Should You Steer Clear of Bitcoin?

Bitcoin, the trendy digital currency, garnered some negative press in August when the U.S. Consumer Financial Protection Bureau warned about its potential pitfalls, like unpredictable exchange rates, hackers and scams.

Despite these concerns, the consumer bureau was quick to add that virtual currencies like bitcoin “offer the potential for innovation,” something that has captured the attention of casual consumers and big hedge funds alike.

Before dipping your toes into bitcoin’s often choppy waters, you should know that this particular form of digital money represents quite a double-edged sword. While some financial experts question its viability and safety, others are adamant that bitcoin is here to stay.

Here’s a look at how this disruptive technology works and what you risk losing – or stand to gain – by using it.

What is bitcoin?

If you’ve heard of bitcoin but haven’t actually seen any, it’s because the cybercurrency exists exclusively online. Some enterprises and individuals “mine” bitcoins using sophisticated computers to wring them out of a digital file called the blockchain. The process is complex and expensive, and there are easier ways to obtain the scrip. The system used to create bitcoin also caps the number that can exist at just under 21 million, easing inflation concerns among users and investors.

You can stash bitcoins away in a digital wallet before transferring a sum directly to another user or to a merchant that accepts them. Due to the lack of a middleman such as a bank, transaction fees are typically much lower, which is among the online scrip’s most attractive features.

People interested in converting cash to bitcoins can do so on “bitcoin exchanges,” where they can buy the virtual currency. Despite being relatively new, the number of exchanges is growing rapidly. Entire websites have made it their mission to direct users to the safest and most reliable online exchanges.

As straightforward and user-friendly as this currency might sound, it has several notable drawbacks.

Bitcoin’s unpredictability

“The value of a bitcoin can fluctuate extraordinarily due to high volatility,” says Evan Hutchinson, a business consultant in Ames, Iowa. “Also, due to the large number of exchanges in the world with relatively little oversight, bitcoins are at risk of being lost or stolen.”

Volatility depicts how much the value of an asset changes over time. When looking at a bitcoin price chart, you might think you’re looking at a seismogram from a strong earthquake. This virtual currency has been known to lose as much as 80% of its value in a matter of days, only to spring back quickly. For people who make purchases with the digital money, checkout time can be a shocking experience.

“Those who choose to use bitcoin with little understanding of how the currency actually works can be in for a big surprise when they try and exchange the money back into local currency or use it to buy a product,” Hutchinson says. A Federal Reserve study cites the “extreme volatility of bitcoin’s price,” which creates significant exchange-rate risk.

While the ever-fluctuating value of the bitcoin has scared many people away, optimistic investors cling to the idea that the digital money will ultimately find its footing. Their hope is that the technology behind bitcoin will be fortified, making it safer to own and use, ultimately broadening its user base and improving its stability and long-term viability.

“While reasons differ, I find many early adopters use bitcoin because they believe in the revolutionary nature of the underlying technology that makes bitcoin possible,” says Scott Nichols, founder of Paybits, a Las Vegas-based company that helps people convert a portion of their income directly to bitcoin.

The ease of making transactions is another draw for bitcoin believers.

“What other currency can you send money so quickly and cheaply over the Internet and across borders?” asks Michael Flaxman, an avid bitcoin user and chief executive of CoinSafe, a Seattle-based online service that helps merchants buy and sell the scrip.

Indeed, while you might have to pay upwards of $45 every time you send money overseas using a traditional bank’s wire service, many bitcoin exchanges offer similar transfers at a much lower cost, and direct transactions can be virtually free.

Flaxman isn’t alone in his enthusiasm: It’s estimated that over 5 million people currently use bitcoin, up from about 750,000 only a year ago.

Drawing the wrong crowd

Unfortunately, a fraction of those users engage in criminal transactions, and some may be intent on stealing bitcoins. Just last year, the world’s then-largest exchange for the virtual currency, Tokyo-based Mt. Gox, collapsed after hundreds of thousands of bitcoins went missing, sticking customers with millions in losses.

Despite the relentless hype surrounding the “revolutionary nature” of bitcoin’s technology, it is still a very vulnerable system. Because you can exchange bitcoins relatively anonymously, the digital currency has attracted hackers who prey on exchanges that store large bitcoin reserves. It has been popular among those engaged in illicit commerce, too – transactions on the shuttered online black market Silk Road took place exclusively with bitcoin.

Although records of every transaction using the cryptocurrency are permanently stored on a shared public transaction register, it’s difficult to track down bitcoin thieves. The lack of government support certainly doesn’t help.

Bottom line

Because bitcoin isn’t backed by the U.S. government or any of the world’s central banks, it’s lightly regulated, if at all. What’s more, any bitcoins you store in a digital wallet are uninsured, meaning you’ll probably eat any losses, regardless of how they occur.

Interestingly enough, the risks and lack of government backing haven’t scared off everyone. According to Nichols, bitcoin’s independence may be one its biggest draws.

“The exact warning from CFPB that bitcoin is not backed by a central government is exactly the reason many use bitcoin today,” Nichols says, referring to the U.S. consumer agency.

While the lack of official oversight attracts users eager to make transactions outside of the regulatory eye, many are reluctant to embrace this new technology.

As with any decision involving your hard-earned dollars, you should think long and hard about the risks that come with an erratic online currency like bitcoin. In the end, any gains may be vastly outweighed by the pain of losses.

This article originally appeared on US News [http://ift.tt/1tUjm9l].

Bitcoin image via Shutterstock

Source Article http://ift.tt/1y39EC7

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Should You Steer Clear of Bitcoin?

Bitcoin, the trendy digital currency, garnered some negative press in August when the U.S. Consumer Financial Protection Bureau warned about its potential pitfalls, like unpredictable exchange rates, hackers and scams.

Despite these concerns, the consumer bureau was quick to add that virtual currencies like bitcoin “offer the potential for innovation,” something that has captured the attention of casual consumers and big hedge funds alike.

Before dipping your toes into bitcoin’s often choppy waters, you should know that this particular form of digital money represents quite a double-edged sword. While some financial experts question its viability and safety, others are adamant that bitcoin is here to stay.

Here’s a look at how this disruptive technology works and what you risk losing – or stand to gain – by using it.

What is bitcoin?

If you’ve heard of bitcoin but haven’t actually seen any, it’s because the cybercurrency exists exclusively online. Some enterprises and individuals “mine” bitcoins using sophisticated computers to wring them out of a digital file called the blockchain. The process is complex and expensive, and there are easier ways to obtain the scrip. The system used to create bitcoin also caps the number that can exist at just under 21 million, easing inflation concerns among users and investors.

You can stash bitcoins away in a digital wallet before transferring a sum directly to another user or to a merchant that accepts them. Due to the lack of a middleman such as a bank, transaction fees are typically much lower, which is among the online scrip’s most attractive features.

People interested in converting cash to bitcoins can do so on “bitcoin exchanges,” where they can buy the virtual currency. Despite being relatively new, the number of exchanges is growing rapidly. Entire websites have made it their mission to direct users to the safest and most reliable online exchanges.

As straightforward and user-friendly as this currency might sound, it has several notable drawbacks.

Bitcoin’s unpredictability

“The value of a bitcoin can fluctuate extraordinarily due to high volatility,” says Evan Hutchinson, a business consultant in Ames, Iowa. “Also, due to the large number of exchanges in the world with relatively little oversight, bitcoins are at risk of being lost or stolen.”

Volatility depicts how much the value of an asset changes over time. When looking at a bitcoin price chart, you might think you’re looking at a seismogram from a strong earthquake. This virtual currency has been known to lose as much as 80% of its value in a matter of days, only to spring back quickly. For people who make purchases with the digital money, checkout time can be a shocking experience.

“Those who choose to use bitcoin with little understanding of how the currency actually works can be in for a big surprise when they try and exchange the money back into local currency or use it to buy a product,” Hutchinson says. A Federal Reserve study cites the “extreme volatility of bitcoin’s price,” which creates significant exchange-rate risk.

While the ever-fluctuating value of the bitcoin has scared many people away, optimistic investors cling to the idea that the digital money will ultimately find its footing. Their hope is that the technology behind bitcoin will be fortified, making it safer to own and use, ultimately broadening its user base and improving its stability and long-term viability.

“While reasons differ, I find many early adopters use bitcoin because they believe in the revolutionary nature of the underlying technology that makes bitcoin possible,” says Scott Nichols, founder of Paybits, a Las Vegas-based company that helps people convert a portion of their income directly to bitcoin.

The ease of making transactions is another draw for bitcoin believers.

“What other currency can you send money so quickly and cheaply over the Internet and across borders?” asks Michael Flaxman, an avid bitcoin user and chief executive of CoinSafe, a Seattle-based online service that helps merchants buy and sell the scrip.

Indeed, while you might have to pay upwards of $45 every time you send money overseas using a traditional bank’s wire service, many bitcoin exchanges offer similar transfers at a much lower cost, and direct transactions can be virtually free.

Flaxman isn’t alone in his enthusiasm: It’s estimated that over 5 million people currently use bitcoin, up from about 750,000 only a year ago.

Drawing the wrong crowd

Unfortunately, a fraction of those users engage in criminal transactions, and some may be intent on stealing bitcoins. Just last year, the world’s then-largest exchange for the virtual currency, Tokyo-based Mt. Gox, collapsed after hundreds of thousands of bitcoins went missing, sticking customers with millions in losses.

Despite the relentless hype surrounding the “revolutionary nature” of bitcoin’s technology, it is still a very vulnerable system. Because you can exchange bitcoins relatively anonymously, the digital currency has attracted hackers who prey on exchanges that store large bitcoin reserves. It has been popular among those engaged in illicit commerce, too – transactions on the shuttered online black market Silk Road took place exclusively with bitcoin.

Although records of every transaction using the cryptocurrency are permanently stored on a shared public transaction register, it’s difficult to track down bitcoin thieves. The lack of government support certainly doesn’t help.

Bottom line

Because bitcoin isn’t backed by the U.S. government or any of the world’s central banks, it’s lightly regulated, if at all. What’s more, any bitcoins you store in a digital wallet are uninsured, meaning you’ll probably eat any losses, regardless of how they occur.

Interestingly enough, the risks and lack of government backing haven’t scared off everyone. According to Nichols, bitcoin’s independence may be one its biggest draws.

“The exact warning from CFPB that bitcoin is not backed by a central government is exactly the reason many use bitcoin today,” Nichols says, referring to the U.S. consumer agency.

While the lack of official oversight attracts users eager to make transactions outside of the regulatory eye, many are reluctant to embrace this new technology.

As with any decision involving your hard-earned dollars, you should think long and hard about the risks that come with an erratic online currency like bitcoin. In the end, any gains may be vastly outweighed by the pain of losses.

This article originally appeared on US News [http://bit.ly/1vstAhD].

Bitcoin image via Shutterstock

Source Article :http://bit.ly/1rzrav6

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get verifed your paypal NOW

Do you really want to know How to get a free Payoneer MasterCard in Bangladesh or Pakistan? Yes that’s right it’s FREE! You can receive a mastercard sent to you directly through postal mail, absolutely free! This is one of finest ways to receive your online earnings in hand.

Free MasterCard in Bangladesh, Pakistan or any country

This offer is available exclusively for users in 200 countries. If you are outside of Bangladesh or Pakistan, you can still apply for this free mastercard.

You wont need a bank account in order to have a free master card.

You will not need credit statement to get a mastercard.

You can use this master card to do online shopping, buy laptops, gadgets, pay online bills, buy domains and use paypal.

You can use this free mastercard to get your funds from a local ATM. Yes Dutch Bangla bank, Janata Bank Q-cash, Standard Chartred ATMs are available too!

You can use this mastercard card in foreign countries.

You can use this mastercard in shopping malls.

Sign up for the payoneer mastercard

The first step for you to get a free mastercard is to follow this link and click sign up!

CLICK HERE -----> Sign Up For MasterCard Payoneer

The good news is that after writing this review, Payoneer Inc contacted me and they created a special promotion where you can sign up and receive a free $25 bonus. Please use this link to sign up and receive $25 when you activate your card.

Now you have to submit your details, on the first step of the order process, add your first name, last name, email address and date of birth and click NEXT:

Select your country from the drop down list. You have option to select Bangladesh or Pakistan. Unfortunately Payoneer MasterCard has stopped working on India. Select your country, add your address (where this card will be mailed to you), enter your phone number and click NEXT:

In step 3 of the order process you have to specify a password and a security question and answer. Please write down the information you have submitted, click NEXT:

In step number 4 you will be asked to submit verification documents. You have the choice to use national ID, passport or driving license. You can use the Govt Voter ID of Bangladesh or your national ID card in Pakistan to sign up. If you have a passport you can use that too.

If you do not have any of them, say you are a minor and have no voter ID, then ask your parents to use their information. For this go back to step one as you will need to use your parent name and details.

Now check all the terms and click FINISH:

You should now receive a message or email of your submission.

Receive & activate your free mastercard

You will receive your payoneer mastercard within 30 days. In Bangladesh it took me roughly 30 days to receive. Some people got it even early within few weeks. I guess in Pakistan, the process is similar.

After you receive your card, log in to your payoneer account and add the digits you see in your card. Add the pin number you want. After that your mastercard will be activated!

Depending on your location it may take 2-4 weeks to receive this card. This will be from a standard postal mail.

Fees?

Although applying and receiving this payoneer mastercard is free of charge, there are some fees associated to maintain this card. So I highly suggest you start working on a marketplace, earn some money to use this card: (click on the image to zoom)

Loading money to your card

I have seen an issue recently that when you get your card first you cannot load money using another card. They require that you load your card from sites like odesk/elance first. I don’t know why they did this thing so before ordering this card make sure you are working on any of these marketplaces and have at least $100 to load.

You can sign up for odesk (a freelance marketplace) and use this as a payment method. From odesk just go to the payment methods and activate the payoneer option. When they ask to sign up for a card, just click that you already have a card and link it.

This card also has the US payment option available.

Basically US payment service is a virtual US bank account. You can use this with Commission Junction to accept ACH/Wire transfers and you can also use it on paypal. 

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Best Apps to Find Free ATMs Near College Campuses

When you’re at college, chances are you need some cash from time to time. While schools all have automated teller machines on campus, they may come with hefty surcharges for withdrawals.

When you use an ATM, your bank may charge a fee if the machine is not in its network, and in such cases the owner of the ATM may slap on still another fee. Even if some banks don’t impose this sort of charge, the ATM operator probably will. Usually the cost runs around $2 per transaction, depending on the owner and location.

To avoid racking up fees every time you need a quick $20, consult your smartphone. There are several apps you can download to help find surcharge-free ATMs on or near your campus.

You’ll want to first look for apps offered by your bank. Many, including JPMorgan Chase and Wells Fargo, offer geo-locators to help you find ATMs that are free for depositors in branches or at stand-alone locations. If those are out of range or inconvenient, try these free apps to find surcharge-free ATMs closer to campus.

Allpoint

The Allpoint mobile app enables you to find more than 43,000 surcharge-free ATMs in the U.S., and another 12,000 around the world. You can search according to where you are, or by city and state or ZIP code. The application will deliver a list or a Google Maps view of the closest locations. When you select one, you can get step-by-step directions or connect to your preferred mobile navigation app to guide you to the machine.

One out of 12 ATMs in the U.S. are in Allpoint’s network, the company says. However, you must be a cardholder of a participating financial institution to get surcharge-free access to these machines. You can check with your bank, or email info@allpointnetwork.com to find out if it’s in the network before using the search app, which is available from the iTunes App Store, Google Play and Windows Store.

MoneyPass

The MoneyPass mobile app includes a locator to help you find one of more than 24,000 surcharge-free ATMs nationwide. It can search by address, ZIP code or your location. The app will connect you to a Google map as well as a list of nearby MoneyPass machines, giving you options to choose from, and then it’ll direct you to your chosen location.

In order to gain surcharge-free access, your financial institution must be part of the MoneyPass ATM Network, which includes over 1,600 organizations. The company says more than 75 million cards will work, charge-free. Typically you’ll have a MoneyPass logo on your plastic to indicate that the issuing bank participates. If it’s not there, contact your branch to find out if you can withdraw surcharge-free at MoneyPass ATMs.

The network’s mobile app can be found at the iTunes App Store or Google Play.

CO-OP network

The CO-OP mobile app lists about 30,000 surcharge-free cash machines for participating credit union members. As with other ATM finder apps, you search using your current location or a given address to find locations on a Google map, as well as a list of cashpoints in the CO-OP credit union network. When you select a location you’ll receive navigation directions to get to the machine. Find out if your institution is part of CO-OP with the CO-OP ATM search tool, which is available at the iTunes App Store or Google Play.

MasterCard Nearby

MasterCard Nearby enables users to find 2 million ATMs worldwide, as well as retailers that offer cash back with a purchase. You can pinpoint your own bank’s cash machines or set a filter to find those without surcharges. The app searches automatically using your current location, but you can also look for a specific address. Much like the other finder apps, this one gives you a Google map as well as a list of nearby machines. Pick one and connect to your navigation app of choice.

MasterCard Nearby can be found at the iTunes App Store, Google Play and Windows Store.

So when your last Friday class ends, it’ll be easy to pick up some of your cash, without paying extra for it.

---

ATM image via Shutterstock.

Source Article http://ift.tt/1y39EC7

Read More

Best Apps to Find Free ATMs Near College Campuses

When you’re at college, chances are you need some cash from time to time. While schools all have automated teller machines on campus, they may come with hefty surcharges for withdrawals.

When you use an ATM, your bank may charge a fee if the machine is not in its network, and in such cases the owner of the ATM may slap on still another fee. Even if some banks don’t impose this sort of charge, the ATM operator probably will. Usually the cost runs around $2 per transaction, depending on the owner and location.

To avoid racking up fees every time you need a quick $20, consult your smartphone. There are several apps you can download to help find surcharge-free ATMs on or near your campus.

You’ll want to first look for apps offered by your bank. Many, including JPMorgan Chase and Wells Fargo, offer geo-locators to help you find ATMs that are free for depositors in branches or at stand-alone locations. If those are out of range or inconvenient, try these free apps to find surcharge-free ATMs closer to campus.

Allpoint

The Allpoint mobile app enables you to find more than 43,000 surcharge-free ATMs in the U.S., and another 12,000 around the world. You can search according to where you are, or by city and state or ZIP code. The application will deliver a list or a Google Maps view of the closest locations. When you select one, you can get step-by-step directions or connect to your preferred mobile navigation app to guide you to the machine.

One out of 12 ATMs in the U.S. are in Allpoint’s network, the company says. However, you must be a cardholder of a participating financial institution to get surcharge-free access to these machines. You can check with your bank, or email info@allpointnetwork.com to find out if it’s in the network before using the search app, which is available from the iTunes App Store, Google Play and Windows Store.

MoneyPass

The MoneyPass mobile app includes a locator to help you find one of more than 24,000 surcharge-free ATMs nationwide. It can search by address, ZIP code or your location. The app will connect you to a Google map as well as a list of nearby MoneyPass machines, giving you options to choose from, and then it’ll direct you to your chosen location.

In order to gain surcharge-free access, your financial institution must be part of the MoneyPass ATM Network, which includes over 1,600 organizations. The company says more than 75 million cards will work, charge-free. Typically you’ll have a MoneyPass logo on your plastic to indicate that the issuing bank participates. If it’s not there, contact your branch to find out if you can withdraw surcharge-free at MoneyPass ATMs.

The network’s mobile app can be found at the iTunes App Store or Google Play.

CO-OP network

The CO-OP mobile app lists about 30,000 surcharge-free cash machines for participating credit union members. As with other ATM finder apps, you search using your current location or a given address to find locations on a Google map, as well as a list of cashpoints in the CO-OP credit union network. When you select a location you’ll receive navigation directions to get to the machine. Find out if your institution is part of CO-OP with the CO-OP ATM search tool, which is available at the iTunes App Store or Google Play.

MasterCard Nearby

MasterCard Nearby enables users to find 2 million ATMs worldwide, as well as retailers that offer cash back with a purchase. You can pinpoint your own bank’s cash machines or set a filter to find those without surcharges. The app searches automatically using your current location, but you can also look for a specific address. Much like the other finder apps, this one gives you a Google map as well as a list of nearby machines. Pick one and connect to your navigation app of choice.

MasterCard Nearby can be found at the iTunes App Store, Google Play and Windows Store.

So when your last Friday class ends, it’ll be easy to pick up some of your cash, without paying extra for it.

---

ATM image via Shutterstock.

Source Article :http://bit.ly/1mVTh9g

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Apple Pay Bank Partners Push Digital Wallet Despite Fee

Between email blasts, full-page magazine ads and website banners, big banks are promoting Apple’s Apple Pay to their customers and highlighting their cooperation with the technology giant on its mobile wallet since the service was introduced Sept. 9.

Yet those institutions will end up paying when their customers use the new system.

So why are the largest banks and card companies going to so much trouble? For one thing, the first debit or credit card you snap a photo of to add to your iPhone automatically will become the default payment option for Apple Pay when the mobile service begins in October. Card companies and financial institutions want to capitalize on that feature to build volume in transactions, which also bring them money.

“By virtue of our early participation in Apple Pay, maybe we’ll be able to pick up some more people who currently have their MasterCard as secondary in their wallet and we would like them to make it primary,” says James Anderson, head of mobile and emerging payments at MasterCard, based in Purchase, New York.

Painless for consumers

Aside from the innovative touch-to-pay experience that will let users forgo their wallets, consumers won’t likely feel much of a difference in the way they interact with their banks and card companies.

“Whether you charge your credit card or debit card to a piece of plastic or use it through Apple Pay, the costs to the consumer are identical,” says Gavin Michael, head of digital for consumer banking at JPMorgan Chase in New York.

Other banks take a similar approach.

“Wells Fargo does not charge a fee for its customers to use Apple Pay,” says spokeswoman Natalie M. Brown.

Banks charged

Banks will foot the bill for using Apple Pay by giving Apple a percentage of every transaction made through the system, according to Bloomberg News. It remains to be seen whether banks will pass on any of that cost to merchants and consumers. Merchants normally pay banks and card issuers a small percentage of each transaction charged on a credit card or made with a debit card, though that usually has no effect on consumers or what they pay.

Apple has made deals with the largest U.S. financial institutions, including Bank of America, Capital One Bank, Chase, Citigroup and Wells Fargo. These organizations account for 83% of the credit card purchase volume in the U.S., according to Apple. Customers of community banks or credit unions will likely be able to use Apple Pay too, but most of those institutions haven’t announced any plans to participate.

“If [merchants] buy into this type of payment system and we have a demand from our members to offer this, then we will,” Steven Page, online product marketing manager for 1^st United Services Credit Union in Pleasanton, California, said by email.

Smaller banks face barriers

However, cost and accessibility are two barriers keeping smaller financial institutions from offering links to the new service right away.

“It is a very expensive option to take, costing 15 basis points [0.15%] per transaction to use the Apple Pay option,” Page says, referring to the amount Apple collects.

First Data, a credit card processor often used by smaller banks, has said it will participate in Apple Pay, which means those banks can offer the service to depositors. However, other institutions are unsure how to provide it to customers.

“There’s not a help line for banks,” says Jill Castilla, president and chief executive of Citizens Bank of Edmond in Oklahoma. “There’s not an invitation out there for how to get involved and how to connect with Apple.”

Still, she says her community bank is just as eager as its mega counterparts to offer Apple Pay to depositors.

“As long as it’s safe and sound, and if it becomes accessible to community banks, we would be one of the first ones to embrace it,” Castilla says.

So now you know why your bank has been shouting out about Apple Pay.

Card image via Shutterstock

Source Article :http://bit.ly/1vabxM2

Read More

Apple Pay Bank Partners Push Digital Wallet Despite Fee

Between email blasts, full-page magazine ads and website banners, big banks are promoting Apple’s Apple Pay to their customers and highlighting their cooperation with the technology giant on its mobile wallet since the service was introduced Sept. 9.

Yet those institutions will end up paying when their customers use the new system.

So why are the largest banks and card companies going to so much trouble? For one thing, the first debit or credit card you snap a photo of to add to your iPhone automatically will become the default payment option for Apple Pay when the mobile service begins in October. Card companies and financial institutions want to capitalize on that feature to build volume in transactions, which also bring them money.

“By virtue of our early participation in Apple Pay, maybe we’ll be able to pick up some more people who currently have their MasterCard as secondary in their wallet and we would like them to make it primary,” says James Anderson, head of mobile and emerging payments at MasterCard, based in Purchase, New York.

Painless for consumers

Aside from the innovative touch-to-pay experience that will let users forgo their wallets, consumers won’t likely feel much of a difference in the way they interact with their banks and card companies.

“Whether you charge your credit card or debit card to a piece of plastic or use it through Apple Pay, the costs to the consumer are identical,” says Gavin Michael, head of digital for consumer banking at JPMorgan Chase in New York.

Other banks take a similar approach.

“Wells Fargo does not charge a fee for its customers to use Apple Pay,” says spokeswoman Natalie M. Brown.

Banks charged

Banks will foot the bill for using Apple Pay by giving Apple a percentage of every transaction made through the system, according to Bloomberg News. It remains to be seen whether banks will pass on any of that cost to merchants and consumers. Merchants normally pay banks and card issuers a small percentage of each transaction charged on a credit card or made with a debit card, though that usually has no effect on consumers or what they pay.

Apple has made deals with the largest U.S. financial institutions, including Bank of America, Capital One Bank, Chase, Citigroup and Wells Fargo. These organizations account for 83% of the credit card purchase volume in the U.S., according to Apple. Customers of community banks or credit unions will likely be able to use Apple Pay too, but most of those institutions haven’t announced any plans to participate.

“If [merchants] buy into this type of payment system and we have a demand from our members to offer this, then we will,” Steven Page, online product marketing manager for 1^st United Services Credit Union in Pleasanton, California, said by email.

Smaller banks face barriers

However, cost and accessibility are two barriers keeping smaller financial institutions from offering links to the new service right away.

“It is a very expensive option to take, costing 15 basis points [0.15%] per transaction to use the Apple Pay option,” Page says, referring to the amount Apple collects.

First Data, a credit card processor often used by smaller banks, has said it will participate in Apple Pay, which means those banks can offer the service to depositors. However, other institutions are unsure how to provide it to customers.

“There’s not a help line for banks,” says Jill Castilla, president and chief executive of Citizens Bank of Edmond in Oklahoma. “There’s not an invitation out there for how to get involved and how to connect with Apple.”

Still, she says her community bank is just as eager as its mega counterparts to offer Apple Pay to depositors.

“As long as it’s safe and sound, and if it becomes accessible to community banks, we would be one of the first ones to embrace it,” Castilla says.

So now you know why your bank has been shouting out about Apple Pay.

Card image via Shutterstock

Source Article http://ift.tt/1y39EC7

Read More