Dwolla founder Ben Milne heard the question more than once while crossing the country pitching his tech startup to potential investors: Will you move the company from Iowa?
Milne said no. While he acknowledges his defense of Des Moines might have cost his company money, the 30-year-old entrepreneur says finding a good match for the company was more important to him.
“We were told more than once, ‘This is a tough one for us because of where you are (located),’ ” he said. “But it’s good to grow a company where it is; why would you want to move that? If an investor wants to take that away, it’s not a good investor at all and not someone you should let invest in your company.”
Dwolla will announce today that it has raised $5 million in a second round of fundraising, known as Series B funding. The money will help the company bolster product development and the technology that supports its mobile payment services. This means more products could be on the way and the service can be built to handle a larger volume of transactions as its user base grows.
Dwolla allows users to use a mobile phone to transfer money and buy goods and services, and it allows merchants to avoid credit card fees.
Company leaders insist they will grow within Des Moines. They signed a multiyear lease Monday that moves them from the Midland Building on downtown’s “Silicon Sixth Avenue” to larger offices a half-block away at the Wells Fargo Financial Center. The company employs about 20 people, and Milne said they hope to double that within the next year.
The company’s $1 million first round of investments came from two Iowa-based financial institutions. All of the new money this round comes from outside of Iowa, led by Union Square Ventures. The New York City-based firm has invested in tech heavyweights Foursquare and Twitter.
Union Square partner Albert Wegner will join Dwolla’s board of directors. Los Angeles-based Paige Craig of Betterworks, Pennsylvania’s Artist and Instigators and New York’s Village Ventures and Thrive Capital round out the list of investors to be announced today.
“I don’t remember the last time an Iowa company got a syndicate with those kinds of names,” DeWaay Investment Banking managing director Adam Claypool said. “It shows investors that a company in the state of Iowa can produce a top-quality management team to attract these kinds of venture investors. It tells me they have made a lot of progress in a short amount of time.”
Milne founded Dwolla in 2008 and launched the service nationally in late 2010. The company says it moves between $30 million and $50 million per month in transactions from its 80,000 individual accounts and 7,500 merchant accounts. Dwolla grew out of Milne’s frustration at credit card fees, and his goal has been to simplify those fees and make transactions safer.
Milne said the lead partnership between Dwolla and Union Square almost fizzled thanks to what Milne called a “philosophical disagreement” he declined to discuss.
“Any time you are looking at doing a business deal or partnership, there are always going to be disconnects,” Milne said. “Albert and me, we had a strong disconnect. I misunderstood what he was saying and said, ‘It’s a dead deal.’ ”
But Wegner saw the potential in Dwolla and wanted to fix the relationship. He reached out and before Milne could respond, he boarded a flight from New York to Des Moines. Wegner said it was important that he meet Milne face to face.
“Misunderstandings without a history of knowing each other are difficult to overcome by phone or email,” Wegner said. “I felt that an in-person trip was the right way to build trust.”
Union Square has a portfolio of heavy tech hitters. Along with Foursquare and Twitter, the firm has invested in social gaming leader Zynga, entertainment social network GetGlue and online craft market giant Etsy. Wegner said he sees similarities between the early trajectory of Dwolla and some of his firm’s other investments.
“We really like the level of engagement among Dwolla’s early adopters, especially in Iowa,” Wegner said. “It reminds us of other companies that seem to have struck some kind of nerve with people, such as Etsy.”
Village Ventures has built a close relationship with Iowa’s Fund of Funds, which seeks national venture capital funds to invest money in Iowa. The fund invested $5 million in Village Ventures in October 2007. Matt Harris of Village Ventures said the timing for Dwolla’s rise could prop up the rest of the Iowa tech community.
“I think this is a real moment in Des Moines, and Iowa more broadly,” Harris said. “The way the community has embraced Dwolla’s success, and Dwolla has, in turn, focused attention on the community, has led to a virtuous feedback loop. ”
2012年2月7日 星期二
2012年2月2日 星期四
Next Street, Citi create $30M small-biz lending fund
The merchant bank Next Street has partnered with financial services company Citigroup Inc. to create Next Street Opportunity Fund, a $30 million pool of lending capital for inner-city, high-performing small businesses.
Citigroup will contribute $25 million. The Baltimore-based nonprofit Enterprise Community Partners will kick in $2.5 million, and the balance will come from Next Street and a group of high net-worth investors, according to Next Street's founding partner and president, Ron Walker. Next Street, based in New York City and Boston, specializes in working with urban small businesses across the U.S.
Only small-business clients of Next Street in New York City and Boston will be able to qualify for the Opportunity Fund. Existing and potential clients can apply through Next Street or Citi. Decisions about loans will be made by Next Street, which provides advisory services as well as cash to small businesses.
“Our model is to provide both high-level strategic advice and growth capital,” Mr. Walker said. “We believe the advice and guidance is as important, if not more important, than the capital. We have a staff of business consultants, marketing experts and organizational development specialists that work with each small business.”
Next Street, whose cofounder is Tim Ferguson, has about 50 employees. Since its launch six years ago, the bank has worked with about 100 small businesses in New York and Boston.
To qualify for Opportunity Fund money, a small business must be in growth mode, with revenues between $5 million and $60 million, and have a business checking account at a retail bank. “They have to be somewhat successful already,” Mr. Walker said. “This isn't a micro-loan program or a program for troubled companies. We are targeting small businesses that are 5 to 15 year old.” The goal is to help these city-based businesses grow so they can create jobs and help with economic recovery. Next Street would not disclose interest rates, but Mr. Walker said they will be commensurate with risk.
The creation of the Next Street fund comes at a time when access to capital is still a big problem for small businesses. For the third quarter of 2011, the Small Business Association reported that all loans under $1 million were down 1.2%, continuing a yearlong slide. Even loans by megalenders—those with $50 billion or more in assets—remained relatively flat from the second quarter to the third quarter of 2011.
But small-business lending may on its way back. Citi announced separately in September that it was committing $24 billion in small business lending over three years, from 2011-2013. The bank surpassed its $7 billion lending commitment to small business by more than $900 million in 2011, a 30% increase over its small business lending in 2010. This year Citi has stated it is working to surpass its $8 billion small business lending commitment.
Other big banks are stepping up lending, too. J.P. Morgan Chase & Co. reported this month that it lent $17 billion to U.S. small businesses in 2011, up 52% from 2010. The bank made 45 % more loans in 2011 than it did in 2010. And this week, Bank of America Corp. reported it had loaned $6.4 billion to U.S. small businesses in 2011, a 20% increase over 2010.
As a small business itself, Next Street gains credibility by partnering with banking giant Citi. “It's a validation of our model,” Mr. Walker said.
Citigroup will contribute $25 million. The Baltimore-based nonprofit Enterprise Community Partners will kick in $2.5 million, and the balance will come from Next Street and a group of high net-worth investors, according to Next Street's founding partner and president, Ron Walker. Next Street, based in New York City and Boston, specializes in working with urban small businesses across the U.S.
Only small-business clients of Next Street in New York City and Boston will be able to qualify for the Opportunity Fund. Existing and potential clients can apply through Next Street or Citi. Decisions about loans will be made by Next Street, which provides advisory services as well as cash to small businesses.
“Our model is to provide both high-level strategic advice and growth capital,” Mr. Walker said. “We believe the advice and guidance is as important, if not more important, than the capital. We have a staff of business consultants, marketing experts and organizational development specialists that work with each small business.”
Next Street, whose cofounder is Tim Ferguson, has about 50 employees. Since its launch six years ago, the bank has worked with about 100 small businesses in New York and Boston.
To qualify for Opportunity Fund money, a small business must be in growth mode, with revenues between $5 million and $60 million, and have a business checking account at a retail bank. “They have to be somewhat successful already,” Mr. Walker said. “This isn't a micro-loan program or a program for troubled companies. We are targeting small businesses that are 5 to 15 year old.” The goal is to help these city-based businesses grow so they can create jobs and help with economic recovery. Next Street would not disclose interest rates, but Mr. Walker said they will be commensurate with risk.
The creation of the Next Street fund comes at a time when access to capital is still a big problem for small businesses. For the third quarter of 2011, the Small Business Association reported that all loans under $1 million were down 1.2%, continuing a yearlong slide. Even loans by megalenders—those with $50 billion or more in assets—remained relatively flat from the second quarter to the third quarter of 2011.
But small-business lending may on its way back. Citi announced separately in September that it was committing $24 billion in small business lending over three years, from 2011-2013. The bank surpassed its $7 billion lending commitment to small business by more than $900 million in 2011, a 30% increase over its small business lending in 2010. This year Citi has stated it is working to surpass its $8 billion small business lending commitment.
Other big banks are stepping up lending, too. J.P. Morgan Chase & Co. reported this month that it lent $17 billion to U.S. small businesses in 2011, up 52% from 2010. The bank made 45 % more loans in 2011 than it did in 2010. And this week, Bank of America Corp. reported it had loaned $6.4 billion to U.S. small businesses in 2011, a 20% increase over 2010.
As a small business itself, Next Street gains credibility by partnering with banking giant Citi. “It's a validation of our model,” Mr. Walker said.
2012年1月31日 星期二
In Italy, Art As A Window Into Modern Banking
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.
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.”
2011年12月26日 星期一
Outside advisers culled as ALP cuts spending
An analysis by The Australian of spending on consultants shows the federal government spent $441 million in 2010-11 on independent experts and technical knowledge, down from the $485m it spent in the final year of Kevin Rudd's tenure.
The achievement, if sustained, will help Ms Gillard and her ministers as they begin a crucial budget process in the new year, with further savings measures in prospect to counter softer revenues due to a weakened global economy.
The hefty cut in consultancies was achieved through a $20m reduction by the Department of Defence and a similar-sized trim by the Department of Broadband, Communications and the Digital Economy, which has scaled down reviews associated with the implementation of the National Broadband Network.
At first glance, the Environment Department accounted for almost the entire reduction - from $60m in 2009-10 to $18m last financial year - as some of the scientific work on water policy came to an end. Still, a $16m increase in consultancies for the National Water Commission offset the department's savings.
Growth in consultancy spending was most pronounced in areas associated with Ms Gillard's reform priorities, including climate change, workforce participation, infrastructure, regional development and social welfare reforms.
In releasing the Mid-Year Economic and Fiscal Outlook last month, Finance Minister Penny Wong said an additional, one-off 2.5 per cent efficiency dividend would apply to the federal bureaucracy next financial year. She urged departments and agencies to achieve savings by reducing spending on consultants, contractors, travel and advertising.
The $44m reduction in consultancy spending by the minority Labor government in 2010-11 almost matches the commitment Tony Abbott made at the 2010 election. As part of a savings regime to offset its own promises, the Coalition vowed to cut spending on consultants by $50m in each of the four years to 2013-14.
It was a modest target cut of $200m compared with Labor's $395m pledge in opposition in 2007. In its first three full financial years of stewardship, Labor has managed a cumulative reduction of about $136m from the Coalition's 2006-07 high-spending mark.
Both sides of politics have proved that pledging to cut both consultancies and the size of Canberra's bureaucracy to rein in spending is a task that looks easier in opposition.
The Rudd government was often criticised for a lack of policy action and an over-reliance on official reviews led by high-cost experts from the major consulting firms, academics and market researchers.
When Labor came to office in November 2007 it had a vast policy agenda across key areas such as health reform, climate change, broadband, economic infrastructure and education.
But under Mr Rudd's governing style and mantra of "evidence-based policy", the new administration increasingly turned to hired experts in the private sector and the academy to determine its reform options.
The Rudd government increased spending on consultants by 7.5 per cent in 2008-09, the year the global financial crisis began and when Labor's fiscal stimulus packages were launched, and by 3.4 per cent the following year.
The reliance on outside experts came at a time when many senior advisers in Canberra expressed a frustration that the strategic capability of the federal public service had been eroded under the Howard government.
According to The Australian's analysis of spending by 51 federal departments and agencies since 2005-06, taking into account recent revisions, the peak year for consultancy spending was 2006-07, the final full year of the Howard government, with a bill of $511m.
As a rule, comparisons of consultancy spending between political administrations is becoming more difficult as agencies change the definition of "consultancies" within their accounting frameworks.
Some very large contracts in defence, information technology and social policy, for instance, which were classed as consultancies during the Howard years, have been rebadged as general contracts.
The stricter definition has meant that an agency such as the Immigration Department, which declared a record $92.5m in consultancies in 2006-07, has been able to pare back its recorded spending on outside experts to about $11m in each of the past two years. The actual spending on activities previously judged to be "consultancies" has not necessarily fallen by that amount.
In general, consultancy spending was overstated in some areas during the Howard years, and it has been somewhat understated in those same areas under Labor.
Yet the reverse is true in an agency such as AusAID, which recently reported that a change in policy in the way it viewed contracts meant its consultancy spend jumped fourfold, or by $2m, in a single year.
According to federal guidelines, whether a contract is classed as a consultancy requires it to pass two crucial tests. First, is the work produced an intellectual output that helps in agency decision making? Second, is the advice independent?
What can be said with confidence is that the Coalition spent huge amounts of consultancy fees on merchant bankers and lawyers for privatisation deals, while Labor has tended to spend money on government functions once performed in-house: economic and scientific modelling and system-wide service delivery reforms in education and health.
The figures on consultancy spending were disclosed in departmental and agency annual reports. The agencies included in the analysis are those that have spent up to $1m on consultancies in at least one of the past six years.
The achievement, if sustained, will help Ms Gillard and her ministers as they begin a crucial budget process in the new year, with further savings measures in prospect to counter softer revenues due to a weakened global economy.
The hefty cut in consultancies was achieved through a $20m reduction by the Department of Defence and a similar-sized trim by the Department of Broadband, Communications and the Digital Economy, which has scaled down reviews associated with the implementation of the National Broadband Network.
At first glance, the Environment Department accounted for almost the entire reduction - from $60m in 2009-10 to $18m last financial year - as some of the scientific work on water policy came to an end. Still, a $16m increase in consultancies for the National Water Commission offset the department's savings.
Growth in consultancy spending was most pronounced in areas associated with Ms Gillard's reform priorities, including climate change, workforce participation, infrastructure, regional development and social welfare reforms.
In releasing the Mid-Year Economic and Fiscal Outlook last month, Finance Minister Penny Wong said an additional, one-off 2.5 per cent efficiency dividend would apply to the federal bureaucracy next financial year. She urged departments and agencies to achieve savings by reducing spending on consultants, contractors, travel and advertising.
The $44m reduction in consultancy spending by the minority Labor government in 2010-11 almost matches the commitment Tony Abbott made at the 2010 election. As part of a savings regime to offset its own promises, the Coalition vowed to cut spending on consultants by $50m in each of the four years to 2013-14.
It was a modest target cut of $200m compared with Labor's $395m pledge in opposition in 2007. In its first three full financial years of stewardship, Labor has managed a cumulative reduction of about $136m from the Coalition's 2006-07 high-spending mark.
Both sides of politics have proved that pledging to cut both consultancies and the size of Canberra's bureaucracy to rein in spending is a task that looks easier in opposition.
The Rudd government was often criticised for a lack of policy action and an over-reliance on official reviews led by high-cost experts from the major consulting firms, academics and market researchers.
When Labor came to office in November 2007 it had a vast policy agenda across key areas such as health reform, climate change, broadband, economic infrastructure and education.
But under Mr Rudd's governing style and mantra of "evidence-based policy", the new administration increasingly turned to hired experts in the private sector and the academy to determine its reform options.
The Rudd government increased spending on consultants by 7.5 per cent in 2008-09, the year the global financial crisis began and when Labor's fiscal stimulus packages were launched, and by 3.4 per cent the following year.
The reliance on outside experts came at a time when many senior advisers in Canberra expressed a frustration that the strategic capability of the federal public service had been eroded under the Howard government.
According to The Australian's analysis of spending by 51 federal departments and agencies since 2005-06, taking into account recent revisions, the peak year for consultancy spending was 2006-07, the final full year of the Howard government, with a bill of $511m.
As a rule, comparisons of consultancy spending between political administrations is becoming more difficult as agencies change the definition of "consultancies" within their accounting frameworks.
Some very large contracts in defence, information technology and social policy, for instance, which were classed as consultancies during the Howard years, have been rebadged as general contracts.
The stricter definition has meant that an agency such as the Immigration Department, which declared a record $92.5m in consultancies in 2006-07, has been able to pare back its recorded spending on outside experts to about $11m in each of the past two years. The actual spending on activities previously judged to be "consultancies" has not necessarily fallen by that amount.
In general, consultancy spending was overstated in some areas during the Howard years, and it has been somewhat understated in those same areas under Labor.
Yet the reverse is true in an agency such as AusAID, which recently reported that a change in policy in the way it viewed contracts meant its consultancy spend jumped fourfold, or by $2m, in a single year.
According to federal guidelines, whether a contract is classed as a consultancy requires it to pass two crucial tests. First, is the work produced an intellectual output that helps in agency decision making? Second, is the advice independent?
What can be said with confidence is that the Coalition spent huge amounts of consultancy fees on merchant bankers and lawyers for privatisation deals, while Labor has tended to spend money on government functions once performed in-house: economic and scientific modelling and system-wide service delivery reforms in education and health.
The figures on consultancy spending were disclosed in departmental and agency annual reports. The agencies included in the analysis are those that have spent up to $1m on consultancies in at least one of the past six years.
2011年11月28日 星期一
New 2011 Kaspersky Cyber Monday bargains
And totally no way grander new day far more than Cyber Monday this Mon men and women arise inside of the Thanksgiving gluttony and basically realise Any social gathering is virtually under a calendar month available.
Just last yr, net 1st time customers utilized $ 1 zillion upon Cyber Monday, a consistent monitor to have net searching, and often have identical great outcomes up coming calendar year, other than if Supply Date upon November. 04 sides it all out.
On offerings, it’s the second greatest day’s acquiring hunting for Black Friday, nufactured Grandpre declared.
Ease and comfort, cost tag and simply willpower are normally driving a automobile this ambigu-digit, yr-around-12 months boost in world wide web offering, Sucharita Mulpuru declared at a Forrester seasonal foreseen.
“The main strengths associated with internet, like economic hardship, the necessity to hand above warily, and simply nonstop offer-facet funds put in can outcome in a diverse good fee of progress complete year to have net seasonal retail sector promoting this time,” your invented.
However, individuals that acquire online whilst in the shops hand around twenty percentage far more than individuals people who shopping mall exclusive to get, NRF Advertising and marketing communications Vp Ellen Davis declared.
Shopping can nonetheless be just a modest portion related with retail business marketing Forrester insurance coverage quotations web selling are $ 59.The five zillion up coming yr. With $ 465.Some zillion in somme retail market marketing forecasted to the particular situations, in stage with a suitable Nationwide Merchandising Federation foreseen, which may possibly be significantly less than 1 among just about seven seasonal euros.
Financial professionals and just retail sector watchers the latest financial conditions brings about website visitors just be stingy their euros. In true reality, we are going to get your a whole lot less offers you, 15.Numerous, in action with Deloitte’s total yearly seasonal on-line survey, which will be way down to the fifthly complete yr successively. During the The year 2007, every person was initially shopping Twenty-3.one presents.
Practically entirely this website is getting tiny amount excellent presents for household and with no far more lengthy an personal can save presents with the volume men and women. Who would like to region a new associate within a place connected with reciprocating when you are the impacted particular person just can not absolutely have the cash for it then?
Gian Fulgoni, state chairman associated with comScore Inc., which typically mp3s e-commerce, declared middle-revenue very first time consumers account for the most screen connected with world wide web selling, Forty three percentage.
Other than reduce-earnings prospective customers who have may possibly probably be more compact, consequently tech-savvy, are generally climbing significantly, Fulgoni declared. Your Millennials are inclined to expectant in regards to latest economic conditions, in addition, he stated.
Just last yr, net 1st time customers utilized $ 1 zillion upon Cyber Monday, a consistent monitor to have net searching, and often have identical great outcomes up coming calendar year, other than if Supply Date upon November. 04 sides it all out.
On offerings, it’s the second greatest day’s acquiring hunting for Black Friday, nufactured Grandpre declared.
Ease and comfort, cost tag and simply willpower are normally driving a automobile this ambigu-digit, yr-around-12 months boost in world wide web offering, Sucharita Mulpuru declared at a Forrester seasonal foreseen.
“The main strengths associated with internet, like economic hardship, the necessity to hand above warily, and simply nonstop offer-facet funds put in can outcome in a diverse good fee of progress complete year to have net seasonal retail sector promoting this time,” your invented.
However, individuals that acquire online whilst in the shops hand around twenty percentage far more than individuals people who shopping mall exclusive to get, NRF Advertising and marketing communications Vp Ellen Davis declared.
Shopping can nonetheless be just a modest portion related with retail business marketing Forrester insurance coverage quotations web selling are $ 59.The five zillion up coming yr. With $ 465.Some zillion in somme retail market marketing forecasted to the particular situations, in stage with a suitable Nationwide Merchandising Federation foreseen, which may possibly be significantly less than 1 among just about seven seasonal euros.
Financial professionals and just retail sector watchers the latest financial conditions brings about website visitors just be stingy their euros. In true reality, we are going to get your a whole lot less offers you, 15.Numerous, in action with Deloitte’s total yearly seasonal on-line survey, which will be way down to the fifthly complete yr successively. During the The year 2007, every person was initially shopping Twenty-3.one presents.
Practically entirely this website is getting tiny amount excellent presents for household and with no far more lengthy an personal can save presents with the volume men and women. Who would like to region a new associate within a place connected with reciprocating when you are the impacted particular person just can not absolutely have the cash for it then?
Gian Fulgoni, state chairman associated with comScore Inc., which typically mp3s e-commerce, declared middle-revenue very first time consumers account for the most screen connected with world wide web selling, Forty three percentage.
Other than reduce-earnings prospective customers who have may possibly probably be more compact, consequently tech-savvy, are generally climbing significantly, Fulgoni declared. Your Millennials are inclined to expectant in regards to latest economic conditions, in addition, he stated.
2011年11月22日 星期二
Low-Tech Fraud Continues To Daunt Card Issuers
Credit-card issuers have spent billions of dollars to stop data thieves cold in their tracks by strengthening their information-technology systems and developing programs that can flag bogus transactions as they occur.
Despite the investments, lenders remain daunted by one of the oldest tricks in fraudsters' playbooks: card skimming.
Skimming involves stripping account information from a credit card using man-made devices that thieves can attach to gas-pump terminals, automated teller machines and retailers' check-out systems. Fraudsters use this information to make purchases online and produce counterfeit cards for spending at brick-and-mortar merchants.
"There's no sophistication about card skimmers," said George Peabody, director of the emerging technologies advisory service at Mercator Advisory Group. "It's an inexpensive item and anybody can do it."
Manhattan District Attorney Cyrus Vance Jr. on Friday said 28 people were indicted in connection with a fraud operation that involved waiters at several high-end restaurants using hand-held skimmers to steal customers' account information. The crimes ensnared at least 50 customers of American Express Co. and occurred from April 2010 through this month.
Such incidents reinforce the need for banks to do more to involve their customers in fraud-fighting efforts, analysts said.
Officials investigating the New York fraud ring said the alleged thieves were able to pull of the heist because the victims were well-to-do clients with high credit lines. The perpetrators used stolen cardholder information to buy watches, handbags and other luxury goods — items the victims presumably could have purchased themselves — that they resold.
With banks, "there's been a belief that ... we don't want to talk to the consumer about security because we don't want to scare the consumer," said Phil Blank, managing director of security, risk and fraud at Javelin Strategy and Research. However, research Javelin has done suggests that consumers want to be actively involved in managing their accounts through alerts that notify a customer when transactions occur.
While more banks have invested in this technology, few have aggressively promoted the services, Blank said. Such services could help customers and their banks more quickly stop fraud like that which occurred in the New York incident by making customers aware when transactions and other activities occur.
The financial value of identity fraud, which includes credit-card fraud, fell 34% in 2010, to $37 billion, according to Javelin. However, the mean costs to an individual consumer affected by identify fraud actually rose more than 60%, to $631, reflecting that fact that certain types of fraud have taken longer to detect, requiring more time to resolve, Blank said.
An American Express spokeswoman declined to discuss specifics of the New York case but wrote in an email that the company has "sophisticated monitoring systems and controls in place to detect fraudulent activity."
Federal law limits customer liability from credit-card fraud to $50, though many banks have zero-liability policies in place to cover consumers.
American Express cardholders are not liable for fraudulent charges on their cards, the spokeswoman wrote.
Despite the investments, lenders remain daunted by one of the oldest tricks in fraudsters' playbooks: card skimming.
Skimming involves stripping account information from a credit card using man-made devices that thieves can attach to gas-pump terminals, automated teller machines and retailers' check-out systems. Fraudsters use this information to make purchases online and produce counterfeit cards for spending at brick-and-mortar merchants.
"There's no sophistication about card skimmers," said George Peabody, director of the emerging technologies advisory service at Mercator Advisory Group. "It's an inexpensive item and anybody can do it."
Manhattan District Attorney Cyrus Vance Jr. on Friday said 28 people were indicted in connection with a fraud operation that involved waiters at several high-end restaurants using hand-held skimmers to steal customers' account information. The crimes ensnared at least 50 customers of American Express Co. and occurred from April 2010 through this month.
Such incidents reinforce the need for banks to do more to involve their customers in fraud-fighting efforts, analysts said.
Officials investigating the New York fraud ring said the alleged thieves were able to pull of the heist because the victims were well-to-do clients with high credit lines. The perpetrators used stolen cardholder information to buy watches, handbags and other luxury goods — items the victims presumably could have purchased themselves — that they resold.
With banks, "there's been a belief that ... we don't want to talk to the consumer about security because we don't want to scare the consumer," said Phil Blank, managing director of security, risk and fraud at Javelin Strategy and Research. However, research Javelin has done suggests that consumers want to be actively involved in managing their accounts through alerts that notify a customer when transactions occur.
While more banks have invested in this technology, few have aggressively promoted the services, Blank said. Such services could help customers and their banks more quickly stop fraud like that which occurred in the New York incident by making customers aware when transactions and other activities occur.
The financial value of identity fraud, which includes credit-card fraud, fell 34% in 2010, to $37 billion, according to Javelin. However, the mean costs to an individual consumer affected by identify fraud actually rose more than 60%, to $631, reflecting that fact that certain types of fraud have taken longer to detect, requiring more time to resolve, Blank said.
An American Express spokeswoman declined to discuss specifics of the New York case but wrote in an email that the company has "sophisticated monitoring systems and controls in place to detect fraudulent activity."
Federal law limits customer liability from credit-card fraud to $50, though many banks have zero-liability policies in place to cover consumers.
American Express cardholders are not liable for fraudulent charges on their cards, the spokeswoman wrote.
2011年10月17日 星期一
4 Steps to Getting the Right High-Risk Merchant Account
Happy Guest Blogger Monday! This week our guest talks about establishing the high-risk merchant account that’s right for your ecommerce solution. Without this knowledge, you might be at risk yourself–for winding up without a merchant account. VP of PayNetSecure.net Tina Brandon guides you through four steps to ensure your business stays safe and your accounts stay open.
Has Your Ecommerce Business Been Labeled “High Risk”?
4 Steps to Getting the Right High-Risk Merchant Account
The lifeblood of your ecommerce business is the ability to accept payments from your online customers. In the last 9 months, banks have been shutting down merchant accounts for many ecommerce businesses because the banks are mitigating their risk. Even if the merchant has good processing history, low charge-backs and fraud, you can find yourself cut off.
There are a lot of sharks lurking in murky waters of high-risk merchant processing that take advantage of unwary business owners. Here are 4 ways to protect yourself.
Establish a Direct Account. Any business with high-risk credit card processing volumes of $50,000 or more should establish an account directly with an acquiring bank. It takes a little more paperwork to set up a high-risk merchant account with a bank compared to using a third-party payment processor but the benefits are worth the extra effort.
A direct high-risk merchant account eliminates the middleman and protects your cash flow. With a direct account, all settlement money is sent directly to you from the bank, providing faster and safer deposits.
Avoid Application or Setup Fees. Stay away from high-risk merchant account providers who charge setup or application fees. Typically the “middlemen”/third-party processors are those that charge setup fees.
Reputable firms that establish high-risk accounts are registered agents and get paid by the acquiring banks. Although there may be some fees associated with establishing high-risk merchant accounts, those fees are assessed by the banks or card brands and should be paid directly to them, not to an agent.
Establish More Than One Merchant Account. Any high-risk merchant processing more than $100,000 per month is wise to establish more than one account. Redundancy and backup is critical for any business but especially so for high-risk merchants. Companies should consider setting up more than one high-risk account, perhaps in different jurisdictions, to safeguard cash flow from card payments.
We all know the saying “Don’t put all your eggs in one basket,” and this is especially true for ecommerce businesses. Diversifying your processing with multiple banks creates an environment where banks are competing for your business. This drives your fees down and profits up.
Interview the High-Risk Merchant Account Provider.
It’s amazing how many companies don’t answer their phones and don’t respond to voicemail or emails. Take your time to call the companies and interview them as you would a new hire. Judge the level of customer service and responsiveness.
Has Your Ecommerce Business Been Labeled “High Risk”?
4 Steps to Getting the Right High-Risk Merchant Account
The lifeblood of your ecommerce business is the ability to accept payments from your online customers. In the last 9 months, banks have been shutting down merchant accounts for many ecommerce businesses because the banks are mitigating their risk. Even if the merchant has good processing history, low charge-backs and fraud, you can find yourself cut off.
There are a lot of sharks lurking in murky waters of high-risk merchant processing that take advantage of unwary business owners. Here are 4 ways to protect yourself.
Establish a Direct Account. Any business with high-risk credit card processing volumes of $50,000 or more should establish an account directly with an acquiring bank. It takes a little more paperwork to set up a high-risk merchant account with a bank compared to using a third-party payment processor but the benefits are worth the extra effort.
A direct high-risk merchant account eliminates the middleman and protects your cash flow. With a direct account, all settlement money is sent directly to you from the bank, providing faster and safer deposits.
Avoid Application or Setup Fees. Stay away from high-risk merchant account providers who charge setup or application fees. Typically the “middlemen”/third-party processors are those that charge setup fees.
Reputable firms that establish high-risk accounts are registered agents and get paid by the acquiring banks. Although there may be some fees associated with establishing high-risk merchant accounts, those fees are assessed by the banks or card brands and should be paid directly to them, not to an agent.
Establish More Than One Merchant Account. Any high-risk merchant processing more than $100,000 per month is wise to establish more than one account. Redundancy and backup is critical for any business but especially so for high-risk merchants. Companies should consider setting up more than one high-risk account, perhaps in different jurisdictions, to safeguard cash flow from card payments.
We all know the saying “Don’t put all your eggs in one basket,” and this is especially true for ecommerce businesses. Diversifying your processing with multiple banks creates an environment where banks are competing for your business. This drives your fees down and profits up.
Interview the High-Risk Merchant Account Provider.
It’s amazing how many companies don’t answer their phones and don’t respond to voicemail or emails. Take your time to call the companies and interview them as you would a new hire. Judge the level of customer service and responsiveness.
2011年7月27日 星期三
Let's Stop Deluding Ourselves About Online Privacy
Why do we bother deluding ourselves with the notion of privacy? If we’re honest with ourselves, we know it simply no longer exists. The only way to ensure something remains somewhat private is to make sure it never escapes the confines of our noggins.
You may balk at the notion postulated in the previous paragraph, but if you really analyze it for a few moments with cold logic and available knowledge, rather than gut reaction and wishful thinking, you’ll realize it’s true.
The quantity of information bouncing around databases regarding each of us is mind boggling. “They” know things about us we don’t even know ourselves, and some of it may even be true.
Consider the information your creditors and their processing affiliates have on you. Visa, MasterCard, American Express, and Discover know what you purchased, where, when, and from whom.
That Sears card you’ve carried for years, detailing all your purchases there, is in the databases of the issuing bank, Citibank/Citigroup, which provides credit card services for many merchants and retailers. How about that Walmart/Sam’s Club card? Monogram Bank/GE Capital thanks you for providing its databases with all that wonderful targeting information.
It doesn’t stop there. A recent article on The Ultimate Banking Guide Website says banks are starting to share data on which customers are unprofitable or might be high-risk. This allows credit card firms to close these customers' accounts and cancel their cards.
Do you shop at Amazon, Best Buy, or any of the many merchant portals? They have oodles of targeting data.
What about those discount cards just about every brick-and-mortar has you hauling around in your wallet or on your keychain? They’re not giving you those deals out of the goodness of their hearts. They’re aggregating your data, which they then sell, use to target you, or both.
Ever heard of the Comprehensive Loss Underwriting Exchange, or the Automobile-Property Loss Underwriting Service? It’s the database where your insurance company tosses your information, ensuring that any insurer will have access forever to any claim you’ve ever filed. Ever! And don’t think they don’t have similar systems for the rest of your insurance needs, regardless of HIPAA or any other law.
Want to get a glimpse of the tip of the iceberg? Check out this LexisNexis page. You can order up to one copy a year of your insurance report, employment history report, and resident history report for free. You also can order a host of other reports for a fee, including vital records, healthcare credentials, and a disturbing bit more. And the ISO site offers even more.
Virtually every industry has an information clearinghouse accruing, storing, and passing out data on you. And there’s absolutely nothing you can do about it. From your driving record to your taste in music, from your choice in hotels to your choice in entertainment, from the age of your children to the age of your dog, they know it all.
The Internet has made things far simpler for us, from shopping to communications, but it’s made it even easier for those who would prey on us. Until we stand up and fight back, forcing our lawmakers to create effective and useful regulations for these industries and practices, the abuse of our privacy will continue. And it will be aided by the spread of inexpensive broadband Internet services, which makes it easier to gather and transfer infomation.
What used to take tapes, drives, and reams of paper, as well as a squadron of operators and data entry personnel working for weeks at a time, now takes a few keystrokes or clicks.
And somehow, we manage to convince ourselves we have a modicum of privacy left in our lives.
You may balk at the notion postulated in the previous paragraph, but if you really analyze it for a few moments with cold logic and available knowledge, rather than gut reaction and wishful thinking, you’ll realize it’s true.
The quantity of information bouncing around databases regarding each of us is mind boggling. “They” know things about us we don’t even know ourselves, and some of it may even be true.
Consider the information your creditors and their processing affiliates have on you. Visa, MasterCard, American Express, and Discover know what you purchased, where, when, and from whom.
That Sears card you’ve carried for years, detailing all your purchases there, is in the databases of the issuing bank, Citibank/Citigroup, which provides credit card services for many merchants and retailers. How about that Walmart/Sam’s Club card? Monogram Bank/GE Capital thanks you for providing its databases with all that wonderful targeting information.
It doesn’t stop there. A recent article on The Ultimate Banking Guide Website says banks are starting to share data on which customers are unprofitable or might be high-risk. This allows credit card firms to close these customers' accounts and cancel their cards.
Do you shop at Amazon, Best Buy, or any of the many merchant portals? They have oodles of targeting data.
What about those discount cards just about every brick-and-mortar has you hauling around in your wallet or on your keychain? They’re not giving you those deals out of the goodness of their hearts. They’re aggregating your data, which they then sell, use to target you, or both.
Ever heard of the Comprehensive Loss Underwriting Exchange, or the Automobile-Property Loss Underwriting Service? It’s the database where your insurance company tosses your information, ensuring that any insurer will have access forever to any claim you’ve ever filed. Ever! And don’t think they don’t have similar systems for the rest of your insurance needs, regardless of HIPAA or any other law.
Want to get a glimpse of the tip of the iceberg? Check out this LexisNexis page. You can order up to one copy a year of your insurance report, employment history report, and resident history report for free. You also can order a host of other reports for a fee, including vital records, healthcare credentials, and a disturbing bit more. And the ISO site offers even more.
Virtually every industry has an information clearinghouse accruing, storing, and passing out data on you. And there’s absolutely nothing you can do about it. From your driving record to your taste in music, from your choice in hotels to your choice in entertainment, from the age of your children to the age of your dog, they know it all.
The Internet has made things far simpler for us, from shopping to communications, but it’s made it even easier for those who would prey on us. Until we stand up and fight back, forcing our lawmakers to create effective and useful regulations for these industries and practices, the abuse of our privacy will continue. And it will be aided by the spread of inexpensive broadband Internet services, which makes it easier to gather and transfer infomation.
What used to take tapes, drives, and reams of paper, as well as a squadron of operators and data entry personnel working for weeks at a time, now takes a few keystrokes or clicks.
And somehow, we manage to convince ourselves we have a modicum of privacy left in our lives.
2011年4月21日 星期四
Fifth Third Bancorp's CEO Discusses Q1 2011 Results - Earnings Call Transcript
Good morning. My name is Mische, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fifth Third Bancorp First Quarter 2011 Earnings Conference Call. [Operator Instructions] Thank you, Mr. Jeff Richardson, Director of Investor Relations. You may begin your conference.
Jeff Richardson
Thanks, Mische. Hello, and thanks for joining us today. Today, we'll be talking with you about our first quarter 2011 results. This call may contain certain forward-looking statements about Fifth Third pertaining to our financial condition, results of operations, plans and objectives. These statements involve certain risks and uncertainties. There are a number of factors that could cause results to differ materially from historical performance in these statements. We've identified a number of those factors in our forward-looking cautionary statement at the end of our earnings release and in other materials, and we encourage you to review those factors. Fifth Third undertakes no obligation and would not expect to update any such forward-looking statements after the date of this call.
I'm joined on the call by several people: Kevin Kabat, our President and CEO; Chief Financial Officer, Dan Poston; Chief Risk Officer, Mary Tuuk; Treasurer, Mahesh Sankaran; and Jim Eglseder, Investor Relations. During the question-and-answer period, please provide your name and that of your firm to the operator.
With that, I'll turn the call over to Kevin Kabat. Kevin?
Kevin Kabat
Thanks, Jeff. Good morning, everyone, and thanks for joining us. Today, we reported first quarter 2011 net income of $265 million or net income to common shareholders of $88 million or $0.10. Net income to common included the effect of $153 million of discount accretion on the TARP Preferred Stock, which is in the preferred dividend line. Excluding this item, net income to common was $241 million or $0.27 per share. It was an eventful quarter for Fifth Third. We completed and submitted our capital plan to the Federal Reserve at year-end. We issued $1.7 billion in common stock and $1 billion in senior debt in January, and in February redeemed the U.S. Treasury's $3.4 billion preferred stock investment in Fifth Third.
In March, we repurchased a warrant issued to Treasury for $280 million. The warrant gave the Treasury the right to purchase 43.6 million shares at $11.72. And this repurchase eliminates this potential future dilution at what we consider to be a reasonable cost. Also in March, we increased our quarterly common stock dividend by $0.05 to $0.06 per share. We believe this is the first step towards beginning to normalize our dividend payout after 2 years of nominal dividend. With no TLGP debt outstanding, Fifth Third has completely exited all crisis-era government programs. We have a robust capital position with Tier 1 common of 9%, Tier 1 capital of 12.2%. We're confident we meet today any capital standards that will be set in the U.S. under the Basel III framework.
Now turning to our quarterly results. Overall, they were in line with our expectations, with strengths and weaknesses reflecting broader aspects of the economy as it recovers. The interest rate environment negatively affected mortgage production and results. Loan demand, while improving, remains lower than would be typical at this stage of the cycle. However, debt capital markets have been very strong, which led to an elevated level of payoffs and refinancings during the quarter and diminished loan growth and yield relative to what we were expecting. Those effects were largely offset by the benefit of continued improving credit trends and lower credit costs. Dan and Mary will provide more details in their remarks, but I'll touch on a few high-level results.
Jeff Richardson
Thanks, Mische. Hello, and thanks for joining us today. Today, we'll be talking with you about our first quarter 2011 results. This call may contain certain forward-looking statements about Fifth Third pertaining to our financial condition, results of operations, plans and objectives. These statements involve certain risks and uncertainties. There are a number of factors that could cause results to differ materially from historical performance in these statements. We've identified a number of those factors in our forward-looking cautionary statement at the end of our earnings release and in other materials, and we encourage you to review those factors. Fifth Third undertakes no obligation and would not expect to update any such forward-looking statements after the date of this call.
I'm joined on the call by several people: Kevin Kabat, our President and CEO; Chief Financial Officer, Dan Poston; Chief Risk Officer, Mary Tuuk; Treasurer, Mahesh Sankaran; and Jim Eglseder, Investor Relations. During the question-and-answer period, please provide your name and that of your firm to the operator.
With that, I'll turn the call over to Kevin Kabat. Kevin?
Kevin Kabat
Thanks, Jeff. Good morning, everyone, and thanks for joining us. Today, we reported first quarter 2011 net income of $265 million or net income to common shareholders of $88 million or $0.10. Net income to common included the effect of $153 million of discount accretion on the TARP Preferred Stock, which is in the preferred dividend line. Excluding this item, net income to common was $241 million or $0.27 per share. It was an eventful quarter for Fifth Third. We completed and submitted our capital plan to the Federal Reserve at year-end. We issued $1.7 billion in common stock and $1 billion in senior debt in January, and in February redeemed the U.S. Treasury's $3.4 billion preferred stock investment in Fifth Third.
In March, we repurchased a warrant issued to Treasury for $280 million. The warrant gave the Treasury the right to purchase 43.6 million shares at $11.72. And this repurchase eliminates this potential future dilution at what we consider to be a reasonable cost. Also in March, we increased our quarterly common stock dividend by $0.05 to $0.06 per share. We believe this is the first step towards beginning to normalize our dividend payout after 2 years of nominal dividend. With no TLGP debt outstanding, Fifth Third has completely exited all crisis-era government programs. We have a robust capital position with Tier 1 common of 9%, Tier 1 capital of 12.2%. We're confident we meet today any capital standards that will be set in the U.S. under the Basel III framework.
Now turning to our quarterly results. Overall, they were in line with our expectations, with strengths and weaknesses reflecting broader aspects of the economy as it recovers. The interest rate environment negatively affected mortgage production and results. Loan demand, while improving, remains lower than would be typical at this stage of the cycle. However, debt capital markets have been very strong, which led to an elevated level of payoffs and refinancings during the quarter and diminished loan growth and yield relative to what we were expecting. Those effects were largely offset by the benefit of continued improving credit trends and lower credit costs. Dan and Mary will provide more details in their remarks, but I'll touch on a few high-level results.
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