Out of Network ATM Fees Hit All-Time High

According to Bankrate.com, the charge inflicted on banking customers who use out-of-network ATM fees is higher than ever, and continues to rise. The average fee now clocks in at $4.52, 4% higher than 2014’s average and 21% higher than the average out-of-network ATM fee in 2010.

This charge is enough to make consumers think twice about visiting a random yet convenient ATM outside of their banking network, especially when the amount to be withdrawn might only be $20. To access that $20 of your own money, you have to pay a fee of almost 25% – who wants to dish out those funds? Consumers may be tired of having to pay a bank in order to access their own money, but it doesn’t seem like the fees are going to decrease at any point in the future.

Banking Fees on the Rise

While this may come as a surprise to those who believe everything is more expensive in New York, Atlanta’s average fee – $5.15 – is the highest in the nation. New York comes in at a close second at $5.03. Phoenix, Miami and Milwaukee have the next three highest ATM fees reported, at $4.88, $4.84 and $4.78 respectively. San Francisco is the major city with the cheapest ATM fees, at $3.85.

While this is the ninth year in a row that ATM fees have risen, overdraft fees also continue to increase as well, as they have for 17 straight years in a row. Also, when Bankrate.com’s study examined the fees associated with non-interest checking accounts, they found only 37 percent of those accounts studied are actually fee-free. In 2009, 79 percent of these types of checking accounts were free. It’s clear that banks are adding fees left and right, then increasing the cost as time progresses – why?

What’s the Cause of the Price Increases?

After the financial crisis in 2008 and 2009, laws were passed to regulate the charges banks could inflict on consumers, specifically the costs charged to retailers when people pay for products with a debit card. So instead of being able to wring money out of the local businesses, banks pass the discrepancy in profit to the consumer. They might not be able to charge a business for your use of your debit card, so instead they charge you in roundabout ways.

As Usual, Lower Income Areas More Affected Than Others

While you may find it simple to just drive to your local bank and take out money in person or through your in-network ATM, not everyone has it that easy. People in low-income areas sometimes only have access to one or two local ATMs. When they need cash in a pinch, they are more likely to be hit with the high withdrawal fees you do your best to avoid. And unexpected high withdrawal fees charged out of necessity can lead to more overdrafts…putting more money in the bank’s pocket and taking it out of the consumer’s account. Lower income workers who live in an area with limited banking options will most likely continue to be the most affected by the hike in prices which seem to have no end in sight.

Long Overdue Chips Can Finally Protect US Consumers — If Merchants and Media Stop Being Shortsighted

There’s been quite a bit of negative reporting on the new microchip credit cards issued to Americans recently. The new cards have a microchip that constantly rotates unique transaction codes that can’t be repeated. Instead of requiring a signature, the credit card will ask for a four-digit pin code to authenticate the transaction.

Merchants complain of the cost of upgrading to microchip readers. Naysayers that the counterfeit fraud it stops is not worth the trouble of conversion, warning that card-not-present online fraud will rise dramatically in its place.

Anyone arguing that magnetic strip cards that store personal information on the strip, making the card vulnerable to theft and fraud is the way to go in the 21st century should probably stick with cash payments, IOUs and wooden nickels.

If you’ve ever been victim to the chaos and indignation a lost or stolen magnetic strip credit card has caused, the claims that chip and pin microchip credit cards offer no additional protection are offensive.

I’ve been a victim of credit card fraud more than once. Unknowingly I dropped my credit card and in less than 24 hours, a man proceeded to use a woman’s Platinum American Express at establishments like Wal-Mart, Chuck-E-Cheese, Dollar Tree, gas stations and a local pizzeria. The pizzeria owner found it so suspicious, they took a phone camera image of the perpetrator. A man purchasing more than $250 in pizza with a woman’s credit card with a signature that did not match warranted a photograph, yet the pizzeria accepted the card anyways. And now they’re out $250. This would have all been improbable had a pin been required for the transactions.

If you’ve visited Europe, you will find that it’s common, even at restaurants, to pay with a microchip credit card where the server will hand you the device, you insert your card in the chip reader, approve the amount and enter your four-digit pin code for approval.

Statistics show that the microchip credit card technology works. Aite Group, an independent research and advisory firm focused on business, technology, and regulatory issues and their impact on the financial services industry has found that counterfeit credit card fraud has fallen 56 percent since microchip cards were issued in Britain in 2005. In Canada, fraud is down 49 percent. The remaining fraud happens across the border in countries without chip capability, like the US.

A microchip card is safer than magnetic strip because the chip creates a unique one-time transaction code. The transaction number is not usable again, preventing someone from duplicating the info. Fake microchip credit cards will be almost impossible, as well as unauthorized use of one without knowing the pin number.

As far as online fraud goes, its days are short-lived. Systems like Visa Token Service or Apple Pay work with the same microchip technology both in-store and online, by replacing the static credit card number with a temporary token that changes every time.

But for the technology to work, merchants need to be on board and stop being short-sighted. The cost of replacing standard swipe terminals with microchip readers is far less than the cost of losses from fraudulent credit card use. While chip readers aren’t mandatory yet, as of October 1, 2015, there is a “liability shift” where merchants and their processing companies will be liable for any counterfeit transactions.

Consumers could help push the industry towards safer technology in a couple of ways. By avoiding payment using older signature-based systems and selecting retailers in-store and online that use updated microchip cards or Apple Pay and Visa Token Service. As consumers demand security, merchants will follow, reducing fraud for all.





How to Find Online Business Opportunities

Online businesses are progressively surpassing regular offline businesses thanks to the ever expanding World Wide Web. According to a Pew Internet Research report published in 2013, more than 85% of adults in the United States regularly surf on the internet. They majorly use it for social networking and shopping- with 97% of consumers, through Google’s ecommerce research conducted in 2013, claiming that they use the internet to search for products and services. Through an infographic published in 2015, Nextopia further accentuates this issue byrevealing that 62% of consumers are always willing to complete their purchases online, largely because of increased convenience.

With such a ready market, the internet is considered the single most expansive and promising platform for entrepreneurs to build their respective businesses. Sadly, only a small fraction of business owners recognize the power of the web. According to Google’s ecommerce research report, more than 58% of small businesses are yet to establish a website. That leaves about 40% of small businesses with the power of leveraging the internet’s increasing potential. But then again, less than a quarter of them are implementing the requisite strategies to comprehensively capture their target market.

Going by these statistics, it’s evident that the internet is severely underutilized. There are still plenty of opportunities for aspiring entrepreneurs to establish themselves and subsequently build empires. So, where should you begin? How can you find sustainable business opportunities and subsequently build your own brand?

Find a Need to Fill

It’s a common mistake for unseasoned entrepreneurs to focus on the product first before embarking on the market.  To increase your chances of business success, consider beginning with the latter before embarking on the former. Comprehensively assess your market to identify current and growing needs, then subsequently devise a solution that you’ll sell in form of products and/or services.

Since the needs you identify will form your business foundation, you need to only focus on the most critical ones that that are in sync with your personal interests. That means evaluating yourself too to determine solutions that go along with your skills and expertise. If this process proves to be a little complicated, you could seek help from Google Consumer Surveys to comprehend what most consumers are after. In case you identify a need that’s already being met, you could consider developing better solutions than your future potential competitor.

Analyze How Others Solve Problems

Everywhere you go, you’re probably surrounded by many problems or needs which other entrepreneurs have tried solving through online solutions. By paying close attention to the detail, you’ll grasp sufficient information and tips which could subsequently help you identify additional opportunities and ultimately set up a business.

Observe how ecommerce sites are organizing their business- their website designs, customer interaction, marketing strategies and competition countering measures. The consequent ideas you get could be used to further refine your opportunities and position yourself even better as you prepare to start a business. In some cases, you could identify a business problem, consequently establishing a B2B type of business to address them.

Proceed With Caution

The internet is as diverse the standard market. It extends to both extremes- good and false opportunities. Since online based fraudsters and conmen understand the rat race of business very well, they’re fond of preying on desperate individuals seeking to monetize online opportunities. It’s therefore advisable to proceed with caution especially when:

  • You are required to pay an upfront fee just to gain access to a business opportunity. Most of the scams even require you to recruit other naïve ‘members’.
  • You are required to pay a regular fixed amount of cash on your ‘membership’ regardless of whether you make money or not.
  • The opportunities presented to you do not have sufficient background information and backing
  • There are guarantees of making a lot of money in a relatively short period of time. For instance, you may be attracted by an ad requiring you to sign up and make USD 10,000 per week possibly just by liking a few pages on social media.
  • You can’t trace genuine members who’re actually benefitting from the said ‘promising opportunity’.

Map It

Many entrepreneurs are fond of seeking opportunities by casting a wide net, possibly trying to capture as many prospective customers as possible. Taking this principle too literally however, could eventually cost you your business. Although it’s advisable to be aggressive, it’s equally important to be strategic and calculative by starting small. That means mapping your opportunities and business by focusing only on the core elements.

Mapping your resources and dedicating them to a specific target market is a much more effective strategy, especially to small businesses, than splitting the resources between unspecified goals for an indefinitely wide market. One of the methods of achieving this is focusing on your location first before growing to spread your products and services to the rest of the world. Since mapping strategies depend on the type of business, resources and consumer needs, you should comprehensively assess these three elements as you define your opportunities.

Assess Your Resources

Lastly, analyze your resources, both offline and online, to understand your capabilities in terms of the opportunities and business types you may be able to handle. Although you could eventually begin compiling additional resources after setting up your business, your current resources greatly dictate your ability. Having technical expertise in one type of business for instance, could significantly boost your chances in that specific industry compared to other businesses.

As you make up your mind on online businesses to pursue, remember to build sufficient resilience, especially against failure. Although failures may pull you back resource-wise, they are good learning experiences. If you fail therefore, you should have the strength and determination to dust yourself and proceed with other ventures- after all, each business is a risk, with a potential of failing or succeeding. What makes the difference is how you manage your risks.