Taking a closer look at the start-up industry in Europe, card processing specialists, Paymentsense, have conducted research to find out which countries have seen the most significant rise in start-ups between 2013 -2017.

 The data has been mapped out across Europe allowing users to uncover the industries that each country specialises in and how fast those industries are growing.

Paymentsense analysed 30 European countries and ranked each one of them based on how many new businesses have been registered in that 5-year period and which business types have been the most popular in these countries.

Turkey tops the list with the most start-ups registered, followed by France and then the United Kingdom. However, data reveals that the UK is the fastest growing start-up nation in Europe and has brought more than a few successful companies to Europe, including Transferwise and Deliveroo.

Top 10 countries fuelling the European start-up industry:

Among all these countries, the UK has seen the biggest growth in the number of start-ups between 2013 and 2017 at 5.09%, followed by Romania and Portugal. What all of them have in common is a business-friendly environment that gives founders the possibility to grow and nurture their company over time.

When looking at what type of start-ups have dominated Europe in the last few years, wholesale and retail have the largest presence with 3.7 million new businesses started up.

This is surprising to see when in recent years we have seen a retail crash with companies like Woolworths and ToysRUs go bust.

The type of companies that have started up in Europe between 2013-2017

Guy Moreve, Chief Marketing Officer at Paymentsense, says: “It’s interesting to see that the UK ranks among the top five countries with the highest numbers of registered new businesses. It shows that the country offers a great setting for those interested in founding their own company.

Further afield, it’s fascinating to see how Europe has changed in recent times. A number of countries are now placing more emphasis on technology which has helped create a ‘golden era’ for tech startups.

“In order to thrive a business in your respective country, make sure you analyse the market you’re addressing – what works best and what doesn’t; It’s also worth looking at the legal and environmental conditions in order to make sure your business idea is a success”.

(Source: Paymentsense)

The 05: Do Not Honor card declined response is the most common and general ‘decline’ message for transactions that are blocked by the bank that issued the card. This week Finance Monthly hears from Chris Laumans, Adyen Product Owner, on the complexities of this mysterious and vague transaction response.

05: Do Not Honor may be the largest frustration for any merchant that regularly analyses their transactions. Although it frequently accounts for the majority of refusals, it is also the vaguest reason, leaving merchants and their customers at a loss about how to act in response.

Although unfortunately there isn’t an easy, single answer about what this refusal reason means, there are several suggestions as to what could be the cause behind the non-descript message. So what might the 05: Do Not Honor mean? From our experiences analysing authorisation rates and working with issuers and schemes, here are some plausible explanations.

Insufficient funds in disguise

In probably half of the cases, 05: Do Not Honor is likely just an Insufficient Fund refusal in disguise. Reality is that some issuers (or their processors) do a poor job of returning the appropriate refusal reasons back to the merchants. This is both due to the use of legacy systems at the issuer side as well there being no mandates or monitoring by the schemes on this, letting issuers continue to use it as a blanket term.

By looking at the data from various banks, it is easy to see how “Do Not Honor” and Insufficient Funds can often be used interchangeably. Records that show a disproportionately high level of Do Not Honor and a low level of Insufficient Fund refusals would suggest one masquerading as the other. Given that Insufficient Funds is one of the most common refusal reasons, 2^nd maybe only to “Do Not Honor”, it makes sense that “Do Not Honor” by some banks may actually represent Insufficient Funds.

Refusal due to credential mismatches

Although the words “Do Not Honor” aren’t the most revealing, sometimes other data points in the payment response can be clues for the refusal. Obvious things to look at are the CVC response, card expiry date, and, to a lesser extent, the AVS response. For lack of a better reason, issuers will frequently default to using “05: Do Not Honor” as the catch-all bucket for other denials.

Suspicion of fraud

The most appropriate use of “05: Do Not Honor” would be for declining transactions due to suspicious activity on the card. In some cases, although the card is in good standing and has not been reported lost or stolen, an issuer might choose to err on the side of caution due to a combination of characteristics on a given transaction. For example, a high value transaction made at 3am from a foreign based merchant without any extra authentication, likely will trigger a few too many risk checks on the issuer side. These types of refusals will again unfortunately be designated into the “05: Do Not Honor” category, with merchants drawing the short straw. Even though issuers may be able to point to specific reasons why the transaction was refused, issuers have no way to communicate this back to the merchant.

Some astute merchants might point out that issuers should be able to use “59: Suspected fraud” in these cases. Some issuers however remap these 59 refusal reasons to 05 before sending the response to the acquirer to protect store owners in the POS environment and avoid uncomfortable situations with the shopper standing in front of them.

Collateral damage

Finally, the reality is that your likely not the only merchant that a given shopper interacts with. Regardless of how good your business is or how clean your traffic is, a shopper’s recent history with other merchants will influence the issuers decision on your transaction. For lack of a better reason, the catch-all 05: Do Not Honor refusal in some cases be seen as “Collateral damage”. If the shopper coincidentally just made a large purchase on a high-risk website or went on a shopping spree before reaching your store, there is the possibility that the issuer may decline the transaction at that moment in time. In these cases, there is unfortunately very little that can be done, except to ask for another card or to try again later.

Hopefully this helps shed some light on the possible reasons why ‘05: Do Not Honor’ is so dominant in the payment space and that there is no single reason for this response. Adyen’s advice to dealing with these refusals is to look at the data at individual issuer/BIN levels and from there, try to distil patterns particular to those bank’s shoppers.

Below Graeme Dillane, manager, financial services, InterSystems, offers insight into best practices in the financial services industry, highlighting where current weaknesses lie and how they can overcome.

Increasing trade volumes and periods of high market volatility create technology challenges for financial services firms. This is especially true for sell-side firms, which can experience extremely high transaction volumes, since they partition already high volumes of incoming orders into an even greater number of smaller orders for execution. At the same time, they must support a high number of concurrent analytic queries to provide order status, risk management, surveillance and other information for clients.

This requirement for multi-workload processing at high scale, coupled with the highest levels of performance and reliability, has historically been difficult to satisfy. Compounding the challenge, transaction volumes grow not only incrementally and within expectations, but can also spike due to unexpected world events.

A critical component of a sell-side firm’s technology infrastructure is its transaction management and analytics platform. The platform must be reliable and highly available. A failure, or even a slowdown of the platform, can have severe consequences as it can take many hours to rebuild order state and resume normal operations after a failure. In the meantime, the firm’s ability to process additional trades and provide order status is compromised and financial losses mount.

To successfully handle growth and volatility without performance or availability issues, the platform must balance transactional workloads with the concurrent analytic demands of downstream applications at scale. Financial services organisations, particularly sell-side firms, must process millions of messages per second, while simultaneously supporting thousands of analytic queries from hundreds of systems that must report on the state of orders while performing other queries.

Currently, in-memory databases are widely used, primarily due to their ability to support high-performance data-insert operations and analytic workload processing. However, in-memory databases alone are not an ideal platform for transaction management and analytics for several reasons:

• Limited ability to concurrently process transactional and analytic workloads at scale. In-memory databases are not designed to support multi-workload processing at high scale. As a result, as volumes increase, at some point both the transaction processing and the analytic queries will slow or stall.
• Scale limitations - Since the data in an in-memory database is stored in main memory, the working data set is limited by the available amount of memory. This creates risk when transaction volumes spike, compromising the ability to process new orders once the available RAM is filled.
• High costs - Since servers have hard memory limits, scaling in-memory databases beyond these limits requires purchasing and procuring additional nodes – to sustain normal operations plus headroom for unexpected volatility - increasing overall costs.
• System downtime - Since the data is stored in-memory, if the database server fails, the data that is resident in-memory on that server is lost.

Finding a Solution

So, given these challenges, how can financial services organisations find a solution that enables them to simultaneously process transactional and analytic workloads at high scale?

The answer comes in the form of the Hybrid Transaction/Analytical Processing (HTAP) database.

Traditionally, online transaction processing (OLTP) and online analytical processing (OLAP) workloads have been handled independently, by separate databases. However, operating separate databases creates complexity and latency because data must be moved from the OLTP environment to the OLAP environment for analysis. This has led to the development of a new kind of database which can process both OLTP and OLAP workloads in a single environment without having to copy the transactional data for analysis. HTAP databases are being used in multiple industries for their ability to uncover new insights, create new revenue opportunities and improve situational awareness and overall business agility for organisations.

The best HTAP database platforms deliver the performance of an in-memory database with the persistence and reliability of a traditional operational database. They are optimised to accommodate high transactional workloads and a high volume of analytic queries on the transactional data concurrently, without incident or performance degradation, even during periods of market volatility.

They have a comprehensive, multi-model database management system (DBMS) that delivers fast transactional and analytic performance without sacrificing scalability, reliability or security. They can handle relational, object-oriented, document, key-value, hierarchical, and multi-dimensional data objects in a common, persistent storage tier.

Moreover, the best of these embody features that make them attractive for mission-critical, high-performance transaction management and analytics applications. These include:

High-performance for transactional workloads with built-in persistence – The ideal scenario is to find a data platform that includes a high-performance database that provides transactional performance equal to, or greater than, in-memory databases along with built-in persistence at scale.

Data is not lost when a machine is turned off, eliminating the need for database recovery or re-building efforts. By using an efficient, multi-dimensional data model with sparse storage techniques, data access and updates are accomplished faster, using fewer resources and less disk capacity.

High-performance for analytic workloads – Seek out solutions that provide a range of analytic capabilities, including full SQL support, enabling you to use their existing SQL-based applications with few or no changes. Since the database stores data in efficient multidimensional structures, SQL applications achieve better performance than traditional relational databases.

Consistent high-performance for concurrent transactional and analytic workloads at scale - Ideally, solutions should provide the highest levels of performance for both transactional and analytic workloads concurrently, at high scale, without compromising performance for either type of workload. Since rising order volumes increase both the transactional and analytic workloads on the system, a data platform must scale to handle such workloads without experiencing performance or availability issues.

Positive Prospects

This article has highlighted that many financial services organisations are, for a variety of reasons, currently crying out for ways in which they can simultaneously process transactional and analytic workloads at high scale. Fortunately, help is now at hand. Thanks to the latest breed of data platforms for high-performance transaction management and analytics applications, both transaction processing and analytic queries are supported concurrently, at very high scale, with built-in durability and with the highest levels of reliability – and at a low total cost of ownership.

Below Dave Orme, SVP, IDEX Biometrics, discusses the challenging landscape of payments and fraud, the fight against scammers and the obstacles the future will find in a cashless society.

Clearing up the mess left behind by fraudsters is a serious challenge and sees financial institutions having to absorb the monetary and logistical damage of card payment fraud daily. Meanwhile, consumers are left with a feeling of dread when they see transactions, that they know they haven’t made, on their payment card accounts. Finding themselves needing to take time away from work or home, to report stolen cards, cancel cards and wait for new ones. Not only is this frustrating for cardholders, it takes a huge amount of time investment by banks to resource this process. Payment card fraud is a serious problem that affects every one of us.

In fact, card fraud is a serious and increasingly urgent problem. Financial Fraud Action UK (FFA UK) reports that in 2016, fraud across payment cards, remote banking and cheques totalled an astonishing £1.38 billion, an increase of 2% on the previous year. The overwhelming majority (80%) of this fraud involved payment cards; there was a particularly large (30%) increase in the proportion of cards lost and stolen, and these alone accounted for losses of £96.3 million.

There is no single reason for these figures; impersonation and deception scams, as well as data breaches, have all played their part. But the UK is becoming an increasingly cashless state — debit card payments overtook cash payments for the first time recently — so we have no real option but to stop the fraudsters. The obvious question is, how?

Fighting back

Financial institutions currently bear much of the impact of card fraud, and in response are investing heavily in machine learning, predictive analytics and other cutting-edge technologies to beat the criminals. These are having some effect; in 2017, fraud losses on payment cards fell somewhat (which contrasts with 2016, as we have seen), but even so there was still £566 million lost to payment card fraud alone and seven pence in every £100 spent was fraudulent — a very worrying statistic in a society that is rapidly increasing its reliance on cards.

In other words, payment card fraud has been a huge problem for a sustained period of time and the steps currently being taken to stop it are not effective enough.

Human nature

In a society that relies more and more on technology, payment cards are the weak link; or rather, the behaviours of the people who own and use payment cards are the weak link. It is human nature to make the mundane administration of life easier — but we all know how dangerous writing down your PIN because you keep forgetting it (and worse, keeping the card and the PIN together) can be. Many people are also guilty of sharing their PIN and card with their friend/partner/relative to enable transactions without the need to be present. Others give out cards and PINs to trusted people because they are elderly or have mobility problems and getting the necessities of life is so much easier that way. All these behaviours are very common, but they are also making card crime very easy.

People fail to keep their PINs or other card details safe not because they are inherently foolish or lazy, but because PINs are simply unfit for purpose. To be effective they demand a far higher standard of discipline and security from human nature than human nature is ever likely to give. The result is a massive headache for individuals, financial institutions and businesses all over the world.

But if not PINs, then what?

Giving the finger to fraudsters

Biometrics, including fingerprint recognition, is a field increasingly recognised as holding the key to card fraud prevention as such fraud becomes a more and more urgent problem. And while financial services may be looking at large-scale use of biometrics now, in other security-conscious sectors this has already happened. For example, many smartphones (which are themselves fast becoming the twenty-first century replacement for the wallet) are protected via fingerprint authentication, usually via a sensor on the lock screen. Passports are also routinely issued with biometric authentication built in, as are government ID cards. Biometrics are used where security is non-negotiable.

Until recently, including biometric authentication in a payment card was very difficult. This is because it required a sensor to be incorporated in the card and for many years those sensors were too large and inflexible to make that viable. However, there have been breakthroughs in this technology recently and we are now able to deliver a very thin, flexible fingerprint sensor that is easy to add to a standard card, so the major barrier to using biometrics with payment cards has now been overcome.

Looking ahead

Biometrics companies are now working in partnership with banks and other financial institutions, smartphone manufacturers and payment processing firms, to make gold standard authentication affordable, practical and available for payment card users and issuers. This is very good news for those in financial and security businesses, because the roll-out of biometrics in those fields will relieve much of the pressure of fighting what is, frankly, now a losing battle. With the arrival of simple, secure and personal authentication for all, hopefully we will see the demise of that twenty-first century pickpocket that is the payment card fraudster.

Neil Williams, Senior Associate Solicitor at business crime experts Rahman Ravelli, considers the possible fate of cryptocurrencies.

It has been reported that more than 800 cryptocurrency projects have died a death in the past year and a half. It is a statistic that cannot be ignored for a number of reasons.

There is little doubt that the rise – and, from what we are seeing, the fall – of cryptocurrencies has been dramatic. It wasn’t a slow and steady rise in popularity. Cryptocurrency seemed to arrive in a bang. Suddenly, as if from nowhere, it was everywhere. And now, it appears, we are seeing a dramatic reversal of that trend.

To explain such a reversal requires a brief examination of the way cryptocurrency functions. In a nutshell, new digital tokens are created through an initial coin offering (ICO); which sees those behind the start-up issuing a new coin. Investors can then choose to buy that coin. By doing this, any investor is not purchasing equity in that company but the cryptocurrency that they do purchase can be used on the company's product. Such a process is, in effect, speculation. Those who invest in an ICO do so because the coins are usually cheap in their early days – and they hope that they will increase in value and provide a tidy profit if and when they cash in.

It is a process that has attracted plenty of enthusiastic followers. Researchers examining the market have stated that companies raised £3.8 billion through ICO’s last year, whereas the figure for this year is expected to be more than triple that. The sheer scale of investment in cryptocurrency demands that we pay attention to the problems it is currently suffering. Those problems may have implications for the financial wellbeing of many individuals and organisations who have staked a lot on the continued rise of cryptocurrency – only to discover that hundreds of such coins are already dead or worthless.

This is due largely to cryptocurrency’s unreliability factor. Many were set up with the simple intention of making fraudulent gains. Fake start-ups have been known to see the initial hard sell swiftly followed by those behind an ICO disappearing with investors’ money. Others were created but the company’s product never became a reality. And even those that have been regarded as the “major players’’ have struggled. Bitcoin, the biggest cryptocurrency, has seen its value fall by about 70% since 2017’s record high of $20,000. It is certainly still in existence and still has its enthusiastic following. But the fact that even Bitcoin has suffered a major battering to its reputation and its value shows that cryptocurrency has a credibility problem. Cryptocurrency has to be seen as a risk. And the more its credibility is eroded, the less chance cryptocurrencies – both the legitimate and fraudulent ones – may have of attracting and retaining investment.

Cryptocurrencies may, therefore, face a struggle to regain credibility – and see that reflected in rising values. Cryptocurrencies, as originally devised, are by their nature a friend of the fraudster. They have no tangible product, they allow anonymity and the lack of regulation historically has made them a virtual haven for those who want to conduct their dealings away from the authorities’ prying eyes. An awareness of this may be behind the sudden attack of cold feet among many who were so keen to invest not so long ago. But conversely, we may still be some way off the logical outcome.

What has to be recognised is that as cryptocurrencies attract the attention of mainstream investors, and even banking institutions, the lure and attraction of them is diminishing for those who wish to remain in the shadows: the very people who have given the currencies their damaging credibility problem. If such mainstream investment in cryptocurrencies continues, it is sure to be followed by closer official scrutiny and / or regulation – either of which will have the effect of further driving out those looking to make fraudulent gains. The consequence of this may not only be these types of currencies having less appeal to those who originally traded in them, it may also lead to a more stable market being created for honest investors.

We may, therefore, see another swing upwards in cryptocurrencies’ fortunes, as they become increasingly marketable and viewed as safer and more legitimate than at present. This is something that could only be hastened if and when regulation is introduced. It would be unwise, therefore, to announce the demise of cryptocurrencies.

PayPal is an American company operating a worldwide online payment system that supports online money transfers and serves as an electronic alternative to traditional paper methods like checks and money orders. PayPal is one of the world's largest Internet payment system companies.

Established in 1998, PayPal had its initial public offering in 2002, and became a wholly owned subsidiary of eBay later that year. In 2014, eBay announced plans to spin-off PayPal into an independent company. Today, PayPal has over 200 million users worldwide. Under the kind patronage of Samuel Patterson.

Online research from Equifax, the consumer and business insights expert, reveals over a third (37%) of Brits believe the UK will be a cashless society within the next 10 years. Over half (53%) of 16-34 years olds believe we’ll be reliant on digital and card payments by 2028, compared to just 22% of those aged 55 or above.

However, the research shows that while the use of cash is declining¹, it still has its fans. In the survey, conducted with Gorkana, respondents said coins are their top payment choice for vending machines (60%), parking meters (57%), charity donations (53%), and buses (52%), and paying with notes is the preference for taxis (42%).

While 46% of people use cash less often that they did three years ago, more than half (54%) of respondents use cash either as or more often, and almost three in five (59%) think shops, cafes or market stalls that only accept cash are convenient.

The findings also highlight that although the use of digital payments via contactless cards and online transactions is growing rapidly¹, some people are still wary about security. Over a quarter (27%) of respondents don’t feel confident payments via websites or contactless cards are secure, and 26% think it’s difficult to track money spent using digital methods.

Sarah Lewis, Head of ID and Fraud at Equifax, said: “We’re in the midst of an exciting smart payments revolution. We can pay for our lunch with our watches and passers-by are now able to donate to buskers via contactless. This growth of new payment technologies is drawing us closer to a cashless society, but long standing preferences for cash remain in certain situations, particularly among older consumers.

“The shift to digital payments in the new economy raises important questions about the role of different payment methods, and highlights the need to balance the convenience people want with security. As digital and online payments continue to grow, so too does the associated fraud. It’s vital that new technology is maximised to give people the reassurance they need as they change the way they spend.”

(Source: Equifax)

According to new research from leading payment provider MasterCard, biometric technology is set to become an integral part of all online shopping, as tighter regulations concerning online fraud are introduced. For instance, new EU regulations come into effect next September, which will increase the number of transactions subject to two factor authentication, known as “Strong Customer Authentication” (SCA).

MasterCard has been a board member of The Fast IDentity Online (FIDO) Alliance since 2013. FIDO is a global non-profit trade association developing technical standards and certification programmes for simpler, stronger authentication.

Andrew Shikiar, CMO of The FIDO Alliance, comments: “MasterCard is spot on in its assessment; the use of passwords is woefully outdated as a means of online authentication. The problem has long been overreliance on yesterday’s approach and a reluctance to embrace the ways in which technology has transformed both our habits and the options available to us. It’s encouraging to see that the tide is finally turning, thanks in large part to evolving regulatory requirements in response to escalating levels of online fraud. Far more secure methods of authentication, including biometrics, are now readily available at our fingerprints, which can greatly improve security and privacy for consumers accessing online services, while improving the user experience into the bargain.

“As the range of activities we undertake online using mobile devices continues to rise, the more sensitive transactions – such as payments and money transfers – can be facilitated using device-enabled strong authentication. However, its success hinges on the industry’s ability to offer this at internet scale. Biometric modalities deliver a number of user experience benefits, but not all biometric systems are built on secure, tried-and-true public key cryptography. Biometric authentication relies on matching an input to a held piece of original data, and how that matching process is managed - and in particular how identifying data is stored - raises a host of security and privacy questions. For instance, if data is held in an online central database, a breach of that data could be catastrophic.

“On the contrary, a decentralised approach allows users to authenticate by using a private key on their personal device to sign a cryptographic authentication challenge from the service provider’s server. With this approach, the service provider only stores a public key associated with that user’s account, which cannot be leveraged by a hacker having infiltrated a database. This is one of many reasons why leading service providers like Google, Facebook, Microsoft, Dropbox and many more have deployed FIDO Authentication to protect hundreds of millions of consumers around the world, while reducing the outdated reliance on passwords.”

(Source: The FIDO Alliance)

Multi-currency payments provider FairFX has revealed that since the Brexit referendum, the Euro has decreased 13% against the pound increasing financial pressure on businesses who operate cross border.

Uncertainty over future trade agreements alongside fluctuating currency rates have put the spotlight on the cost of doing business internationally and highlights the importance of monitoring foreign currency transactions.

An estimated 17% of UK based SMEs are doing business internationally, boosting their own bottom line, as well as the UK economy.  Whilst international expansion offers access to new markets, ambitions for growth need to be well planned financially, starting with the basics.

35% of SMEs state cashflow is a barrier to growth, making smart currency moves essential when it comes to international payments, and by getting the best value for every international transaction, both business ambition and cashflow can be supported.

FairFX Top tips for getting the best value when making international payments:

1. Know what you want

To get the best international payment provider for your business you need to know what you want. Consider how regularly you’ll be sending and receiving money overseas, how many currencies you’ll need to transact in and understand the costs associated with making both singular and regular transactions.

Fees and charges can vary by transaction type, day, time and speed you require the transaction to be completed in, so list out the different transaction types you may want to make and understand how the fees and charges can vary so you don’t get caught out. Understand how currency rates are set and how they compare to other providers. This can be confusing to unpick so speak to a currency expert if necessary.

2. Review your current payment package

High street banks don’t offer the best value when it comes to international business payments. Using your current banking provider to handle international as well as domestic transactions may be convenient but defaulting to them might mean you’re missing out on better rates and lower fees.

As your business grows and develops, your business banking needs will also evolve and if you’re transacting regularly small charges can add up, meaning you could be paying a high price for an unsuitable service. 

3. Select a transparent, convenient and consistent service

If you’re regularly buying from and selling abroad, fees could soon take a portion of profit from your bottom line. Pick a provider whose fees are transparent and made clear upfront so you can better manage your expenses. Look for a service where rates are consistently good – don’t be lured with teaser offers that expire and leave you trapped or unaware of post introductory fees and charges.

4. Understand the market you’re operating in

Keeping track of currency movements can be easier said than done, so sign up for a reliable rate watch service, like the one provided by FairFX which alerts you when currencies you operate in have moved in your favour. This way you can make international payments when rates give you a commercial advantage.

5. Maintain your standards

The rigorous standards you set for expenses and payments at home don’t stop when your employees pass border control, so find a solution where you are confident in who is spending what. Consider prepaid corporate cards which allow you to transact with competitive exchange rates and top-up in real-time, giving your staff the funds they need to travel for work, providing peace of mind and control over expenditure on a global scale.

6. Watch the way your employees pay

When it comes to travel, regardless of whether your staff are hosting meetings or need to cover the cost of their own accommodation and essentials, make sure you’re in charge of the exchange rate they are using for their payments.

If staff are currently paying their own expenses and then claiming back, make sure they don't fall into any exchange rate traps. Advise them to always pay in the local currency when travelling and avoid exchanging at the airport.

The FairFX corporate prepaid card allows staff to pay for expenses with the amount of money you have approved them to spend, whilst you can track and report on spending on the integrated online platform, so there is no reliance on employees using their own payment methods, choosing the exchange rate and fees charged and reclaiming the cost from your business.

7. Benefit from the best rates

Exchange rates fluctuate from day to day with the euro currently 13% lower than before the Brexit referendum announcement, a sum that on a large transfer could make the difference between profit and loss. Consider a forward contract to ensure you can benefit from peak rates by fixing international transactions up to a year in advance.

8. Ask an expert

If you are regularly making international payments it is worth finding an expert to help you with services not offered by your bank to help minimise risk and maximise the return of doing business overseas.

9. Set up a stop loss or limit order

Protect your business against market downturns with the aid of a Stop Loss, which will ensure any losses are limited if you’re aiming for a higher rate and the market takes a turn.

Also consider a Limit Order where you set up ‘target’ exchange rates and ask your currency dealer to process the transaction when the rate you’ve set is achieved to give you certainty over how payments will affect your bottom line.

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Ian Stafford-Taylor, CEO of FairFX said: “Easy access to international currency at market-leading rates whether travelling abroad or sending and receiving payments is vital for businesses breaking into and operating successfully internationally, especially in a market where rates are constantly fluctuating.

“Many small and medium sized businesses settle for high street bank accounts which can charge extortionate fees for international transactions and offer poor service. The right account and sensible planning could add up to big savings, something that SMEs can ill afford to waste in a competitive marketplace.

“As future trade agreements post Brexit become clearer businesses could find themselves with heavy workloads as they adjust the way they operate, so finding a trusted payment provider and reaping every possible benefit when it comes to currency will continue to be crucial for success.”

(Source: FairFX)

Cryptocurrency values have risen and fallen in spectacular fashion over the last year and while financial watchdogs are looking to tighten the regulatory grip on how cryptocurrency trading operates, some traders have already profited from the volatility in the new currencies – and they’re not the only ones. Below Martin Voorzanger, EclecticIQ, explains for Finance Monthly how criminals are making the most of the current crypto sphere.

Another group making profits from the turbulent cryptocurrency market is cybercriminals. In fact, last year there was a marked increase in cryptomalware reports and breaches of crypto exchanges and it’s clear that 2018 will be no different. After all, where there is money, there is crime.

The future ‘bank job’

In some cases, criminals are adapting tried and tested cybercrime techniques – such as hacking email accounts, social engineering and spoofing emails – to prise digital coins out of the hands of those that own them.

For example, in late 2017, criminals pulled off the classic bank heist – with a twist. Making off with approximately 4,700 Bitcoins (valued at the time as $70m) in a raid on digital currency exchange, NiceHash, hackers gained access to the company’s payment services through an employee’s PC. The organisation described the attack as “sophisticated social engineering”.

Hackers found a similar route into Bithumb – South Korea’s biggest cryptocurrency exchange – earlier in 2017. Again, the weak link was an employee – and this time it was their home computer which was compromised. While, in this case, no currency was stolen, a vast amount of personal computer data was. Despite Bithumb suffering no real, initial monetary loss, the theft of sensitive personal data can actually be even more damaging to a business. In this instance, Bithumb stated that no passwords were stolen, but customers reported receiving calls and emails that scammed them out of funds, ultimately resulting in financial loss for Bithumb and potentially an irreversibly damaged reputation.

While, bitcoin and other cryptocurrencies may have been designed with security in mind through the blockchain platform, to keep their crypto assets and data safe, organisations can’t rely on this alone. Yes, blockchain is notoriously difficult to tamper with, however opportunist criminals have found something much easier to compromise – the computers and employees within exchanges.

It is for this reason that organisations must exercise more caution and ensure all security technology and practices are fit for purpose. Good security hygiene should always be front of mind in finance matters – whether it’s around cryptocurrency or not.

A new kind of ‘botnet’

Potentially more worrying than these older, but still successful, cybercrime tactics, is when criminals start to adapt new techniques specifically with the intention of defrauding holders of crypto assets. One of the methods that is becoming popular with criminals in a bid to exploit digital currencies is cryptojacking – where cybercriminals take over employees’ computers to secretly mine cryptocurrency. While the method itself has been around for some time, the surge in the value of cryptocurrencies means mining coins has become an incredibly enticing prospect for criminals. And although each infected device can only mine a small amount of value, criminals are collecting enough machines to create data-mining ‘botnets’ which collectively, can deliver a large profit.

While cryptojacking in itself may not carry the destructive payload of ransomware or other malware, it still represents a device compromise and one which, at best, affects the performance and longevity of devices and, at worst, provides an open doorway for more destructive threats, such as ransomware.

Furthermore, it’s not just the cryptocurrencies themselves that are under threat of attack. Worryingly, earlier this year, security firm Radiflow reported that a European water provider had been compromised. This attack represented the first public discovery of cryptocurrency mining malware in the systems of a critical national infrastructure organisation proving that criminals are no longer just after currency – they want power.

The threat to cryptocurrencies is real and growing - whether the end game of the criminals is financial gain or to disrupt critical infrastructures. Indeed, Microsoft warned earlier this year that it has seen a surge in currency-mining malware infecting Windows PCs in enterprises around the world. The company believes this could be the work of external criminals or, equally, insiders with access to company systems.

Ultimately, while cryptocurrencies themselves are secure, the exchanges and the systems that surround them are not. Humans remain the weakest link – whether intentionally or not – criminals continue to use the same tried and tested vectors of attack and humans are still just as vulnerable to being conned or manipulated by social engineering.

One thing is for certain though – cybercrime activities in this area will not decrease anytime soon. Organisations need to make sure they have the correct security measures in place, including ensuring that employees understand the threats associated with social engineering, to best protect against this new kind of threat.

Credit management has a vital role to play within any business. Its primary aim is to ensure customers pay their outstanding balances within the pre-agreed timeframes. When implemented effectively, it helps reduce late payments and improve cashflow, in turn driving a more positive liquidity position for the business. Below Martin de Heus, VP of Direct Sales at Onguard, explains for Finance Monthly.

All of this is fundamental to the work of the credit manager. Unfortunately, however, credit management departments don’t always believe their job also entails keeping the customer happy. Whereas sales and customer service departments might be trained in the arts of charm and diplomacy, credit management teams are more likely to value persistence and tenacity. After all, organisations want outstanding invoices paid as quickly as possible.

The issue is that the role of the credit management department also needs to be about maintaining positive customer engagement. Sales and customer service departments will have done their best – with the help of various tools and technologies – to get to know the customer and ensure their satisfaction. Maintaining this positive relationship is generally much trickier if the customer falls into debt.

It’s a delicate situation. The wrong approach may negate any early groundwork and jeopardise a potential long-term relationship. Nonetheless, these customers are in the credit manager’s portfolio for a reason: experiencing payment difficulties, in arrears or have already been transferred to a collections agency.

The organisation wants to keep Day Sales Outstanding (DSO) as low as possible, however the customer still expects to be treated well and with respect. Respectively, how can organisations create a positive customer experience despite these payment difficulties?

As credit managers are aware, the reasons for non-payment differ greatly between customers; there is never a ‘one size fits all’ approach. Some may be experiencing temporary difficulties. For example, an understaffed accounts department with a high workload might mistakenly overlook an open invoice. While some always pay late as a matter of policy, and others are genuinely facing cash-flow problems.

Because of these differences in circumstances, all these will act favourably to a personalised approach.

Today there is technology available that monitors each customer’s order to cash journey and this will segment customers, assessing who the customer is, what they need, what the risks are, their payment behaviour and how they prefer to communicate. Automated reminders, processes and actions can be created based on these segments. Consequently, communication with a customer who always pays late will differ from those with the customer who simply forgot to pay an invoice. This functionality provides customers with the attention they need, while at the same time, giving credit managers more time to focus on exceptions.

Because this software provides insights on the entire order to cash process, all stages of the journey can be optimised and KPIs achieved. This may include lowering the DSO, optimising cash flow, improving the ability to focus on the core business and focusing on a positive customer experience. It also gives a fully integrated overview of the cash flow forecasting and outstanding debts.

In short, a positive experience and the lowest possible DSO can co-exist – and a credit management team can focus on the customers’ needs and requirements. After all, with the right care and attention, a late-payer can suddenly transform into a loyal customer – and one that pays on time.

Last week a row erupted over ATMs in the UK. While Link announced that the fee paid each time a cash machine is used will be cut from Sunday, consumer champions Which? claimed that 300 ATMs are closing every month.

Stuart Rye, Director of business development for financial services at Fujitsu UK, believes that it’s vital to ensure a spread of ATMs across the regions that addresses consumer demand and for ATM networks to look to technology to lower costs.

“Even as we move towards a cashless society, ATMs still play an important role in the financial life of Brits across the country, and reduced access might have unpredictable consequences for a number of industries besides the financial services – such as retail and hospitality – as well as for consumers.

“There is clearly a mandate for a more homogenous spread of ATMs across all regions, but if closures need to happen, they should be done in a strategic manner that still takes into account ATM supply and consumer demand. Other countries, such as Sweden, have developed cashless economies that work well for everyone, but we would need a more sophisticated ecosystem to do this in a cost effective and efficient way – ATMs are still vital.

“Maintaining an ATM estate can be challenging, with cash replenishment and machine maintenance involving high recurring costs. However, there are other ways to lower these costs; investing in technology can help create power and energy savings and better install and maintenance processes. At Fujitsu, we’re looking at how we can use AI and advanced computing techniques to optimise cash management, a development which could reduce the cost of cash handling and create a more efficient ATM network.

“Ultimately, this is a complex issue involving numerous important stakeholders – banks, retailers, consumers, and ATM businesses. It’s tough to get it right, and requires a considered approach which takes into account those parties needs now and the trends that will determine their needs in the future.”