As Italy and much of Europe struggle with their finances, the city of Florence has staged an art exhibition looking at the critical — and controversial — role that financial institutions have played for centuries.
The recent Money and Beauty exhibit, held in the majestic 15th-century Palazzo Strozzi, illustrated how Florentine merchants got around the Catholic Church's ban on money-lending and bankrolled the Renaissance.
With the Bible explicitly condemning usury, the lending of money was relegated to Jews, one of the few professions they were allowed to practice.
Yet in Florence, merchants turned the city into a laboratory and invented the financial instruments of international trade.
The exhibition starts with a small gold coin — the florin, named after the city. It was first minted in 1252, and a half-century later it was being used throughout Europe.
In the audio guide to the show, one of the curators of the exhibition, British writer Tim Parks, says the imagery on the gold coin is important: "On one side, the lily of Florence, on the other St. John the Baptist — civic identity and religious belief fused in cash."
As illustrated in the exhibition, Florentines also invented the letter of exchange, whereby a banker would give a client, say, 1,000 florins in one city with a pledge that the loan would be paid back in another within three months in the local currency.
The banker made a profit on the exchange rate. The trader, meanwhile, did not have to carry heavy metal coins on his trip and risk being robbed.
Many current financial terms derive from 14th-century Florence. Rischio — or risk — was the Tuscan word used to denote the costs incurred on, or contingencies of, a loan. It was simply a euphemism for interest, a taboo for the Catholic Church.
Many bankers made donations for the salvation of their souls, devoting money to good works or art. It was said, 'great sinners, great cathedrals.'
The word "bank" comes from banco, the bench on which itinerant merchants traded. An insolvent merchant would have his banco broken — hence, bankruptcy.
One of the objects on display is an account book that illustrates the dangers of sovereign default. When the English King Edward III reneged on war loans he had received from Florentine bankers, it contributed to financial problems in the city in the mid-14th century.
Parks, one of the curators, describes how this new way of doing business soon pervaded every sphere of life.
"Suddenly everything has a unit value, and everything can be compared in numbers. A priest has a fee for a wedding and a funeral — is that more or less than the cost of a flask of wine, or a prostitute?" Parks says.
The Catholic Church didn't like what was happening. But art historian Ludovica Sebregondi, who also curated the exhibition, says in the audio guide that some theologians began to make exceptions to the condemnation of money-lending.
"Amid this tension between opposing views," she says, "many bankers made donations for the salvation of their souls, devoting money to good works or art. It was said, 'great sinners, great cathedrals.' "
And in another hedge against eternal damnation, bankers filled those great cathedrals with great paintings and great sculpture. Through penitential patronage — the fear of God — Florence became the foundry of great artwork and set the stage for the Renaissance.
James Bradburne, director of the exhibition space, says Money and Beauty has a particular resonance in today's financially troubled world.
"It asks people to think about bankers' bonuses, how bankers make their money. How mysterious was a letter of credit — it was like short-selling, like derivatives," he says. Many of the same questions, Bradburne notes, are being asked today.
"Are the bankers the devils? Are they making illegitimate profits, or are they just good chaps?" Bradburne says. "We need the banking system. The dilemma is the same — and it devolves into a social and moral dilemma — then as now."
What's less clear is whether today's bankers — perhaps less guilt-ridden than their Florentine forerunners — are willing or able to finance a new renaissance.
2012年1月31日 星期二
2012年1月30日 星期一
The Pentagon's giant sucking sound
Those draconian Obama defense cuts are actually not. As Fred Kaplan reports in Slate, the real spending reduction proposed for fiscal 2013 is a mere 1 percent less than the actual spending in FY 2012. More details have yet to emerge, but the obvious winners are technology and special operations; the losers the ground forces.
And none of this accounts for the many hidden places for defense spending, such as the State Department, which is spending heavily on its own drone fleet and security contractors. According to the New York Times, 5,000 private security contractors, along with drones, are protecting 11,000 embassy employees in Iraq alone. Mission accomplished.
Mr. Obama's line about using money spent on wars for nation-building at home was also a bit disingenuous. The $1.3 trillion-and-rising cost was mostly borrowed, including from China. Conservatively, the United States spends more on its military than the next 14 biggest military powers in the world. This is Ike's Military Industrial Complex in full flower. It distorts the economy and until its really addressed, America can't recover and compete.
There are winners from the status quo, including big defense contractors such as Boeing. While we've allowed our high-tech manufacturing to migrate to Asia, America has actually increased its market share as the world's largest arms merchant -- often with catastrophic consequences in the many small wars you never read about. But this edifice is not as productive, not as constructive for rebuilding the middle class, or, as Eisenhower foresaw, not healthy for a democracy, as a more balanced use of national resources and focus.
Someday, the United States will need to restructure its economy for peaceful competition in a neo-mercantilist world, to meet the national-security threats (acknowledged by the Pentagon) of climate change and peak oil. Or debt or another misbegotten military adventure will force us to, on very unfavorable terms. What's happening now is not making us safer. It's making us poorer, and ultimately more at risk.
And none of this accounts for the many hidden places for defense spending, such as the State Department, which is spending heavily on its own drone fleet and security contractors. According to the New York Times, 5,000 private security contractors, along with drones, are protecting 11,000 embassy employees in Iraq alone. Mission accomplished.
Mr. Obama's line about using money spent on wars for nation-building at home was also a bit disingenuous. The $1.3 trillion-and-rising cost was mostly borrowed, including from China. Conservatively, the United States spends more on its military than the next 14 biggest military powers in the world. This is Ike's Military Industrial Complex in full flower. It distorts the economy and until its really addressed, America can't recover and compete.
There are winners from the status quo, including big defense contractors such as Boeing. While we've allowed our high-tech manufacturing to migrate to Asia, America has actually increased its market share as the world's largest arms merchant -- often with catastrophic consequences in the many small wars you never read about. But this edifice is not as productive, not as constructive for rebuilding the middle class, or, as Eisenhower foresaw, not healthy for a democracy, as a more balanced use of national resources and focus.
Someday, the United States will need to restructure its economy for peaceful competition in a neo-mercantilist world, to meet the national-security threats (acknowledged by the Pentagon) of climate change and peak oil. Or debt or another misbegotten military adventure will force us to, on very unfavorable terms. What's happening now is not making us safer. It's making us poorer, and ultimately more at risk.
2012年1月12日 星期四
PayPal and AJB Bring Digital Wallet to Offline Retail Space
A new partnership with payment solution provider AJB Software Design is helping PayPal expand beyond its extensive online presence and into an offline environment. Together, the companies will offer point-of-sale application programming interfaces that will allow shoppers to make PayPal payments at U.S. retail stores that use AJB payment technology.
AJB is building a PayPal interface for its Retail Transaction Switch (RTS) platform that AJB customers are already using. Once the interface is complete, shoppers will be able to pay for merchandise at the merchants' existing POS terminals by entering the mobile phone number and PIN associated with their PayPal account. Additionally, customers will be able to swipe a PayPal card for payment and to redeem coupons, gift cards or rewards associated with their accounts.
Anuj Nayar, PayPal's director of communications, says that this new project is a simple way to bring the digital wallet into the physical retail environment. "There's a lot of buzz right now in the industry about the digital wallet," says Anuj Nayar, PayPal's director of communications. "PayPal has had a digital wallet for 13 years. It just lives up in the cloud and can be accessed from any device. Deals like this allow us to jumpstart the adoption of these technologies with a very easy integration."
What makes PayPal's digital wallet so easy to deploy is that it does not require a change in technology from a merchant infrastructure perspective, says Pat Polillo, vice president of sales at AJB. "When you're looking at retailers who have got hundreds of thousands of stores, is a costly endeavor," he explains. "The nice thing about the PayPal wallet is that it uses technology that is already in the stores being used for the acceptance of a credit or debit card. Merchants can deploy this much faster than any of the other digital wallets that are on the market."
This news follows a recent announcement that PayPal is rolling out a small pilot of its POS technology with retailer Home Depot. Nayar says that its partnerships with both Home Depot and AJB are the start of a larger initiative that PayPal is undergoing to expand its relationships in the offline retail environment and beyond, and to expect similar announcements down the road.
In addition to merchants and payment technology providers, PayPal stresses that it looks to expand upon its relationships with banks. "We think there's a massive opportunity for financial institutions to work with PayPal," says Nayar. "We actually have an entire group dedicated to working with financial institutions in order to develop new ways to connect with their customers via PayPal."
AJB is building a PayPal interface for its Retail Transaction Switch (RTS) platform that AJB customers are already using. Once the interface is complete, shoppers will be able to pay for merchandise at the merchants' existing POS terminals by entering the mobile phone number and PIN associated with their PayPal account. Additionally, customers will be able to swipe a PayPal card for payment and to redeem coupons, gift cards or rewards associated with their accounts.
Anuj Nayar, PayPal's director of communications, says that this new project is a simple way to bring the digital wallet into the physical retail environment. "There's a lot of buzz right now in the industry about the digital wallet," says Anuj Nayar, PayPal's director of communications. "PayPal has had a digital wallet for 13 years. It just lives up in the cloud and can be accessed from any device. Deals like this allow us to jumpstart the adoption of these technologies with a very easy integration."
What makes PayPal's digital wallet so easy to deploy is that it does not require a change in technology from a merchant infrastructure perspective, says Pat Polillo, vice president of sales at AJB. "When you're looking at retailers who have got hundreds of thousands of stores, is a costly endeavor," he explains. "The nice thing about the PayPal wallet is that it uses technology that is already in the stores being used for the acceptance of a credit or debit card. Merchants can deploy this much faster than any of the other digital wallets that are on the market."
This news follows a recent announcement that PayPal is rolling out a small pilot of its POS technology with retailer Home Depot. Nayar says that its partnerships with both Home Depot and AJB are the start of a larger initiative that PayPal is undergoing to expand its relationships in the offline retail environment and beyond, and to expect similar announcements down the road.
In addition to merchants and payment technology providers, PayPal stresses that it looks to expand upon its relationships with banks. "We think there's a massive opportunity for financial institutions to work with PayPal," says Nayar. "We actually have an entire group dedicated to working with financial institutions in order to develop new ways to connect with their customers via PayPal."
2012年1月11日 星期三
Rare Legal Fight Takes On Credit Card Company Security Standards and Fines
A small celebrity-friendly restaurant in Utah is finally doing what many merchants have only dreamed of doing for a long time — taking on a part of the payment card industry’s powerful but flawed system for securing card data by fining merchants for failing to secure their data.
Stephen and Theodora “Cissy” McComb, owners of Cisero’s Ristorante and Nightclub in Park City, Utah, have filed a lawsuit against U.S. Bank claiming that the financial institution, which used to process the restaurant’s credit and debit card transactions, wrongfully seized money from the McCombs’ merchant bank account.
U.S. Bank seized about $10,000 from the McCombs’ account to pay $90,000 in fines that Visa and MasterCard imposed after alleging that Cisero’s had failed to secure its network and suffered a data breach that resulted in fraudulent charges on customer bank cards. U.S. Bank sued the McCombs to obtain the remaining balance on the fines, saying a contract the McCombs signed with the bank makes them liable for such fines.
But in their countersuit against U.S. Bank (.pdf), the McCombs allege that the bank, and the payment card industry (PCI) in general, force merchants to sign one-sided contracts that are based on information that arbitrarily changes without notice, and that they impose random fines on merchants without providing proof of a breach or of fraudulent losses and without allowing merchants a meaningful opportunity to dispute claims before money is seized.
It’s the first known case to challenge the heart of the self-regulated PCI security standards — a system that requires businesses accepting credit and debit card payments to implement a series of technological steps to secure data. The controversial system, imposed on merchants by credit card companies like Visa and MasterCard, has been called a “near scam” by a spokesman for the National Retail Federation and others who say it’s designed less to secure card data than to profit credit card companies while giving them executive powers of punishment through a mandated compliance system that has no oversight.
“It’s just like Visa and MasterCard are governments,” said Stephen Cannon, an attorney representing the McCombs. “Where do they get the authority to execute a system of fines and penalties against merchants? That’s a very important issue in this case.”
Legal experts say the case raises a number of broad questions that could have implications for enforcing contracts that many other merchants have signed with banks and card processors.
“All it takes is for one case to drive a truck through a provision of the contract, and all other contracts written like this one are suddenly put into question,” says Andrea Matwyshyn, a law and business ethics professor at the University of Pennsylvania’s Wharton School.
Cisero’s is a popular Italian eatery frequented by locals as well as celebrities who come to Park City each year for the Sundance Film Festival. Actors Russell Crowe, Sandra Bullock and Sundance founder Robert Redford have all eaten there, the owners told Bloomberg recently.
The issue began for Cisero’s in March 2008, when Visa notified U.S. Bank that Cisero’s network might have been compromised after cards used at the restaurant were apparently used for fraudulent transactions elsewhere. U.S. Bank, and its Georgia-based affiliate Elavon, process the bank card transactions that customers make at Cisero’s.
In the wake of the alleged breach, Cisero’s, per rules imposed by the payment card industry, was required to hire a forensic investigations firm — from a list of six firms approved by Visa and MasterCard — to determine if a breach had occurred and if the restaurant was in compliance with the so-called PCI security standards that were adopted by the Payment Card Industry Council in 2005.
The McCombs hired two firms, Cybertrust and Cadence Assurance. Both examined Cisero’s point-of-sale system (POS) and servers and found “no concrete evidence that the POS server suffered a security breach which led to the compromise of cardholder data” and no evidence that insiders had installed skimmers on card readers to collect account data. Cadence in fact determined that no evidence existed that payment card data of any kind was improperly taken from Cisero’s systems.
The audits, however, did find that the POS system the restaurant used — a system made by Micros — was storing customer account numbers as they were read from the magnetic stripe on bank cards.
Since storage of card data is a violation of the PCI security standards, Visa and MasterCard imposed fines on U.S. Bank and Elavon. Under the PCI system, the banks and card processors that process transactions for merchants are fined, not the merchants and retailers themselves. But those banks and card processors have separate agreements with merchants and retailers that indemnify them against any such fines, forcing the merchants and retailers to pay them instead of the banks and processors — an arrangement that gives merchants little power in challenging fines.
Visa determined that the total cost of the liability for Cisero’s noncompliance was $1.33 million, but ultimately set the fine at $55,000, without explaining how it reached these figures, the McCombs claim. MasterCard stated that although it could have imposed a fine of up to $100,000 for the violation of storing card data, it decided to impose a fine of only $15,000.
The fines increased after card issuers came forward claiming they suffered losses from the alleged breach. Under recovery programs run by Visa and MasterCard, card issuers that have suffered losses due to data breaches can recover these losses from the bank of the merchant accused of being the source of the breach. So after RBS Citizens Bank and Chase claimed they had suffered $13,849 in losses from fraudulent charges to their customer’s accounts as a result of the alleged breach of Cisero’s network, MasterCard added that to the fine, for a total of about $90,000.
But instead of simply notifying the McCombs about the fines and giving them an opportunity to dispute the claims of Visa and MasterCard, U.S. Bank and Elavon simply “helped themselves” to about $10,000 from the McCombs’ U.S. Bank account. The McCombs refused to pay the remainder of the fines and closed their bank account before any more money could be siphoned.
In 2010, Elavon sued to obtain about $82,600, the remainder of the fines. The McCombs countersued, accusing U.S. Bank of wrongfully seizing their money without providing any proof that a breach occurred or that fraud losses claimed to have been suffered by RBS and Chase were even connected to cards that Cisero’s had processed. They accuse Visa and MasterCard of levying “punitive” fines on them that have no relation to actual losses suffered.
To determine the source of a breach, Visa uses a “common point of purchase” method that traces where cards involved in fraud were used in order to find the most likely place where they were stolen. But according to the Cadence forensic report of Cisero’s servers, most of the fraudulent activity reported by RBS and Chase involved credit card numbers that were not found on Cisero’s point-of-sale system, suggesting they might never have been used at Cisero’s. Yet the McCombs were not given a chance to dispute this before the money was seized from their account.
“At no time has Elavon, U.S. Bank, Visa, MasterCard or any other entity proven that a data breach occurred at Cisero’s, that issues actually suffered fraud losses, or that any such losses were caused by a data breach at Cisero’s,” the McCombs’ complaint reads. “Notwithstanding these facts, neither U.S. Bank nor Elavon ever gave Cisero’s an opportunity to present evidence in its defense before Visa and MasterCard assessed the fines.”
Visa and MasterCard did not immediately respond to a call for comment.
The McCombs also charge that U.S. Bank had a duty to ensure that they were properly notified about the PCI security standards when they were first instituted and had a duty to ensure that Cisero’s met those standards. Instead, they say, the standards only went into effect four years after they signed their contract with U.S. Bank and were incorporated into that contract indirectly, without explicit notice of the new rules. The McCombs say the bank only made reference to the rules via a web site address that appeared on six printed bank statements sent to the McCombs between 2005 and 2007. Since the McCombs did their banking online, they never noticed the reference and only learned of the rules when they were told they might have violated them.
The McCombs assert that the PCI system is less a system for securing customer card data than a system for raking in profits for the card companies via fines and penalties. Visa and MasterCard impose fines on merchants even when there is no fraud loss at all, simply because the fines “are profitable to them,” the McCombs say.
Furthermore, there is no recourse and no process available for merchants to challenge fines, they say in their complaint. Although the acquiring bank, such as U.S. Bank, can appeal the fines in writing with supporting material, the banks have no incentive to do so, since they are indemnified from liability in their contracts with merchants and simply pass the fines onto the merchants. Banks also have to pay a nonrefundable fee of $5,000 to file an appeal, giving them even less reason to do so.
Matwyshyn says the system of fining merchants could prove to be a problem for the payment card industry if the court views them as punitive in this case.
“In general, contract law does not like punitive damages being included in contracts,” she says. “If you argue that these fines are punitive and unrelated to actual losses suffered, courts could deem your contact to be overreaching and conclude that its intent is to punish rather than to compensate harm.”
Matwyshyn also says the fact that merchants are liable for a third-party agreement their banks make with Visa and MasterCard is also problematic because it disempowers merchants and prevents them from being able to “negotiate the kinds of balanced provisions we would expect to see between two parties to a contract.”
Stephen and Theodora “Cissy” McComb, owners of Cisero’s Ristorante and Nightclub in Park City, Utah, have filed a lawsuit against U.S. Bank claiming that the financial institution, which used to process the restaurant’s credit and debit card transactions, wrongfully seized money from the McCombs’ merchant bank account.
U.S. Bank seized about $10,000 from the McCombs’ account to pay $90,000 in fines that Visa and MasterCard imposed after alleging that Cisero’s had failed to secure its network and suffered a data breach that resulted in fraudulent charges on customer bank cards. U.S. Bank sued the McCombs to obtain the remaining balance on the fines, saying a contract the McCombs signed with the bank makes them liable for such fines.
But in their countersuit against U.S. Bank (.pdf), the McCombs allege that the bank, and the payment card industry (PCI) in general, force merchants to sign one-sided contracts that are based on information that arbitrarily changes without notice, and that they impose random fines on merchants without providing proof of a breach or of fraudulent losses and without allowing merchants a meaningful opportunity to dispute claims before money is seized.
It’s the first known case to challenge the heart of the self-regulated PCI security standards — a system that requires businesses accepting credit and debit card payments to implement a series of technological steps to secure data. The controversial system, imposed on merchants by credit card companies like Visa and MasterCard, has been called a “near scam” by a spokesman for the National Retail Federation and others who say it’s designed less to secure card data than to profit credit card companies while giving them executive powers of punishment through a mandated compliance system that has no oversight.
“It’s just like Visa and MasterCard are governments,” said Stephen Cannon, an attorney representing the McCombs. “Where do they get the authority to execute a system of fines and penalties against merchants? That’s a very important issue in this case.”
Legal experts say the case raises a number of broad questions that could have implications for enforcing contracts that many other merchants have signed with banks and card processors.
“All it takes is for one case to drive a truck through a provision of the contract, and all other contracts written like this one are suddenly put into question,” says Andrea Matwyshyn, a law and business ethics professor at the University of Pennsylvania’s Wharton School.
Cisero’s is a popular Italian eatery frequented by locals as well as celebrities who come to Park City each year for the Sundance Film Festival. Actors Russell Crowe, Sandra Bullock and Sundance founder Robert Redford have all eaten there, the owners told Bloomberg recently.
The issue began for Cisero’s in March 2008, when Visa notified U.S. Bank that Cisero’s network might have been compromised after cards used at the restaurant were apparently used for fraudulent transactions elsewhere. U.S. Bank, and its Georgia-based affiliate Elavon, process the bank card transactions that customers make at Cisero’s.
In the wake of the alleged breach, Cisero’s, per rules imposed by the payment card industry, was required to hire a forensic investigations firm — from a list of six firms approved by Visa and MasterCard — to determine if a breach had occurred and if the restaurant was in compliance with the so-called PCI security standards that were adopted by the Payment Card Industry Council in 2005.
The McCombs hired two firms, Cybertrust and Cadence Assurance. Both examined Cisero’s point-of-sale system (POS) and servers and found “no concrete evidence that the POS server suffered a security breach which led to the compromise of cardholder data” and no evidence that insiders had installed skimmers on card readers to collect account data. Cadence in fact determined that no evidence existed that payment card data of any kind was improperly taken from Cisero’s systems.
The audits, however, did find that the POS system the restaurant used — a system made by Micros — was storing customer account numbers as they were read from the magnetic stripe on bank cards.
Since storage of card data is a violation of the PCI security standards, Visa and MasterCard imposed fines on U.S. Bank and Elavon. Under the PCI system, the banks and card processors that process transactions for merchants are fined, not the merchants and retailers themselves. But those banks and card processors have separate agreements with merchants and retailers that indemnify them against any such fines, forcing the merchants and retailers to pay them instead of the banks and processors — an arrangement that gives merchants little power in challenging fines.
Visa determined that the total cost of the liability for Cisero’s noncompliance was $1.33 million, but ultimately set the fine at $55,000, without explaining how it reached these figures, the McCombs claim. MasterCard stated that although it could have imposed a fine of up to $100,000 for the violation of storing card data, it decided to impose a fine of only $15,000.
The fines increased after card issuers came forward claiming they suffered losses from the alleged breach. Under recovery programs run by Visa and MasterCard, card issuers that have suffered losses due to data breaches can recover these losses from the bank of the merchant accused of being the source of the breach. So after RBS Citizens Bank and Chase claimed they had suffered $13,849 in losses from fraudulent charges to their customer’s accounts as a result of the alleged breach of Cisero’s network, MasterCard added that to the fine, for a total of about $90,000.
But instead of simply notifying the McCombs about the fines and giving them an opportunity to dispute the claims of Visa and MasterCard, U.S. Bank and Elavon simply “helped themselves” to about $10,000 from the McCombs’ U.S. Bank account. The McCombs refused to pay the remainder of the fines and closed their bank account before any more money could be siphoned.
In 2010, Elavon sued to obtain about $82,600, the remainder of the fines. The McCombs countersued, accusing U.S. Bank of wrongfully seizing their money without providing any proof that a breach occurred or that fraud losses claimed to have been suffered by RBS and Chase were even connected to cards that Cisero’s had processed. They accuse Visa and MasterCard of levying “punitive” fines on them that have no relation to actual losses suffered.
To determine the source of a breach, Visa uses a “common point of purchase” method that traces where cards involved in fraud were used in order to find the most likely place where they were stolen. But according to the Cadence forensic report of Cisero’s servers, most of the fraudulent activity reported by RBS and Chase involved credit card numbers that were not found on Cisero’s point-of-sale system, suggesting they might never have been used at Cisero’s. Yet the McCombs were not given a chance to dispute this before the money was seized from their account.
“At no time has Elavon, U.S. Bank, Visa, MasterCard or any other entity proven that a data breach occurred at Cisero’s, that issues actually suffered fraud losses, or that any such losses were caused by a data breach at Cisero’s,” the McCombs’ complaint reads. “Notwithstanding these facts, neither U.S. Bank nor Elavon ever gave Cisero’s an opportunity to present evidence in its defense before Visa and MasterCard assessed the fines.”
Visa and MasterCard did not immediately respond to a call for comment.
The McCombs also charge that U.S. Bank had a duty to ensure that they were properly notified about the PCI security standards when they were first instituted and had a duty to ensure that Cisero’s met those standards. Instead, they say, the standards only went into effect four years after they signed their contract with U.S. Bank and were incorporated into that contract indirectly, without explicit notice of the new rules. The McCombs say the bank only made reference to the rules via a web site address that appeared on six printed bank statements sent to the McCombs between 2005 and 2007. Since the McCombs did their banking online, they never noticed the reference and only learned of the rules when they were told they might have violated them.
The McCombs assert that the PCI system is less a system for securing customer card data than a system for raking in profits for the card companies via fines and penalties. Visa and MasterCard impose fines on merchants even when there is no fraud loss at all, simply because the fines “are profitable to them,” the McCombs say.
Furthermore, there is no recourse and no process available for merchants to challenge fines, they say in their complaint. Although the acquiring bank, such as U.S. Bank, can appeal the fines in writing with supporting material, the banks have no incentive to do so, since they are indemnified from liability in their contracts with merchants and simply pass the fines onto the merchants. Banks also have to pay a nonrefundable fee of $5,000 to file an appeal, giving them even less reason to do so.
Matwyshyn says the system of fining merchants could prove to be a problem for the payment card industry if the court views them as punitive in this case.
“In general, contract law does not like punitive damages being included in contracts,” she says. “If you argue that these fines are punitive and unrelated to actual losses suffered, courts could deem your contact to be overreaching and conclude that its intent is to punish rather than to compensate harm.”
Matwyshyn also says the fact that merchants are liable for a third-party agreement their banks make with Visa and MasterCard is also problematic because it disempowers merchants and prevents them from being able to “negotiate the kinds of balanced provisions we would expect to see between two parties to a contract.”
2012年1月10日 星期二
Why Regions Bank is Offering Secure Vault Online Payments
"We were interested in adding this to the depth and breadth of product features we offer," says Greg Miles, senior vice president and Regions Treasury Management product development executive. "It's important to us to be able to offer this to commercial clients interested in expanding the range of payment options available to their customers. We have a variety of client types that would be interested in Secure Vault payments."
For example, a banker calling on a university for its banking business might offer this as a way to accept large online payments such as tuition. Four universities — Auburn University, Columbus State University, University of Georgia and University of Wisconsin — accept Secure Vault to date.
It's also important to the bank to accept Secure Vault payments on the consumer side, Miles says, and be listed on the drop-down menu on sites that support Secure Vault.
Secure Vault uses technology from eWise and NACHA's clearing network. It appealed to the bank because "it combines the convenience of the automated clearing house network with security that isn't always available with an ACH payment," Miles says.
"An ACH payment is subject to non-sufficient funds and other issues. With SecureVault payments, there's a high degree confidence the that purchaser is who they say they are, and we do check funds availability and hold funds the way the way credit or debit card payments do."
The system lets the bank extend the security measures it's developed for online banking, such as multifactor authentication, to Secure Vault payments.
"It's not a full-fledged login to online banking," Miles explains. "The way the user experience works, our customer goes to a merchant's website that accepts Secure Vault. When Regions Bank is the selected bank, the user is presented a scaled-down authentication page, which then provides a list of eligible bank accounts the customer can select from to make payment. Once an account is selected and the funds available verified, then the payment is made. Behind the scenes, we place a hold on those funds, then we conclude that payment using the ACH network."
The hold is typically two or three days. The bank is in the process of creating a secure interface from Secure Vault to Region's online banking system.
Miles acknowledges that future acceptance of Secure Vault among merchants and consumers is unknown.
"To some extent, there's a chicken and egg scenario going on," he says. It's important to the Secure Vault Payment network that many financial institutions participate, and it's important to the banks that the network sign up more merchants.
"We're impressed with the range of financial institutions that are already part of the network and we felt it was important for us to be participants as well," he says. "We do think it's important to provide alternatives to commercial clients and consumers, beyond that I can't say."
For example, a banker calling on a university for its banking business might offer this as a way to accept large online payments such as tuition. Four universities — Auburn University, Columbus State University, University of Georgia and University of Wisconsin — accept Secure Vault to date.
It's also important to the bank to accept Secure Vault payments on the consumer side, Miles says, and be listed on the drop-down menu on sites that support Secure Vault.
Secure Vault uses technology from eWise and NACHA's clearing network. It appealed to the bank because "it combines the convenience of the automated clearing house network with security that isn't always available with an ACH payment," Miles says.
"An ACH payment is subject to non-sufficient funds and other issues. With SecureVault payments, there's a high degree confidence the that purchaser is who they say they are, and we do check funds availability and hold funds the way the way credit or debit card payments do."
The system lets the bank extend the security measures it's developed for online banking, such as multifactor authentication, to Secure Vault payments.
"It's not a full-fledged login to online banking," Miles explains. "The way the user experience works, our customer goes to a merchant's website that accepts Secure Vault. When Regions Bank is the selected bank, the user is presented a scaled-down authentication page, which then provides a list of eligible bank accounts the customer can select from to make payment. Once an account is selected and the funds available verified, then the payment is made. Behind the scenes, we place a hold on those funds, then we conclude that payment using the ACH network."
The hold is typically two or three days. The bank is in the process of creating a secure interface from Secure Vault to Region's online banking system.
Miles acknowledges that future acceptance of Secure Vault among merchants and consumers is unknown.
"To some extent, there's a chicken and egg scenario going on," he says. It's important to the Secure Vault Payment network that many financial institutions participate, and it's important to the banks that the network sign up more merchants.
"We're impressed with the range of financial institutions that are already part of the network and we felt it was important for us to be participants as well," he says. "We do think it's important to provide alternatives to commercial clients and consumers, beyond that I can't say."
2012年1月9日 星期一
TV Adviser on Money Offers Card
For more than a decade, Suze Orman has exhorted her viewers on CNBC to spend less than they earn, flashed her blazing smile from the covers of best-selling books and endorsed the occasional auto loan provider and brokerage firm.
Never before, however, has she built a financial product from scratch and urged her considerable number of fans to use it frequently. That changes with the introduction on Monday of her Approved card, which works a lot like a bank debit card but does not come with a checking account. It is a prepaid debit card, and companies that offer similar cards have drawn criticism for sky-high fees and poor disclosure.
The hip-hop mogul Russell Simmons, American Express and the Kardashian sisters are among those who have piled in with their own cards, and they are nearly ubiquitous at drugstores and other retailers. The target customers are most often people who have little credit history — or credit so bad that banks will not come near them.
Ms. Orman seeks to broaden the debit card market by charging low fees and offering new services, including unlimited access to credit reports. She has put more than $1 million of her own money into the venture and is prepared to add more, since the product may not break even right away. But her move also raises so many questions that it is hard to even know where to start.
How can the Approved card make money charging fees on par with those on Walmart’s cut-rate MoneyCard, while also paying a credit bureau for access to its services? Also, can it really be just fine with CNBC, where Ms. Orman has a weekly show, that her card will compete with products from companies she discusses frequently with viewers? And will her followers care that she is pushing purple pieces of plastic that will help her make money from their everyday spending?
“I couldn’t be more proud of this card if I tried,” she said. “And it doesn’t really matter what I say. It matters what happens when somebody uses this baby.”
Their choice to use it may be colored by the opportune moment in which Ms. Orman finds herself. Big banks have offended scores of consumers with new fees and account balance minimums. People seeking alternatives may well find what they are looking for in prepaid cards.
That might not have been the case several years ago, when most prepaid card issuers marketed them to teenagers, or as gifts, or to people with poor credit who needed a way to make online purchases or visit a merchant without wads of cash.
More recently, companies like Green Dot (a partner with Walmart) and NetSpend have emerged. They persuade consumers to buy the cards first, in part through their availability in 300,000 locations, including grocery and convenience stores, according to the Mercator Advisory Group. Then, they try to persuade people to reuse them. Services like direct deposit and online bill payment have helped some. Still, 43 percent of the cards are never reloaded or are reloaded only once, according to Mercator.
These cards differ from checking accounts in other ways. There is no checkbook, nor do they have their own network of A.T.M.’s, though some prepaid card issuers have agreements with networks to offer free withdrawals. And different regulators govern them, which can mean fewer consumer protections under certain circumstances.
The biggest difference from a regular bank account, however, is the fee structure on the debit cards. Prepaid-card holders must often pay to buy the card and put money on it. There is often a monthly fee. Bill paying, phone help — even making a purchase can cost a dollar or two.
Ms. Orman watched this unfold and vowed to build something better. Her fees for the Approved card for things like A.T.M. withdrawals are about as low as they come, though she was not able to fulfill her goal of avoiding a $3 monthly fee, which is deducted from the remaining balance.
Whether consumers could do better with a free checking account (and yes, plenty still exist) would depend on whether they value paper checks and in-person service. Financially, they would most likely do worse if they bounced those checks or used overdraft services and paid $20 or $30 for each transaction.
The Approved card, like most leading prepaid cards, generally does not let people spend more than they have.
But the most noteworthy part of the Approved card is Ms. Orman’s efforts to make her customers more aware of their credit histories. All users get unlimited access to their credit reports and credit scores from TransUnion, though not the more widely used FICO scores. They will also get free credit monitoring and identity theft protection.
The real question is whether any debit card can help a cardholder become more creditworthy. The three major credit bureaus — TransUnion, Equifax and Experian — generally do not use debit card spending data to determine whether someone is qualified for loans.
“There is something radically wrong here,” Ms. Orman said. “We are rewarding people for having credit and punishing people who pay in cash. I want to change that paradigm.”
So she has persuaded TransUnion to collect spending data from Approved card customers. Perhaps it will look at other companies’ data too. And in a few years, it will see whether there is any proof that prepaid debit users deserve recognition for good behavior.
Until then, this is mere vaporware. The data may prove meaningless, and even if there are patterns, TransUnion probably would not give people more than a handful of points’ worth of credit on their scores.
As for the free credit reports and such, TransUnion could raise the price Ms. Orman pays in 2013. TransUnion may simply be in this temporarily for the gold star it gets from siding with Ms. Orman and her people-first philosophy.
Never before, however, has she built a financial product from scratch and urged her considerable number of fans to use it frequently. That changes with the introduction on Monday of her Approved card, which works a lot like a bank debit card but does not come with a checking account. It is a prepaid debit card, and companies that offer similar cards have drawn criticism for sky-high fees and poor disclosure.
The hip-hop mogul Russell Simmons, American Express and the Kardashian sisters are among those who have piled in with their own cards, and they are nearly ubiquitous at drugstores and other retailers. The target customers are most often people who have little credit history — or credit so bad that banks will not come near them.
Ms. Orman seeks to broaden the debit card market by charging low fees and offering new services, including unlimited access to credit reports. She has put more than $1 million of her own money into the venture and is prepared to add more, since the product may not break even right away. But her move also raises so many questions that it is hard to even know where to start.
How can the Approved card make money charging fees on par with those on Walmart’s cut-rate MoneyCard, while also paying a credit bureau for access to its services? Also, can it really be just fine with CNBC, where Ms. Orman has a weekly show, that her card will compete with products from companies she discusses frequently with viewers? And will her followers care that she is pushing purple pieces of plastic that will help her make money from their everyday spending?
“I couldn’t be more proud of this card if I tried,” she said. “And it doesn’t really matter what I say. It matters what happens when somebody uses this baby.”
Their choice to use it may be colored by the opportune moment in which Ms. Orman finds herself. Big banks have offended scores of consumers with new fees and account balance minimums. People seeking alternatives may well find what they are looking for in prepaid cards.
That might not have been the case several years ago, when most prepaid card issuers marketed them to teenagers, or as gifts, or to people with poor credit who needed a way to make online purchases or visit a merchant without wads of cash.
More recently, companies like Green Dot (a partner with Walmart) and NetSpend have emerged. They persuade consumers to buy the cards first, in part through their availability in 300,000 locations, including grocery and convenience stores, according to the Mercator Advisory Group. Then, they try to persuade people to reuse them. Services like direct deposit and online bill payment have helped some. Still, 43 percent of the cards are never reloaded or are reloaded only once, according to Mercator.
These cards differ from checking accounts in other ways. There is no checkbook, nor do they have their own network of A.T.M.’s, though some prepaid card issuers have agreements with networks to offer free withdrawals. And different regulators govern them, which can mean fewer consumer protections under certain circumstances.
The biggest difference from a regular bank account, however, is the fee structure on the debit cards. Prepaid-card holders must often pay to buy the card and put money on it. There is often a monthly fee. Bill paying, phone help — even making a purchase can cost a dollar or two.
Ms. Orman watched this unfold and vowed to build something better. Her fees for the Approved card for things like A.T.M. withdrawals are about as low as they come, though she was not able to fulfill her goal of avoiding a $3 monthly fee, which is deducted from the remaining balance.
Whether consumers could do better with a free checking account (and yes, plenty still exist) would depend on whether they value paper checks and in-person service. Financially, they would most likely do worse if they bounced those checks or used overdraft services and paid $20 or $30 for each transaction.
The Approved card, like most leading prepaid cards, generally does not let people spend more than they have.
But the most noteworthy part of the Approved card is Ms. Orman’s efforts to make her customers more aware of their credit histories. All users get unlimited access to their credit reports and credit scores from TransUnion, though not the more widely used FICO scores. They will also get free credit monitoring and identity theft protection.
The real question is whether any debit card can help a cardholder become more creditworthy. The three major credit bureaus — TransUnion, Equifax and Experian — generally do not use debit card spending data to determine whether someone is qualified for loans.
“There is something radically wrong here,” Ms. Orman said. “We are rewarding people for having credit and punishing people who pay in cash. I want to change that paradigm.”
So she has persuaded TransUnion to collect spending data from Approved card customers. Perhaps it will look at other companies’ data too. And in a few years, it will see whether there is any proof that prepaid debit users deserve recognition for good behavior.
Until then, this is mere vaporware. The data may prove meaningless, and even if there are patterns, TransUnion probably would not give people more than a handful of points’ worth of credit on their scores.
As for the free credit reports and such, TransUnion could raise the price Ms. Orman pays in 2013. TransUnion may simply be in this temporarily for the gold star it gets from siding with Ms. Orman and her people-first philosophy.
2012年1月8日 星期日
Chase Instant Storefront - Secure Ecommerce for Small Sellers
If you're around my age, you remember the days when bank patrons stored their valuables in safe deposit boxes at their local financial institution. Banks still have the aura of safety and security. That's the reason why Maxanne Durkee of Heavyweight Collections decided to sign up with Chase Instant Storefront when it came time to redesign and rename her Heavy T-Shirts ecommerce website.
It wasn't that Durkee had experienced a hacker attack or security breach. But as a responsible businessperson who (at the time) hosted her own website, she naturally wanted to protect her customers' account information and found she was spending lots of time maintaining the server.
"Since we hosted our own site, we were always on alert," she says. "Then the requirements for passing security standards changed and we had to re-configure our server which made it a little more difficult to access it remotely."
Since Chase Instant Storefront is based directly on the popular Miva Merchant ecommerce platform, Durkee felt her site would be extra secure, and easier to maintain than the open source ecommerce program she was also considering.
According to Miva Software Marketing Manager Jesse Ness, Chase Instant Storefront is really just Miva Merchant 5.5 software white labeled for Chase. He says the Chase offering is primarily targeted to small online sellers who don't have an ecommerce enabled website as yet and who want to apply for a merchant account that enables them to process credit card payments as part of the process of creating their site.
But the Miva platform is robust enough that large retailers can either use it from the start, or small sellers can start out with the software "and grow without having to upgrade to a new platform," Ness says.
Chase Instant Storefront includes the usual website templates that storefront operators can customize to their own business needs. "The software is an all-in-one ecommerce solution and includes all the pages you would need for an online store."
One thing that sets the Chase offering apart from Miva or other storefront programs is the inclusion of the merchant accounts. The rates charged for processing payments are standard, says Ness, and are determined by the bank's underwriting department. But a typical transaction would be $.30 plus a 2.39% fee. Chase also charges $100 to set up the merchant account, but that fee is sometimes waived during promotions.
Once your store is online, you get hosting and 24/7 support for $39.95 per month for the smallest plan, which enables a seller to offer 100 products for sale. Other plans run at $59.99 per month for 1,000 products, $89.95 for 5,000 and $129.95 for 100,000. These aren't hard numbers, however; the number of products is based on storage space, so in the unlikely event you have no product images you could post many more products online.
It was Maxanne Durkee's banker who suggested she check out Chase Instant Storefront, and Durkee found Miva's customer support and user forms excellent for getting started up and then customizing her site.
"Once we got the site up and running, it was pretty vanilla but sales started to roll in on day one," she says. "I had joined the forum discussions at that point and found that I could easily customize my site to have some pretty cool bells and whistles. The folks in the forum are like gold, sharing all their experiences and how-to's."
While Chase Instant Storefront is user-friendly for beginners, Ness points out that sellers who already have storefronts up and running and who are already familiar with ecommerce can investigate Miva Merchant directly for more sophisticated solutions.
It wasn't that Durkee had experienced a hacker attack or security breach. But as a responsible businessperson who (at the time) hosted her own website, she naturally wanted to protect her customers' account information and found she was spending lots of time maintaining the server.
"Since we hosted our own site, we were always on alert," she says. "Then the requirements for passing security standards changed and we had to re-configure our server which made it a little more difficult to access it remotely."
Since Chase Instant Storefront is based directly on the popular Miva Merchant ecommerce platform, Durkee felt her site would be extra secure, and easier to maintain than the open source ecommerce program she was also considering.
According to Miva Software Marketing Manager Jesse Ness, Chase Instant Storefront is really just Miva Merchant 5.5 software white labeled for Chase. He says the Chase offering is primarily targeted to small online sellers who don't have an ecommerce enabled website as yet and who want to apply for a merchant account that enables them to process credit card payments as part of the process of creating their site.
But the Miva platform is robust enough that large retailers can either use it from the start, or small sellers can start out with the software "and grow without having to upgrade to a new platform," Ness says.
Chase Instant Storefront includes the usual website templates that storefront operators can customize to their own business needs. "The software is an all-in-one ecommerce solution and includes all the pages you would need for an online store."
One thing that sets the Chase offering apart from Miva or other storefront programs is the inclusion of the merchant accounts. The rates charged for processing payments are standard, says Ness, and are determined by the bank's underwriting department. But a typical transaction would be $.30 plus a 2.39% fee. Chase also charges $100 to set up the merchant account, but that fee is sometimes waived during promotions.
Once your store is online, you get hosting and 24/7 support for $39.95 per month for the smallest plan, which enables a seller to offer 100 products for sale. Other plans run at $59.99 per month for 1,000 products, $89.95 for 5,000 and $129.95 for 100,000. These aren't hard numbers, however; the number of products is based on storage space, so in the unlikely event you have no product images you could post many more products online.
It was Maxanne Durkee's banker who suggested she check out Chase Instant Storefront, and Durkee found Miva's customer support and user forms excellent for getting started up and then customizing her site.
"Once we got the site up and running, it was pretty vanilla but sales started to roll in on day one," she says. "I had joined the forum discussions at that point and found that I could easily customize my site to have some pretty cool bells and whistles. The folks in the forum are like gold, sharing all their experiences and how-to's."
While Chase Instant Storefront is user-friendly for beginners, Ness points out that sellers who already have storefronts up and running and who are already familiar with ecommerce can investigate Miva Merchant directly for more sophisticated solutions.
2012年1月5日 星期四
Iran could be bluffing in the strait of Hormuz
Tehran's vow to stop US warships crossing international waters in the strait of Hormuz, following 10 days of provocative Iranian missile tests and naval exercises, is seen in Washington as evidence that ramped-up western sanctions are finally beginning to bite.
While this conclusion may be correct, there is always the danger of a disastrous miscalculation. Iran could be merely sabre rattling, as American analysts suggest. But what if it is not?
Seen from Tehran, the most serious threat to the survival of the regime led by supreme leader Ayatollah Ali Khamenei comes from within, not without – a consideration not sufficiently understood in the west. The political establishment is riven by deep divisions, principally between economic reformers loyal to President Mahmoud Ahmadinejad, and clerical arch-conservatives backed by the Revolutionary Guards and a wealthy, corrupt merchant class that has grown fat on the 1979 revolution.
Khamenei appears to be trying to hold the line between the two factions. What worries him more than the movements of the USS John C Stennis aircraft carrier group in the Gulf, or even US and EU oil sanctions, is the thought that crucial parliamentary elections due in March could produce a permanent rupture within the Islamic Republic. Such a split could open the way to a second Iranian revolution.
Memories of the mass demonstrations that shook Tehran and other cities in 2009 after rigged presidential elections have not faded. The Green movement's leaders are dispersed, in jail or under house arrest. But their demands for transparent democracy, freedom of expression and an end to misrule by mullahs have not been forgotten. Millions of young Iranians have been watching the Arab spring unfold and they believe Iran's turn will come.
Khamenei is running scared. As Yasmin Alem noted in a recent commentary, the supreme leader views the coming election as a potential "security challenge". The minister of intelligence, Heydar Moslehi, says the polls will be the "most sensitive elections in the history of the Islamic Republic".
Alem continued: "The regime is now in a quandary. While it has traditionally boasted about high voter participation as the symbol of its legitimacy, Tehran is increasingly concerned that an election boycott or turmoil could adversely affect its standing. In the wake of the Arab uprisings the clerical regime is seeking to project an image of its power and popularity. If the election becomes a dismal affair, however, it will have the reverse effect."
There can be little doubt that new US sanctions penalising dealings with Iran's central bank, announced by Barack Obama last month, and a prospective EU ban on Iranian oil, are adding to the internal pressures – even if habitual Iranian customers such as Japan and Turkey succeed in obtaining waivers.
Food prices are soaring, dollars are being hoarded, and Iran's currency, the rial, has fallen in value by 40% in recent weeks. The prospect of sharp falls in oil export earnings – the oil industry accounts for 60% of Iran's economy – is a dire one. Khamenei and other leaders have indicated that such an outcome would amount to a casus belli.
And this is the point that should worry the west's sanctioneers, fixated by Iran's nuclear programme to the exclusion of other considerations. At the moment the regime's deep internal contradictions could be leading towards a revolutionary climax, the US and its allies are giving Khamenei a possible way out by allowing him to externalise the problem and claim that the Iranian nation is under attack from hostile foreign forces, rather than definitively changing from within.
This is the overlooked domestic backdrop to the strait of Hormuz shenanigans and other provocations, such as the alleged plot against the Saudi ambassador in Washington. Iran, for all its aggressive rhetoric over the past few years, has studiously avoided military confrontation. In fact, it has studiously eschewed an open conflict that it would probably lose, relying instead on time-consuming diplomacy and occasional publicity stunts. But with the regime's back to the wall at home, that may be changing.
"The latest warning by Iran that a US aircraft carrier that recently transited through the strait of Hormuz should not do so again is a sign to the west that should be well-observed. It tells us the regime in Tehran is ready for a fight," warned Vali Nasr of Tufts University. "It wasn't preordained that Iran would opt for battle. For much of the past year its leaders have debated how best to deal with Western pressure … [but] subsequent events seem to have settled the policy debate in Tehran. They included the accusations by the US in the Washington plot; a UN report critical of Iran's record on human rights; the IAEA report articulating 'serious concerns' about a possible Iranian nuclear-weapons programme; and the ensuing fresh sanctions."
In other words, confident statements by the White House and state department that Iran is buckling under sanctions pressure appear to blithely ignore the possibility that the regime is being pushed into a corner from which it will come out punching, not negotiating. One result may be an acceleration of its nuclear activities – the opposite of what Obama wants. And then there is the unpredictable Gulf tinderbox. Fearing fatal insurrection at home and with their oil exports blocked, Khamenei and the mullahs, egged on by trigger-happy Revolutionary Guards, may choose to export chaos instead.
While this conclusion may be correct, there is always the danger of a disastrous miscalculation. Iran could be merely sabre rattling, as American analysts suggest. But what if it is not?
Seen from Tehran, the most serious threat to the survival of the regime led by supreme leader Ayatollah Ali Khamenei comes from within, not without – a consideration not sufficiently understood in the west. The political establishment is riven by deep divisions, principally between economic reformers loyal to President Mahmoud Ahmadinejad, and clerical arch-conservatives backed by the Revolutionary Guards and a wealthy, corrupt merchant class that has grown fat on the 1979 revolution.
Khamenei appears to be trying to hold the line between the two factions. What worries him more than the movements of the USS John C Stennis aircraft carrier group in the Gulf, or even US and EU oil sanctions, is the thought that crucial parliamentary elections due in March could produce a permanent rupture within the Islamic Republic. Such a split could open the way to a second Iranian revolution.
Memories of the mass demonstrations that shook Tehran and other cities in 2009 after rigged presidential elections have not faded. The Green movement's leaders are dispersed, in jail or under house arrest. But their demands for transparent democracy, freedom of expression and an end to misrule by mullahs have not been forgotten. Millions of young Iranians have been watching the Arab spring unfold and they believe Iran's turn will come.
Khamenei is running scared. As Yasmin Alem noted in a recent commentary, the supreme leader views the coming election as a potential "security challenge". The minister of intelligence, Heydar Moslehi, says the polls will be the "most sensitive elections in the history of the Islamic Republic".
Alem continued: "The regime is now in a quandary. While it has traditionally boasted about high voter participation as the symbol of its legitimacy, Tehran is increasingly concerned that an election boycott or turmoil could adversely affect its standing. In the wake of the Arab uprisings the clerical regime is seeking to project an image of its power and popularity. If the election becomes a dismal affair, however, it will have the reverse effect."
There can be little doubt that new US sanctions penalising dealings with Iran's central bank, announced by Barack Obama last month, and a prospective EU ban on Iranian oil, are adding to the internal pressures – even if habitual Iranian customers such as Japan and Turkey succeed in obtaining waivers.
Food prices are soaring, dollars are being hoarded, and Iran's currency, the rial, has fallen in value by 40% in recent weeks. The prospect of sharp falls in oil export earnings – the oil industry accounts for 60% of Iran's economy – is a dire one. Khamenei and other leaders have indicated that such an outcome would amount to a casus belli.
And this is the point that should worry the west's sanctioneers, fixated by Iran's nuclear programme to the exclusion of other considerations. At the moment the regime's deep internal contradictions could be leading towards a revolutionary climax, the US and its allies are giving Khamenei a possible way out by allowing him to externalise the problem and claim that the Iranian nation is under attack from hostile foreign forces, rather than definitively changing from within.
This is the overlooked domestic backdrop to the strait of Hormuz shenanigans and other provocations, such as the alleged plot against the Saudi ambassador in Washington. Iran, for all its aggressive rhetoric over the past few years, has studiously avoided military confrontation. In fact, it has studiously eschewed an open conflict that it would probably lose, relying instead on time-consuming diplomacy and occasional publicity stunts. But with the regime's back to the wall at home, that may be changing.
"The latest warning by Iran that a US aircraft carrier that recently transited through the strait of Hormuz should not do so again is a sign to the west that should be well-observed. It tells us the regime in Tehran is ready for a fight," warned Vali Nasr of Tufts University. "It wasn't preordained that Iran would opt for battle. For much of the past year its leaders have debated how best to deal with Western pressure … [but] subsequent events seem to have settled the policy debate in Tehran. They included the accusations by the US in the Washington plot; a UN report critical of Iran's record on human rights; the IAEA report articulating 'serious concerns' about a possible Iranian nuclear-weapons programme; and the ensuing fresh sanctions."
In other words, confident statements by the White House and state department that Iran is buckling under sanctions pressure appear to blithely ignore the possibility that the regime is being pushed into a corner from which it will come out punching, not negotiating. One result may be an acceleration of its nuclear activities – the opposite of what Obama wants. And then there is the unpredictable Gulf tinderbox. Fearing fatal insurrection at home and with their oil exports blocked, Khamenei and the mullahs, egged on by trigger-happy Revolutionary Guards, may choose to export chaos instead.
2012年1月4日 星期三
ASA bans Naked Wines ad
The complaint concerned an advert run by the merchant in August 2011, which offered consumers the chance to have 40 refunded to their account after making a purchase and then signed them up to a 20 a month Angels Account if they said “yes”.
Rowan Gormley, founder of Naked Wines, told the drinks business that the affair was a “storm in a wine glass as nobody has lost a penny – nor can they.”
The ASA’s website explains that after making a purchase a customer would see and an advert asking: “Thank you. Now would you like your money back?” with two boxes underneath, one red stating: “No thank you, I have quite enuff (sic) already”, and another in green that read: “Yes please, it would be stupid not to”.
A further heading underneath that asked why the merchant was doing such a thing followed by the text: “We are delighted to give you 40 now and 33% cashback on ALL future orders because, frankly, we would rather give it to you than Rupert Murdoch.
“You see if you buy from us on a regular basis, we don’t need to waste money selling to you. So we can afford to take that money and refund it to you. It’s like getting paid to drink wine!”
Again under that was the heading “What do you have to do to get paid to drink wine?” whereupon it explained: “Show us that you are going to become a good customer by investing 20 a month into your Naked Wines account”.
It was then explained that customers would be able to cancel their Angels Account at any time with a full refund.
However, the ASA maintained that the complainant’s challenge that the ad was misleading was justified as “the website did not make clear that by clicking the green link, which stated ‘Yes please’ he would automatically be subscribed to an Angels Account and be charged 20 per month.”
Naked Wines argued that it was explained that by clicking the green button, customers were opening an Angels Account and that the green button was linked to a page explaining the workings of the account and that customers were able to cancel and receive a full refund at any time.
Nevertheless, Naked Wines said that it had amended the advert. A subsequent assessment by the ASA, however, decided that the amended advert was too similar to the previous one and upheld the complaint.
The explanation on the ASA’s site agreed that although there had been a change to the order of the text and a broadening of the explanation regarding the deal and the Angels Account, “We considered that the ad did not make it clear that by clicking on the green button, the customer was signing up to open an Angels Account and would be charged 20 a month, which would go into the account towards future purchases.
“We considered that the main body of the ad should have made it clear that by clicking on the green button the customer would be opening an account. Because the ad had not done so we concluded that it was misleading and had breached the Code.”
It ruled that the advert must not be run again in its current form. Gormley however has explained that it was not and indeed is not possible for consumers to lose money with the merchant through the scheme, saying: “Customers have to opt in to become Angels, by clicking a button.
“The requirement to invest 20 a month was set out on the page in question, and not hidden in terms and conditions.
“The Angel scheme has been designed so that there is no risk of loss to customers. Any customer signing up in error can cancel at any time and get their money back immediately. The 20 monthly payment is not a subscription or a fee or an investment. It is the customer’s money and they can do with it as they will.
“The page in question was one step of a process, that includes a confirmation page, and an insert in the customer’s case and a monthly statement.
“Over 50,000 customers have signed up to become Angels over the three years Naked Wines has been in business. On the other hand the number of complainants is tiny.”
Rowan Gormley, founder of Naked Wines, told the drinks business that the affair was a “storm in a wine glass as nobody has lost a penny – nor can they.”
The ASA’s website explains that after making a purchase a customer would see and an advert asking: “Thank you. Now would you like your money back?” with two boxes underneath, one red stating: “No thank you, I have quite enuff (sic) already”, and another in green that read: “Yes please, it would be stupid not to”.
A further heading underneath that asked why the merchant was doing such a thing followed by the text: “We are delighted to give you 40 now and 33% cashback on ALL future orders because, frankly, we would rather give it to you than Rupert Murdoch.
“You see if you buy from us on a regular basis, we don’t need to waste money selling to you. So we can afford to take that money and refund it to you. It’s like getting paid to drink wine!”
Again under that was the heading “What do you have to do to get paid to drink wine?” whereupon it explained: “Show us that you are going to become a good customer by investing 20 a month into your Naked Wines account”.
It was then explained that customers would be able to cancel their Angels Account at any time with a full refund.
However, the ASA maintained that the complainant’s challenge that the ad was misleading was justified as “the website did not make clear that by clicking the green link, which stated ‘Yes please’ he would automatically be subscribed to an Angels Account and be charged 20 per month.”
Naked Wines argued that it was explained that by clicking the green button, customers were opening an Angels Account and that the green button was linked to a page explaining the workings of the account and that customers were able to cancel and receive a full refund at any time.
Nevertheless, Naked Wines said that it had amended the advert. A subsequent assessment by the ASA, however, decided that the amended advert was too similar to the previous one and upheld the complaint.
The explanation on the ASA’s site agreed that although there had been a change to the order of the text and a broadening of the explanation regarding the deal and the Angels Account, “We considered that the ad did not make it clear that by clicking on the green button, the customer was signing up to open an Angels Account and would be charged 20 a month, which would go into the account towards future purchases.
“We considered that the main body of the ad should have made it clear that by clicking on the green button the customer would be opening an account. Because the ad had not done so we concluded that it was misleading and had breached the Code.”
It ruled that the advert must not be run again in its current form. Gormley however has explained that it was not and indeed is not possible for consumers to lose money with the merchant through the scheme, saying: “Customers have to opt in to become Angels, by clicking a button.
“The requirement to invest 20 a month was set out on the page in question, and not hidden in terms and conditions.
“The Angel scheme has been designed so that there is no risk of loss to customers. Any customer signing up in error can cancel at any time and get their money back immediately. The 20 monthly payment is not a subscription or a fee or an investment. It is the customer’s money and they can do with it as they will.
“The page in question was one step of a process, that includes a confirmation page, and an insert in the customer’s case and a monthly statement.
“Over 50,000 customers have signed up to become Angels over the three years Naked Wines has been in business. On the other hand the number of complainants is tiny.”
2012年1月3日 星期二
The global economic crisis and South Africa
This old thigh-slapper on how capitalism works will illustrate: Four people go to a restaurant, and three leave through the toilet window. The mug is left with the bill. For the diners who have departed, it is a very efficient way of dining (all you can eat, free); for the mug, and potentially for the restaurant, it is ruinous. Variously, the mug is the investor, the shareholder, or increasingly, the taxpayer, the pension fund.
Many are predicting that the now constant financial crisis means the end of capitalism. I do not share these fears (or for others, such hopes). Capitalism will survive. It is democracy that will have its wings clipped; with it, the European social welfare state.
To use the analogy: the banks invited the governments to dinner and said they could order whatever they wanted. We can guess what happens when you give a politician an a la carte menu and free rein. It suited the banks too. After gorging themselves, the banks discovered their pockets were mostly filled with nothing but expired, plastic cards. They needed to get paid. The politicians had a coronary at the table. The bankers quickly left through the toilet window, the directors so bloated, they could barely squeeze through; a handful got stuck. The restaurant and its staff were left with the bill.
What did the banks do with those sovereign bonds? They used it to plug the hole they blew in the financial system in 2008. In a sense, they have swapped subprime mortgage lenders for countries. Essentially, they leveraged ever more credit to underwrite their unregulated (by the EU treaty) financialisation. We have gone from "too big to fail" to "too big to save".
Newspapers write almost glibly of a trillion ‘stimulus' here (in the USA ending up in currency markets and the like) and a trillion ‘bailout' there (in the USA used for bankers' bonuses, mergers and further acquisitions).
It is worth reminding ourselves what we mean by the shorthand of a "trillion dollars"; it is: $1000000000000. If I gave you ten dollars every second of every minute of every hour of every day, after 3170 years I still wouldn't have finished paying you out $1 trillion.
I accept that a well-structured free market with its hive brain making aggregate conclusions is the most efficient economic tool mankind has ever invented. But the global financial market has ceased to be this. In fact it is hugely unproductive, if not counter-productive. Mobile capital has become an end to itself, and it is staggeringly wasteful.
Banks were meant to facilitate commerce. They are meant to be a service, like water, roads, electricity, telecoms. Banking should never have become an "industry". Instead of serving, they are draining the economy. Solid investment (factories, infrastructure and so forth) has been steadily replaced with silly money (luxury consumerism, real estate bubbles, phoney financial instruments, everything on tick).
A telling example is how often the market no longer reflects the true price of commodities (as determined by return versus risk; supply versus demand). Coffee hit record high levels when there was no increased demand, no drought or fall in crops, in fact when nothing at all had changed in the real world. Investors were parking money is something supposedly more real than the Euro. The results of such speculation can have real world consequences for production and be devastating on the living.
Taxpayers are now expected to pick up the tab for the wealth the financial industries have destroyed in the global markets. Politicians have acted hand in glove with a greedy and incompetent financial elite that has transformed the global market into a piggery, taking no account of present and future costs to society.
The political question now is: should it be the poor, the youth, and the middle class who pay the price for this?
How much choice do they have? It may well be that a country such as Iceland that allowed its banks to fail will come out better and quicker than those who bailed out their banks and saddled future generations with massive debt.
There is no doubt that the Greek government and its bureaucracy has behaved scandalously. But the fact is people have structured their lives (30 years in the EU; 10 years in the Euro) on what they were told and were all too willing to believe. The hardships faced by many vulnerable members of Greek society are real and they are brutal. Successive governments have bribed the electorate. But the central powers of Europe, especially Germany, were eating at that dinner table too.
We should also not make the mistake of equating the various sovereign crises. The world economy is tightly enmeshed, but the reasons in Italy or Spain are not exactly the same for what went wrong in Greece. And what went wrong in ‘socialist' Europe is different in important ways from what has gone wrong in ‘capitalist' USA.
One thing we can be sure of is that South Africa will not be immune. Even China is beginning to show cracks as a result of what is happening in Europe and the USA. The current ANC government - as incoherent as it is in terms of economic policy - does not give one much confidence that it is prepared, either preparing or even capable of responding adequately when the crisis hits, as surely as it will. We need to see a bit more than our finance minister scratching his bald pate.
Of course the ANC government are not alone in being befuddled. In the public arena and our business media there is a deathly, terrible silence surrounding our global financial exposure. Not much more is said other than that Europe is our biggest trading partner (one third of our exports) and so we will be affected badly (among the worst case scenarios, our automobile industry could potentially fail), and a world recession will mean government's present pipe dreams on how it plans to reduce unemployment are doomed.
The Presidency's attitude is all too smug, while tinged with victimhood. The European crisis "is harming the developing world as well, and the developing world did not play any part in causing this crisis," Mac Maharaj said. "Where are we on this matter?"
Could the government please answer their spokesperson's question?
What changes are mooted for current economic policy to ensure we have a buffer against the storm? How are we going to protect our citizens and the most vulnerable when it hits? How exposed are our banks? Since government allowed pension funds to invest overseas (Old Mutual and Liberty Life were the first to move vast amounts outside of South Africa), do we know how solid those investments are? How will the political storm be managed when the jobs promised do not materialise as a world recession, possibly depression, strikes?
This is the time for innovation and creative solutions. Take Belgium for example, where the country's sovereignty is being protected from technocratic intrusion by the citizenry taking up the sovereign debt in government bonds.
Instead, the so-called crisis of capitalism (which is actually even more so a crisis of socialism in Europe) has opened a rhetorical space in the tripartite alliance to roll out failed ideas and disguise excessive spending on a profligate elite. In our crony and monopolistic private sector, South African executive management is following Wall Street, while in the public sector our officials are taking after Kenya (the most overpaid government in the world). We have mayors with six digit salaries. It is an elite hegemony that will sink us as surely as it has sunk economies elsewhere.
The divisive onset of Manguang together with the centenary celebrations of the ANC, do not bode well for a government knuckling down to address the economic recession that will strike in 2012. Instead, we are to be embroiled in a debate around the merits of capitalism, when it is democracy we should be worried about. Fascist populism only ever thrives under economic hardship; after which it destroys itself together with its country.
Parastatals are a good, because ideologically speaking relatively neutral, example to illustrate the sham capitalist versus dirigiste debate. Whether nationalised or wholly privatised and opened to competition, either way would be better than the chimeras we are currently menaced with. Under Thabo Mbeki and Trevor Manuel the country embarked on the creation of the worst of both worlds - semi-privatised monopolies.
In some cases, we saw initially a marked improvement in customer service levels. In a space of a couple of years, Telkom and the Post Office outlets were portentously transformed into looking like a branch of your local bank.
However, protected by the state from competition, their service charges have rocketed. They are now profit-driven monopolies with hardly a societal conscience. Telkom's exorbitant data charges are literally strangling education in this country, not to mention small businesses. Eskom is off the chart in terms of costs; forcing ordinary consumers to finance its capital projects and subsidise toxic industries like smelters.
(And what will happen down the line when the industries Eskom's ambitious coal plants are promised to power find their goods hit with carbon taxes levied by the importing nations of the world? South Africa will discover its goods are once again uncompetitive. Nothing less than our future economy is at stake here.)
After rendering tens of thousands of people unemployed and dumping them on society's doorstep, trimmed down state-owned enterprises still take huge bailouts, pay dividends to private shareholders and award staggering bonuses to an elite (often politically connected). Sound familiar? I'm thinking of the merchant banks on Wall Street and in London of course.
It is this nexus of power that needs to be broken, whether they are bourgeois capitalist or state owned enterprises.
The real revolutionaries today, the real left, are not our sickeningly obedient Communists (voting for the Protection of State Information Bill even while the workers in the unions are threatening to take Constitutional Court action against it), or our arthritic Trade Unions (ever shrinking as their interests narrow and hurt the unemployed), or the proto-Fascist leaders of the ANC Youth League (cheering for tyrants the world over), or our ossified ANC (looking every bit a hundred years old), but radical democrats, people who demand freedom of speech, accountability and transparency; people like those on Tahrir Square or for that matter on the streets of Athens.
Who better mirrors the free market - the 1% hegemony fortified in Wall Street, or the anarchical, headless, consensual Occupy Movement on Liberty Square? The technocrats huddled in Brussels or the protestors on the streets of Europe?
Our democratic freedoms are our best insurance policy against being hoodwinked.
I would go even further in terms of democratic principle. Our lives are organised around our economic life. It seems logical that democracy needs to start there.
A democratically run company (which includes the workers as well as the shareholders) is far less likely to poison its own community (where the workforce lives) or to up stakes and relocate willy-nilly to Australia because government wants to impose a transaction tax (as British financial companies are threatening to do).
The people should demand a new business model: one that includes the future costs stemming from production (tax breaks, borrowings from future generations, costs to the environment and our health from pollution etcetera). For hidden in the calculation of profit is an ideological position. Business has been allowed to cherry pick the costs for which it will accept responsibility, slip through the toilet window, and dodge the actual bill.
We can simply no longer - if for no reason other than climate change - ignore these costs as we have done in the past. As one economist put it, we have run out of road to kick the can down.
Many are predicting that the now constant financial crisis means the end of capitalism. I do not share these fears (or for others, such hopes). Capitalism will survive. It is democracy that will have its wings clipped; with it, the European social welfare state.
To use the analogy: the banks invited the governments to dinner and said they could order whatever they wanted. We can guess what happens when you give a politician an a la carte menu and free rein. It suited the banks too. After gorging themselves, the banks discovered their pockets were mostly filled with nothing but expired, plastic cards. They needed to get paid. The politicians had a coronary at the table. The bankers quickly left through the toilet window, the directors so bloated, they could barely squeeze through; a handful got stuck. The restaurant and its staff were left with the bill.
What did the banks do with those sovereign bonds? They used it to plug the hole they blew in the financial system in 2008. In a sense, they have swapped subprime mortgage lenders for countries. Essentially, they leveraged ever more credit to underwrite their unregulated (by the EU treaty) financialisation. We have gone from "too big to fail" to "too big to save".
Newspapers write almost glibly of a trillion ‘stimulus' here (in the USA ending up in currency markets and the like) and a trillion ‘bailout' there (in the USA used for bankers' bonuses, mergers and further acquisitions).
It is worth reminding ourselves what we mean by the shorthand of a "trillion dollars"; it is: $1000000000000. If I gave you ten dollars every second of every minute of every hour of every day, after 3170 years I still wouldn't have finished paying you out $1 trillion.
I accept that a well-structured free market with its hive brain making aggregate conclusions is the most efficient economic tool mankind has ever invented. But the global financial market has ceased to be this. In fact it is hugely unproductive, if not counter-productive. Mobile capital has become an end to itself, and it is staggeringly wasteful.
Banks were meant to facilitate commerce. They are meant to be a service, like water, roads, electricity, telecoms. Banking should never have become an "industry". Instead of serving, they are draining the economy. Solid investment (factories, infrastructure and so forth) has been steadily replaced with silly money (luxury consumerism, real estate bubbles, phoney financial instruments, everything on tick).
A telling example is how often the market no longer reflects the true price of commodities (as determined by return versus risk; supply versus demand). Coffee hit record high levels when there was no increased demand, no drought or fall in crops, in fact when nothing at all had changed in the real world. Investors were parking money is something supposedly more real than the Euro. The results of such speculation can have real world consequences for production and be devastating on the living.
Taxpayers are now expected to pick up the tab for the wealth the financial industries have destroyed in the global markets. Politicians have acted hand in glove with a greedy and incompetent financial elite that has transformed the global market into a piggery, taking no account of present and future costs to society.
The political question now is: should it be the poor, the youth, and the middle class who pay the price for this?
How much choice do they have? It may well be that a country such as Iceland that allowed its banks to fail will come out better and quicker than those who bailed out their banks and saddled future generations with massive debt.
There is no doubt that the Greek government and its bureaucracy has behaved scandalously. But the fact is people have structured their lives (30 years in the EU; 10 years in the Euro) on what they were told and were all too willing to believe. The hardships faced by many vulnerable members of Greek society are real and they are brutal. Successive governments have bribed the electorate. But the central powers of Europe, especially Germany, were eating at that dinner table too.
We should also not make the mistake of equating the various sovereign crises. The world economy is tightly enmeshed, but the reasons in Italy or Spain are not exactly the same for what went wrong in Greece. And what went wrong in ‘socialist' Europe is different in important ways from what has gone wrong in ‘capitalist' USA.
One thing we can be sure of is that South Africa will not be immune. Even China is beginning to show cracks as a result of what is happening in Europe and the USA. The current ANC government - as incoherent as it is in terms of economic policy - does not give one much confidence that it is prepared, either preparing or even capable of responding adequately when the crisis hits, as surely as it will. We need to see a bit more than our finance minister scratching his bald pate.
Of course the ANC government are not alone in being befuddled. In the public arena and our business media there is a deathly, terrible silence surrounding our global financial exposure. Not much more is said other than that Europe is our biggest trading partner (one third of our exports) and so we will be affected badly (among the worst case scenarios, our automobile industry could potentially fail), and a world recession will mean government's present pipe dreams on how it plans to reduce unemployment are doomed.
The Presidency's attitude is all too smug, while tinged with victimhood. The European crisis "is harming the developing world as well, and the developing world did not play any part in causing this crisis," Mac Maharaj said. "Where are we on this matter?"
Could the government please answer their spokesperson's question?
What changes are mooted for current economic policy to ensure we have a buffer against the storm? How are we going to protect our citizens and the most vulnerable when it hits? How exposed are our banks? Since government allowed pension funds to invest overseas (Old Mutual and Liberty Life were the first to move vast amounts outside of South Africa), do we know how solid those investments are? How will the political storm be managed when the jobs promised do not materialise as a world recession, possibly depression, strikes?
This is the time for innovation and creative solutions. Take Belgium for example, where the country's sovereignty is being protected from technocratic intrusion by the citizenry taking up the sovereign debt in government bonds.
Instead, the so-called crisis of capitalism (which is actually even more so a crisis of socialism in Europe) has opened a rhetorical space in the tripartite alliance to roll out failed ideas and disguise excessive spending on a profligate elite. In our crony and monopolistic private sector, South African executive management is following Wall Street, while in the public sector our officials are taking after Kenya (the most overpaid government in the world). We have mayors with six digit salaries. It is an elite hegemony that will sink us as surely as it has sunk economies elsewhere.
The divisive onset of Manguang together with the centenary celebrations of the ANC, do not bode well for a government knuckling down to address the economic recession that will strike in 2012. Instead, we are to be embroiled in a debate around the merits of capitalism, when it is democracy we should be worried about. Fascist populism only ever thrives under economic hardship; after which it destroys itself together with its country.
Parastatals are a good, because ideologically speaking relatively neutral, example to illustrate the sham capitalist versus dirigiste debate. Whether nationalised or wholly privatised and opened to competition, either way would be better than the chimeras we are currently menaced with. Under Thabo Mbeki and Trevor Manuel the country embarked on the creation of the worst of both worlds - semi-privatised monopolies.
In some cases, we saw initially a marked improvement in customer service levels. In a space of a couple of years, Telkom and the Post Office outlets were portentously transformed into looking like a branch of your local bank.
However, protected by the state from competition, their service charges have rocketed. They are now profit-driven monopolies with hardly a societal conscience. Telkom's exorbitant data charges are literally strangling education in this country, not to mention small businesses. Eskom is off the chart in terms of costs; forcing ordinary consumers to finance its capital projects and subsidise toxic industries like smelters.
(And what will happen down the line when the industries Eskom's ambitious coal plants are promised to power find their goods hit with carbon taxes levied by the importing nations of the world? South Africa will discover its goods are once again uncompetitive. Nothing less than our future economy is at stake here.)
After rendering tens of thousands of people unemployed and dumping them on society's doorstep, trimmed down state-owned enterprises still take huge bailouts, pay dividends to private shareholders and award staggering bonuses to an elite (often politically connected). Sound familiar? I'm thinking of the merchant banks on Wall Street and in London of course.
It is this nexus of power that needs to be broken, whether they are bourgeois capitalist or state owned enterprises.
The real revolutionaries today, the real left, are not our sickeningly obedient Communists (voting for the Protection of State Information Bill even while the workers in the unions are threatening to take Constitutional Court action against it), or our arthritic Trade Unions (ever shrinking as their interests narrow and hurt the unemployed), or the proto-Fascist leaders of the ANC Youth League (cheering for tyrants the world over), or our ossified ANC (looking every bit a hundred years old), but radical democrats, people who demand freedom of speech, accountability and transparency; people like those on Tahrir Square or for that matter on the streets of Athens.
Who better mirrors the free market - the 1% hegemony fortified in Wall Street, or the anarchical, headless, consensual Occupy Movement on Liberty Square? The technocrats huddled in Brussels or the protestors on the streets of Europe?
Our democratic freedoms are our best insurance policy against being hoodwinked.
I would go even further in terms of democratic principle. Our lives are organised around our economic life. It seems logical that democracy needs to start there.
A democratically run company (which includes the workers as well as the shareholders) is far less likely to poison its own community (where the workforce lives) or to up stakes and relocate willy-nilly to Australia because government wants to impose a transaction tax (as British financial companies are threatening to do).
The people should demand a new business model: one that includes the future costs stemming from production (tax breaks, borrowings from future generations, costs to the environment and our health from pollution etcetera). For hidden in the calculation of profit is an ideological position. Business has been allowed to cherry pick the costs for which it will accept responsibility, slip through the toilet window, and dodge the actual bill.
We can simply no longer - if for no reason other than climate change - ignore these costs as we have done in the past. As one economist put it, we have run out of road to kick the can down.
2012年1月2日 星期一
Chip ahoy! Are RFID credit cards secure?
Ask any of the estimated 9 million Americans who become victims of identity theft each year: getting billed for someone else's credit card charges stinks.
Enter the "radio frequency identification" (RFID) credit card. Designed to provide extra layers of security against identity theft, an RFID card transmits credit card information through radio waves from a chip embedded in the card..
If you're using a card with an RFID chip, and your merchant has a compatible card reader, you don't have to swipe your card when making a transaction. You merely hold your card within one to four inches of the card scanner. This practice raises questions as to how safe the technology is and whether you should protect your RFID card with a special wallet or card sleeve. Here's the skinny on RFID credit cards.
Available through credit card companies including Visa, MasterCard, and American Express, RFID cards eliminate certain security hazards posed by traditional cards, but could make you vulnerable to others. According to Denis G. Kelly, author of "The Official Identity Theft Prevention Handbook" and chairman of the Identity Ambassador Commission in Seattle, the security benefits of the RFID cards are threefold: limited card exposure, data encryption and new authentication codes.
A side benefit: RFID cards also help speed the checkout process. "RFID technology tends to cut the overall transaction time in half," says Kelly.
Because the technology doesn't require card holders to physically remove the card from their wallet, Kelly adds that RFID can eliminate the need for waiters, retail clerks, and all other salespeople to handle your card. That creepy guy lurking behind you at the grocery store? He won't get a chance to see your credit card info because you'll never have to take your card out.
The new technology causes some to worry that it's now easier to steal RFID credit card information. Because your RFID card allows you to transact without pulling out the card itself, critics argue that identity thieves could swipe your credit information simply by placing an RFID scanner nearby.
Jay Foley, executive director of the Identity Theft Resource Center in San Diego, is quick to admit that thieves could get your card info remotely through a scanner, but adds that they probably wouldn't be able to use it. Unlike magnetic stripe cards, RFID credit cards encrypt a card holder's information. To access a consumer's account, thieves not only have to scan the card, they also have to break the card issuer's encryption.
RFID cards also create a new authentication code for each transaction. If an identity thief nabs info by physically skimming a traditional credit card, he or she can use that information as many times as they like, racking up purchase after purchase until the card gets reported. If all they have is the information from your RFID chip, they can only make one purchase with that authentication code.
"If someone captures your card , the most they can use it is one transaction," Foley explains.
But of course, the encryption and authentication code only helps you if your card information is swiped remotely from an unauthorized scanner. If a thief physically nabs your RFID card, they can still use the magnetic stripe all over town until you alert the authorities.
Enter the "radio frequency identification" (RFID) credit card. Designed to provide extra layers of security against identity theft, an RFID card transmits credit card information through radio waves from a chip embedded in the card..
If you're using a card with an RFID chip, and your merchant has a compatible card reader, you don't have to swipe your card when making a transaction. You merely hold your card within one to four inches of the card scanner. This practice raises questions as to how safe the technology is and whether you should protect your RFID card with a special wallet or card sleeve. Here's the skinny on RFID credit cards.
Available through credit card companies including Visa, MasterCard, and American Express, RFID cards eliminate certain security hazards posed by traditional cards, but could make you vulnerable to others. According to Denis G. Kelly, author of "The Official Identity Theft Prevention Handbook" and chairman of the Identity Ambassador Commission in Seattle, the security benefits of the RFID cards are threefold: limited card exposure, data encryption and new authentication codes.
A side benefit: RFID cards also help speed the checkout process. "RFID technology tends to cut the overall transaction time in half," says Kelly.
Because the technology doesn't require card holders to physically remove the card from their wallet, Kelly adds that RFID can eliminate the need for waiters, retail clerks, and all other salespeople to handle your card. That creepy guy lurking behind you at the grocery store? He won't get a chance to see your credit card info because you'll never have to take your card out.
The new technology causes some to worry that it's now easier to steal RFID credit card information. Because your RFID card allows you to transact without pulling out the card itself, critics argue that identity thieves could swipe your credit information simply by placing an RFID scanner nearby.
Jay Foley, executive director of the Identity Theft Resource Center in San Diego, is quick to admit that thieves could get your card info remotely through a scanner, but adds that they probably wouldn't be able to use it. Unlike magnetic stripe cards, RFID credit cards encrypt a card holder's information. To access a consumer's account, thieves not only have to scan the card, they also have to break the card issuer's encryption.
RFID cards also create a new authentication code for each transaction. If an identity thief nabs info by physically skimming a traditional credit card, he or she can use that information as many times as they like, racking up purchase after purchase until the card gets reported. If all they have is the information from your RFID chip, they can only make one purchase with that authentication code.
"If someone captures your card , the most they can use it is one transaction," Foley explains.
But of course, the encryption and authentication code only helps you if your card information is swiped remotely from an unauthorized scanner. If a thief physically nabs your RFID card, they can still use the magnetic stripe all over town until you alert the authorities.
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