Author: lphoa

http://time.com/money/4036511/venmo-more-check-than-cash/

Venmo is a very popular transaction payment program that is primarily used on mobile devices. It is a service application that is owned by Paypal, which is another payment transaction company. However, in the research that I have done on Venmo’s security, there were a lot of concerns initially with how effective the structure of the mobile app was in deflecting and detecting fraud.

Typically people use Venmo as a cashless way of sending money to others. These type of transactions range from personal transactions and small business transactions. Initially, Venmo did not have a notification method for changes in email and physical addresses which allowed scammers and hackers to send up to three thousand dollars to themselves. Venmo has implemented more precautions to avoid mishaps like this.

Additionally, the most common scam, according to Wolff-Mann is when someone sends you a payment but then cancels the transfer process before you could fully transfer their money to your account. In the same way that a paper check could bounce or be nulled out, Venmo scammers implement the same trick after they received their reciprocal payment.

Whether it’s implementing a security deposit initially for transactions or slipping in a contract that obligates the sender to fulfill their payment request, using Venmo definitely has its risks and benefits.

https://wallethub.com/edu/credit-debit-card-fraud-statistics/25725/

To be quite frank, credit card scams and credit card fraud scares the living daylights out of me. The thought of some stranger having all of my personal financial information is terrifying mainly because with knowledge comes power, and that power may just be financially ruining me. However, through this article of statistics on Credit and Debit Card Fraud, I was surprised that it’s really the card issues (74%) and merchants and ATM acquirers (28%) who incur most of the fraudulent losses.

Interestingly enough, “in 2015, US accounted for 38.7% of the worldwide payment card fraud losses but generated only 22.9% of total volume” (Nilson Report, October 2016). The reason that the US has such high fraud losses compared to its contribution of worldwide total volume may be attributed to the development of more complex fraud schemes. Additionally, from Javelin Strategy & Research, 2016-2017, although switching to EMV reduced existing card fraud, the US saw a 113% increase in new account fraud, which now accounts for 20% of all fraud losses. Essentially, despite these precautions, people are just getting more clever at stealing money.

Additionally, the most recent largest credit card data breach is from Home Depot in 2014 with 56 million. With the push for online sales, protecting customer data has and will surely play a larger part in the fintech industry.

https://squareup.com/townsquare/emv

Again, for this blog post, I am using Square’s resources in defining how and what certain financial transaction technologies, such as EMV, that are in place within small businesses.

EMV is a fairly new term that has been thrown around the business world. It stands for “Europay, MasterCard and Visa” and it “uses computer chips to authenticate (and secure) chip-card transactions” (Square).

Banks are migrating to EMV because they are able to encrypt bank information, making transaction-making much more secure. Originally, “if businesses ran a fradulent card, the banks would absorb the cost … [but now] if there is a fradulent card and the business isn’t set up with an EMV card reader, it’s possible that the banks are no longer liable” (Square). As Square and I anticipate, the lag in the EMV payments, which are significantly more noticeable than using the magnetic strip, will usher in a faster adoption of NFC payments which are contactless payments that are faster and just as secure.

I predict that most consumers will prefer to use NFC payments over EMV style payments in the near future, especially with the “instant gratification” of the future generations.

PCI Compliance – Part 2
https://squareup.com/guides/pci-compliance

As a Part 1 of my blog last week, I explored what PCI compliances were and how organizations play a role. Merchants are required to follow PCI-compliance regulations such as “establishing data security policies for your business and employees to removing card data from your processing system and payment terminals” (Square).

There are a couple of places that data can be stolen, as outlined by Square: compromised card readers, insecure payment system databases, recording entry of authentication data, and a secret tap into your store’s wireless or wired network. PCI compliances aim to provide guidelines so that a business’ payment processing life cycle is secure.

Square also follows the PCI standards including having an “integrated payment system [that] provides end-to-end encryption for every transaction at the point of swipe and tokenizes data once it reaches our services” (Square). Instead of directly communicating with a bank, Square provides the hardware, software, and relationship with banks so that small business owners can focus on other activities aside from payment compliance. This is ultimately their competitive advantage and why Square is so popular amongst up and coming businesses around the nation.

https://squareup.com/guides/pci-compliance

I discovered this topic while I was researching my last week’s blog post about Square. I wasn’t surprised that there are rules and regulations in place for online transactional services but I certainly did not know how extensive these rules are.

PCI Compliance is a standard put on by five big credit card companies that aim to reduce bank data breaches. These rules are set so that organizations and sellers can “safely and securely accept, store, process, and transmit cardholder data during credit card transaction to prevent fraud and data breaches” (Square). There are different compliance levels depending on the total transaction volume, annually, that also affect the fees that organizations need to pay. The burden of “maintaining compliance for all parts of the payment processing life cycle is on the sellers and organizations” (Square).

In my opinion, it seems unfair for an oligopoly of banks to issue a set of compliance standards that would disallow businesses to operate a credit card option for their customers. However, in a FIS class, having such regulations are a necessity given the sensitive nature of customers’ personal information. There is so much more history to the necessity of these compliances.

http://www.zdnet.com/article/square-launches-its-first-industry-specific-platform-for-retailers/
https://squareup.com/security

On February 8, 2017, Square launched their first industry specific platform for retailers (as noted in the article’s title). Prior to its launch, Square’s capabilities were limited in the sense that its system could not accommodate for growing businesses with a large catalog. The concern with Square’s expansion into the retail space raises the question of if more customers are exchanging their credit card information with this credit card processing service, who’s ultimately responsible for the upkeep and security of such sensitive information?

On Square’s website, the company lists different measures that they take to ensure the safety of their customers and customers’ users. Square provides a B2B service to usually, B2C businesses. This financial device and service has gained the reputation for being easily accessible and user friendly for businesses. However, as a credit card user with small businesses, it somewhat frightens me how easy it could be for small businesses to steal my personal information through the use of a device that looks similarly to Square’s. I think that although credit card processing can be streamlined and be more cost efficient, consumers must be more cautious and wary about where our personal information is going.

https://www.yahoo.com/tech/how-to-send-money-on-snapchat-103138292194.html
http://www.npr.org/sections/alltechconsidered/2017/02/02/512434920/snapchat-all-grown-up-5-things-we-learned-from-snaps-ipo-filing

Snapchat, or Snap, is going public and is estimated to raise at least $3 billion. Snapchat’s popularity is notorious for its functions as a secret social media app. Although Snapchat’s payment partnership with Square, another digital payment service, isn’t new to the app, its data security including its financial services is a huge concern in light of the impending IPO.

Snapchat’s partnership with Square allows Snapchat users to send money using their debit or credit cards. This means that each user shares their financial information with two companies, Snapchat and Square, increasing the risk that personal information could be leaked.

In the Yahoo article, sending money to your friends is as easy as sending a selfie, with a click of a few buttons. Although there is a security feature that allows users to enter their CVV number for each payment, the concern with this transactional system is where personal information will be stored, especially since Snap is moving their storage to Google Cloud.

With the growing popularity of digital payment methods, it’ll be interesting to see how a popular app created with secrecy in mind will either perpetuate or remain stagnant once Snapchat files their IPO.

http://money.cnn.com/2017/01/19/technology/india-cash-biometric-payments-davos/index.html

This article reports on how India is planning on switching to biometric payments in the next few years. India has plans to eliminate physical cash and credit cards for their 1.3 billion citizens.
There are far reaching effects with India’s move to a completely digital payment method. The most concerning with moving towards this system relates to its security, the reliability, and implementation. Even though producing counterfeit bills is relatively difficult, producing counterfeit digital money seem to be much easier with a few clicks. With biometrics, there should be concern with how reliable the system is. If the system is down or doesn’t recognize the biometric identifier, people would not be able to trade, which could bring the Indian economy to a halt. Additionally, the sheer size of the Indian population will make this a very difficult system to implement which affects the upkeep of removing and registering new users. It will be interesting to see if India actually pulls through with this project.

http://www.forbes.com/sites/jaysondemers/2017/01/11/7-ways-the-internet-of-things-will-change-businesses-in-2017/#247886a71260

This article touches upon seven different ways that the Internet of Things (IoT) would potentially change business in 2017. The Internet of Things is, in a brief summary, a new technology revolution that connects all sorts of electronic devices together that can track, record, and send consumer data to those manufacturers. One way that IoT can affect businesses is by improving the efficiency of certain processes, like inventory management, that can enable less worker time, and essentially less room for error.

The ability to track, view, and gather data using technology isn’t new but certainly IoT would simplify and automate many tasks that would otherwise need worker supervision. Then, with the improvement of these inventory systems, financial information systems managers, auditors, and many more stakeholders must question the reliability of the financial system in terms of accuracy, security, and functionality. From the viewpoint of system architects, 2017 would be a good year to get into the IoT designing business, which will also keep systems testers and regulators employed. The Internet of Things, with its ability to collect and store more irrelevant data will also inevitably make finding fraud much more difficult, something that auditors have something to look forward to.

Bitcoin’s price fell 10% this week when the People’s Republic of China announced their intent to investigate companies using bitcoin (CNBC). As explained in the article, “Chinese investors dominate the global bitcoin volume trade” which has led Chinese authorities to question whether the use of this financial system is having a negative effect on the renminbi (CNBC).

The idea that a national government is looking into an peer-regulated system like bitcoin begs the question of how far does a country’s jurisdiction reach in regulating its own citizens’ use of such system. This investigation, at least according to the article, indicates that the Chinese government is attempting to reduce Chinese bitcoin users’ exchanges. Because of its large presence in China, it will be very interesting to see how authorities will investigate whether or not this digital currency has a significant effect on the renminbi, their national currency. In the age of skepticism of financial information systems, the whole world will be watching and waiting to see how the bitcoin will react and whether or not this peer-to-peer financial system can withstand this economic superpower. (WC 183)

Reference: http://www.cnbc.com/2017/01/11/bitcoin-falls-5-as-china-plans-to-investigate-firms.html