ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION | |
edition: October 17, 2024 | |
Which Alternative Payment Methods Are Consumers Gravitating Towards?
Consumers today have more payment options than ever, ranging from traditional methods like checks and cash to prepaid cards and online payment service providers such as PayPal, Venmo, and Cash App. Some might assume that consumers who rely solely on alternative payment methods would conduct most of their transactions digitally. However, it turns out that fully banked individuals account for a much higher share of digital payment transactions than those using only alternative methods.
A study from the Atlanta Fed looks at the share of digital payments by value across different consumer groups. The highest share is seen among high-income, fully banked consumers, defined as those with annual household income over $50,000. This cohort uses digital payments for more than 85% of the value of their transactions. However, for consumers who rely solely on alternative accounts or credit cards, that figure drops to 57%.
Read more at PaymentsJournal.com
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Paving the Payments Future
Proven payment technology helps businesses pay and
get paid so they can focus on what matters most.
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The Folly of Capping Credit Card Interest Rates
One idea floated in the current presidential race is temporarily imposing price controls on credit card rates, limiting them to 10%. While this may seem appealing to consumers living in a world where the average credit card interest rate is 22.76%, such price controls could have a potentially adverse—and possibly catastrophic—impact on the U.S. credit card market. This move would likely disrupt capital markets as well, with investors losing confidence in the revenue stability of lending contracts.
In a recent Impact Note, Brian Riley, Director of Credit at Javelin Strategy & Research, examined how such a move would affect the credit card industry. His conclusion: Market-driven, risk-based lending benefits both card issuers and cardholders.
Slashing Revenue Sources
Credit card issuers derive their income from two channels: interest and non-interest. Interest income is revenue earned by lending money, while non-interest income is generated through fees and interchange. The interest side of the equation currently represents about three-quarters of credit card revenue. What would happen if that revenue were slashed to the bone?
Read more at PaymentsJournal.com
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Jose L. Santiago
Public Affairs Specialist
Tax Outreach, Partnership and Education
Email: jose.l.santiago@irs.gov
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Mexico: Banking Beyond Brick And Mortar
Mexican fintechs eye a piece of the nearshoring pie.
Mexico continues to post record numbers for many of its economic indicators. And with what is projected to be a $30 billion-$40 billion nearshoring bonanza in its sights, financial institutions of all sorts are rushing to stake their claim.
The $644 billion-in-assets banking sector remains dominated by a few brick-and-mortar, multinational giants. BBVA México, Santander, and Banorte account for nearly 50% of the market, while Banamex, HSBC, Scotiabank and Inbursa contribute another 27%. But 66 million Mexicans, or 51% of the population, remain unbanked, creating cross-border payment and remittance opportunities for nearly 1,000 fintech startups.
Now is the time for anyone who wants to be in Mexico for the long term, specifically in the finance sector, according to Gilberto García, partner at Miranda Financial Advisory. “If you wait because you don’t know what’s going to happen when there’s more certainty, you’re going to tell yourself you should have done this before.”
Read more at Global Finance
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MONEYTREND 2024
October 28-30
in TAMPA
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How Much the Average Middle-Class Person Owes in Credit Card Debt
Many of us are taught that debt is bad and should be avoided. However, if managed properly, some types of debt can be advantageous. For instance, debt that may improve a person’s net worth or financial position can be considered “good debt.” However, any debt that’s difficult to repay or offers no long-term benefits is typically called “bad debt”.
When it comes to bad debt, several types, like high-interest or payday loans, are difficult to repay and can worsen your financial situation. And then there’s credit card debt, which plagues a large percentage of the American population.
Credit Card Debt Statistics
Credit card debt is arguably the worst type of debt and the biggest threat to building wealth. With high interest rates and low minimum payments, you could pay on your balances for a significant part of your life.
Read more ay GOBankingRates.com
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The Most Advanced Self-Service Check Cashing ATM
Check Cashing, Money Transfer, Bill Payment, Mobile Reload, ATM and more.
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Latin America: Stepping Up For The Unbanked
With Brazil in the lead, Latin America is rapidly growing an innovative coterie of fintechs, filling service gaps ranging from credit to payment platforms to mobile banking.
Latin America has established itself as a magnet for fintech investment.
The region received $15.6 billion in investments for financial technology providers over the past 10 years, with Brazilian companies making up 66.7% of the total, according to consultant Distrito’s Fintech Report 2024. Digital services—e-wallets, accounts, and digital banks—attracted the most money, with $5.3 billion. But the most numerous deals, and those most often targeted for acquisitions, were in credit fintech, with 477 reported.
“The region has a large unbanked or underbanked population,” notes Andrés Fontao, co-founder of Finnovista, a Brazilian venture capital firm focused on fintechs. “A significant portion of the population, both consumers and small to medium-sized enterprises, still lack full access to traditional financial services, creating a substantial opportunity for fintechs offering innovative and accessible solutions.”
Read more at Global Finance
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Enabling organizations to streamline payment acceptance,
minimize processing costs, and reduce the risk of fraud.
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Three Less Obvious Reasons to Give Coin Counting a Second Look
In an era of digital banking, coins might seem like relics of the past. Yet, this article reveals how these humble metal discs could be the key to unlocking new opportunities for financial institutions. From tapping into a $15 billion coin economy to reaching millions in banking deserts, smart deployment of coin-counting technology offers surprising strategic advantages. It's not just about convenience — it's about growth, sustainability, and even employee satisfaction. As banks wrestle with rising deposit costs and expanding physical footprints, could the solution be jingling in our pockets all along?
As consumer-facing financial institutions continue to push the envelope on digital delivery of services, seeking more interactions with physical coins might seem like an odd choice. Indeed, many large banks have phased out courtesy coin counting, believing that the obvious convenience afforded to customers
Read more at The Financial Brand
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Customized Payment Processing and
Merchant Service Provider for Your Business
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Chase Ramps Up Its Community Banking Push. Can Local Brands Compete?
Chase is leaning into its community banking model nationwide, with major expansion plans on top of its existing campaign to open new branches in promising markets. Experts warn this is a wakeup call for other banks and their retail distribution strategies.
JPMorgan Chase is beginning to look like the player who walks into the casino with a big bucket of chips, approaches the roulette table, and puts something on everything.
That would be a slight exaggeration, especially after Jamie Dimon, chairman and CEO, told analysts in the third quarter earnings briefing about how much capital was not being deployed, in favor of stockpiling cash and waiting for the right, good opportunities.
“If you look at it roughly, we have about a minimum $30 billion of excess capital,” said Dimon. “And for me, it’s not burning a hole in my pocket.”
Read more at The Financial Brand
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PROVIDING SERVICES TO THE
FINANCIAL SERVICES INDUSTRY NATIONWIDE
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Prepaid Cards Are Essential Components of Rewards and Incentives Programs
When the topic is prepaid cards, the store-branded or general-purpose gift cards at grocery stores and retailers might come to mind. However, a substantial number of businesses and organizations continually use prepaid cards for a range of cases, including employee incentives and customer rebates.
In a recent PaymentsJournal podcast, Sheryl Shewman, Vice President of Business Development at U.S. Bank, and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, discussed the types of incentive programs and how organizations can leverage them to maximize employee engagement
A Must-Have
More companies are offering some form of reward or incentive program. The reasons could be to improve productivity, increase engagement, or retain employees. A company might give a team member a prepaid card to recognize years of service or to show appreciation for hard work. Many organizations also give employees gift cards around the holidays.
Read more at PaymentsJournal.com
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ALTERNATIVE FINANCIAL SERVICE PROVIDERS ASSOCIATION | |
Alternative Financial Service Providers Association
757.737.4088
315 Tuscarora St., Lewiston, NY 14092
Copyright © AFSPA 2007-2024
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