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America Catching On With Contactless

To many, the global superpower that is the United States can seem like the trendsetter that the rest of the world follows. In terms of how they pay for things, however, it is pretty far behind Europe and Asia. A study available here by A.T. Kearney last year showed that only 3% of US cards are contactless, compared to the UK’s 64% and South Korea’s 96%.

 

Why America is lagging behind

The faster alternative to chip and PIN, that only requires tapping it on a checkout terminal for the transaction, haven’t taken over the US mainly due to the size of the market. It is far easier to make changes to a comparatively small country like the UK compared to one of the world’s largest countries that has a far vaster amount of different retail stores and banks. The method of introduction also played a key part in this difference. Almost five years ago, when the UK first introduced contactless cards to the public, it was done through the popular travel option of public transport. Three years later, the number of contactless cards in the UK had already reached 119 million, accounting for 78% of debit cards and 62% of credit cards in use based on UK Finance statistics.

 

By contrast, the US don’t even use a regular credit card for public transport most of the time. In fact, chip and PIN could even be seen as a work in progress in America with how many retailers are just getting used to it, so contactless is clearly not held in high regards over the pond. Despite this, chip and PIN is growing more accepted over time, with retailers who don’t install chip technology to prevent fraud being held accountable as of 2015.

 

This has a silver lining, however, as it’ll make the transition towards the contactless system far easier for America. Most of the new card readers installed after the 2015 changes already have contactless technology built into them, giving Americans the option if they don’t trust it.

Last year, J.P. Morgan expressed desires to provide millions of contactless cards to customers and by the end of this year, Visa hopes the number of contactless cards in the US to have reached 100 million.

 

Whilst that seems like an overly ambitious goal for some, it’s what many banks and card issuers will be striving toward, as A.T. Kearney has already estimated banks could make a $2.4 billion profit from card earnings across the next five years by introducing contactless cards as a widespread system.

Research has also shown most contactless card payments will be used for mundane things such as grocery shopping, fast-food and clinic payments, as many people will want to pay for these generic tasks quickly and conveniently. That’s the way it is here due to our £30 limit on contactless payments to eliminate fraud- and the US may implement a similar policy.

 

Credit Cards in the US

Two years ago, the payments from all types of cards in the US (other than contactless), amounted to $6.6 trillion according to the Federal Reserve. Whilst this may seem like a giant amount, analysts believe it could be far greater if payment options such as contactless became popular in the country’s market.

 

A big bite for Apple

Beyond the banks and card issuers, there’s another party benefiting from the increase of contactless cards coming to America; the tech giant Apple. The payment service ApplePay acts as a contactless payment option for iPhone, Apple Watch, iPad, and Mac, and they’d reap the rewards of a contactless-loving USA.

 

Why Americans are scared of contactless

No option is ever perfect, as many worry about the security of contactless options. Despite evidence from financial experts presenting it as every bit as secure as chip and PIN, the public’s natural scepticism of new ideas have caused many to worry about the safety of this option.

Contrary to this belief, however, contactless cards have far less chance of counterfeit problems due to the chips placed into them, making them an even safer option. On top of this, creating a maximum spend on contactless would stop people from stealing a card and emptying a bank account quickly.

Despite the fear some have of contactless cards in America, they are on the rise now and will only continue to grow. The US has started moving towards the cashless society the rest of the world is nearing, and contactless will be the figurehead of that.

 

Need a card machine for contactless payments?

CheaperPay can help. Visit http://cheaperpay.me/request-a-quote/ to get a free quote!

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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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Selfies And Contactless Rings: New Ways To Pay

The way we pay for goods is changing. Get ready for Selfie Pay, contactless payment rings and iris scanners.

What if you could use a selfie to pay for things? How about the rhythm of your heart?

New technologies that could change the way we buy things have been shown off at the Gherkin as part of London Tech Week.

Selfie Pay takes everyone’s favourite vanity exercise and makes it useful: allowing you to authorise a transaction with your face.

The app requires you to blink so it knows you’re really there and someone isn’t using a photo of you to fraudulently authorise a transaction.

The idea is to get rid of the need for passwords, instead using biometrics: unique data based on individual characteristics like your face, eyes or fingerprint.

“If you think about passwords, they’re a standalone measure,” said Jane Khodos from MasterCard. “They’re easily lost, stolen or forgotten.

“Here you’re authenticating with what you have: your phone and also who you are.”

You could use this kind of tech to buy goods, pay for bus or train fares, or to log into your computer.

We also saw more of Nymi: a wearable wristband that can identify you by the unique rhythm of your heart, found in your electrocardiogram (ECG).

Your heart rhythm is not to be confused with your heartbeat, so the band would still work if you had just run for a bus, for example.

“We’re also very concerned about the security issues, it’s something that’s top of the mind for us,” said Amy Neal from MasterCard Labs, the company’s research and development division.

It is not just biometrics that could change payments.

Kerv is said to be the world’s first contactless payment ring: a simple piece of technology that essentially means you are wearing a contactless payment card.

Payment tech inventors emphasise that there is no need to choose just one of these products.

“You can start to bundle biometric authentication together,” says Ms Neal. “So you might have Selfie Pay, but also the electrocardiagram for additional security.

“We hear stories like people are concerned that they may have an identical twin, so what does that mean if you’re doing selfie pay?

“For us this is ensuring that we have a full suite of biometrics available.”

The Kerv ring is due out in July, Selfie Pay comes out in the UK this year and the Nymi band and iris scanner are both still in development.

 


Team, T.S. (2016) Selfies and Contactless rings: New ways to pay. Available at: http://news.sky.com/story/selfies-and-contactless-rings-new-ways-to-pay-10323052 (Accessed: 15 July 2016).

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Visa: Most People Back Biometric Payments

Majority of people want to use biometrics when making payments, with fingerprints the favoured option.

New research from Visa has revealed that a clear majority of people are in favour of combining biometrics with their payment process.

The Visa Biometric Payments study surveyed over 14,000 consumers across seven European markets. And it comes at a time when the use of biometric technology is being actively debated as a way to improve transaction security.

Safer Transactions

Biometric technology of course has been around for many years now, but thanks to some high-profile launches of late such as Apple’s TouchID system and Windows Hello, the technology is being used by more and more people.

And the Visa survey revealed that two thirds (73 percent) of people believe that two-factor authentication, where a form of biometrics is used in conjunction with a payment device (i.e. a mobile device or card reader), would make for a more secure payment authentication.

Half of people (51 percent) believe that biometrics would make payments faster and easier, and 68 percent want to use biometrics as a method of payment authentication. The survey revealed that biometrics would mostly help online retailers, as nearly a third (31 percent) of people have at some stage abandoned a browser-based purchase because of the payment security process.

And it seems that 33 percent of people appreciate the fact that biometric authentication means their details would be safe even if their device was lost or stolen.

“Biometric identification and verification has created a great deal of excitement in the payments space because it offers an opportunity to streamline and improve the customer experience,” said Jonathan Vaux, Executive Director of Innovation Partnerships. “Our research shows that biometrics is increasingly recognised as a trusted form of authentication as people become more familiar with using these capabilities on their devices.”

“Biometrics work best when linked to other factors, such as the device, geolocation technologies or with an additional authentication method,” said Vaux. “That’s why we believe that it’s important to take a holistic approach that considers a wide range of enabling technologies that contribute to a better end-to-end experience, from provisioning a card to making a purchase to checking your balance.”

What type?

Fingerprint recognition is viewed as the most favourable secure option by 81 percent of respondents. Iris scanning is backed by 76 percent of people.

But most people are comfortable with fingerprints, as 53 percent of people expressed a preference for fingerprint over other forms of biometric authentication when using it for payment. The other biometric choices such as voice or facial recognition as a payment method are much less popular.

The survey also found that 48 percent of respondents want to use biometric authentication for payments when on public transport. 47 percent want to use biometric authentication when paying at a bar or restaurant, and 46 percent want to use it to purchase goods and services on the high street at a coffee shop or fast food outlet for example. 40 percent want to use it when shopping online and 39 percent when downloading content.

Biometric Uptake

Biometric technology is seeing increasing use of late, not just because of its incorporation into mobile and computing devices.

Earlier this year HSBC launched new biometric logins for its customers. Barclays also allows some of its corporate clients and Wealth customers to log in to their accounts using a biometric reader, and also has voice recognition software, enabled for certain users, with RBS and NatWest also offering fingerprint technology to some customers.

Previous research has found that younger British consumers are the most comfortable with using biometric data to verify their accounts.

 

 


Jowitt, T. (2016) Visa: Most people back Biometric payments. Available at: http://www.techweekeurope.co.uk/security/authentification/people-biometric-payments-195063 (Accessed: 15 July 2016).

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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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Contactless payments in vogue for Barclaycard and Topshop accessories

News: Card payments on the increase as mobile and contactless take off.

Barclaycard and Topshop have teamed up on a range of contactless payment accessories.

The NFC-enabled bracelets, phone cases and keychains come as part of the bPay collection that was launched in 2014.

Users that have a UK registered Visa or MasterCard, debit or credit card will be able to add funds to their digital wallet using a mobile app, online through the bPay web site, or set up an automatic top-up, which will add funds to their balance one it falls below a pre-set level.

The accessories contain a bPay chip by Barclaycard that links to the digital wallet.

Britain is clearly a big fan of contactless payments and paying by card instead of cash, with rising online and contactless transactions increasing spending on debit and credit cards by 10% to £660 billion in 2015.

Online card spending increased by 20% to £210 billion from £175bn in 2014, this means that almost a third of plastic spending takes place on the internet. Paying by mobile is also on the increase with half of online spending taking place on tablets and smartphones, up from 37% in 2014, according to figures from the UK Cards Association show.

Contactless payments are also on the increase, partly thanks to the increase in the payment limit to £30 and nearly half of all cards issues now having contactless capabilities. In 2015 £7.75bn was spent via tap and pay, compared to £2.32bn in 2014.

Graham Peacop, CEO, UK Cards Association, said: “With the amount spent using contactless cards almost trebling between 2014 and 2015 and the payment limit increasing to £30, it is clear 2015 was the year contactless went mainstream.

“Whether buying a sandwich on the go, or paying for a round of drinks or a tube journey, contactless has become the default way people choose to pay for every day shopping.”

 


Nunns, C.J. (2016) Contactless payments in vogue for Barclaycard and Topshop accessories. Available at: http://www.cbronline.com/news/internet-of-things/consumer/contactless-payments-in-vogue-for-barclaycard-and-topshop-accessories-4919256 (Accessed: 8 July 2016).

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Balance transfer war hots up as Tesco Bank launches fee-free 24-month deal

Tesco Bank has launched a new 24-month fee-free 0% balance transfer card, matching the market-leading deal launched by Halifax earlier this week.

As with the Halifax deal, the new Tesco ‘No Balance Transfer Card’ charges no interest on debts transferred from other cards for up to two years, and there’s no balance transfer fee either.

However, people looking to shift a credit card debt might find the Tesco Bank deal the more attractive of the two, as all successful applicants will receive the full two-year interest free period.

Halifax will only offer the full 24-month 0% period to 51% of people who qualify for the card. Other successful applicants will only get a 13-month interest-free period.

The Tesco No Balance Transfer Card charges 18.9% APR once the 0% period is up, but while “most” successful applicants will receive this rate, some borrowers will be charged 20.9% APR or 23.9% APR, subject to their credit history.

Halifax’s two-year fee-free balance transfer card also charges 18.9% representative APR, though borrowers that don’t qualify for the advertised rate will also be charged higher interest rates, at 21.9% or 25.9% APR.

While this is the strongest deal, if you can repay your card debt over two years, anyone looking to pay down a larger credit card debt might want to consider a longer interest-free period. Several lenders offer interest-free balance transfers for up to 40 months.

 


Moneywise (2013) Balance transfer war hots up as Tesco bank launches fee-free 24-month deal. Available at: http://moneywise.co.uk/news/2016-07-07/balance-transfer-war-hots-tesco-bank-launches-fee-free-24-month-deal (Accessed: 8 July 2016).

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EU ban on credit card fees backfires – you’ll still pay 2.5pc to spend

Consumers are still having to pay high fees when using credit cards despite new EU regulations that have capped transaction costs.

At the same time, the rules have resulted in millions of cardholders losing popular perks such as cashback.

As of December 2015, the EU ruled that the “interchange fee” – paid in the first instance by the shop – on credit and debit cards could be no more than 0.3pc and 0.2pc repectively.

Up to then the typical fee was 0.8pc, with shops passing on the cost to customers either through higher prices or explicit credit card usage fees.

The intention of the EU’s new rules was to lower this cost and with the hope that consumers would benefit from lower prices and fees.

But many readers have contacted Telegraph Money confused as to why they continue to pay far more than 0.3pc when using a credit card. Airlines such as Ryanair and Easyjet still add a 2pc charge, for example, and some cinemas charge over 5pc –in the form of fixed-sum “card handling fees”.

The regulations make clear that shops and other sellers of services “must not charge consumers, in respect of a given means of payment, fees that exceed the costs borne by the trader for the use of that means.”

In other words, these fees shouldn’t be used to boost retailers’ profits.

But with some firms charging nothing, and others 2pc or more, that is precisely what Your Moneyreaders, among others, believe is happening.

James Daley, managing director of consumer campaign group Fairer Finance, said: “There doesn’t seem to be anyone policing credit card charges. Nobody is stepping up to these companies and asking them why they apply a 3pc surcharge when others process cards transactions for free.”

According to the Department for Innovation and Skills, unfair surcharges are only looked into when there is a complaint. The first point of call is consumers’ local trading standards office.

Complaints are rare, partly because the sums are often small – but also because the companies that levy the charges are quick to justify them.

The industries that charge

Richard Koch, head of policy at trade body, the UK Cards Association, said the worst offenders are airlines, cinemas and travel agents.

When paying for a flight, customers could expect to pay a 2pc credit card charge with Ryanair. EasyJet applies the same 2pc charge plus a £13 “administration fee” which it adds to all bookings. Flybe and Monarch charge 3pc.

Ryanair told Telegraph Money that the charge reflected the cost of processing credit card payments, including bank fees.

Easyjet took the same line. A spokesman said: “The 2pc transaction fee applied to credit card payments covers all costs associated with processing the transaction of which the bank charge is just an element.

“Other associated costs have increased significantly, particularly in relation to card data security.”

Online travel agents apply charges too. Customers who book a trip through Travel Republic could expect a 1.99pc surcharge if paying by credit card and Thomson applies a 1.5pc fee.

Rail firms and cinemas also charge. Everyman Cinema adds 75p to every ticket booked online.

Even the Government charges taxpayers who pay with credit cards – although here at least theses fees appear to be falling.

Until recently, the government charged a 1.5pc fee for those who wanted to pay tax by credit card. As of April 1, it has been reduced to “better reflect the costs associated with different credit cards.”

When asked about the varying costs, an HMRC spokesman said: “We don’t make a penny from credit card charges. We are merely passing on what we are charged for processing a credit card payment.

“We have introduced and published separate rates to better reflect the costs associated with different credit cards.”

A surcharge is not applied when paying for driving licences and passports. However, the DVLA does add a £2.50 fee to vehicle tax payments by credit card which it says cover the costs of processing the payment.

A number of high-profile firms, such as Trailfinders, do not charge customers for using credit cards.

A Trailfinders spokesman said: “Unlike other travel companies, we don’t charge extra for the use of credit cards or unwanted hidden extras, nor do we charge a premium rate telephone number.”

Sainsbury’s and online marketplace Amazon also do not add on a surcharge.

Homeware retailer IKEA dropped its fee in 2010.

Cashback rewards cut

While the rules appear not to have stopped some firms from levying high card fees, they have had another distinctly negative impact. This is the dramatic decline in cashback and other cardholder perks.

Capital One, one of the biggest credit card providers, was the first to cut its cashback scheme.

It withdrew all of its reward cards in April 2015, saying the EU rules meant they were “no longer sustainable.

A month later, RBS and Natwest announced the end of the “YourPoints” scheme which gave customers one point per £1 spend.

War workers queuing for a midnight show at the cinema. circa 1940

A 75p “card handling fee” applied to your cinema ticket may not seem much – but it could be 5pc of your ticket

 

Tesco Bank* was another provider which slashed its rewards scheme. In November, it announced that customers would need to spend £8 outside of Tesco to earn one Clubcard point, instead of £4 previously.

At the time, a Tesco spokesman said: “As a result of changes in the credit card industry taking affect this year, the amount that card companies earn from businesses who accept credit cards is reducing.”

M&S Bank also cut rewards. Customers were told they would earn one point for every £5 spent from February 2016, instead of the usual £2.

Instead of reducing the cashback, some providers increased the annual credit card fee – Santander’s 123 credit card* went from £2 to £3 a month in January.

Santander suggested the EU commission ruling was part of the decision.

It added: “ The European commission ruling on interchange has significantly reduced the fees banks receive.”

European Commission competition spokesman, Yizhou Ren, said it was too early to judge whether costs borne by consumers would fall.

“It is quite possible that these reductions in interchange fees have not yet been passed on to merchants,” she said.

What to do if you think the surcharge is unfair

If you feel like your credit card costs is unjustified, the first thing to do is to complain to the retailer.

If this doesn’t work, you can complain to your local authority’s trading standards officers.

Another option is to try alternative dispute resolution where an independent party will look at your case to try and help you and the retailer to reach an agreement. According to Citizens Advice, most judges will expect you to try this before taking the matter to court.

 


Murray, A. (2016) EU ban on credit card fees backfires – you’ll still pay 2.5pc to spend. Available at: http://www.telegraph.co.uk/personal-banking/credit-cards/eu-ban-on-creditcard-fees-backfires–youll-still-pay25pc-to-spen/ (Accessed: 7 July 2016).

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OT Enables Contactless Payment with Swatch in Switzerland

OT (Oberthur Technologies), a leading global provider of embedded security software products and services, announces a key partnership with Swatch, the renowned Swiss watchmaker and one of the world’s most popular brands, to provide contactless payment to customers in Switzerland.

They will be able to pay with speed, security and convenience, just waving their stylish Swatch Bellamy watch close to on contactless terminals – a great way to shop and save time.

This Smart News Release features multimedia. View the full release here: http://www.businesswire.com/news/home/20160616005616/en/

As contactless POS terminals are now widespread in all kinds of locations (convenience stores, Quick Service Restaurants, vending machines, car parks, etc.), using such a wearable to pay becomes easy and really convenient for everyday purchases. Combining payment convenience with the style of a Swatch watch really enhances customers’ everyday experience.

OT’s FlyBuySE (Secure Element) is fully integrated within Swatch Bellamy watches and provides a high level of security while enabling seamless payments and transactions. OT’s latest portfolio covers a broad range of payment networks and applications (such as payment, security access, transport, etc) and can be embedded in many different types of wearables. With this partnership between Swatch and OT, Swatch Bellamy holders can perform fast contactless transactions with an innovative alternative to cash. Their watch remains as stylish as before, while embedding the latest payment technologies.

“At OT, we are delighted to work with such a renowned brand as Swatch to launch this innovative product. As contactless payment becomes widespread from an acceptance point of view, more end-users will be looking for such stylish wearables enabling them to pay in a quick, secure and convenient way” said Eric Duforest, Managing Director of the Financial Services Institutions business at OT.

Carlo Giordanetti, Creative Director, Swatch International, declared: “We are happy with the cooperation with the OT team in the Swatch Bellamy project. OT knows how to adapt its portfolio of products and solutions to the latest trends and it is the ideal partner to offer this innovative watch. We look forward to developing this relationship further, and to presenting Swatch Bellamy in more countries.”

“We are delighted to team up with OT and Swatch to provide a payment-enriched version of this emblematic Swiss time keeper to our customers. The Swatch Bellamy is an innovative and fashionable alternative to traditional payment cards. Due to the prepaid functionality, the funds can be easily loaded without any need of a bank account” said Alessandro Seralvo, Director Cornèrcard.

ABOUT OBERTHUR TECHNOLOGIES
OT is a world leader in embedded digital security that protects you when you connect, authenticate or pay.

OT is strategically positioned in high growth markets and offers embedded security software solutions for “end-point” devices as well as associated remote management solutions to a huge portfolio of international clients, including banks and financial institutions, mobile operators, authorities and governments, as well as manufacturers of connected objects and equipment.

OT employs over 6 500 employees worldwide, including almost 700 R&D people. With a global footprint of 4 regional secure manufacturing hubs and 39 secure service centers, OT’s international network serves clients in 169 countries. For more information: www.oberthur.com

 


(No Date) Available at: http://finance.yahoo.com/news/ot-enables-contactless-payment-swatch-114400627.html (Accessed: 4 July 2016).

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Forget your phone, Visa just put a ring on mobile payments

Anyone who has watched TV or an Apple or Google keynote event within the past year knows that paying for things with anything but your credit card is all the rage. Visa, not to be left out being a leader in all things money, is experimenting with a new device.

Meet the Visa payment ring. Set to launch at the 2016 Olympic Games in Rio, Brazil for the firm’s 45 athletes repping Team Visa, a prototype of the device was shown off at an event in New York City.

You’ve seen something – seemingly thinner and lighter, at that – like this before in the Kerv ring earlier this year. However, Visa does have a first to tout with its own payment ring: tokenization.

Ringing in payments for Rio

Using its Visa Token service, which replaces the attached card’s sensitive payment information with a unique digital identifier, the ring can be used to process payments without exposing any account details in the transaction. And, the process is stupid easy.

When an NFC-ready payment terminal is prepared to accept a card, just make a fist and gently “fist bump” the terminal. Your payment is accepted automatically from there, as if you had just swiped your card.

However, save for a secure microchip made by Gemalto and a tiny, NFC-enabled antenna, there’s nothing else inside this waterproof ring (to a depth of 50 meters) designed by McLear & Co. That means there’s no need to charge this device, as any payment terminal picks up the hard work once it reads Visa’s unique token from the ring’s otherwise dormant microchip.

All said, there are two catches when it comes to Visa’s payment ring. First, it’s a tied to a prepaid, contactless debit card (seen above) supplied by Visa. Athletes will have to load up their card – err, ring – with cash via an online portal before gently punching the nearest point of sale.

Second is that I was told several times by several Visa representatives that this is very much a test for Visa. (I was also told that the ring will be shaved down a bit before the big event.) Should things go well down in Rio, the firm will consider a wider release of the device.

Once the ring gets the Olympian seal of approval, perhaps we’ll see an official Visa Payment Ring tied straight to our debit cards. Honestly, I just want an excuse to coin the term “Punch Payments.”

 


Osborne, J. (2016) Forget your phone, visa just put a ring on mobile payments. Available at: http://www.techradar.com/news/wearables/forget-your-phone-visa-just-put-a-ring-on-mobile-payments-1322670 (Accessed: 1 July 2016).
In-text citations:

  • (Osborne, 2016)
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How will the homeless survive in a cashless society?

In less than ten years time it is estimated that only one in four payments will made by cash.

Although it might feel to some like we have reached that point already, it will mark a dramatic shift from the current status quo when around half of all payments are made by notes or coins.

But while the shift to a cash free existence might feel like an inevitability, there are people on the fringes of society who are so reliant on it, that a life without it almost seems like an impossibility.

Yet, there is a growing awareness amongst the homeless and those that support them that action needs to be taken now so they are ready when the time comes.

For those with no fixed abode there are a huge array of different hurdles that need to be jumped in order for them live a life not wholly reliant on cash.

LONDON, ENGLAND - JANUARY 27: Two homeless men sleep near Trafalgar Square on January 27, 2016 in London, England. A group of 21 charities, including Crisis, St Mungos and Centrepoint, have called for extra effort by the next London Mayor to help end the growing problem of homelessness on Londons streets. (Photo by Dan Kitwood/Getty Images)

Only 1 in 4 payments will involve cash by 2025 (Picture: Dan Kitwood/Getty Images)

Take setting up a bank account, for instance.

It seems tough enough when you have a permanent address, proof of other credit facilities and ID.

But when you don’t it becomes a whole lot harder.

And that is why charities like St Mungo’s and the Big Issue Foundation (the charitable arm of the Big Issue) are working hard to help as many people as possible gain access to the things we take for granted.

Around one in four of St Mungo’s clients dont have a bank account, many having only dealt with cash before.

(Picture: iZettle)

The Bis Issue is amongst those looking alternative payment methods (Picture: iZettle)

David Fisher, the charity’s executive director of services, said setting up bank accounts and other services, like phone contracts, can be difficult without a permanent address.

He added: ‘It’s important that people who may be homeless or vulnerable aren’t left behind when it comes to living in an ever evolving and innovative society.’

Paul McNamee, who is the editor of the Big Issue magazine, told metro.co.uk it is also working with its vendors to ensure they have the facilities they need.

‘We haven’t necessarily noticed a negative impact on our sales because of the move to cashless,’ he said.

‘But we know that’s going to come which is why this is something we are looking to get ahead of.’

He explained discussions are ongoing with banks to ensure people selling the Big Issue will be able to take both contactless and cash payments.

‘Because it’s essentially a cash environment our vendors work in, we’ve also had to consider how they will be able to cash up because they are leading lives that are pretty hand to mouth some of the time,’ he continued.

‘We are working with vendors to enable to them do those things. To help them get ID, whether that’s tracing back to help them get a National Insurance number, helping them getting ID or passports.’

(Picture: Simon Mott)

Simon Mott is the first Big issue vendor to take cashless payments in the country (Picture: Simon Mott)

The magazine has been trialling cashless methods of payment in a number of different locations across the country.

But there is one vendor, who pioneered the method off his own back and has been reaping the benefits ever since.

Simon Mott first invested in a chip and pin device through Swedish company iZettle a few years ago.

The 52-year-old, who sells the Big Issue outside South Kensington Tube station, spent £59 on the initial device but now takes around £500 a year in chip and pin, contactless and Apple Pay transactions.

‘I wouldn’t have seen that money if it wasn’t for the card reader,’ he told metro.co.uk.

(Picture: iZettle)

He estimates he takes around £500 a year in cash free transactions (Picture: iZettle)

He said the investment was a reaction to what he realised was a growing issue.

‘People say to me I’d like to buy the magazine but I don’t have money on me,’ he continued.

‘In the past it might have been a polite put down, when nowadays it’s actually true, they haven’t got any money or change.’

Simon said one noticeable difference about taking card payments, is that the money does not go in to his pocket instantaneously. And he thinks that’s a good thing.

‘You don’t have access to those funds immediately, it might be a couple of days  before it goes in to your bank account,’ Simon added.

LONDON, ENGLAND - AUGUST 04: Bedding belonging to a homeless person lies under a railway bridge on August 4, 2015 in London, England. Income inequality in the United Kingdom is higher than many other developed countries with a 2014 report by the Institute for Fiscal Studies claiming that around 23% of Britons were now in relative poverty. (Photo by Carl Court/Getty Images)

(Picture: Carl Court/Getty Images)

‘You don’t have the money to spend and waste it. It encourages the forethought of managing your money in a better way really

‘I think things are going to have to change.

‘This isn’t just from the Big Issue’s point of view but from that of other homeless people begging on the streets, if people don’t change then they are going to suffer as well.’

 


Meyjes, T. (2016) How will the homeless survive in a cashless society? Available at: http://metro.co.uk/2016/06/10/how-will-the-homeless-survive-in-a-cashless-society-5936662/ (Accessed: 29 June 2016).

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Never mind the contactless card, I will be paying by ear

Spending with contactless cards more than trebled last year to almost £8 billion. Experts predict that wearable payments will be the next big thing, with the technology incorporated into watches, earrings and clothes.

Henry Holland used the wearable technology in his London Fashion Week show last September. VIPs in the crowd were able to buy garments from the catwalk by touching a specially designed ring to a blue brooch that the models were wearing.

Contactless technology, which allows shoppers to buy without entering a PIN, has been in circulation since 2007 but adoption rates soared when the spending limit increased to £30.

Half of all credit and debit cards in circulation allow contactless payments, according to the UK Cards Association.

Analysts say that within five years millions of Britons will be paying via smartwatches, wristbands or key fobs with embedded microchips.

 


2016, T.N.L. (2016) Never mind the contactless card, I will be paying by ear. Available at: http://www.thetimes.co.uk/article/never-mind-the-contactless-card-i-will-paying-by-ear-kgs7dcfvv (Accessed: 28 June 2016).

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Is your business prepared for the cashless economy?

The UK is on the fast track to being cash-free, but are our small and medium businesses ready?

The pounds in your pocket are destined for the museum display cabinets. This is according to new research by trade association, Payments UK, who predict that debit card and contactless payment use will overtake cash transactions by 2021 after finding that cash transactions accounted for less than half of consumer payments for the first time in 2015.

There’s no doubt that contactless technology has transformed consumer buying, and with Apple and Android Pay now available, it’s clear that the days of counting out coppers for a pint of milk and a Mars bar will soon be over.

Who has the least cash?

Citigroup and London’s Imperial College latest Digital Money Index indicates that the UK has begun to sprint ahead in the global race to becoming a cashless society after rising from 7th to 4th place in the list of countries that are most ‘digital ready’. Finland topped the list as the most digital-ready country for the third consecutive year, with Singapore and the US following behind in second and third place respectively.

Finland’s continued position as a digital leader is unsurprising considering their strong investment in digital infrastructure. Fixed broadband is available to 97 per cent of Finnish homes; this combined with affordability has helped Finland become one of the most tech savvy nations, with 91 per cent of the population being regular internet users. Furthermore, according to the Digital Economy and Society Index (DESI), Finland has one of the highest shares of eGovernment users and users of eHealth services in Europe. The Finnish government’s integration of digital and public services has further embedded digital processes into everyday life, meaning that digital payment is just another aspect of efficient modern living.

Contactless: the consumer’s choice

The rapid change in the UK’s payment habits can largely be attributed to big brands’ early adoption of contactless. In 2014 Tesco updated all 6,000 of their payment terminals in London to accept contactless payment, they announced that this would save 6 seconds for every customer that used it. For a consumer that is often time poor, 6 seconds less spent in a queue is 6 seconds less stress but more importantly for Tesco it speeds up customer service which enhances the customer experience.

However, contactless payment hasn’t always been hailed as a hero. Transport for London’s (TFL) announcement that its buses would go cashless in 2014 was initially met with scepticism. Nonetheless, since TFL has rolled out contactless across its network, more than 400 million journeys have been made using credit or debit cards or a mobile device, revealing that contactless is an option that offers consumers more, not less choice.
While Tesco and TFL helped lead the way in implementing wave and pay into our everyday lives, the increase in the contactless spend limit from £20 to £30 further pushed contactless mainstream by boosting retailer opportunities and encouraging a wider range of merchants to adapt their payment systems. In 2016, from petrol stations to pubs, consumers can go about their daily lives without having to enter their pin.
Contactless may have won London over first, but a recent study by Barclaycard found that contactless is growing fastest in Manchester, Glasgow and Cardiff. Furthermore, the study also revealed that the over 60’s, the group often deemed as ‘technophobes’, are the fastest growing adopters of contactless card payments. The popularity of contactless across generations offers further evidence that wave and pay is here to stay as more consumers look to utilise new technology that will allow them to make safer, more convenient payments.

Better for business

The swift infiltration of contactless into our everyday lives has certainly raised customer expectations of the pace and ease of service, meaning that businesses not offering customers the payment options they expect, risk undermining their reputation by appearing out of touch.
However, the new way to pay offers considerable benefits to businesses too. Sage Pay’s Payments Landscape Report 2015, found that annual cash handling costs, including allowance for fraud and theft, set UK retailers back more than £3,600 on average. By offering cashless payment options, businesses will benefit hugely from reduced cash handling costs. While digital payments are not completely free from fraud, the risk is significantly lower. Figures from the UK Cards Association show that in the first six months of 2015, fraudulent transactions were equivalent to only 2p for every £100 spent using contactless functionality.

In addition to speedier, safer transactions, digital payments also open up the possibility of integrated reward programmes and location-based marketing. Tapping into these smartphone capabilities will allow businesses to use customer data to deliver tailored marketing campaigns, enhancing customer experience and encouraging loyalty.

While the question of whether the UK will turn completely cashless remains debatable, there’s no doubt that paying for a latte with a quick swish of your wrist has become so commonplace that digging deep in your purse for cash feels like an archaic practice. Whether you’re a high street store, independent coffee shop or a local newsagent, consumers now expect to be able to pay with lightning speed. Cashless is coming, make sure you’re prepared.

 


Growth Business UK. 2016. Is your business prepared for the cashless economy?. [ONLINE] Available at: http://www.growthbusiness.co.uk/comment-and-analysis/2532811/is-your-business-prepared-for-the-cashless-economy.thtml. [Accessed 24 June 2016].

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Facebook: the latest way to transfer cash

Would you trust a social media website such as Facebook or an app such as Snapchat with your money? In America, thousands of people already do.

Facebook users there have been able to transfer money to their friends free of charge on Messenger, the site’s instant messaging service, since last year, while Snapchat users in the United States can also send money to contacts using “Snapcash”.

Snapcash is designed to enable users to exchange money quickly and easily when splitting the bill at a restaurant or paying someone back for concert tickets, for example.

And social media payments seem likely to arrive in Britain soon thanks to the relaxation of strict European laws that govern who can offer digital payment services. A revised EU directive is due to become UK law within the next 18 months, opening up the way for social media transfers.

But with new social media hacks and scams hitting the headlines every week, is it really safe to send money via Facebook or WhatsApp?

Security and scams

Cyber criminals love to exploit the security weaknesses of social media sites and apps. In 2014, for example, hackers  posted 4.6 million usernames and phone numbers online.

Facebook, which owns WhatsApp, has a big problem with fake accounts being set up in legitimate users’ names, a scam that could easily be used to trick people into sending money to the wrong account.

The website, which is reportedly working on a mobile payment feature that will allow users to make card purchases in shops and restaurants, claims that it has taken steps to ensure that Messenger payments are secure. These include asking users to create a Pin or use fingerprint ID to authorise transactions.

“We use secure systems that encrypt the connection between you and Facebook as well as your card information when you ask us to store it for you,” the company said. “Payment systems are kept in a secured environment that is separate from other parts of Facebook.”

Facebook on a phone

‘Payment systems are kept in a secured environment that is separate from other parts of Facebook,’ the company said

Dave Birch of payments consultancy Consult Hyperion backed the company’s line, arguing that storing your card details with a social media app was safer than sharing your bank details by email.

“If you wanted to make a transfer using WhatsApp, you would need both my phone and my password to do so,” he said.

Hackers  are not the only potential problem, though. The ability to send money via a social media site may make vulnerable people easier targets for confidence tricksters. There is also a danger that the speed and ease of social payments will attract criminal users.

How social media payments work

To use payment services such as Snapcash and Facebook Messenger, you must be 18 or over and have registered a debit card to your account. Credit cards, PayPal accounts and prepaid cards are not accepted.

As the services are currently available only in America, the linked accounts must also be US based. Once set up, they are quick and easy to use.

To send money via Facebook Messenger, for example, all you have to do then is open a chat with a friend, press “More” and then tap the $ icon followed by “Pay”. To receive a payment, meanwhile, you simply open the chat and click “Add card” to add a US debit card to be credited with the payment.

However, you cannot reverse a payment made in error.

‘I’m interested but fraud worries me’

Facebook user Kate Evans (pictured above) likes the idea of being able to send money to friends via the website but is worried that it would leave her open to fraud.

Ms Evans, 40, a teacher from Derbyshire, said: “Sending cash to friends via Facebook Messenger is something I would be interested in trying when it becomes available here.

“However, I would want to know more about where my card details were being stored and whether I would be refunded if something went wrong.”

She said she would keep an eye out for any stories about problems with Facebook Messenger payments in the US.  “If there are any scandals, it would definitely make me less likely to use the service myself.”

 


The Telegraph. 2016. Facebook: the latest way to transfer cash  . [ONLINE] Available at: http://www.telegraph.co.uk/money/consumer-affairs/facebook-the-latest-way-to-transfer-cash/. [Accessed 24 June 2016].

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New criminal gadget can clone up to 15 contactless bank cards a second from victims who are simply standing nearby

 

  • Hi-tech device steals info such as the card number and name and address 
  • Details then written onto a blank card which is used on for speeding spree 
  • Ready-made con kits sell for £500 on London and south east black market
  • Device first to target contactless, which is becoming increasingly popular

 

A new gadget can be used by criminals to clone up to 15 contactless bank cards a second – from victims who are simply standing nearby.

The hi-tech device steals details such as the card number and the person’s name and address contained on the credit or debit card.

The scanner – called the Contactless Infusion X5 – extracts the information where it can be written onto blank cards, which can then be used by thieves to go on spending sprees.

Ready-made con kits, including the device, special software and 20 blank cards, are being sold on the streets of London and the south east for £500, according to the Daily Star Sunday.

The device is thought to be the first sold on the black market to specifically target the increasingly-popular contactless bank card.

The technology enables customers to pay for goods with a single tap of their card on a reader, without the need to provide a signature or enter their PIN number.

Card use is being boosted by the rising popularity of contactless ‘tap and go’ payments, with mobile payment services such as Apple Pay making payments ever more convenient.

Industry experts predict that by 2025, notes and coins will be used for just one in four payments, while credit, debit and charge cards will account for more than half of all payments made.

The tipping point at which cash will no longer be king is expected to come in 2021, when it is predicted 14.5 billion debit card payments will be made, overtaking the 13 billion cash payments forecast for the first time.

The device is thought to be the first sold on the black market to specifically target the increasingly-popular contactless bank card (stock image)

The device is thought to be the first sold on the black market to specifically target the increasingly-popular contactless bank card (stock image)

 

Looking specifically at consumer payments, the average UK adult made 20 card payments per month in 2015, with around two payments per month being contactless.

By 2025 people are predicted to use a debit, credit or charge card virtually every day – at 30 times per month.

The UK Cards Association has said that contactless card spending topped £1.5 billion in the space of a month for the first time in March.

The milestone was reached just four months after contactless spending reached £1 billion for the first time in November 2015.

 


Mail Online. 2016. New criminal gadget can clone up to 15 contactless bank cards a second nearby | Daily Mail Online. [ONLINE] Available at: http://www.dailymail.co.uk/news/article-3637553/New-criminal-gadget-clone-15-contactless-bank-cards-second-victims-simply-standing-nearby.html. [Accessed 24 June 2016].