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Payments

Fitting Paper Checks Into a Faster Payments World

By Victoria Dougherty

Rumors on the death of paper checks have been circulating for years. Despite speculation, the check is alive and well. Most people still write and cash checks, even if it is less frequently. Expectations & Experiences: Household Finances, a quarterly consumer trends survey from Fiserv, confirmed changes in consumer payment behaviors, including the infrequent use of checks as payments. However, 58 percent of consumers cashed a check in the three months prior to the survey.

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Payments and Cybersecurity

Banks must prepare for the inevitable cyber-attack.

By Michael Scheibach

In the new era of digital banking and e-payments, banks must continually improve their safeguards and strategies against cyber-attacks, which are predicted to increase by 25 percent in 2017, with ransomware — malware that severely restricts access to computers or files until a ransom is paid — leading the way. Tech Micro, a cloud-based security company, also predicts that ransomware and other cyber-attacks will spread rapidly this year to point-of-sale terminals, IoT (Internet of Things) devices and even ATMs.

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What Banks Can Learn from Social Media Apps

By David Lester

With technology advancing at an exponential rate, it seems as though most banks have fallen behind the curve when it comes to their mobile app capabilities and enticing a millennial audience. A generation that demands superior service, convenience and accessibility at their fingertips, millennials will follow where amenity leads and unfortunately simply having a mobile app will no longer suffice. So what exactly does the largest generation in the U.S. expect from its bank in terms of mobile technology? Here are a few features in high demand: (more…)

Partnering for Payments

Fintech payments solutions offer new challenge.

By Michael Scheibach

Generating revenue, improving product offerings, streamlining operations and better serving customers are among the top priorities for financial institutions in 2017. They also are the priorities for small businesses, especially retailers, who constantly look for ways to reduce costs, better serve their customers and increase revenues. Many retailers, in fact, are now part of the Merchants Payments Coalition — representing nearly 3 million stores — whose mission is to reduce credit card fees and create “a more transparent system that works better for consumers and merchants.”

Needless to say, banks must confront this changing payments landscape or risk losing their retail customers to fintech startups. In a report released last year, “Banks, Retailers and Fintech: Reimaging Payments Relationships,” the authors point out that fintech companies “sense an opportunity” in payments and are “muscling in” on banks’ traditional turf. “Banks cannot afford to be complacent,” reads the report. “Changes sweeping the industry suggest that there is a lot more disruption ahead, with potentially much more significant impact on banks.”

An even greater threat than payments processing, however, may be the weakening of the overall business relationship with a retail customer — an area of strength for banks. In other words, fintech payments solutions often have expanded capabilities that strengthen the fintech’s connection with its customers.

An example of a fintech company offering more than a simple payments solution is Fattmerchant (www.fattmerchant.com), a subscription-based merchant processing company. Its solution also includes one-time and recurring online payments, invoicing capabilities, a reporting dashboard with analytics, a mobile app, technical support, customized reports and more.

Although Fattmerchant has focused primarily on retailers, professional services and ecommerce companies, it also knows the importance of working with banks because of their longstanding small-business customer base. To do this, the company recently introduced a white-label Partner Program for banks and credit unions that is fully customizable according to the financial institution’s brand standards. A financial institution that becomes a partner has access to tools and resources for marketing, customer service, technical support and account management. Plus, the program allows institutions to analyze merchant processing savings for clients and helps clients switch processors, all while the institution earns money.

CEO Suneera Madhani emphasizes that one of the biggest benefits of the program for financial institutions is the ability to partner with a merchant services provider with no markups. Financial institutions have traditionally worked with standard processors cutting into their customers’ bottom lines, says Madhani. Now they are able to recommend a company that works for the mutual benefit of both the merchant and the institution.

“Customers of financial institutions enrolled in our Partner Program have access to a network of available resources and transparent pricing to help them succeed,” said Madhani. “The program provides updated technology such as a detailed analytics dashboard and tools, as well as a fully integrated virtual terminal. By using Fattmerchant, merchants are offered major savings through no markups and no contract. Merchants also have the added benefit of working with both their bank and the Fattmerchant team to find ways to save, essentially expanding their financial support system.”

Although the Partner Program is new, Madhani said the early response has been positive, with small to medium-sized financial institutions seeing the greatest return. One such institution is Axiom Bank in Orlando, Fla. According to Daniel Davis, president and CEO, the bank and Fattmerchant are working together to provide customers with affordable merchant processing, and to ensure that customers are improving their return each month and reducing unnecessary spending on exorbitant bills.

“Small-business owners are seeking convenience, clarity and trustworthy services,” said Davis, “and that’s what they’ll find with this partnership.”

 

 Michael Scheibach is executive editor of BankNews.

 

 

Fed: Noncash Payments Continue to Grow; Checks on Decline

December 30 – Credit and debit card payments continued to gain ground in the payments landscape from 2012 to 2015, accounting for more than two-thirds of all core noncash payments in the United States, according to a Federal Reserve study of U.S. non-cash payments. Automated clearinghouse payments grew modestly over the same period, and check payments declined at a slower rate than in the past. (more…)

Top 2017 Banking Trend Will Be Digital Momentum

December 21 – The major online and mobile banking replacement cycle that began in 2016 will gain significant momentum in 2017 as more financial institutions seek to stabilize and grow customer bases through an advanced, comprehensive digital banking strategy. This is the prediction of  D3 Banking, the leading innovator in data driven digital banking. (more…)

Walmart Expands Money Transfer Service

October 26 –  Walmart, Ria and MoneyGram have announced a series of changes to their money transfer services that deliver lower prices, greater convenience and a simplified fee structure for customers.

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CFPB Announces New Protections for Prepaid Card Users

October 5 – The Consumer Financial Protection Bureau has finalized strong federal consumer protections for prepaid account users. The new rule requires financial institutions to limit consumers’ losses when funds are stolen or cards are lost, investigate and resolve errors, and give consumers free and easy access to account information. The Bureau also finalized new “Know Before You Owe” disclosures for prepaid accounts to give consumers clear, upfront information about fees and other key details. Finally, prepaid companies must now generally offer protections similar to those for credit cards if consumers are allowed to use credit on their accounts to pay for transactions that they lack the money to cover. (more…)

Fintech, Payments and Banking

Creating opportunities by leveraging fintech and payments industry knowledge

By Chris McNulty

It has been many years since the local community bank required only a reasonable delivery of core banking skills to thrive. Yet most community banks still think of their business clients and payments in two separate ways. One is related to merchant services and how to provide this critical service to their business clients. The other is a more traditional cash management view of payments led by the need for ACH payments and bill pay functionality.

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Blockchain and Banks

Banks of all sizes can benefit from blockchain technology.

By Michael Scheibach

As banks brace for an uncertain future rife with demographic changes and fintech competitors, blockchain has emerged as another factor contributing to the industry’s forced transition into a digital-first age. What began simply as a means to support bitcoin transactions has morphed into a digital distributed ledger enabling secure transactions through a shared, decentralized database.

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