Is card surcharging justified or does it encourage rorting? Is card surcharging justified or does it encourage rorting?
ANZ BlueNotes

Following a brief history of credit cards in Australia – this piece looks at the development of surcharging following the intervention by the Reserve Bank of Australia (RBA) in 2002, to allow surcharging, so as to highlight to consumers the cost of accepting payments by credit card, verses paying by debit card.

Why are we such suckers for financial scams?
ANZ BlueNotes

Despite all the information our financial services providers and public bodies publish on how to look out for and hopefully avoid being taken in by scammers, we still appear to be gullible and vulnerable to their deceptions.

What’s the role of cash in financial inclusion?
ANZ BlueNotes

Highlights the role of cash as a gateway to other financial services such as savings, credit and insurance. Points out that making cash difficult to access and to use as a payment mechanism, actually can result in exclusion from using financial services, as certain sections of society find it difficult to engage without using cash. Maintaining branch and ATM access; cash back at retail outlets and post office banking services are some of the measures being taken to ensure that access to cash remains available to all those who need it.Highlights the role of cash as a gateway to other financial services such as savings, credit and insurance. Points out that making cash difficult to access and to use as a payment mechanism, actually can result in exclusion from using financial services, as certain sections of society find it difficult to engage without using cash. Maintaining branch and ATM access; cash back at retail outlets and post office banking services are some of the measures being taken to ensure that access to cash remains available to all those who need it.

Can cash resist the digital tide?
ANZ BlueNotes

Discusses the reasoning behind cash being designated a Public Good, as being cut off from using cash, is tantamount to being excluded from society. Describes how countries across the world have sought to protect the use of cash, both in access to cash and in ways that it can be used for payments.Discusses the reasoning behind cash being designated a Public Good, as being cut off from using cash, is tantamount to being excluded from society. Describes how countries across the world have sought to protect the use of cash, both in access to cash and in ways that it can be used for payments.

Are neo-banks here to stay? Or just a passing phase?
ANZ BlueNotes

Using the 3-6-3 Rule as a starting point – this article questions whether neo-banks can actually be true ‘banks’, in that their ability to secure deposits is good – but their ability to successfully lend is questionable. Using examples from both Australia and the UK, it looks at both successes and challenges for neo-banks and discusses what might be their typical life cycle.

Financial Fraud in a Digital Era

ANZ’s BlueNotes

This chapter discusses how lobbying has been used to push for regulations to counter the rise in fraud, particularly in the payments arena. It concentrates on the rise in Identity Theft and the associated increase in fraud on Authorised Push Payments (APP’s), where ‘victims’ are persuaded to transfer money to an account linked to a fraudster. Besides increasing and improving warnings to customers about how to detect and then hopefully prevent an APP fraud, there is a need for consistent remediation policies.

Are fraudsters really that clever?

ANZ’s BlueNotes

Questions whether fraudsters are ‘agile’ and have been able to ‘pivot’ to follow the money in their ongoing quest to exploit digital payments and e-commerce, both of which have been turbo-charged during the current Covid pandemic. Identity theft has become part of the fraudsters repertoire and has been used to steal payment card details and is now increasingly being used in Authorised Push Payments (APP’s), where money is transferred to a bogus account, leaving individuals and organisations unable trace where their money has disappeared to. There have been attempts to offer reimbursement though voluntary codes, but just as with a clever virus, warnings about it are insufficient, firm measures and avoidance will have much a much better chance of ongoing success.

The Culture of Cash
ANZ’s BlueNotes

Cash as a payment facility is in decline and the current pandemic has hastened that process, with people concerned that both coins and notes may be carriers of the virus. This is an international phenomenon and yet there is no evidence that cash is anymore of a risk then touch pads on ATM’s or PIN pads. Cultural differences also play a part- citizens of some countries are keen to continue to hold cash – both as a payment option and as a store of value. Disadvantaged groups, such as the elderly also rely heavily on paying by cash.

Challenger banks: still a challenge?

ANZ’s BlueNotes

Considers both in Australian and UK perspectives, whether new entrants into the banking market can really disrupt the status quo of the ‘Big Four’ banks that dominate both markets. Using the UK examples of Virgin Money, Tesco Bank and Metro Bank, the article describes how and why they have struggled to ‘challenge’ the status quo, particularly using a ‘bricks and mortar’ network. Various digital challengers in Australia hope that by using different distribution models that they might challenge the ‘Big Four’ here – only time will tell !

Exaggerating the death of cash

ANZ’s BlueNotes

Countries with different cultures and experiences reveal why and how cash remains a useful and ever-popular payment option. Evidence from Canada, United States, Sweden, Germany, Japan and Hong Kong is used to explain why the death of cash is greatly exaggerated. Cash still has its own Triple A accreditation -it is Anonymous; Accepted nearly everywhere and it is Authentic and offers instant and visible settlement.

Why bother surcharging?

ANZ’s BlueNotes

Reviews the history of surcharging on card payments in Australia and comments on the complexities that have arisen since their introduction in 2003 and the subsequent alterations that have been imposed by the RBA. Discusses the relevance of this topic in the context of the RBA’s encouragement of card acquirers to route debit card transactions through the eftpos network channel, rather than as at present through the Mastercard and Visa channels. Reflects on how other jurisdictions have dealt with surcharging and suggests that the logical step in Australia would be to ban surcharging altogether.

Depending on who you are, the benefits of a cashless society are greatly overrated

The Conversation

Using examples from a number of countries , this piece describes how certain members of society can be disadvantaged, as we move further towards a cashless society. Even in Sweden, a country often described as the ‘poster child’ for a cashless society, there is a pushback against the loss of opportunities to access cash and then to spend it. In the UK, there are concerns that the country is ‘sleepwalking’ towards a cashless society and that the loss of ATM’s and bank branches will further exasperate the situation.

The new and more efficient payments system means new and more efficient payments fraud

The Conversation

The article describes the background to the New Payments Platform (NPP) and the pros and cons of ‘real time’ payments transfers. Using examples from the United Kingdom’s Faster Payments System which is over 10 years old, it comments on how fraudsters have been attracted to these irreversible payments, which now have very high monetary ‘caps’ on their transfers. In particular it examines the ‘Friday afternoon frauds’ that involve conveyancing and how the regulators in the UK have responded to this ‘scam’.

Cash and the black economy

ANZ BlueNotes

Using the the difference between symptoms and causes, this piece examines what are the causes of the worldwide increase in the amount of money in circulation and suggests that it is not just demand for cash, but also the supply of it by central banks as a consequence of ‘Quantitative Easing’. Cash is also used as a ‘store of value’ and again the cause of its continuing usage is that with the current low interest rates being offered by the financial institutions there is little or no lost opportunity cost in keeping cash in hand.

The New Payments Platform may mean faster transactions, but it won’t be safer

The Conversation

Comments on the launch of the NPP and discuses whether the take up of this new payments platform will be as rapid as its instigators believe and also whether, as has happened in the UK, fraudsters may well seek to test the NPP as a means of generating Automatic Push Payments, whereby genuine account holders are persuaded to transfer money in ‘real time’ to a fraudulent account. Asks the question of the NPP -it is faster, easier, but is it safer?

Football’s cash derby

ANZ’s BlueNotes

Describes two different business models found in Professional Sports, in this case Football, using the two EPL teams based in Manchester, England as examples. Using the revenues earned by both clubs and the investments both owners have made in their teams, it compares both one model which involves short term profitability, with the other model which takes much longer view of what the return on investment might be.

In payments, fraud never changes

ANZ BlueNotes

Discusses how the adoption of common standards for payment cards and the use of chips on cards has reduced fraud in those countries that have wholeheartedly adopted these EMV standards. Australia is one such country and the rapid take up of contactless cards by both consumers and merchants has been very popular. However this very success has hindered the adoption of digital payments, as there does not seem to be a marked advantage over using contactless cards. Is public transport the ‘killer app” here?

Customer Intention to Save for Retirement using a Professional Financial Services Planner

Financial Planning Research Journal

This paper presents the results of an investigation into the factors that determine the intention to save for retirement using a ‘planner’. A survey sample of 289 Australian individuals, aged between 30-65 years, revealed that self-efficacy and attitudes are the main factors that cause a consumer to save for retirement, using the services of a financial planner.

Alibaba, fintech & techfin

ANZ BlueNotes

Uses the example of Alibaba and it’s financial services arm Ant Financial, to consider whether their payments platform Alipay is a disruptive fintech, or is it best described as a techfin. Comments on the vast data held by Alibaba; the super app that all its features run off; the use of QR codes to make payments and how this is spreading throughout other Asian countries and the ‘codeonomy’ that it has generated in China. Also reflects on Tencent’s WeChat and WeChatPay as rivals to Alibaba and Alipay.

The ATM celebrates 50 years but we are using it less

The Conversation

The first ATM was launched on June 27th 1967 and although we are taking less and less cash from the ATM’s in Australia, we still use cash both as a payment option and as a store of value. ATM’s can be used for other purposes than just withdrawing cash and this article discusses how ATM’s in other countries are used to provide other goods and services to customers. The ATM is 50 years old – it could well last another 50 years!

A cashless utopia? Dream on!

ANZ BlueNotes

Some commentators suggest that a cashless society is imminent and that all payments, of all kinds, will soon be electronic. Cash however has its own Triple A – it is Acceptable nearly everywhere; it is Anonymous and it is Authentic. This article describes how payments in Australia have changed over recent years, whilst also pointing out the residual attractions of cash to many people. It concludes by stating that the utopia of a cashless society is merely a mirage.

Apple Pay may have won the battle but it may not win the war

The Conversation

Uses the recent regulatory decision on Apple Pay, as a springboard to discuss why digital wallets and mobile payments have yet to take off in Australia. Then goes on to speculate whether the digital wallet providers in China, who use in-apps apps to run payments, music streaming, taxi bookings, photo sharing and more, will provide the future business models for other countries to emulate and which may prove to be more attractive to consumers than the current offerings.

Will demonetisation become de-rigueur?

ANZ BlueNotes

An explanation of the reasoning behind the withdrawal of the 500 and 1000 rupee notes from circulation in India in November 2016-and comments on how this might affect the Indian economy and the prospects for the use of more electronic payments in India.

ACCC rejects the banks colluding to bargain on Apple Pay

The Conversation

Reports on the ACCC’s draft decision to deny three of the major Australian banks permission to engage in collective bargaining with Apple, over the adoption of Apple Pay. Discuses why the ACCC may have denied them permission and on how the banks could respond, during the consultative phase, before the ACCC delivers its final verdict.

Apple Pay dispute may mean less opportunity to pay with your mobile

The Conversation

Discusses some of the issues behind the application by four Australian banks to secure collective bargaining rights for technology that grants access to Apple Pay. It offers a background to the changing ways that Australian consumers pay for their purchases, then focuses on the claims being made by the four banks and some of the underpinning economics of mobile payments.

Getting a Handel on paying bankers to help customers

ANZ BlueNotes

Using the example of the how at Wells Fargo, bonuses and remuneration for employees were rewarding wrong behaviours, that is sales rather than services to customers, this article examines how the Swedish Bank, HandelsBanken has a very different business model to that of the major American and Australian banks. It concludes by recommending the dismantling of the Four Pillars in Australian banking, a policy which has produced arguably a bank oligopoly in that country.

Banks can target service before sales to avoid a banking royal commission

The Conversation

Taking the example of the employees at Wells Fargo bank in the USA, who opened over 2 million fake accounts to make their sales targets, this article examines the sales pressures on customer facing bank employees in Australia and how this can lead to poor customer outcomes.Cross selling of products and services is a KPI for many financial services providers – but it should not be achieved at the expense of customer harm. This would damage the trust that is vital to banking.

Australian small businesses could be stretched by changes to commercial cards

The Conversation

September 2016

Large businesses are extended the length of their payment terms to their suppliers and this will put further pressure on SME finances. The RBA intends to cap the interchange element of the Merchant Service Fee associated with the use of commercial cards and this could damage their viability, just when SME’s may need to use them more to fill the finance gap caused by even later payments to them.

Mobile payments and tap and go might not mean the end for tellers

The Conversation

August 2016

Challenges the assumption that increasing use of electronic payments will result in the closure of bank branches, with attendant job losses, as well as a decline in the number and use of ATM’s.

Will mobile banking be an Atom bomb or a damp squid?

ANZ BlueNotesJuly 8, 2016

Reflects on whether or not the new banking apps based on mobile phones will revolutionise banking or just be another channel for serving customers?