Online research from Equifax, the consumer and business insights expert, shows that using a debit or credit card with a pin number is still the preferred method of payment for 42% of people in the UK. Contactless methods followed at 34%, with the vast majority of these respondents (31%) preferring a contactless card to using their phone or wearable technology (3%).

The survey, conducted with Gorkana, also highlighted that the majority of consumers (66%) are happy with the current £30 contactless payment limit and only 16% think it should be increased. Of the people keen to see a higher limit, 13% would like to see it increased by a maximum of £10, and 39% would like the limit to be set between £40 and £50.

When asked why they would use contactless rather than cash, 34% see the speed of the transaction as the main advantage and 21% said it’s more convenient than making a trip to a cash point. Only 16% of people feel that contactless payments are more secure than carrying cash.

The research found that 45% of consumers withdraw cash just once a month or less, yet 28% of people surveyed said they would never choose contactless payments over cash. Despite the rising popularity of using wearable technology like watches to make payments, 36% of Brits don’t expect this payment method will ever overtake cards.

Sarah Lewis, Head of ID and Fraud UK at Equifax, said: “The rise in popularity of contactless and wearable payment methods is a hot topic right now but our research shows that retailers and service providers are going to have to accept a variety of payment types for some time to come. Many consumers have been early adopters of contactless and wearable payments, and really value the convenience of these options, but others remain wary and prefer the more traditional means.

“Contactless payment is not without its risks and these results show that consumers are well aware of this. There has been talk about increasing the contactless payment limit but this would simply increase the incentive for criminals to steal contactless cards, resulting in higher levels of related fraudulent activity. Contactless and wearable payments will continue to grow in popularity, but the financial services industry has a lot of work to do to make customers completely comfortable with these options.”

(Source: Equifax)

Banks and card companies prevented £1,458.6 million in unauthorised financial fraud last year, equivalent to £2 in every £3 of attempted unauthorised fraud being stopped, the latest data from UK Finance shows.

In 2017, fraud losses on payment cards fell 8% year-on-year to £566.0 million. At the same time, card spending increased by 7%, meaning card fraud as a proportion of spending equates to 7.0p for every £100 spent – the lowest level since 2012. In 2016 the figure stood at 8.3p.

For the first time, annual data on losses due to authorised push payment scams (also known as APP or authorised bank transfer scams) has also been collated. A total of £236.0 million was lost through such scams in 2017.

The unauthorised fraud data on payment cards, remote banking and cheques for 2017 shows:

• Combined total losses fell by 5% to £731.8 million.
• Losses due to unauthorised transactions on payment cards fell 8% year-on-year to £566.0 million. The industry helped prevent £984.9 million in attempted unauthorised card fraud.
• Losses due to unauthorised remote banking fraud totalled £156.1 million, a 14% rise on 2016. Banks prevented £261.4 million of unauthorised remote banking fraud, 27% more than last year.
• Cheque fraud losses fell 28% in 2017 to £9.8 million. This is the lowest annual total on record. £212.3 million of attempted unauthorised cheque fraud was prevented.
• There were 1,910,490 reported cases of unauthorised financial fraud, a rise of 3% compared to the year before.

The new authorised push payment scams data, collected for the first time in 2017, shows:

• There were 43,875 reported cases of authorised push payment scams with a total value of £236.0 million. 88% of this total were retail consumers, losing an average of £2,784, and the remainder were businesses who lost on average £24,355 per case.
• Financial providers were able to return £60.8 million (26%) of the authorised push payment scam losses in 2017.

Katy Worobec, Managing Director of Economic Crime at UK Finance, said: “Fraud is an issue that affects the whole of society, and one which everyone must come together to tackle. The finance industry is committed to playing its part – investing in advanced security systems to protect customers, introducing new standards on how banks respond to scam victims, and working with the Joint Fraud Taskforce to deter and disrupt criminals and better trace, freeze and return stolen funds.

“We are also supporting the Payment Systems Regulator on its complex work on authorised push payment scams, providing the secretariat for its new steering group. It’s a challenging timetable, but it is important that we get it right to stop financial crime and for the benefit of customers.”

The finance industry is responding to the ongoing threat of all types of fraud and scams by:

• Helping to prevent customers being duped by criminals by raising awareness of how to stay safe through the Take Five to Stop Fraud campaign, in conjunction with the Home Office.
• Working with government and law enforcement to deter and disrupt criminals and better trace, freeze and return stolen funds, while calling for new powers on information sharing to allow banks to share data to detect and prevent financial crime better.
• Implementing new standards to ensure those who have fallen victim to fraud or scams get the help they need, including around-the-clock availability of fraud teams, to make it easier and better for the customer, and, where possible, improve the likelihood of their funds being recovered. UK Finance will also be the secretariat for the PSR’s new steering group on authorised push payment scams².
• Working with government on making possible legislative changes to account opening procedures to help the industry act more proactively on suspicion of fraud and prevent criminals from accessing financial systems.
• -Rolling out the Banking Protocol – a ground-breaking rapid response scheme through which branch staff can alert police and Trading Standards to suspected frauds taking place – to every police force area in the UK. In 2017, while it was still being introduced across the country, the Protocol prevented £13.3 million of fraud and led to 129 arrests.
• Sponsoring the Dedicated Card and Payment Crime Unit⁵, a specialist police unit which tackles the organised criminal groups responsible for financial fraud and scams. This has led to a combined value in savings and disruptions in criminal activity of close to £30 million in 2017.
• Exploring new ways to track stolen funds moved between multiple bank accounts.

To help everyone stay safe from fraud and scams, Take Five to Stop Fraud urges customers to follow the campaign advice:

• A genuine bank or organisation will never contact you out of the blue to ask for your PIN, full password or to move money to another account. Only give out your personal or financial details to use a service that you have given your consent to, that you trust and that you are expecting to be contacted by.
• Don’t be tricked into giving a fraudster access to your personal or financial details. Never automatically click on a link in an unexpected email or text.
• Always question uninvited approaches in case it’s a scam. Instead, contact the company directly using a known email or phone number.

Tony Blake, Senior Fraud Prevention Officer at the Dedicated Card and Payment Crime Unit, said: “With criminals using social engineering to target people and businesses directly, it’s vital that everyone follows the advice of the Take Five campaign. Always stop and think if you are ever asked for your personal or financial details. Remember, no bank or genuine organisation will ever contact you out of the blue and ask you to transfer money to another account.”

Unauthorised fraud

In an unauthorised fraudulent transaction, the account holder does not provide authorisation for the payment to proceed and the transaction is carried out by a third-party.

Authorised fraud

In an authorised push payment (APP) scam, the account holder themselves authorises the payment to be made to another account. If a customer authorises the payment themselves, current legislation means that they have no legal protection to cover them for losses – which is different for an unauthorised transaction.

Banks will always endeavour to help customers recover money stolen through an authorised push payment scam but customers typically only approach their bank after the payment has been processed, once they realise they have been duped. By this time the criminal has often withdrawn the stolen funds and the customer’s money has gone. Alongside the extensive work already underway through the Joint Fraud Taskforce, UK Finance is also currently working with the Payment Systems Regulator on its proposals to tackle these scams.

Behind the data

Fraud intelligence points towards criminals’ use of social engineering tactics as a key driver of both unauthorised and authorised fraud losses. Social engineering is a method through which criminals manipulate people into divulging personal or financial details, or into transferring money directly to them, for example thorough impersonation scams and deception.

In an impersonation scam, a fraudster contacts a customer by phone, text message or email pretending to represent a trusted organisation, such as a bank, the police, a utility company or a government department. Under this guise, the criminal then convinces their victim into following their demands, sometimes making several separate approaches as part of one scam.

Data breaches also continue to be a major contributor to fraud losses. Criminals use stolen data to commit fraud directly, for example card details are used to make unauthorised purchases online or personal details used to apply for credit cards. Stolen personal and financial information is also used by criminals to target individuals in impersonation and deception scams, and can add apparent authenticity to their approach.

(Source: UK Finance)

Cryptocurrency has been arguably the big financial breakthrough of the past few years and in 2017 it really took off, led of course by bitcoin. The potential of such digital currencies and the technology which powers them has created the Internet of Value. But when does control lie within these spheres?

While both have created a lot of buzz and interest, the future of cryptocurrency remains unclear. Changes introduced buy them both have offered many fresh opportunities for businesses as RSM reports, with the middle market especially holding  a lot of power to take advantage of these developments and improve their futures.

Introducing the Internet of Value

The Internet of Value essentially refers to the allowance of value transactions (such as sending a foreign currency overseas) to be made almost instantly over the internet. It aims for value to be transferred across the internet at the same rate as information and such a goal is being worked towards and slowly met thanks to the development of blockchain technology.

Most cryptocurrencies use blockchain to power their transactions. This is the first technology which allows one asset to be transferred from person to person directly, without having to use a middleman such as a bank, marketplace or third-party service. Therefore, nothing is standing in the way to slow the process down or disrupt such financial transactions.

It’s not just cryptocurrencies that are adopting blockchain technology, Nasdaq are using it to enable firms to manage shares, the Estonian government has used it for looking after healthcare records and more. These all help support the Internet of Value’s mission though there is still work to do. Few blockchains are connected which means not all information can be exchanged, let alone instantly, so greater adoption is required which the middle market could provide.

The Middle Market’s Influence

Referring to those growing businesses that occupy the space between start-ups, small firms and SMEs and giant global corporations, it is the middle market which needs to innovate to take that next step up. Already some ecommerce companies are beginning to integrate cryptocurrencies within their model as they help with fraud prevention, are quick and secure.

There are many start-ups using such technology and involved in the Internet of Value. While this does provide some uptake and investment in cryptocurrency, in order for it to really take off much more is needed. Middle market companies can offer this, using the benefits of the Internet of Value to speed up their payment processes and increasing the security through cryptocurrency acceptance and usage.

Given there is no middleman required, this can help cut the budgets for many, allowing this money saved to benefit these businesses while providing investment in cryptocurrency and its technologies. If there is no uptake from the middle or upper market then the Internet of Value and cryptocurrencies may just remain an interesting concept, used only by smaller investors and businesses.

Unless there is great investment from another source then the middle market does look like it could control the future for the Internet of Value and cryptocurrency as a whole.

The majority (80%) of organisations have expressed interest in using cryptocurrencies - such as bitcoin - for business transactions, despite widespread fears of being compromised by associated DDoS attacks, according to new research from the Neustar International Security Council (NISC).

While 48% highlighted alternative forms of currency as a way to generate income through potential increased value, 26% of businesses also pointed out the heightened risk of currencies being used as an alternate form of ransom.

This ongoing fear has encouraged the majority of organisations to focus heavily on increasing their ability to respond to DDoS (41%), ransomware (40%) and targeted hacking (39%).

This new data has been revealed as part of a bi-monthly research series from the NISC, which has polled 255 IT security CTOs, VPs, senior directors, business managers and other professionals with a security remit across Europe.

The NISC research findings have also been used to calculate a unique Cyber Benchmark Index, which measures the level of concern in the NISC community of security professionals about the current international cybersecurity landscape. Based on the latest set of data, the index figure has reached 10.5, a considerable increase from the 6.5 rating in May last year, and 0.4 points higher than the last report in November.

From November to December, DDoS was seen to be the greatest concern to businesses at 22%, with financial and ransomware following close behind. However, ransomware was most likely to be perceived as an increasing threat to organisations, with 45% listing it as their greatest concern moving forward.

Rodney Joffe, Head of NISC and Neustar Senior Vice President and Fellow, commented on the findings: “Ransomware and DDoS attacks continue to be seen as the leading threat to companies due to the sheer volume, complexity and potential severity of an attack. That said, not too far behind as the second greatest concern to businesses moving forward is financial threat,” he said.

“Armed with plenty of tools, such as compromised IoT devices, it’s likely that we’ll see hackers make use of ransomware and DDoS attacks to cause major distractions. At the same time, we’ll likely see them put a focus on stealing large amounts of financial data, which may include traditional currencies, or the increasingly popular cryptocurrencies - such as Bitcoin. By developing a more cohesive security strategy, organisations can hone in on their most vulnerable data, processes and models, protecting their critical information in the short and long term.”

Participants also noted that - due to the quickly evolving cyber-threat landscape - increasing their ability to respond to DDoS, ransomware and targeted hacking was a main priority, with 9 out of 10 (90%) agreeing that a WAF (Web App Firewall) was an essential component of their company’s security infrastructure, a figure that increased the survey average by a significant margin.

(Source: Neustar International Security Council)

Price comparison experts Money Guru conducted a survey of 1,000 UK credit card holders. This uncovered a deep-rooted misunderstanding of credit card agreements.

The majority of credit cards can now be signed up for online. This means with no one there to talk you through each point, the agreement needs to be detailed and cover every legal aspect. But does anyone really read the fine print? And if not, why not?

The national survey revealed that 64% of people don’t read their credit card agreement before signing on the dotted line. They also uncovered the banks with the worst readability score for credit card agreements.

Other shocking stats include:

• 60 % of people don't read any updates to their credit card agreements
• 64% of people think credit card agreements are lengthy
• Only 9% of people understand their credit card agreements
• 48% of Brits don't know when they are liable for charges made on their card by someone else
• 50% of people don't know when they must be notified of any changes to their credit card agreement
• 33% of Brits don't know that their credit card score can be affected after just one missed payment

The majority of credit cards can now be signed up for online. This means with no one there to talk you through each point, the agreement needs to be detailed and cover every legal aspect. But does anyone really read the fine print? And if not, why not?

In this age of digital consumerism, when virtually anything you want is just a click away, it’s worrying that we could be agreeing to things we don’t understand. Skipping the terms and conditions page is something we’ve all done. So, we decided to dig deeper and find out if our fears were unfounded or just the tip of the iceberg.

We conducted a survey of 1,000 credit card holders in the UK. Combined with research on the most popular credit card providers and their most popular offerings from our comparison website, we were able to find out more about the level of understanding from the British public.

How readable is your credit card agreement?

The Flesch Kincaid score is a readability test, commonly used in education. It uses word length and sentence length to determine how easy a piece of text is to read, equating it to the US school grading system. The lower the number, the easier the content is to read. We ran both standard credit card agreements for each provider through this test, as well as the card specific information on their website, given before you apply. The results were disappointing. In our research not one of the agreements was rated below 6th grade, which equates to the reading level of 11 and 12 year olds. Not bad, you may think. But the national average reading age for the UK is 9 years old.

The Flesch Kincaid Reading Ease score also takes into account syllables within a sentence and is based on a score of 0-100. The higher the score, the easier the text is to read. The UK Government advises to aim for an average sentence length of 12 words and a reading ease score of 60 or over. A higher number of syllables within a sentence indicates more complicated wording.

How complicated is the text?

In the graph above, we can see that standard agreements contain far more complicated wording, which could prove problematic for those trying to read and fully understand the text. With the exception of the Vanquis credit card, the information contained in the pre-apply pages appears less complex. While this might be great for helping you to understand the product before you sign up for it, it’s not the official document you actually agree to.

Out of 22 agreements and information that we ran through this test, only two fell below the average 12 words per sentence.

Are you bored reading it?

If you are able to understand the agreement, one thing that might still might make you skim it or not read it at all, is the length.
The reading time for standard agreements is generally much longer than the pre-apply information and it’s not surprising, given they are on average 16 times wordier than their pre-apply counterparts.

What our research told us

Our research was pointing us towards the following;

Both credit card standard agreements and the pre-apply information available on websites is not easy enough for the average UK person to read and understand well.

Pre-apply information usually contains less complicated text and is longer overall, taking more time to read.

Sentence length for both standard agreements and pre-apply information was over and above the recommended number of words.

The British public had their say

This paints a picture much like the one we thought might emerge. Credit cards agreements, terms and conditions and pre-applying information is often difficult to read for many reasons. But is this reflected in real life?

We conducted a survey of 1000 UK people. The results showed that;

• 64 % of people don't read a credit card agreement before signing up for one.
• Only 9% of people understand their credit card agreements.
• Almost half of all Brits could be paying too much on their credit card because they don't know how to dispute a charge.
• 48% of Brits don't know when they are liable for charges made on their card by someone else.
• A third of all Brits are unaware of how their credit score can be affected after missing a payment.

64% of people surveyed admitted that they didn’t read the full agreement when signing up for a credit card. 60% also said they don’t read any updates to their agreement and simply click accept.

This can be explained, in part, by how Brits view those agreements. When asked to describe their credit card agreement in one word, 12% said “confusing”, 15% thought “unreadable” and 64% called them “lengthy!”

The survey also found that 45% of people didn’t know how to dispute a charge on their credit card, which could mean that they are paying unnecessary fees. If you’re unsure of any recent charges or fees, it’s advisable to check, especially as your agreement can change at any time. 13% of our respondents didn’t know this.

When it comes to knowing how and when you’re protected from someone else using your card, almost half of those asked didn’t know their rights. In fact, if you have compromised your own security, such as losing your card and not reporting it or not using your providers authentication portal during a purchase, you are liable for any costs made to your card under those circumstances.

Your credit score or credit report details your financial history. Its purpose is to inform potential lenders how reliable you are likely to be when it comes to paying money back. If you forget to make a payment on your credit card one month, do you think it affects your credit score? Even if you’re successfully paying rent or a mortgage and other bills on time? The answer is yes! And a third of all Brits are unaware of this, thinking that missing a payment will either not affect your score or will only affect it if you miss payments repeatedly.

Data released in Creditsafe’s Prompt Payment Formula 1 Standings, has revealed that, on average, Formula 1 teams pay 16% of their invoices late by an average of 10.5 DBT (days beyond the agreed payment terms), despite a combined turnover of over £3.6 billion.

Red Bull was found to be the worst offender, paying almost a third (31%) of its invoices to suppliers late by as many as 16 days beyond agreed terms. This is despite the team’s success, coming third in last season’s constructors’ standings, the exciting team rivalry between Daniel Ricciardo and Max Verstappen, and a turnover of close to £200 million.

In comparison, despite a disastrous 2017 season ending in ninth place and multiple engine failures affecting the team’s performance, McLaren was found to be the most prompt payer of the group, with 93% of its invoices paid on time. Of the 7% paid late, McLaren had a DBT of nine days.

Similarly, Torro Rosso, which came seventh in last season’s standings, was the second most prompt payer of the group, paying less than 10% (9.02%) of invoices late with a particularly low DBT of five days. While Ferrari joined Torro Rosso with the joint lowest DBT, 22% of its invoices were paid late, dragging it down the standings.

Led by Drivers’ Champion Lewis Hamilton, Mercedes topped the F1 Standings in 2017, but in terms of late payments, the team sat firmly in the middle of the table with 11% of invoices paid late and a slightly below average DBT of 11.

Rachel Mainwaring, COO, Creditsafe Group said: “In recent years we have seen the emergence of a late payment culture in the UK. Even in Formula 1, with the huge amount of money that is available to teams, late payment is rife and noticeably, none of the teams pay their invoices on time.

“Late payments can be a huge problem for businesses, whether dealing with the huge sums of money in F1, or smaller amounts of daily business expenses. It can leave companies with a potentially dangerous financial shortfall and all businesses, particularly those at the top of the podium should be fulfilling their obligations to suppliers.

“However, it is interesting to see the lower performing teams, such as McLaren and Torro Rosso, beating out competitors when it comes to prompt payment. There’s no doubt that if McLaren’s reliability last season had been as good as its prompt payment rate (97%), Fernando Alonso would have been a happier driver!”

Creditsafe’s Prompt Payment Formula 1 Standings

Data not available for: Force India, Haas and Sauber.

(Source: Creditsafe Group)

From the $20,000 mark back down to $7,000 Bitcoin is generally on the low, and with Google, Facebook and Twitter's decision to ban all ads related to ICOs, it's clear the world isn't on cryptoculture's side.

What are your thoughts on the future of crypto investment/bitcoin and the rise of other currencies? Are you confident the cryptowave will continue to reach the shores of new investors? Find out in this week’s Your Thoughts.

Andrew Pritchard, MD Blockchain, 10x Growth Account:

It’s been a tough time for Bitcoin and crypto investors as the markets continues to go backwards. The bears have continued to win the battle against the bulls pushing the price of BTC and most altcoins further downwards. But, what is causing the drop in the markets?

There are several influences that are helping the bears as the cryptomarket struggles to gain any forward momentum.

Firstly, increasing regulatory framework (this is a short term negative issue but will ultimately be a very positive outcome) as each time the SEC/FCA, or any regulatory body for that matter, announces new regulations, even if supporting crypto, the markets react negatively.

The Governor of the Bank of England, Mark Carney called for greater regulation of cryptocurrencies and in Japan, punishment notices were issued to several exchanges while forcing some to halt trading entirely.

Secondly, the Mt Gox Bitcoin dump has been affecting the market for a few weeks as thousands and thousands of Bitcoins have been put on the market to be sold. This increased supply and cooled demand has led to further downward pressure on the price of Bitcoin. Basic economics of supply and demand has reduced the price. I.E Supply increases and demand remains constant or reduces, then price will fall.

However, as a positive supporter of the Cryptomarket, it is only a matter of time before the bulls return. Yes, Bitcoin’s price has taken a beating the past ten days due to major events negatively impacting market sentiment. However, one thing remains exceptionally clear. Blockchain technology is here to stay.

The next 6 months for major cryptocurrencies like bitcoin, is likely to be very, very bullish, as the public start to enter market with easier routes such as Coinbase and Barclays collaboration on faster payment methods.

Savva Kerdemelidis, Legal Adviser, LegalEdge:

The technology and protocol behind cryptocurrencies brings an exciting method to transact in a new and more efficient way. So long as cryptocurrencies can achieve mainstream adoption beyond simply being a "store of value", then there remains a significant potential for growth. As with the dotcom era, we’ll see winners and many losers. In my view, the potential for cryptocurrencies is just beginning. I expect to see new applications and use cases, particularly around governance or decentralised autonomous organisations (DAOs).

Although there’s been a lot of hype, cryptocurrency has not reached mainstream retail investors. Technological barriers have led to a lack of access and the risk of losing your investment, for example, by losing your password or transferring funds to an incompatible wallet. At the same time, regulatory risk has been a real factor in terms of curbing take-up. Both investment and adoption will increase once these barriers decrease and are better understood, with the availability of user-friendly applications.

If you look at investors, most of them have taken over 50% losses since the new year. Naturally this has impacted the appetite for ICOs and other investments. However, many will likely ride it out until June or July when the market is expected to recover.

Samuel Leach, FX Trader and Founder, Samuel & Co. Trading and Yield Coin:

With the recent news of Facebook and Twitter banning cryptocurrency adverts and Google potentially following suit in June 2018, it cannot be denied that there is a negative feeling around crypto.

Regulatory bodies such as the ICO, FCA, and GBX are also becoming more vocal; with new regulations being created and set to be enforced in the coming months. This is causing unease among potential investors as they are reluctant to invest in a market that currently doesn’t have widespread regulation, and which could risk them becoming uncompliant in the future. As such, crypto is in a limbo stage where current investors are cashing out and potential investors are hesitant to part with their money.

In reaction to the continuous stream of negative feeling surrounding the crypto market, cash outs are increasing at an unprecedented rate. This won’t recover until governments and regulatory bodies align and have a consistent strategy and overall view point on the crypto market. Therefore, it is possible we could see Bitcoin bottom out to $6,500. However, I believe we will see the markets hover around $9,000 in the short term, until there is more clarification around the wider view of the market.

Kevin Murcko, CEO, CoinMetro:

Prices between various cryptocurrencies are linked to an extent; when Bitcoin goes up, Ethereum or XRP, for example, will often follow suit. This is no different to how company stocks tend to follow the direction of the general market, their sector or industry rivals. For instance, a negative financial report for one retail stock often drags down other retail stocks as “guilt by association” turns things bearish for the whole sector. Cryptocurrencies are just as exposed to this effect if not more given the fact that the money flows currently are mainly from retail investors, who are much more susceptible to following the trend.

It is unlikely that 6-11k is the new range for BTC. The simple fact that it has existed far above these ranges for prolonged periods is an indicator that the floor and ceiling have not been set at all yet. Rather, BTC is still free-floating, and until the market as a whole becomes more regimented, a stable floor and ceiling won’t exist for any of the assets.

Increased stability is important for the future of crypto, as well as for overcoming the sector’s perceived reputation for being a poor store of value. In part, price stability will come from the introduction of more national and harmonised global regulatory oversight. This will allow for more institutional involvement and the creation of liquidity by way of synthetic instruments like futures, ETNs, ETFs, etc. It will also come from the realization amongst the general public that, like all investments, crypto does carry risk. As with other securities, prices are liable to go up or down.

Corrections have occurred, but it’s important not to think of crypto prices myopically: the price of bitcoin, for example, is today roughly 700 percent of what it was this time last year. Long-term, cryptocurrencies remain viable multitrillion-dollar assets.

Drew Bell, Chief Developer, Ethercoin:

The future is bright for crypto investment, as eventually the market will stabilise and become a more manageable platform. The market has a lot of potential for development and it’s about time businesses started accepting it, rather than ignoring it as sooner or later, their customers will catch on the trend and look for businesses that support the crypto industry.

There will always be an air of skepticism around digital currency, because it is not a tangible product, and people have a hard time understanding its true value.

I really believe that cryptocurrency will replace more traditional forms of currencies in the next 10 -15 years, especially with the growth and adoption that Bitcoin, Ethereum and Ripple has already seen. If that growth continues and we see more currencies reaching these heights, who knows just what the future holds for this new era of payment and investment.

The key to cryptocurrency breaking through to the mainstream and reaching new investors is all about trust. If you don’t build a relationship with your investors that is centered around trust and transparency, you can’t expect them to believe in your project. At a time when it seems the world is against a new form of payment, cryptos have to be on top of their game more so now than ever before.

Even though cryptocurrency is built on blockchain, the volatility of the market is clear and can therefore deter some investors. It can be extremely difficult for cryptos to instill trust in potential investors, especially as tech giants Google, Facebook and now Twitter have banned cryptocurrency ads, making it even harder for currencies to secure investment and appeal to potential customers.

It is clear there is a lack of understanding from key players in the financial industry about this new disruptive technology, therefore highlighting the need for more mainstream education so the market can continue to grow and develop for the future.

Kerim Derhalli, CEO, Invstr:

Cryptocurrencies are here to stay but, as with any emerging market, they must undergo a transition that will eventually attract the mainstream investor.

In my opinion, that transition will entail a few important steps, firstly, in regards to scalability, which will see blockchain evolve to handle more throughput. Currently, sharding techniques have increased transactions per second from seven in traditional blockchain to 3,000 in alternative blockchains. This still falls well short of the typical 20,000 or more credit card transactions per second.

Security is critical too. Digital exchanges and wallets are secure until they are not. Anonymity and the lack of a custodian make the operational risks far greater in cryptocurrencies that in traditional financial assets. Improvements in security will be needed before cryptocurrencies represent a serious challenge to other financial assets as a store of wealth. With a July deadline set by the G20 for unified regulation of cryptocurrency, coming alongside the launch of a dedicated UK task force, things are moving in the right direction.

Fundamentally, there is still also a lack of education around cryptocurrencies among investors. The number of currencies, tokens and assets is growing at a far faster pace than our collective comprehension and most people are still struggling with the basic concepts. Once the currency starts to achieve some real, commercial utility and we are more easily able to earn, spend, save and invest in cryptocurrencies, understanding and overall acceptance will increase.

Ivan Gowan, CEO, Capital.com:

The cryptowave is only going to build more momentum in the next 12 to 18 months. Just two weeks ago Barclays announced a partnership with a leading crypto company to facilitate payments to buy Bitcoin, Ethereum and Litecoin, the most established crypto assets. This may reflect a trend of major financial institutions moving away from outright denunciation of cryptocurrencies to a cautious participation, marking a significant shift in their approach and making these assets much more accessible to new investors.

Cryptocurrencies are seeing a remarkable increase in transparency, further improving trust. There are now a number of companies specialising in interrogating the blockchain of Bitcoin, establishing whether the currency has been used in any potentially illegal transactions on the dark web. This could make a huge difference to the willingness of those new to the market to invest in the currency. Bitcoin and other cryptocurrencies still labour under a perception of being used for dodgy dealings in dark corners of the internet, but with the increase in transparency, investors will feel much more comfortable putting their money into this market.

Of course, there are many ICOs that do not go through the proper regulatory procedures before launching, and it is these less-than-scrupulous organisations that are prompting Facebook and Google banning ICO advertising. However, there are many players in the market, backed by some of the biggest venture capitalists in Silicon Valley, that are spending hundreds of thousands of dollars on legal fees to ensure that they align completely with whichever regulatory environment that they operate in. We are increasingly seeing leading regulators, such as FINMA and the Gibraltar Financial Services Commission, embracing this innovation, issuing guidance and frameworks to companies looking to issue an ICO to ensure they do so responsibly and effectively. Smaller investors, who could be priced out of investing in exciting tech stocks like Amazon and Facebook, can access fantastic opportunities with ICOs, either getting in on the ground floor in the initial offering, or when the coin is listed on an exchange.

The ICO industry is currently something of a Wild West scenario. However, we are also at the early stages of what will be a transformative asset class. There is no doubt that we will see a number of new investors in cryptocurrencies and assets increase as the market matures, as regulators get up to speed with the technology, as the big banks begin to adopt more open-minded positions and as the transparency of cryptocurrency transaction history continues to improve.

Zafar Kanani, Network Manager, Forbury Investment Network:

It is difficult to predict the future path of cryptocurrencies, though it would be safe to say that they will likely continue to proliferate, and that regulation will increasingly become a consistent feature of the landscape.

With an ever-increasing pool of choices – there are now over 1,000 cryptocurrencies – anyone considering an investment should take the time to conduct thorough diligence and invest only what they can afford to lose, especially given the growing evidence of fraudulent activity. The likes of Twitter, Google and Facebook have gone so far as to ban cryptocurrency and ICO related ads due to concerns of reputational damage resulting from users unwittingly investing in fraudulent cryptocurrencies advertised on their platforms.

Despite Bitcoin, the best-known cryptocurrency, now trading at less than half its peak in December, there is no shortage of demand from investors across all cryptocurrencies. Many cryptocurrencies have and continue to be endorsed by celebrities, further fuelling interest and growth.

Alongside these developments, the increasingly disparate range of cryptocurrency applications is engaging a broader set of stakeholders than ever. The emergence of a ‘civic’ cryptocurrency, for example, has gained momentum as a mechanism to crowdfund capital for local projects for the public good. The city of Berkeley, California, has plans for such a cryptocurrency to generate funding for affordable housing amongst other public needs.

Daniel Wolfe, CEO, Tradingene:

Personally, my confidence in crypto is undiminished, despite the recent losses. I am confident that investors will have ample opportunity to ride the cryptocurrency wave up. However, they shouldn’t expect to generate quick returns and they need to be prepared for potential extended periods of volatility before we see a consistent upward trajectory.

There is always hysteria surrounding cryptocurrencies, but many fail to grasp that it is the transformative and disruptive nature of Blockchain which will ultimately bring rewards to those who invest wisely. Investors who follow the settled rules of investment, especially diversification, will be the big winners.

However, liquidity may be hard to come by and severe losses are a possibility.

Cryptocurrencies currently consist around 0.3-0.4% of the global fiat money supply. Therefore, if you believe, as I and many other experts do, that crypto will rise over the next five years to at least five percent or so of M2, then that is a tremendous return for investors.

They will just need to be prepared to stomach the turbulence.

Adrian Daniels, Corporate Partner, Yigal Arnon:

The cryptowave will continue to reach the shores of new investors. This is not to say that there will not be changes in form, size and type of cryptocurrencies, but the wave is now a tide and it's only going in one direction. But let's go back to some basics. The "cryptowave" is based on what is known as blockchain protocols, which is a kind of software that allows data to be stored digitally on a record that is held on the computers of 1000’s of people (or nodes) across the world. This allows people who do not know each other to complete transactions without fear of being cheated. This is so, because those nodes will hold a record of each transaction in an encrypted manner on the blockchain which cannot then be undone. As a result those transactions cannot be falsified without hacking 1000's of computers simultaneously and altering their records. Consequently, there is no centralized authority and no simple way to fake transactions. Bitcoin introduced the blockchain technology almost a decade ago, since which time the technology has become vastly more versatile and sophisticated, with smart (or self-executing) contracts capable of allowing the transfer of data, goods and services in a secure and verifiable manner without any "middle-men" like banks, ad-agencies, internet traffic aggregators, and a whole bunch of other third parties which make online commerce far less efficient and much more expensive. What does all this mean, it means the technology has uses that we have only just started to imagine. Since the blockchain can store any data and each block cannot be changed, any activity can be recorded on the blockchain. This means that the blockchain can ensure that people can be incentivized for contributing to the chain, which will have enormous knock-on effects on commerce, politics, regulations and science, among others. The blockchain will also likely change how or even if we bank – we will be able to keep all of our banking records on the chain, to which each of us will be the only one with the encryption key. Our medical records will be held exclusively by us, and will be shared only with whom we wish.

ICO’s are all supposed to be based on blockchain technology. The problem has been that a lot of them were fraudulent from the get-go, and others were pipe dreams with nothing behind them. A smaller number have related to companies offering great blockchain and smart contract ideas. As the number of ICO's has grown, the regulators have become increasingly involved, to the point where the US Securities and Exchange Commission (SEC) has largely put the brakes on public ICOs (as opposed to sophisticated investors, who in theory have the wherewithal to look after themselves) in the US. As the regulators untangle the knot, public ICO's will slow down and private ICO’s to sophisticated investors will take their place. This somewhat undermines the whole “democratization” of the investment process that the ICO’s were supposed to have brought us, but it may only be a phase before clearer regulations are adopted to safeguard the public in general. Additionally, we will see larger numbers of companies offering cryptocurrencies that look much more like a token you can use for a purpose (utility token) than a share. However, as the result of increased oversight will be fewer chancers bottling air and making millions, I think we will see an increasing numbers of offerings by brilliant entrepreneurs with profoundly disruptive, highly innovative and world changing products. To hijack Winston Churchill’s famous phrase: “This isn’t the end, it isn’t even the beginning of the end, but it is perhaps the end of the beginning. But what the end will be, I think is hard for us to yet imagine.”

If you have thoughts on this, please feel free to comment below and let us know Your Thoughts.

Iwoca has found that female applicants are 18% more likely to repay small business loans on time than their male counterparts. Women-led small businesses make up an estimated 20% of iwoca’s customers and it has supported an estimated 2,400 women business owners in the UK with almost £50 million in lending since its launch in 2012.

iwoca uncovered the data in response to a study by the Federation of Small Businesses (FSB), which found that a quarter of female small business owners cite the ability to access traditional funding channels as a key challenge, with many relying on alternative sources, such as crowdfunding, personal cash and credit, for growth.

While this technology-driven risk platform draws on thousands of data points to make credit decisions, gender is not included. iwoca’s data scientists were able to calculate gender-based statistics on loan repayment rates by checking customer application forms for self-identified female titles and then comparing the approximate default rates for both cohorts.

Christoph Rieche, Co-founder and CEO of iwoca, said: “More can be done to narrow the entrepreneurial gender gap in the UK. Making it easier for women to access business funding would go a long way to achieving that. Sadly, the reality is that banks are withdrawing critical finance from across the entire small business sector and unless the Government takes action to encourage greater competition that will allow alternative providers to fill the hole, women will continue to be at a greater disadvantage from an unfair system, regardless of their higher propensity to repay on time.”

(Source: iwoca)

Trading is no longer a male-only club. Women now represent 19% of online traders worldwide, and they’re also more successful at it than their male counterparts. This stems from an international report assessing the habits and demographic data of more than 500,000 traders. It was published by BrokerNotes, the online trading comparison site.

What’s caused the shift
The shift has been driven by the democratisation of trading as a result of the internet. This has paved the way for women to enter an industry that’s historically been dominated by men. But it’s not only that female trader numbers are increasing. They’re also better at it.

Women are depositing less than men in their online trading accounts (on average $424 less) and are making fewer, more calculated trades. Men, on the other hand, make more trades and are much more likely to be reactionary to changes in the market, which is proven to have a negative impact on overall return on investment. This type of trading costs men money – the average income of a female online trader being £35,743 compared to the average male income of £32,525.

The female crypto boom
The crypto boom has had a big role to play in fuelling the surge of female traders. Last year, there were 9.6 million total online traders worldwide. In 2018, it’s now 13.9 million, with 2.7 million of them being female. Interestingly, 59% of women choose to trade crypto over traditional assets like forex.

Although both genders are trading Bitcoin, women only represent 10% of total Bitcoin traders. This points to the fact that women are looking to altcoins when investing in crypto with females accounting for 18% of Dash traders and Ripple also attracting a higher percentage of female traders.

Other data points

• Highest percentage of female traders in the UK are in Herefordshire (21%).
• 42% of women describe themselves as experienced traders.
• 16.23% of female traders earn more than £50k/year compared to only 10.93% of male traders.

Marcus Taylor, CEO at BrokerNotes, commented: “When people think of trading, they think of testosterone-fuelled ‘Wolf of Wall Street’ characters. The reality is there’s no place for stereotypes in an online world. By offering anyone the tools to research and develop trading strategies, the internet has opened up trading to the masses. With more women demonstrating a flair for trading, it points towards a transformation that’s also moving towards gender equality.”

E-commerce has experienced exponential global growth over the last decade. A wider array of markets has encouraged greater competition and provided more opportunities for online merchants to reap the rewards. However, staying ahead of the competition in such a climate is easier said than done and, if not approached properly, going global can put merchants at risk of falling behind. With this in mind Finance Monthly hears from Ralf Ohlhausen, Business Development Director at PPRO Group, who sets out ten simple steps to help make a success of going global.

1. Assess cross-border market opportunities

Consider the barriers to trade in the regions that interest you, making sure the benefits of doing business in the area outweigh the costs of meeting market needs and expectations. Also, don’t dismiss high-growth markets, such as Vietnam and Poland, which might be relevant for your business, but not the regions that spring to mind when looking for new sales opportunities and cross-border expansion.

2. Know your market and audience

This is important not only in terms of what you sell and to who, but also in terms of the most relevant payment preferences. Online casinos do not accept credit card payments due to the fraud potential, while travel websites need to offer customers the option to pay via credit card due to the high value of the transaction. Sale conversions are linked to the provision of appropriate payment methods – and payment behaviour varies by demographic, just as purchasing behaviour does. In many cultures, younger people are more likely to use non-traditional payment methods, but if your target audience is primarily older, this may not be relevant. Do your research by considering all important marketing segments before you begin to trade.

3. Plan your marketing strategy

If you are new to a region, you need to raise your profile and gain customer trust to convert browsers into buyers. Consider your target market carefully. For example, a German national buying furniture online would rather not pay for a new sofa in advance, but wait for delivery and then pay directly from their account. Think about the behaviour of your target customer and which marketing strategies will resonate most successfully with them. If this is out of your remit, then working with a local marketing partner will provide the necessary knowledge to attract and retain business in the region, supporting long term growth.

4. Plan your market entry

The best marketing plan in the world will fail if not supported by a well thought through market entry strategy. Consider the best way to set-up shop in a new region, as it will differ depending upon your business model and regional knowledge. Do you need to use a partner to begin with, to sell via an online market place, auction site or through an established local vendor? If so, for how long? Or can you go it alone from the start?

5. Consider your market share and positioning

Your current market/s may be crowded or dominated by one or two big names. If you enter an emerging market with a carefully tailored and localised offering, you could grab a large slice of that niche before others do.

6. Review payment methods

When it comes to payment options, decide how much risk you are happy with. Some payment methods may be convenient for customers, but carry a greater burden of chargeback/refund risk or other cost to the vendor. Such risk can often be mitigated, for example by offering less riskier forms of payment, such as SEPA direct debits, for goods below a certain value or to trusted customers. So-called ‘push payments’, which are proactively sent by the client, are less risky in terms of chargeback but their use must be balanced with local preferences. Examples of push payments include giropay in Germany and iDEAL in the Netherlands.

7. Personalise your e-commerce offering for local needs

Make sure customers are only offered the products and payment methods relevant to their location, in a regionally-appropriate format. There are several ways of doing this, including local versions of websites and identification of site visitors by location (e.g. according to their IP address), which then dictates the pages and payment options available. You should offer each visitor at least three, or ideally around six, of the most popular payment options in their location, to maximise your chances of making a sale.

8. Do not leave it too late

Online retailers wanting to take a share of emerging markets need to act now, while the trend towards internationalisation is in its infancy and market niches are free.

9. Compliance matters

As a business, you must comply with a multitude of legal, financial and customs regulations of the markets you trade in. It is therefore crucial to keep abreast of and respond to any regulatory changes in a timely fashion. This generally demands external expertise, particularly as the penalties for non-compliance can be extremely tough.

10. Consider third-party support

When making a foray into a new market or region, it is important to keep on top of commercial and regulatory barriers and implement the best alternative payment methods. This is fundamental to the success of your business expansion. However, very few retailers have sufficient expertise in-house to manage all of these matters optimally, so finding a partner who can support you on your global journey can be the key to success.

While the prospect of ‘going global’ is still new for some, it’s vital for merchants to break into new regions quickly, armed with the best strategy and proposition to seize the opportunities, before the competition swoops in. Only by taking this approach can merchants win new customers and multiply their bottom line, building new revenue streams and expand into new regions. Global success is only a few steps away, and now is the time to go for it.

If cash is in decline, how does the future look for finance?

Once the preserve of banks, states and major institutions, the world of finance has seen big changes in its product offering. A huge growth in tech companies creating ways to make spending easier for both consumers and institutions has seen a shift away from banks ruling the finance industry. Cryptocurrencies have gone even further, removing the need for major institutions to even get involved with both positive and negative results.

Money comparison experts Money Guru have analysed the growing payment trends, how tech and finance have formed an unlikely partnership, and what the future has in store for our spending.

World

Payments

Cashless payments and the plight of cash in society has been something of a subject over the past few years, but a conversation many aren’t having is that of financial exclusion; something that has happened in the past is likely set to happen again. Below Jack Ehlers, Director of Payments Partnerships at PPRO Group, delves into the details.

In 2016, according to a report just published by the European Central Bank (ECB), EU citizens made €123 billion worth of what the ECB calls ‘peer-to-peer’ cash payments. That’s just another way of describing the money grandparents tuck inside birthday cards, donations to charity, payments to street vendors and the hundreds of other small cash transactions people make all the time.

But even as cash remains central to the economy, cashless payment methods become more common with each year. The use of e-wallets such as Apple Pay and Samsung Pay is predicted to double to more than 16 million users by 2020. Overwhelmingly, the rise of the cashless society is a good thing. It promises greater convenience, lower risk, and improvements in the state’s ability to clamp down on practices such as tax avoidance and money laundering.

But what about those micro-payments? And even more importantly, what happens to the estimated 40 million Europeans who are outside the banking mainstream? These are the EU’s most vulnerable citizens and they have little or no access to digital payment methods.

If we don’t plan properly, the transition to a largely cashless future could see the re-emergence of financial exclusion, which we thought had been vanquished. In Western societies. Ajay Banga, CEO of Mastercard, has talked of the danger that in the future we’ll see “islands” of the unbanked develop, in which those shut out of the now almost entirely digitised economy are left able to trade only with each other.

But are we really going cashless any time soon?

The ECB report quoted above, also found that cash is still used in almost 79% of transactions. So, do we really need to worry about what will happen when we finally ditch notes for digital payments? Yes and no.

Even though contact payments are on the rise, the demand for cash is also growing. A recent study found that the value of euro banknotes in circulation has increased by 4.9% over the last five years. Given the historically low rate of inflation over the past few years, this would seem to be largely due to a cultural preference for cash. Low interest rates could also be encouraging Europeans to spend rather than save. But whatever the reason, cash isn’t going away soon.

But that doesn’t mean we can relax. Some markets are already much closer to going cashless than the European average would suggest. In Sweden, consumers already pay for 80% of transactions using something other than cash. In the Netherlands, that figure is 55%, in Finland 46% and in Belgium 37% [1]. Today, Britons use digital payments in 60% of all transactions. By 2027, that number is expected to rise to 79%. Already, 33% of UK citizens rarely, if ever, use cash.

Unless we take this challenge seriously, we risk stumbling into a situation in which the majority in these countries use cash-free payments most of the time, even if they still use cash in minor transactions. In such cases, there is the danger of many shops and services no longer accepting cash, leaving those who still rely on it stuck in the economic slow lane.

For most people, cashless payments can offer easier and faster payments, greater security, and improved access to a wider range of goods and services. But to maximise the benefits and reduce the downside, including those for strong personal privacy, we need to start thinking now about how we can manage the transition in a way that minimises the risk of financial exclusion for already marginal groups in society.

Charities and mobile payments show the way

The rise of digital payments does not have to mean the growth of financial exclusion. It is possible to create an affordable payments-infrastructure for small traders, churches, and charity shops — and, even more importantly, for economically marginal consumers.

In the UK, charities are leading the way. After noticing that donations were tailing off, the NSPCC and Oxfam sent out one hundred volunteers with contactless point-of-sale devices, instead of charity collection tins. The rate of donations trebled. The success of the NSPCC trial shows that it is possible to roll out the supporting infrastructure for cashless payments even to individual charity collectors on the street.

But that’s only half the story. While charities and shops — even small independent retailers — may be able to afford and install point-of-sale systems to accept micro-payments, normal citizens cannot. Here, mobile payments may be the answer.

The example of the Kenyan M-Pesa, a system which allows payments to be made via SMS, shows that it is possible to create an accessible, widely available and used mobile payment system that does not rely on the consumer owning an expensive, latest-model smartphone. Already, 17.6 million Kenyans use M-Pesa to make payments of anything from $1 to almost $500 in a single transaction.

An inclusive cashless future—in which mobile e-wallets and other contactless forms of payment dominate—is possible. But it won’t happen by itself. As an industry and a society, we need to plan and work towards it: starting today. The stakes for many businesses and some of the most vulnerable people in our society couldn’t be higher.

Sources: 

The use of cash by households in the euro area, Henk Esselink, November 2017, Lola Hernández, European Central Bank
FinTech: mobile wallet POS payment users in the United Kingdom (UK) from 2014 to 2020, by age group, Statista.com.
Close to 40 million EU citizens outside banking mainstream, 5 April 2016, World Savings and Retail Banking Institute​
Insights into the future of cash, Speech given by Victoria Cleland, Chief Cashier and Director of Notes, Bank of England, 13 June 2017.
Why Europe still needs cash, 28 April 2017, Yves Mersch, European Central Bank.
Europe’s disappearing cash: Emptying the tills, 11 August 2016, The Economist
UK Payment Markets 2017, Payments UK.
The Global State of Financial Inclusion, 5 March 2015, Pymnts.com