[ILLUSTRATION OMITTED] With all the jockeying in the payments space, keeping up with new partnerships, upstarts, and product innovations could be a full-time job. Prepaid cards, alternative currencies (Ven, Bitcoin), mobile payments, and person-to-person (P2P) payments are just a few of the payment schemes that may or may not threaten a bank's traditional business. Add nonbank competitors like PayPal, Google, or Facebook, and payments becomes even more challenging. Like most banks, Home Federal Savings Bank, a $1 billion-assets institution in Sioux Falls, S.D., is wary of nonbank competitors in payments. Says Natalie Sundvold, senior vice-president, service and support, From my seat in a financial services company, the thought of an outsider coming into payments is frightening. It doesn't feel good, especially because consumers may not understand how payment security works. When evaluating payments players and planning their own strategy, banks would be wise to keep the words of the Chinese general and military strategist Sun-tzu in mind: Keep your friends close, and your enemies closer. That may seem extreme, but consider that earlier this year ABA formed a Payments System Task Force to evaluate the impact of the many new developments on banks and to ensure that banks of all sizes will have the ability to participate (See story, page 31). Here's a roundup of some payment types and competitors to watch closely. Is it time for P2P? Today, true payments have a very low adoption rate due to usability issues, says Nancy Langer, senior vice-president of ePayments Solutions for bank technology company FIS. P2P is standalone and not integrated with the consumer payment network or online banking, she says. You cannot survive with a proprietary approach to P2P. But even with its problems, Langer says that is positioned for great growth. There is a real potential for payments, especially for unanticipated transactions that need to happen rapidly, wrote Dean Seifert, senior vice-president, product strategy, Vantiv, in the report Top 10 Payment Trends to Watch in 2012. So far, it's been a consumer-to-small business tool, said Seifert, noting that the average transaction value is $300. One example of an operating network is clearXchange, the joint venture of Wells Fargo, Bank of America, and JPMorgan Chase. Langer believes it can make sense for banks to partner with clearXchange, as long as they are careful that it doesn't take away the bank's brand. (ClearXchange notes that it allows member banks to control branding.) Customers of the three banks can move funds directly from their existing checking accounts to any customer of any other bank. However, if the receiving institution is not a clearXchange member, then the recipient has to create a profile in order to receive the payment. Fiserv is another major player in the space, having acquired CashEdge and combined its Popmoney solution into Fiserv's Zashpay (keeping the Popmoney name). Popmoney allows people to pay the babysitter or the cable bill or their share of the rent, for example, using an online bank account, email, or even a mobile number. According to the Fiserv website, 1,400 financial institutions are currently signed up to offer Pop-money--one of them being New York heavyweight Citibank, which is actively promoting the service. Home Federal Savings Bank is moving quickly to Popmoney, says Sundvold. The bank launched mobile banking in April with great customer acceptance, and it plans to offer in late summer. Sundvold says she expects bank customers to adopt much in the same way they took to mobile banking--quickly. [ILLUSTRATION OMITTED] Mobile banking vs. mobile payments The adoption figures for mobile banking and mobile payments differ significantly. While 21% of mobile phone users used mobile banking in the past 12 months and 11% believe they will use it within the next 12 months, only 12% of mobile phone users made a mobile payment, according to the March 2012 report, Consumers and Mobile Financial Services, from the Federal Reserve Board. …
Contributions From Twenty-Five Distinguished Scholars Are Brought together here to provide a comprehensive, accessible, state of the art appraisal of interdisciplinary research at the boundaries of anthropology, linguistics and Native Studies. The collection seeks to correct the prevailing notion that the Americanist tradition in anthropology. (typified by Franz Boas and his colleagues) is a theoretical.Participants in this dialogue accepted the challenge of making their underlying theoretical assumptions explicit. The papers range from the history of anthropology and linguistics to present innovations within this tradition. Issues of authenticity lead to examination of changing traditions in text and literacy in linguistics and education, and in emerging contemporary discourse spanning the Americas.The volume is framed by Coyote, the quintessential American trickster who is the inspiration for much of the volume's play with tradition and change, with the construction of identity through discourse, and with the interaction of Americanists and First Nations/Native American communities. Remarks on the future of the Americanist tradition forms a critical part of this collection.The collection pioneers in juxtaposing Canadian and American theoretical work on language and revitalizes a shared tradition centred around the study of meaning. Readers are invited to enter this open-ended and vibrant Americanist discourse.
There are very few life experiences that are more convenient and more anonymous than purchasing goods and services over the internet. Online shopping means there's no need to leave your home or office, no rude sales people, no waiting in line, and no person-to-person contact. Convenience and anonymity have their price, however. While consumers relish the ease of online shopping, so do criminals, who find the internet an easy way to commit online payment fraud. Online payment fraud--someone stealing credit card numbers and using them to make purchases over the internet--is not only a huge concern for consumers, but it has a great impact on online merchants and their banks and the financial institutions that issue the cards. Even though consumers have zero liability for repudiated charges, many consumers say that concerns about the security of their credit card number prevent them from online shopping. For the merchants and financial institutions online payment fraud is more than just a concern: it directly impacts their bottom line. As many as one in three online merchants refuse to accept international sales because the rate of international fraud is so high. This negates some of the value of the world wide web, and results in lost customers and lost revenue. Other online merchants--especially those selling goods and services most targeted by fraudsters, such as electronics, jewelry, and downloadable software-manually review each and every online order for fraud. Not only does manually reviewing orders delay shipment, but the overhead costs of having employees review orders can take a big bite out of a merchant's bottom line. There is also the issue of being too draconian and denying good transactions, resulting in lost sales and unhappy customers. For financial institutions, online payment fraud erodes consumer confidence and trust in their brands, explains Xavier Kris, CEO, Retail Decisions, USA. For many consumers, a breach of security prompts a knee-jerk reaction of closing accounts and moving to another financial institution. And, with recent changes made by Visa and MasterCard (see sidebar), the liability for fraudulent transactions shifts to the issuing financial institution. In addition, the cost to process chargebacks is $20-$30 per transaction estimates Mike Keresman, CEO of Cardinal Commerce. But even with these incentives, Avivah Litan, vice-president and research director, Gartner Financial Services, doesn't believe that financial institutions are doing enough to combat fraud, content instead to push the onus to the merchant. Just how big is the problem? According to Celent Communications, online payment fraud is 30 times higher than payment fraud in the physical world. Gartner puts a more conservative figure of at least 15 times higher on online fraud; both numbers are substantial. Fraudulent credit card use is not new, but it has evolved thanks to the internet, which has effectively created a playground for thieves, says Ariana-Michele Moore, an analyst with Celent. One such playground includes online brokers selling stolen credit card numbers to fraudsters. Since these criminals typically work through chat rooms and migrate around the internet, they are difficult to catch. Another type of online payment fraud is triangulation where a fraudster will post a bogus product for sale on an online auction site, attract a buyer, and capture their credit card number. He or she then uses the stolen credit card to buy the goods, and sells them back to the buyer. Hackers who steal credit card information from merchant and bank databases remain a very real threat. In May of this year, First National Bank of Florida notified its Marco Island branch customers that a hacker had seized some of its Visa credit and debit card numbers, prompting the bank to reissue cards. In February, Visa, MasterCard, and American Express confirmed that a computer hacker had accessed eight million credit card records. …
Luck has little to do with the success of small business banking at Union Bank. The San Francisco, Calif.-based bank, part of $107 billion-assets UnionBanCal Corp., is investing heavily in technology and staff to service its current small business customers and attract new small businesses to the bank, says Todd Hollander, executive vice-president and head of Business Banking. We want to be a top ten banking company, so we are concentrating on leveraging the tremendous growth of small businesses. Within the last three years, volume in Union Bank's business banking center has increased 400%. The bank provides a full range of cash management services, including next-day settlement of merchant accounts, purchasing cards, and payments services. The West Coast regional is far from the only bank to see opportunity in the small business nor is it demarcated by size. According to Abound Resources' Insights into 2014 report, 49% of community bank CEOs also say that improving small business market share is critical to growth. business customers are a tremendous opportunity for banks, explains Gail Angel, senior vice-president of Commercial Treasury Solutions at technology provider FIS. Small business is an underserved market, she says. The opportunity may be there, but many banks just don't know how to win at small business banking. That's the consensus of many of those contacted for this article. Stumbling blocks cited include not being able to distinguish between retail and small business customers; segmenting small business customers by revenue rather than business need; and struggling to determine what products and services to offer and how to price them (tending to give them away for free). Some bankers also worry that they don't have access to competitive cash management products, so they hesitate to aggressively pursue the small business opportunity. Brad Smith, president of Abound Resources, believes that the latter concern is unfounded, because nearly all banks have access to basic cash management products--through their core or internet banking providers--that are sufficient to meet the needs of most small business customers. For specialized products, such as electronic invoicing, image lockbox, purchasing cards, and payroll, banks can look to third-party vendors, suggests Smith. Just what is a small business? Ask five banks to define small business and you will likely get five different answers based on annual revenues. But oftentimes revenue doesn't capture how sophisticated a small business is and the types of products and services it values. For example, while Union Bank defines a small business as being privately held, it also looks at the needs and complexity of the business rather than pigeonholing it into a segment based on revenue. A small business with 8100,000 in annual revenue may have more sophisticated cash management needs than a business with more than $ 1 million in revenue, explains Todd Hollander. And because the health of a small business is usually linked closely to the owners, the analysis also is personal. You need to look at the owners and determine their ability to generate cash and grow a business, Hollander points out. Even the smallest of small businesses are becoming more complex, he adds, and are requesting services and products to help them manage payments, foreign exchange, and accounting. Angel of FIS agrees that small businesses are becoming more sophisticated, but cautions that sophistication does not necessarily extend to financial products and services, such as understanding the differences between ACH and wire transfers. This is where banks can step in to educate small businesses about products and services that can help them manage cash flow and improve efficiency. She warns, though, against using banker speak and encourages bankers to use language that resonates with small business owners. …
Like many financial institutions, Banc Investment Group, LLC, a subsidiary, of Pacific Coast Banker's Bancshares, with $3.1 billion assets under management, has a continuous need diversify its lending portfolio. bank, headquartered in San Francisco, Calif., functions both as an independent bank and as a broker/dealer and writes many real estate loans. However, it wants add more commercial and industrial loans its portfolio. problem is that the commercial market is highly competitive and the cost of marketing and advertising these markets can be prohibitive. bank is hoping that FLEX--the Financial Lending Exchange--will enable them enter new commercial markets cost effectively, says Chris Nichols, president and CEO of Banc Investment Group. No aggregation Offered by Electronic Financial Services (EFS) of Costa Mesa, Calif., FLEX is a commercial lending exchange more akin the New York Stock Exchange than aggregator sites such as LendingTree, explains Pete Taranto, executive vice president of marketing for EFS. The NYSE is an exchange where companies go get funding and people who have dollars invest go buy equity. Similarly, FLEX is a true lending exchange where financial institutions can go grow their commercial lending business and where manufacturers and suppliers can go obtain funding, says Taranto. biggest difference between FLEX and aggregator sites, says Taranto, is that aggregator sites simply distribute loan applications banks and the onus is on the banks do the decisioning. In the FLEX model, underwriting rules for each financial institution are stored on the FLEX exchange. FLEX then forwards each institution only those loans that they would be able write, saving the institutions time and money otherwise wasted evaluating loans that wouldn't fit their portfolio requirements. We don't deliver applications a financial institution, but we give the financial institution the wherewithal push their underwriting guidelines onto our exchange. When an application comes in, we match the applicant those guidelines and deliver a client that the financial institution wants, explains EFS president Mike O'Brien. Another difference between FLEX and the aggregators is that lenders do not compete against each other. Instead, a round robin process distributes loans evenly so each financial institution gets a turn at funding loans to satisfy their lending appetite, says O'Brien. …
