Current financial transaction methods have their limitations, exemplified by the typical £100 contactless transaction limit to prevent extensive fraud, and even risks, such as ATM skimming for PIN thefts.  

Cyberattacks went up 600% due to the COVID-19 pandemic and financial institutions and their customers were undoubtedly priority targets for identity theft, the most common type of financial fraud. 

With 67% of financial institutions reporting an increase in cyberattacks for 2021 and 79% of financial CISOs stating that threat actors are deploying more sophisticated attacks, the race is on for businesses to stay ahead of hackers and invest in technologies to safeguard both internal and customer data privacy.   

In a digital society, where elevated customer experiences are the new normal, people expect their payments to not only be safe but also easy and convenient.

When linked to biometric data, transactions, as well as other pain points for financial services such as lengthy onboarding and account verification, become swift, comprehensive, and exponentially more secure.   

A journey in trust  

Biometric technology’s first forays into the identity verification scene were not without their own set of security and privacy challenges. Back then, some of these technologies proved to be easily hackable, especially facial recognition which could be duped by deep-fakes, 3D printed reconstructions and even photographs of users. Strides made in “liveness” AI algorithms alone now paint a vastly different picture for the security and reliability of biometric authentication, providing 100% secure authentication.   

Beyond this, developments in the space are opening up new and innovative avenues for the most common applications of biometric authentication, one of the largest being finance as we have seen from Mastercard’s recent “smile to pay” biometric payments enablement.   

Fully automated identity verification engines have been advanced in the most crucial areas for financial institutions: privacy, to remain compliant with rapidly evolving government regulations; customer experience, to rapidly enrol customers, and security; to reduce fraud and avoid financial losses.   

At the core of an iconic digital identity verification solution, is the capacity to “orchestrate” multiple dynamic data sets to not only detect and deter fraud, but also to deliver a customer experience, which reduces online friction, converts more applicants to customers, and increases retention rates.  

This also extends beyond initially considered use cases to a growing variety of industries, further validating the increasing trust being instilled in these systems. Face ID is no longer just for iPhones but is being implemented in hospitality for hotel check-in, customised personal experiences and room service payments, all without the need for a physical card.  

Why passwords are more problematic than protective  

It is not entirely unreasonable for organisations to have a fear of the unknown when comes to implementing biometric authentication, and for their customers who are expected to use it. However, where digital identity authentication has been subject to suspicion of data theft and privacy breaches, we must also acknowledge the gravity of the risks associated with passwords and PINs.  

In 2021, 92% of LinkedIn’s users’ data was exposed and sold on the dark web in a breach widely reported as a result of weak passwords, with over 700,000 profiles found to be unlocked with a painfully simple “123456”.   

As we move at a rapidly escalating rate towards a cashless and contactless society, passwords and PINs are not only leaving individual security in the hands of human error but are nearing obsoletion. A worrying 59% of IT security respondents report that their organisation relies on human memory to manage passwords. When left to individuals to create and remember dozens, if not hundreds, of passwords, the likelihood of resorting to easily remembered but weak passwords skyrockets – along with their susceptibility to brute-force cracking by hackers.   

Keeping track of changing passcodes, PINs, and security questions is time-consuming, less secure, and less convenient than in-depth biometric identity verification and authentication. Particularly social engineering scams, a key driver of fraud losses, rely on victims handing over personal details and passwords. This is circumvented when that information is replaced with biometric authentication. 

We do see a convergence between the two where apps use biometrics to unlock a secure password store within the device. However, this typically does not offer added security but serves the purpose of convenience. When the security burden is placed on passwords in our modern cyber-sophisticated age, users are left highly vulnerable to breaches and data theft.   

Identity verification solutions need to balance risk with modern digital consumer needs and expectations. Biometrics as the primary or sole means of verification takes the onus of authentication away from the user, whilst maintaining the elevated levels of security that people and organisations expect from financial transactions.  

One identity everywhere  

As financial fraud becomes more pervasive and elaborate, and people become more focused on ensuring their privacy, creating a world of trust is pivotal, not only for identity verification, but also for the future of payments. The positive impact that AI and biometrics can have will be substantially limited if there is a lack of trust in how the technology is used. Users need to be sure that privacy is a top priority, and that their data is safe from theft or exploitation.   

With AI technology, we can create a smooth, secure, and privacy-enabled identity verification process in which people themselves will be the only documentation needed to verify their identity, an approach central to Incode’s “One Identity Everywhere” future. As consumers, retailers and institutions alike adjust to constant digital innovation, the gold standard in the future of payments will be both frictionless and secure, and where data privacy is absolute. 

About the author: Ricardo Amper is CEO & Founder of Incode.  

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With the biometrics market expected to be worth $18.6 billion by 2026, the potential for this technology is huge. 

However, opponents point out that while the convenience of waving a hand or smiling at a camera has potential, there are still big risks if the technology goes wrong – foremost among them are concerns over privacy, security and cost.

Face not recognised, please unlock with pin

While facial recognition has improved over the last few years, there are still errors. For instance, we are all familiar with those frustrating moments when our phones do not recognise our faces for some reason, requiring a PIN to open instead. While this is a minor inconvenience to get access to a text message, when it comes to paying a bill, it could cause huge problems. 

Error rates are now less than 0.1%, an impressively low number, but when partnered with the millions of transactions that happen every day that is still hundreds, if not thousands, of moments where biometric authentication could fail.

To reduce the chance of failure, companies will need to have access to several different forms of authentication, such as fingerprints, vein patterns, iris scanning, facial recognition and more. While reducing the risk of errors and fraud, each system has its own accuracy rates and problems that firms need to be aware of. For example, facial recognition can sometimes be thrown off by glare from glasses, and vein pattern relies on high-quality photos in the first instance and ensuring that subsequent scans are not affected by different light conditions.

You can’t change who you are

The trade-off in ensuring success for biometric payments is that companies will have to store more personal data of their customers. This is fundamental to how the technology operates and will reduce the chances of errors, but it also raises the stakes for the company holding the data.

For instance, while a data breach today may result in passwords and usernames being leaked, this information can be changed and updated relatively quickly and easily. Biometric data is much harder to change, and although the processes of using that data may be harder, the rewards are greater – where people might have different passwords for various systems, biometric data would in theory give access to any account where this information is used as a means of entry. Securing these databases is essential.

As well as security concerns, consumers may be reluctant to share such sensitive information with large companies, with ongoing questions around privacy and rights on how those companies use the data of their users. For example, in countries with less protection for individual rights, such as China, a facial database could be used to identify and target certain groups of people by the state authorities, as has already been seen with the Uighur people. If the public becomes distrustful and refuses to share information with payment firms, any biometric technology beyond just unlocking a smartphone will struggle to get off the ground in a meaningful way.

If this is to be overcome, it will be essential for firms and governments to work together to improve regulations and processes. This will help build trust in the new technology, and create conformity across countries on how data should be handled and secured. Firms in turn will benefit from being able to focus on one set of rules, in the knowledge that the rights of people in different locations are being protected.

Who is paying for this all?

Any deployment of new technology comes with a cost. In this case, it will require new devices that can read biometric information to be installed in every shop, restaurant and hospitality location, potentially costing billions. 

At the moment some high-end biometric systems can cost up to $10,000, a significant cost if you run a small business. After all, it is not the kind of investment that can justify itself through additional business – payments can still be made by other means. It needs consumer behaviour and expectation to reach a point of critical mass where biometric payment becomes expected rather than a novelty. But until the technology reaches an affordable price where it is feasible for businesses to make this investment, there is no way for it to enjoy widespread adoption. It's a ‘chicken and egg’ situation – one of widespread availability and mainstream adoption will drive the other but if neither comes first, biometric payments will continue to struggle.

There is no doubt that schemes like Mastercard’s are going to start happening more frequently, and likely do offer a snapshot of what the future of payments will look like. It is also not as much of a leap in technology as some people believe. For instance, platforms such as Apple Pay already use facial recognition to authorise payments. Bringing in other forms of Biometric payments will remove friction from the authentication process, and no doubt when the technology is ready, customers will love it if it is user friendly enough. 

However, we are still a distance away from this becoming a mainstream form of transaction. A lot of work needs to be done to reduce the cost of the technology itself so that everyday businesses can afford it, while serious conversations need to take place to ensure regulations are in place to protect individuals’ data and rights. Otherwise, it will struggle ever to be a viable option.

About the author: Ashish Bhatnagar is Client Partner at Cognizant.

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This is something that confuses a lot of people but they seldom stop to find out why they are having to pay this extra money. In some cases, this is marketed a little differently under the title of a service fee, but again there is no explanation about what services this is for exactly. If you were asked “how would you like to pay?” the convenience fee may be in response to the answer you gave to the question. Below, we cover all the important things you need to know about convenience fees and why you’re having to pay them.

Why Is The Customer Charged?

In most situations these days customers will choose to pay through a credit card. Especially since the pandemic of 2019, paying through cash has become far less favourable. In fact, people are gravitating towards contactless payment solutions and trying to watch out for their health and safety. In the past, credit cards were considered a luxury. They were not very common and both payment processing companies and merchants needed specialised hardware and software to execute payments. No business wants to increase its costs so the solution was to charge the customers using credit cards an additional cost to cover the processing fees that the business had to bear.

Customers paying through cash or debit cards didn’t pose this problem therefore they were exempt from these additional charges. Today, newer payment options also carry a certain cost for the merchant and since they don’t want to reduce their profits, they pass this on to the customer. These payment processing costs are particularly problematic for merchants in situations where the customer is buying things for a very small amount. Generally, payment processing companies have fixed rates per transaction, much like how merchants have a flat-rate processing fee regardless of the value of your bill. This makes it more inconvenient for people that are buying things of a lower value or those that have a smaller bill overall since they still have to pay just as much in convenience fees.

Card Surcharge

A lot of people confuse the convenience fee with the card surcharge. While they both serve a similar purpose, the way they are charged does vary slightly.

A convenience fee is charged to cover the processing fees of a transaction but merchants are not allowed to cover the entire fees. For instance, if a transaction costs the merchant $2 to process, they might charge $1 or $1.50 in convenience fees. Also, the convenience fee is a fixed value regardless of the value of the transaction because that is how the payment processor charges the merchant as well. 

On the other hand, a surcharge is usually a percentage of the total value of a transaction. Moreover, it is also common across certain payment methods such as credit cards belonging to Visa, Master, Visa Infinite, and other brands. A surcharge is not an alternative to merchants imposing convenience fees but in fact, most merchants charge both of these fees depending on the situation. Also, the convenience fee for using a credit card will be the same regardless of what kind of credit you use. The surcharge will vary depending on the kind of credit card you have since payment processing companies have different rates for different credit card companies. You will find that certain cards have lower surcharge costs than others.

Rates

Whether a merchant chooses to charge convenience fees, how much they choose to charge and who they choose to charge are questions that are dictated by the payment processor rather than the merchant.

There are a lot of payment processors that merchants choose to work with. Different kinds of businesses need to work with specialised payment processors. For instance, there are certain payment processors that specialise in working with brick and mortar stores while others work solely with online businesses. There are certain rules that businesses have to keep in mind when deciding the convenience fee they want to charge. They also have to take into consideration their own circumstances such as the number of customers they get, the infrastructure they have, and their own pricing, to find a suitable convenience fee.

Generally, merchants are free to decide the kind of fee they want to charge but given that nearly all merchants are operating under similar frameworks, they all end up charging a fee that is relatively similar. Also, certain payment systems, such as invoicing, keyed payments, and credit cards from certain companies will always be more expensive regardless of which merchant you’re doing business with. This is because handling that kind of payment is generally more expensive for all merchants.

How To Save Yourself

In some cases, merchants will have a higher convenience fee for certain solutions because they want customers to use an alternative. Others will have discounts available for specific payment options because they want to motivate customers to use those options.

As a customer, there are a few things you can do to save yourself from having to face the inconvenience of the convenience fee. The easiest solution is to have multiple payment options at your disposal. If you know your local grocery store charges a convenience fee for credit cards, then pay through cash. Ask them what channels don’t have a convenience fee and become part of that ecosystem. Another option is to look for different stores. One merchant might charge a convenience fee but the store on the other side of the road might not. Explore your options to see where you can save money.

The convenience fee is something that started out when credit cards were new and it really was a hassle for both merchants and payment processing companies to manage the transaction. However, today we are in an era where credit card payments and digital accounts have become the norm. As much as merchants want to remove the convenience fee, they can't remove it until the payment processors change their pricing system. At the end of the day, the customer takes the hit but the merchant also pays the price in the business they lose to competition because of the convenience fee they charge.

The Present

Over the last few years, customer payment preferences have changed significantly. Particularly, the COVID-19 pandemic accelerated the shift towards digital payment solutions like Alternative Payment Methods (APM). To highlight the importance of APM integration for businesses, Macropay’s CEO & Founder Adam J Clarke notes that “alternative payment methods are critical. [It is] life or death customer experience.”

This shift in payment and banking trends are also characterized by decentralization. Long gone are the days when customers visited a banking hall to make payments or deposits. In fact, mobile wallets and other open banking solutions even allow people without bank accounts to access loans. In turn,this shift in access to financing has accelerated the need for more flexible and fluid payment options.

For instance, businesses are no longer restricted by borders and can easily access new markets and clients. Globalization and digitalization have given birth to phenomena like drop shopping which lowered barriers of entry for new businesses. However, traditional banking is not evolving fast enough. This is evident in how banking restrictions still make it difficult for new business owners to open bank accounts. In addition, traditional banking tends to be more expensive in comparison to its alternatives.

The Past

Previously, payments and banking were controlled by a select few. Financing was centralized, flowing to and from a central bank. This meant payments took a long time as they needed to be verified by the middleman or central controller. In addition, the middleman needed to get paid, which made financial access expensive.

Similarly, access of loans was expensive and, in some cases, prohibitive. This is because customers need to prove their liquidity and provide “know your client” (KYC) documents to open an account. For some, these documents are impossible to obtain. As a result, 31% of the world population remains unbanked today according to World Bank statistics.

However, the rise of mobile wallets, for example, has meant anyone with a smart phone and internet access can access a new way of payment and banking. Businesses now have access to more clients as a result. That is if the business is able to offer clients their preferred payment option.

The Future

As client preferences evolve, businesses must keep up in order to stay relevant. With so much change it might be tempting to assume that we have reached the pinnacle in payment evolution. However, Macropay CEO Adam J Clarke begs to differ. He believes that “the great tech revolution is just beginning, and that AI is the future of tech which will continue to change the way the world works.” 83% of financial service executives agree according to Forbes.

Conclusion

As we become more of a cashless society, Artificial Intelligence (AI) will help make digital payments more secure. Cybercrime and digital fraud currently make online payment solutions very risky. AI allows for the early detection of potentially fraudulent activity or a breach in security. This is one of the main reasons why Macropay utilizes both cutting edge technology and AI. 

Around the world, cryptocurrencies are coming under regulatory pressure, but some exciting developments have come out of the UK in the past few weeks.

The British Treasury announced that it intends to bring stablecoins under the Financial Conduct Authority's (the UK regulator) remit if used for payments as part of a broader plan to make the UK a hub for digital payment companies.

In January of last year, the British Treasury consulted on whether and how it should regulate crypto assets. Given that stablecoins have a stable value linked to traditional currencies or assets like gold, the Treasury's view that they have the potential to develop into more mainstream usage; therefore, regulating stablecoins would ensure they are used safely by the public.

The FCA has come under widespread criticism in recent months for stifling the innovation of FinTech – an industry in which the UK supposedly wants to be a leader. But as crypto is quickly becoming more widely adopted, delays in implementing regulation is causing the UK to fall behind on this ambition. For example, in the US, stablecoins are already being used to facilitate trading, lending, or borrowing other digital assets. As a result, they are moving to craft regulations to support faster, more efficient, and more inclusive payment options.

The move to regulate the industry comes at a crucial time for the UK economy. Rishi Sunak, Chancellor of the Exchequer, said in his statement:

"We want to see the [cryptocurrency] businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively, we can give them the confidence they need to think and invest long-term."

What is the proposed regulation?

While no official regulation has been published yet, the British Treasury published a response to consolidation and called for evidence, which considers the following:

• An amended e-money framework that can deliver a consistent framework to regulate stablecoin issuance and the provision of wallets and custody services.
• An amendment to Part 5 of the Banking Act 2009 to include stablecoin activities to apply in cases where the "the risks posed have the potential to be systemic, and so the threshold for the Bank of England supervision is met".
• An amendment to the Financial Services (Banking Reform) Act will mean stablecoin-based payment systems will be subject to appropriate competition regulation by the Payment Systems Regulator.

What does this mean for crypto in the UK?

Establishing a regulatory environment for stablecoins used as payment allows market entry to support innovation while ensuring regulatory standards apply for the customer's benefit, market integrity, and stability. Ultimately, the regulation intends to safeguard and protect the customer, and organisational and reporting requirements will herald the need for self-regulation.

For the UK's FinTech sector, this is a welcome move and will give the UK a fighting chance to uphold its approach to financial services and future technology innovation by ensuring effective competition continues. It also marks a more serious consideration of the crypto industry, with more announcements coming in the forthcoming months.

That said, the proposed regulation comes with a disadvantage to financial promotions. Firms designated as regulated stablecoin service providers will not be able to act as Section 21 approvers of financial promotions. These businesses will not be able to promote investment opportunities to potential investors who aren't certified as high net worth individuals or sophisticated investors.

What does the future hold?

This announcement is a pivotal and exciting moment for the future of crypto-asset payments in the UK, and regulation is a crucial enabling factor for the industry.

The UK will be able to attract and retain top FinTech innovation and support its plan of becoming a global hub for digital payments by attracting talent from across the globe. The government will be paid dividends in driving investment in UK FinTech and adding to the value of the exchequer.

About Joaquin Ayuso de Paúl

Joaquín Ayuso de Paúl serves as Head of Nium Crypto. Joaquin’s work focuses on expanding the business into the crypto, investment and lending sectors. He is a firm believer in leveraging the core of Nium’s current offerings to provide new avenues for users. His passions also drive him to explore the NFT, web3 and blockchain spaces. 

Prior to Nium, Joaquin co-founded and served as CTO of Tuenti, a private social network often referred to as the “Spanish Facebook”. He also founded Kuapay, which developed a secure, mobile, payment method platform in Chile and Colombia. He also recently co-founded Rayo, a digital bank for immigrants in the US, which launched in 2021.

There are rules and guidelines that must be followed/enforced while also ensuring that homeowners are abiding by the bylaws or policies of the organisation. Furthermore, there's the matter of upkeep on the property, making repairs or additions to the common areas, handling member dues, and participating in board meetings. Interfacing with homeowners to run the organisation efficiently is one of the key roles of a community manager but it isn't the only one. A lot of administration, budgeting, and handling of funds needs to occur throughout. To better accomplish this, the use of automation or software tools can be a significant help. Here are five business tools to help you with improving your property management.

1. Accounting Software

When considering the use of software to help streamline running a community, using software to handle accounting is probably the number one priority. Collecting dues, providing receipts, and complete transparency over the process are all something to think about. It's also crucial to be able to budget effectively and easily while having clean access to any pertinent financial reports. So the question is should you use accounting software or property management software? There are pros and cons to each one. The counting software can be inexpensive and multifaceted. It can have plenty of features, easy to use, and get the job done in most circumstances. On the other hand, it doesn't have many features beyond the basics. So, if you need to look back at previous data, find extensive reports, and get a comprehensive overview of all your properties you may need to go a little bigger. Accounting software is ideal for managing a few properties, but property management software might be better for managing a lot of properties. Property management software is usually pretty inexpensive per unit and can have a lot of the same features as accounting software, plus some additional benefits that make it so much easier to stay on top of the HOA's finances. The decision is ultimately up to the community manager, but it's best to weigh the options before making a final call.

2. Reserve Fund Administration

In an HOA, the reserve fund serves an integral function. In finance, the reserve fund is a predetermined amount of a liquid asset that's supposed to be available to handle future costs or expenses that may occur. In an HOA, this serves a vital function: to be available to use for repairs, maintenance, and emergency. So, administering the reserve fund is extremely important. Distinct from the operating fund, reserve funds are more of a backup plan. T best practice for reserve funds is to keep expenses written on a separate ledger and keep them in separate bank accounts from the operating fund. A reserve fund should have enough in it to handle future repairs and to be able to cover unexpected expenses. Lack of a decent reserve fund can result in homeowner issues, lack of capital, and big problems down the line. That's why it's so important to use whatever tools you have at your disposal to Monitor and maintain your reserve fund. Accounting software can help, along with some automation in tracking deposits, withdrawals, and expenses involving the fund. Automation is great for this sort of thing because it can help you spot issues early and take swift action.

3. Banking, Budgeting, And Payments

Getting some accounting software can help with this aspect of running the HOA, but you still need to oversee each of these factors. The best way to do that might be by getting some powerful property management accounting software instead of messing with multiple programs. This type of thing offers a comprehensive solution for banking, budgeting, payments, and more. How so? The property management software can handle electronic banking, take payments, help you budget in real-time, allow for payment plans, and even do batch processing. All of these work in tandem with one another to create a comprehensive payment solution that will benefit the entire organisation.

4. Vendor Management Portal

Part of any community manager's job is vendor management. Vendor management is simply a way to manage suppliers and vendors within an organisation. When applied to a homeowners association, the principles are the same but the practice might be a little bit different. When it's time to select the vendor, there should be a comprehensive vetting process to determine if there's going to be any third party risk from using that vendor. Third-party risk can lead to property, personal, reputational, or financial damage. The last thing you want is to hire somebody to build an addition to the common area and find out they're skimming on supplies and materials, or that they do shoddy work. So assessing the reputation and finding vendors that are going to be able to do the job for a reasonable cost is in the community manager's job description. Using some kind of vendor management software or utility is going to go a long way to helping assess those vendors and build a base of reputable vendors that the HOA can use as needed. There are dedicated vendor management portals specifically for this purpose, but some property management/tracking software also has it as built-in functionality. If it does, that may be your better bet for a one size fits all solution to vendor management challenges. Because maintenance and repairs are a part of the job, it's important to have quality tools to help.

5. Financial Reporting

Financial reports are also incredibly important for understanding where your money is going. If you want quick access to all of your reports that you can bring up during board meetings or with communications through members, then using a software repository is going to help. The property management software suites often have this function built in so you can find exactly what you want. No more coming through spreadsheets or random files. Everything is accessible and easy, a convenient location so that you can print it out on-demand or access it quickly to make the important decisions you need to make throughout your management career.

A credit card processor is a third party that connects the consumer and the bank, merchant, and credit card network. This organisation is vital in completing payments made using credit or debit cards. 

This industry is evolving and becoming more extensive than ever, making companies confused about whom they will entrust this aspect of their businesses. If you are still on the hunt for the best credit card processor, here are the things that you should consider before deciding which one to pick. 

How Much Does The Service Cost?

The first thing you should take into account is the cost of the card processor. It would be best if you considered that you are running a business and need to choose services that cost the lowest. Below are the standard fees that card processing companies will charge you.

Application Fee

The first thing you will have to pay when acquiring a card processor is the application fee. You will need to settle this fee to process your application and schedule your business for the setup. 

Setup Fee

Once you have paid the application fee, the next step for your application is to set up the card processing equipment, which will require you to pay another fee. It will cover the installation cost, like the labour and equipment of the technician. 

Monthly Statement Charges

When you start using the credit card processor to accept payments from your customers, you will need to pay the service provider a monthly statement fee. You pay a fee for the processor to mail you the statement every month. 

Gateway Access Fee

Another monthly fee charged to you is the gateway access fee. This payment is for the data transaction between the payment processor and the bank. 

Interchange Fee

Your business performance will be charged every transaction, which they call the interchange fee. 

Monthly Minimum Fee

The credit card processor will collect a minimum fee from you even if your sales are low.

Software Compatibility

After figuring out which processor works best based on your budget, the best thing you must consider is the software compatibility. Although most payment processors work well with any software, it is still best to investigate further and ensure that it is indeed compatible. Additionally, you might also want to consider other features of the card processor, like an option to accept digital wallets as payments, as it is becoming a popular payment option nowadays. 

Security Of The Process

Security is a significant concern, especially for this kind of financial transaction. No matter how small or big your business is, security should be your top priority. You must already be aware of fraud and security breaches in this kind of transaction. It is why you should be vigilant and ensure that the processor you choose can provide you with the best security and fraud prevention system. Regarding this concern, opting to acquire a card processing service from the best in class card processor can be viable. Therefore, choose the best and trustworthy names when choosing the credit card processor you will use. 

Pre-Termination Fee

Although a pre-termination fee is still a fee, it is not considered part of the card processor cost. A pre-termination fee will only come into account when you decide to stop the service before your contract matures. The fee for the early termination of your contract may vary from one service provider to the other. It is why you must figure out how much is at stake just in case.

Early termination of the contract is inevitable, especially if you are not happy and satisfied with the service provided by the card processor. Commonly, credit card processing companies charge a pre-termination fee from a couple of hundreds to thousands of dollars.

When choosing a credit card processing company, you should consider those that only charge $400 or lower. It will help you avoid paying a considerable amount of money whatever happens.

The Ease Of Use

The ease of use should be your next concern when choosing a credit card processor. It would be best if you went for a processor that is easy to understand and use. This way, you will never have to encounter any problems related to its operation along the way. Additionally, an easy-to-understand system is also easy to troubleshoot when issues arise. Plus, if your card processor is easy to use, you will never have difficulty teaching your employees how to use it. 

Taking Everything Into Account

You might find it complicated to choose which credit card processor is best for you. However, considering all the factors mentioned above, you are now well aware of what to look for in one. Use this information to help you pick the suitable processor that will help you run your business' payment system.

This refers to a banking practice that gives third-party financial service providers open access to consumer banking, transactions and other financial information via application programming interfaces (APIs). The sharing of financial information has enabled customers to access user-friendly interfaces and make faster, easier and more secure payments.

It’s a modern, straightforward and highly effective approach, so it’s no surprise that open banking is so popular, particularly in light of COVID-19 which forced the industry to digitise even faster than originally expected. In the UK, for example, there are currently three million open banking users — three times more than in 2020.

One area of the finance sector that looks set to reap significant benefits from open banking is cross-border payments. Due to the various time zones, intermediaries and legal requirements involved in a transaction, sending money internationally has always been somewhat challenging. However, open banking can go some way in solving the problems financial institutions, businesses and consumers have all traditionally faced, ensuring that cross-border payment services are cheaper, faster and better for all parties involved. Stan Cole, Head of Financial Institutions at Inpay, delves into the topic.

APIs and cross-border payments

Open banking enables third-party financial services providers to access data from banks and other financial institutions, with APIs offering access to account information services (AIS) and payment initiation services (PIS), allowing apps to directly interact with bank accounts. Although APIs take a great deal of effort to design and implement, they are time-saving and cost-effective in the long term. This is because with these solutions, financial institutions don’t need to create custom solutions for every FinTech they intend to integrate with. APIs also allow new financial services to be developed more quickly around these interfaces.

So, what does this have to do with cross-border payments? Well, in our globalised world, sending money abroad is commonplace, whether that’s due to trade and e-commerce, international investments, global supply chains, or the sending of money via international remittances. And according to the Bank of England, cross-border flows are expected to grow significantly in the coming years, from $150 trillion in 2017 to an estimated $250 billion by 2027. As a result, banks, financial institutions and other global businesses must be able to facilitate these transactions with ease and efficiency if they want to attract and retain their customers. Partnering with FinTechs using APIs can play a significant role in achieving this.

The benefits of open banking for cross-border payments

Cost & speed

Open banking enables senders and recipients to bypass the intermediaries that would otherwise be involved in facilitating cross-border transactions. For instance, direct access to customers’ bank accounts means that a business or financial institution could verify their identity and creditworthiness without the help of a third party. This results in reduced fees and quicker services. Time and money can also be saved because FinTechs using open banking will provide an efficient alternative to the slow, expensive legacy systems currently in use.

Ease

Open banking can make it considerably easier to make cross-border payments. APIs can be designed to provide a streamlined, responsive user interface and thereby provide an excellent customer experience. In addition, open banking makes know-your-customer (eKYC) processes much simpler as they can be entirely digitised, gaining the required information in seconds rather than days.

Safety

As well as improving KYC processes, open banking allows banks, financial institutions and businesses to reduce the risks associated with cross-border payments. They can immediately check that customers are able to afford the transaction, for example, and set precise limits. FinTechs using APIs are also likely to have stronger cybersecurity measures in place compared to dated legacy systems.

Competition

Open banking means financial institutions and businesses can stay flexible and meet evolving customer demands, with APIs allowing them to offer exceptional customer experiences. As a result, there is increased competition, encouraging innovation and giving customers more choice over the companies and services they use.

Open banking and cross-border payments today

Open banking is already making waves in the cross-border payments sphere, with many companies already responding to the clear benefits APIs can bring. Some exciting services to have emerged include API-driven live FX pricing and API-based currency hedging automation, while many big names in the financial services sector (including Visa, Mastercard and Western Union) have teamed up with forward-thinking FinTechs in order to use open banking to improve their cross-border payment services.

The most exciting part of this is that open banking is still in its relative infancy and is continuing to evolve. With new tools regularly launching to accommodate various markets and purposes, financial institutions and businesses can take advantage of this phenomenon to provide the best possible customer experiences to anybody that needs to make a cross-border transaction. However, to do so, they must find the right FinTechs to support them as they strive to bring their financial services into the present day.

Organisations have had to rethink their entire business models, new players have sprung up seemingly from nowhere, and consumer behaviour has completely changed. Of course, more transactions are now taking place online and the use of cash is dwindling.  

But while digital payments are dominating the ecosystem in regions such as the Nordics and the UK, there are some key markets in Europe where there is still a way to go. Both Spain and Germany, for instance, still have fairly low rates of card usage and digital payment adoption with cash still used in around 40% of in-person transactions in Spain, rising to 44% in Germany, according to figures from PCM. 

However, while these statistics suggest that digital payments still have a long way to go in these markets, it could also indicate that a boom is set to happen. Indeed, the growth seen in the Spanish e-commerce sector, for example, and Germany’s creation of a common standard for open Application Programming Interfaces (APIs) through the Berlin Group suggest that further revolutionary changes could be just around the corner. Kriya Patel, CEO of Transact Payments, explores the massive untapped potential of the Spanish and German markets, highlighting the opportunities for innovative incumbents and agile new players. 

Spain: Modernisation will drive a boom in digital payments

Spain has a developed payments market, with 86.3 million credit, debit and charge cards used by a population of 47 million for 5.58 billion payments with a value of €210.56 billion via 1.7 million point of sale (POS) terminals and more than 115,000 online merchants. But as mentioned above, cash use remains relatively high suggesting there are still opportunities for cards to replace cash.

The foundations for huge growth in digital payments already exist. Spain’s three major payment systems merged into a single provider, SistemaPay in 2018. As well as rationalising the previously complex infrastructure, Spain’s banks and regulators have upgraded and modernised the technologies that power their payments system. This has led to the enablement of instant payments and other services, while regulatory sandboxes have provided a catalyst for trials of new payment methods between FinTechs and banks.

While all European markets saw a rise in e-commerce during COVID-19, Spain enjoyed the fastest growth in this sector among all Southern European nations at 15%, with e-commerce accounting for double the proportion of national GDP compared to the UK, at 4.5% compared to 2.25% of total GDP.

As well as e-commerce, contactless transactions for in-person payments grew during the pandemic. Spain’s smaller merchants are continuing to open up to electronic payment both in-store and online.

Having previously been something of a desert in terms of opportunities for payments players — largely because of its bureaucratic systems and standard debit-led card portfolios — the outlook is now much brighter. The modernisation of its payment systems and speed of digitisation means issuers could be set for a boom in business over the next three to five years.

Germany: Embracing PSD2 to drive massive growth

Meanwhile in Germany, the growth potential is even more obvious. While the country is unarguably Europe’s economic powerhouse and a global leader in banking, there is still relatively high use of cash, while card use is not as high as some other regions, with 153 million cards held by a population of 84 million people — just under two cards per person. These cards were used for 6.29 billion payments with a total value of €350 billion via 1.15 million POS terminals and online in 2019.

Like Spain, there are solid foundations for digital payments players to build on. Digital transactions are expected to grow at a compound annual growth rate of around 11% in the next few years. While debit cards are most commonly used to pay online, low digital wallet use at just 7% suggests an openness to new solutions other than wallets.

Germany has not sat on its hands when it comes to embracing the EU’s PSD2 regulations. The Berlin Group has created a common standard for open APIs, opening the way for innovative players to muscle into the payments market. With a high number of permissioned intermediaries now able to deliver payments services thanks to the new regulations, smaller companies in Germany now have better options for accepting payments, reducing their reliance on more expensive third-party players.

There are also plans to bring together Germany’s various instant peer-to-peer (P2P) and person-to-business payments schemes. Instant payments are experiencing very rapid growth in Germany, though with only 20% of banks offering this function the room for growth is obvious. Look out for “PayX” — a merger between schemes like Geldkart, Paydirekt and Kwitt — in the coming months and years.

Overall, there look to be plenty of opportunities for players in the payments space to take advantage of in these two key European markets. While restrictive infrastructure has previously made these two nations something of a challenge for payments innovators, recent regulatory and systemic changes coupled with public appetite for new services make Spain and Germany an exciting place to be right now. 

Even chasing these late payments can also be a drain on your already stretched resources, taking time and money away from other areas of your business. Putting ground rules in place can help you protect your business and your bottom line, as well as preserving those precious relationships with your clients. So, with this in mind let’s explore some helpful tips to ensure your invoices are paid on time, every time.

Make Your Invoices Clear And Professional

Writing up invoices can be time-consuming and incredibly dull, and this is often reflected in the end result. Dull, boring invoices can easily be overlooked or forgotten about, causing you a bigger headache later on. Updating your invoice software and utilising invoice templates will help you create eye-catching, memorable and high-quality invoices within seconds. Customisable templates will also help you build a strong business identity, with bold logos on professional-looking documents that will encourage loyalty to your brand, as well as better recognition.

Automate Your Invoices

Automating your invoices every month helps in two ways. Firstly, you’ll know that the job has been done and it’s one less responsibility you need to oversee. Secondly, when your invoices are automated, clients can’t claim that they didn’t receive your invoice or that it’s been misplaced. Automation leaves a digital paper trail that can’t be ignored or disputed.

Be Willing To Check In

Of course, some payments are often late, due to a lack of organisation and forgetfulness on your client’s part. If payment is late, it’s always worth checking in with your client, to enquire. While reaching out and chasing payments can sound daunting, there are gentle ways you can prompt or remind clients about outstanding amounts without being aggressive, such as calling to enquire about their satisfaction with your services and if they haven’t paid because something wasn’t quite right. Most of the time, clients will feel embarrassed at their oversight and pay you straight away.

Set Clear Expectations

You want to get paid on time, but if you fail to stipulate this in your payment terms, then your clients won’t know this. Stating your payment terms as early as possible, and reminding them of your guidelines when you send out your invoice, will ensure payments are on time and overdue payment collections will be avoided.

Highlight Your Willingness To Pursue Legal Action

This doesn’t have to get personal! In your payment terms, it’s important that you also highlight that you’ll be willing to take legal action if payment terms aren’t met within a certain time frame and after a certain number of reminders and warnings have passed. Stating these terms as early as possible keeps everything professional and clear.

Final thoughts…

Follow these tips to ensure your invoices are paid on time, every time.

Businesses today must keep up with the times to entice all customers and give them little or no reason to go elsewhere. With the world getting smaller by the day due to the internet and how it is used by businesses and customers alike, companies who aren’t riding the wave could find themselves struggling to keep up with their competitors.

The best way in which you can boost your business is to be on top of the latest technology trend and use it to its maximum advantage, and embracing cryptocurrencies like Bitcoin and Ethereum would certainly do that.  However, before you decide that taking Bitcoin will make your business explode overnight, there are a few other things you need to consider first.

The rise of Bitcoin

Bitcoin is very much a hot property, as is Ethereum and, as of this moment, Dogecoin. They are in the news every day, and ‘Bitcoin prices’ is one of the most searched terms on Google. It would be easy to assume that cryptocurrencies would naturally be used to purchase goods in the same way we once used cash.

However, this is not currently the case. It is not because Bitcoin and other cryptocurrencies are not safe and secure (because everybody already knows this is not the case), but instead, it seems to be a problem of perception, which is always a critical factor in the mass adoption of anything new.

Cryptocurrency trading

While those with a decent working knowledge of Cryptocurrencies do not share this bias, there is a strong current perception (especially in the face of daily stories about the rising price of Bitcoin) that Bitcoin is something you invest in, not something you use to buy everyday items.

It could be argued that, given the current perception of Bitcoin almost as a commodity, that the person in the street is as likely to pay for a newspaper or a can of Red Bull with Bitcoin as they would using a bar of gold.

Accepting Bitcoin for everyday payments

This looks to be the main barrier in the way of accepting, for example, Bitcoin as a method of payment online. The technology should never be a problem; but instead, it is the willingness of the customer to use it.

Social media can play a significant role in this by normalizing the use of Crypto for everyday purchases. Seeing influencers using Crypto as a currency and not something that just sits in exchanges like Coinbase will increase the ability of regular users to see digital currencies the same way they see the ones they use every day.

Final thoughts

Suppose you are not sure about using cryptocurrency or feel that perhaps this is not the way forward. Just think about how customers used to pay on sites like eBay 20 years ago, which was mainly cheque or cash through the post. Paypal was not really trusted as a payment method, whereas now it is most definitely preferred and indeed requested by most if not all sellers.

Hong Kong is a highly banked, wealthy region which enjoys excellent digital and physical infrastructure. To hear about the financial hub’s payment evolution, we hear from leading ePayment technology and eCommerce management company Payment Asia which provides customised all-around payment strategies to more than 10,000 Asian and multinational companies.

We speak with Lance Lau, Head of Sales at the Hong Kong Team of Payment Asia. Established in 1999 in Hong Kong, Payment Asia has over 20 years’ experience in providing eCommerce payment solution services to local and international markets. Taking the lead in the ePayment technology and eCommerce management market in Asia, the company helps merchants to continue to grow in the wave of technological development.

Over the last two decades, Payment Asia has expanded its business from Southeast Asia to the international market, including the Philippines, Malaysia, Singapore, Australia, New Zealand, Mauritius, the United Kingdom and Canada.

Tell us a little bit about the current payments environment in Hong Kong?

The current payments environment has been very interesting as we’re witnessing a stage of transformation - from cash transactions to the digital era with traditional cashless payment such as credit and debit cards being replaced by eWallets, mobile payments, virtual banking and the future usage of cryptocurrencies.

What payments trends do you expect to see in Hong Kong in 2021? How is Payment Asia going to respond to these?

With the pandemic still affecting everyone across the globe, most merchants are finding ways to improve the purchase experience for their clients while also implementing the online/eCommerce elements to their business.

At Payment Asia, we have designed and self-developed a mobile payment application called PA Pay - specifically for merchants - which integrates multiple payment channels, including credit cards, debit cards, UnionPay and a variety of eWallets, and can be applied to POS or smartphone operating systems.

We offer various online payment solutions including Visa, Mastercard, UnionPay, Alipay and WeChat Pay, which integrate with online stores, H5 web pages and applets through API. We can also guide merchants and personal clients in the process of setting up international bank accounts (IBAN) for payment settlements and operate as an offshore virtual bank.

On top of payment processing solutions, Payment Asia’s services also cover online and offline eCommerce payment strategies, payment gateways integration, eCommerce management, artificial intelligence, big data and more.

Payment Asia’s mobile payment application - PA Pay which can be applied to POS or smartphone operating systems

What is Hong Kong’s current position in China’s payment evolution?

Over the last decade, China has been a pioneer in implementing ePayments, propelled by China UnionPay, Alibaba’s Alipay and Tencent’s WeChat Pay.

The FinTech industry is taking off amid a backdrop of growing consumption and the large, tech-savvy millennial generation. China’s FinTech Explosion explores the transformative potential of the country’s financial technology industry, covering subsectors such as digital payment systems, peer-to-peer lending and crowdfunding, credit card issuance and internet banks, blockchain finance and virtual currencies, and online insurance.

In 2014, the People’s Bank of China established the Digital Currency Institute of the People’s Bank of China where a specialist research team discusses technical and regulatory issues in relation to the development of Digital Currencies in China.

Since August 2020, the People’s Bank has been carrying out pilot trials of Digital Currency Electronic Payment (DCEP) in various cities across China. The estimate is that 30%-50% of cash will be replaced by the DCEP within two to three years.

Features and capabilities of DCEP:

• DCEP uses digital tokens and blockchain technology to represent a country’s official currency. DCEP differs from cryptocurrencies in that it has the status of legal tender and is centralised and regulated by a country’s monetary authority.
• DCEP is a digital version of the Renminbi (RMB).
• DCEP is a sovereign currency issued and backed by the People’s Bank of China and controlled by the Chinese Government which will be able to track the currency moving through its economy and monitor its usage.
• DCEP is said to be secure, have controllable anonymity and prevent counterfeiting. It also addresses the high costs of cash issuance and handling, and difficulties in tracking and fraud.
• Like cash, the DCEP cannot be refused as payment. The People’s Bank will exchange DCEP with commercial banks and payment operators, which can then distribute DCEP to their customers via eWallets.
• The use of DCEP will be convenient for the public and provide more efficiency in the financial system, helping China bring its unbanked population into the mainstream economy and accelerate the move to a cashless society.
• DCEP also helps to internationalise the RMB’s use in trade settlements and presents an attractive alternative to the established international funds-transfer system, SWIFT, with lower transaction fees.

On 4^th December 2020, Eddie Yue, Chief Executive of Hong Kong Monetary Authority (HKMA), announced that HKMA and the Institute are discussing the technical pilot testing of using DCEP for making cross-border payments and are making the corresponding technical preparations.

How is Payment Asia contributing to this?

Payment Asia has always delivered the advantage of being in Hong Kong to our merchants. We are now implementing blockchain technology to our payment platform and are actively developing an emerging cryptocurrency gateway. This can be seen as a baby step but is still an efficient and effective way to get merchants to warm-up and be ready for the new payment era.

At present, 36% of the SMEs in the United States accept Bitcoin (BTC), whereas Wikipedia, Microsoft, Expedia, AT&T, Burger King, KFC and Subway have also started accepting BTC. Our value proposition is to provide merchants with a familiar payment gateway experience while bridging the gap between digital and fiat currencies. Customers will be able to have this new option as their payment method while merchants will be protected on the cryptocurrency’s fluctuation.

Features of Payment Asia’s Crypto Gateway:

• Acceptance of major digital currencies (e.g., Bitcoin, Ethereum, Cardano, BCH, Stellar, USDT etc.) for online and offline payments.
• Instant locking of rate to minimise merchants’ risk.
• Withdrawal of funds in less than a business day.
• Payment to merchant’s suppliers in 200+ countries with digital currencies.

Payment Asia’s Crypto Gateway bridges the gap between digital and fiat currencies

What does the future hold for Hong Kong’s payments industry?

With its status as a key Asian financial hub, Hong Kong will always be an important part of the global payments industry.

Supporting this, Hong Kong's Stock Exchange raised $51 billion from 154 new listings in 2020.

Numbers like this make Hong Kong irresistible for many investors, according to Tara Joseph from the American Chamber of Commerce Hong Kong.

"The flow of money that comes in and out of Hong Kong on a daily basis, that goes into mainland China and comes out, is very hard to replicate," she said during an interview with BBC's Asia Business Report.

A city with attractive tax rates and a business-friendly environment is the natural successor to Hong Kong. Being the gate into the Chinese market, a lot of international businesses will still prefer Hong Kong as the processing hub for their B2B and B2C activities.

How can Payment Asia help merchants with digital transformation?

One of Payment Asia’s strengths is based on creating a landscape for merchants and businesses in order to generate traffic and convert this into sales through our payment technology.

As transactions are made, we are implementing big data for our merchants, through our secure system and a robust business intelligence system.

We use this data to create inbound and outbound digital marketing strategies for merchants, in order to increase their conversion rates.

In addition, we have also developed a chatbot platform that uses artificial intelligence to realise real-time conversations to strengthen the interaction between brands and consumers.

What’s on Payment Asia’s agenda for 2021?

With our extensive experience in the market, moving forward into the post-COVID world, we aim to redefine the benchmark of online/offline and mobile payments - not just in Hong Kong but on a global scale.

For more information on the work we do, you can follow our  blog on our official website: www.paymentasia.com.