easy to achieve in any singular product. In payments, there are hundreds of players involved in making every single transaction work smoothly, from acquirers and banks to regulators setting standards that must be met to, of course, the payments processor.

The point-of-sale terminal at Walgreens or Kroger must work with a credit card from Chase, a mobile payment, a foreign debit card and more. How can the company that produces the terminal ever be sure it can do all that?

Trial and error, said van Hoek. But not with real consumers or real transactions. That is where payments testing comes in. In a recent interview, van Hoek told PYMNTS how this quality assurance process works for payment technology companies, how that’s changed over the years and why this stage of product development is so important.

 

An Investment in Reputation

User experience is more than a buzzword, van Hoek said. Every tap on a mobile device, every imaginable payment method — all of it is about creating the most seamless and smooth user experience possible, devoid of any bugs or errors.

Testing lets the developer see how the product will perform for every customer in every situation and shows whether the software is logical and intuitive or needs to be smoothed over.

When developers invest in payments testing, they aren’t just ensuring that their product does what it’s supposed to do, said van Hoek. They’re investing in their reputation. Building a good reputation is hard. Destroying it is easy — all it takes is one bad product. Earning back consumers’ trust is more difficult the second time around.

With the speed of innovation today, it may feel like a race to get products to market, but the last thing any developer wants is to go to market only to watch the product fall apart in the real world. Between the expense of fixing it and the business lost due to damaged reputation, “Those are costs you don’t want to bear,” said van Hoek.

 

Automate

To achieve the highest level of product quality, the product must be subjected to a high level of testing, and that requires a lot of repetitive actions and test cases. The number of repetitive actions will only increase as new payment methods and infrastructure are introduced and must also be tested.

That’s why payments testing is often seen as a chore. But, said van Hoek, it doesn’t have to be. Today, there are tools on the market to help manage some of those repetitive tasks, freeing up human testers from pressing buttons all day to make better use of their time.

Van Hoek said that manual testing can be extremely labor-intensive and time-consuming in some cases. But that doesn’t necessarily mean artificial intelligence (AI) has to be a part of the answer, he said. It simply means that any pieces of the process that can be automated should be.

Which pieces? That’s a decision that only the company can make. Van Hoek said that, due to the complexity of some test cases, automation is not always cost-efficient, either. Individual organizations must decide what is the best combination of manual and automated testing to optimize their processes.

At UL Transaction Security, customers can submit their hardware to undergo a barrage of different uses and scenarios in UL’s test labs, and van Hoek said the company is always looking to automate even more of the process as new technologies become available. The key client problem that UL helps to address is reducing time to market by eliminating the complexity that companies are facing with new technologies and regulations flooding the market.

 

Divide and Conquer

In the old days, said van Hoek, testing used to be done on final products at the end of the development cycle. But today, payments testers, like UL, subject the product to smaller tests along the way. By breaking the project into manageable chunks, UL is able to be more thorough in its testing and can identify problems before the rest of the product gets built around them.

Van Hoek said that can save a lot of time and money throughout the development process, as it enables development teams to address issues as they go along rather than having to tear down and rebuild a final product that doesn’t work right.

The thinking around testing must change, he argued. It’s more about quality assurance, though testing is just one piece of a larger quality assurance process that includes identifying, anticipating, managing and resolving issues across the product, while testing focuses specifically on finding and eliminating bugs.

As development processes have become more agile, van Hoek said that testing processes throughout the lifecycle must also increase their agility.

 

Growth Ahead

Again, the number of payment methods out there — and the infrastructure that goes with each one — is only going to increase. There are many players trying to disrupt the industry, but people aren’t abandoning cash and credit cards to pay with their smartphones; it’s not “either/or” but “both/and.”

Cryptocurrencies are another growing method in the payments industry, and the price of bitcoin (currently around $11,000) reveals just how popular it is among its fans. Eventually, at least some consumers are going to want to spend that digital currency in real-world brick-and-mortar stores.

Money is money, and merchants want to be ready to accept whatever form of it customers want to hand them. Doing that will require new technology and new components, or new use cases for old components, van Hoek explained — all of which will need to be tested and validated before rolling out to merchants and the public — for their own good and for the good of the brand.

Source: (Pymnts, 2017)

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Google Predicts AI Will Be An Issue For Regulators

“It’s going to be a big issue,” Geoffrey Hinton said at a Reuters Newsmaker event in Toronto on Monday (Dec. 4).

Hinton should know: He led a group of scientists at the University of Toronto who developed some of the key algorithms that neural networks (programs that mimic the way humans learn to perform complex tasks) use to crunch massive quantities of data and train themselves to identify patterns to mimic the way the human brain would perform tasks, such as driving a car, analyzing potential financial trades or using medical images to diagnose diseases.

Those advances enabled Google to add voice recognition to Android mobile devices, and researchers also used it to cut error rates in optical recognition compared with earlier technology, said the Google executive.

And since neural networks teach themselves to perform complex operations, it is impossible for their developers to tell government regulators exactly how those systems work.

“All you need is lots and lots of data and lots of information about what the right answer is, and you’ll be able to train a big neural net to do what you want,” he said.

Hinton believes that deep learning is close to revolutionizing the way certain diseases are treated, including making more accurate diagnoses. In fact, he expects mobile apps to be created that use neural networks to examine images of skin lesions, advising users when to see a doctor for a possible biopsy.

“We’d like to make medicine better,” Hinton said.

 

Source: (Pymnts, 2017)

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Paytm Says On Track To Be World’s Biggest Digital Bank

In an interview with Bloomberg published Tuesday (Nov. 28), Paytm founder Vijay Shekhar Sharma said the company is aiming to have 500 million bank accounts.

“We are unveiling our money market fund, launching our debit card and we’ll have the capabilities to allow enterprises to open business accounts,” Sharma said. “Digital payments was our entry point, we want to become a vertically-integrated financial services company.”

While Paytm Payments Bank can accept deposits and remittances, it cannot lend money to its customers. The bank will be the country’s first mobile-only bank that does not charge fees for online transactions and will not require a minimum balance. The bank is majority owned by Sharma, but telecommunications firm One97 Communications has a 49 percent stake. According to Sharma, the company can get around regulatory obstacles to offer lending by working in partnership with One97, which will launch a credit card and offer monthly installment-based loans.

“We will launch share trading and insurance products very soon,” he added. “We want to become an nternet-agei financial services company.”

Sharma explained his company is leveling the playfield. The banking system has traditionally been skewed heavily toward those with money, while the less wealthy people of India have had a tough time paying their bills or transferring money to family members.

“Buying insurance and investing through our wealth management products will become widely accessible through the payments bank,” he said.

Paytm Payments Bank is an offshoot of digital money service Paytm, an electronic payment firm which recently obtained a permit to create a payments bank and provide financial services to those underserved by the Indian financial services industry.

 

Source: (Pymnts, 2017)

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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.

Scams 

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.

Phishing/smishing 

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.

Hacking

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].