EU to tighten money transfer rules to prevent online fraud

In an effort to thwart the surge in cybercrime and various other forms of online fraud, the European Banking Authority has announced that internet-based payment service providers will be required to improve their general security procedures by August of 2015. As a follow-up to this statement, the EBA has published a series of ‘minimum security guidelines’ that must be met by payment service providers in each of the EU’s 28 member states.

Examples of these reforms include a new mandate which states that these service providers improve the verification standards present in their systems in order to ensure that customers are properly authenticated before carrying out their payment. Additionally, the EU has announced that they will be revising their Payment Services Directive in order to improve the general consumer experience as well as provide a more secure and competitive environment in which payment service providers will be compelled to enhance their services in order to maintain a positive relationship with their customers. These new guidelines will likely be initiated in 2017.

It seems as if the EU’s efforts to thwart online fraud and misuse of money transfer software could not have come at a better time. In 2014 alone, the losses created by money transfer software was approximately $975 million dollars, a 21% increase over the previous year.

Whether or not these new guidelines will truly make the positive impact outlined by the European Banking Authority has yet to be seen. What is likely, however, is that the topic of cybersecurity and cybercrime prevention will become much more commonplace than it is now which is, in itself, a huge step forward for the European Union. As evidenced by the recent £650 theft allegedly perpetrated by Russian hackers, there is a massive need for online security reform. The damage caused by these crimes is very real and is likely to pose a serious threat to future EU growth unless it is confronted now.

More information concerning the outcomes of this legislation, as well as coverage of the reforms being outlined to the Payment Services Directive, is likely to be offered in the upcoming months.

How to save money on currency transfers

International money transfers are an essential element of daily living for a large number of foreign nationals and migrant workers living outside of their native country. In the United Kingdom, for example, there exists a sizeable population of individuals who have arrived here from a kaleidoscopic array of international destinations, ranging from Africa to Asia. These individuals regularly engage in international money transfers with friends and family abroad. That being said, these services can prove to be quite expensive for those who have yet to discover optimal methods for transferring currency at minimal cost.

Although banks are often considered a “go-to” resource for money transfers, these institutions are often guilty of charging lofty service fees on international currency deliveries. Because of this, individuals who are planning on scheduling international currency transfers on regular basis are strongly advised to seek out alternative opportunities to do so.

One of the more popular international money transfer services available to UK citizens is the Telegraph International Money Transfer Service, offered in collaboration with moneycorp. Thanks to affordable transfer rates and an outstanding reputation for service, the Telegraph International Money Transfer Service has quickly been elevated to start status amongst those who engage in international transfers regularly.

The amount of money spent on transfer fees and service charges related to international money transfer on an annual basis is staggering. The issue has become charged enough for accusations of predatory business practices to be levied against some institutions, particularly those who have been found to prey on otherwise unknowing migrants and foreign nationals.

Ultimately, those who are in the process of seeking out an international money transfer service for their next transaction are highly advised to spend the time needed to research all available options before committing to a specific service provider. The chances are good that,with a small amount of time, a more rewarding and cost-efficient offer can be found which will ensure that international money transfers remain beneficial to both sender and receiver. More information about the Telegraph International Money Transfer Service, as well as other affordable, highly successful international money transfer companies can be found on the websites of the companies in question.

12 Ways how mobile money can go further

As mobile phone coverage continues its inevitable crawl across the world’s continents, experts are largely in agreement that mobile payment platforms will soon become the de facto “bank” for individuals living in areas which are either underserved or have a historical precedent for shaky financial infrastructures.

That being said, mobile payment systems cannot simply be established over night. These programs require extensive development, planning, and, most importantly, strategization in order to ensure that the “next best thing” won’t be replaced when a newly minted payment platform jumps online.

After a series of conversations amongst tech innovators regarding what exactly should be happening in the world of mobile payment systems, 12 strategies emerged which all parties agreed are quite integral on the path towards seamless mobile integration. They are as follows:

Trust must be established, particularly in areas of the world where corruption and crime are rampant.
The need must exist. Not every individual in the world needs the service offered by an international money transfer service.
The real world is just as important. In the event of questions or conflicts, individuals must be able to speak with a real-world representative.
Education is everything. In order for these systems to flourish, individuals must first understand how to use them properly.
Every country is unique, and every country presents its own sets of challenges and opportunities.
Regulations limit progress, particular in situations where oversight is slowing the path of development.
Agents are essential, particularly when spreading the message about new services in less developed regions.
Financial services are only the beginning. Utilities and other resources may soon follow.
The customers needs must clearly be defined in order for a system to truly flourish.
Advertising and marketing remain critically important tools, regardless of where you are currently expanding your services to.
The sign-up process has to be incredibly easy.
Interoperations are a must, particularly in areas of the world that are culturally and ethnically diverse

With these ideas in mind, business owners seeking to expand their money transfer operations into new regions of the world may be able to find success at a faster rate than they would have previously.

Why Facebook has entered the money transfer market

For both casual and serious Facebook users, it’s common knowledge that this particular social media platform has a habit of changing design and user interface elements on a regular basis. Recently, Facebook launched one of the most significant evolutions of its platform to date – the introduction of a money transfer service which allows individuals to quickly send cash to one another at the touch of a button.

Experts have engaged in intense speculation as to what exactly Facebook’s motives may be. After all, money transfer has become a highly competitive domain which is already populated by industry heavyweights such as PayPal. Perhaps anticipating the statements that critics would be quick to make, Facebook has stated that their new transfer services are highly secure, featuring some of the most state-of-the-art encryption and security protocols in existence today.

Believe it or not, this is not Facebook’s first experience with online payments. The company has long provided users with the ability to store their credit card information on file in the event they wished to purchase a game or other “perk” within the social media platform. Essentially, the new money transfer system is simply an evolution of what already exists. Facebook is not alone in their attempt to secure a piece of the highly lucrative e-payment marketplace. Over the past year, Apple and Google have also launched their own payment systems which feature similar functionality and transfer-related features.

It remains to be seen as to whether or not this new system will make a serious impact on the current money transfer industry. Given the fact that Facebook remains one of the world’s most profitable and in-demand companies, it is likely that Facebook’s newest addition to their platform will be given the financial and technical support it needs to flourish. It’s also important to note that Facebook’s money transfer systems could also be quickly implemented into the WhatsApp platform, considering the former now owns the latter after a recent $22bn purchase.

Those who are interested in learning more about this particular development can read more on Facebook’s official website. It will be quite interesting to observe how this system develops in upcoming months.

‘Rip off’ money transfer companies under threat in the UK

It is estimated that nearly 10% of the world’s population currently sends money to relatives and loved ones in other countries. Knowing this, it is perhaps easy to understand why so many money transfer companies have sprung up in cosmopolitan cities such as London, and why so many individuals have become outraged by the prices they are being charged to send this money.

According to recent statistics, the annual sum of remittances sent from the UK to locations around the world totals in excess of 15 billion pounds. Over 66% of these funds are sent to developing countries. According to the World Bank, the total sum of remittances in 2014 will equate to well over 278 billion pounds.

The lofty fees that many of these money transfer companies are charging for the arrangement of currency delivery has sparked outrage amongst citizens and politicians alike. Labour MP Tessa Jowell has recently launched an investigation into several of these predatory establishments, stating, “Many people who are trying to support friends and family abroad are being ripped off. Instead of their hard-earned money going towards medical bills, books or to cover the cost of failing crops, huge amounts are being creamed off by the giant money transfer companies who have cornered the market.”

Jowell is hoping to gain support for new legislation which, if enacted, would force local money transfer services to cut their fees by half during the months leading up to Christmas, as this is typically the peak time for individuals to send money to loved ones abroad. It will be interesting to observe how the target companies respond, as this is typically one of the most profitable times of the year for them.

According to Scott Paul, a senior humanitarian advisor for Oxfam, the need for new reforms in this particular market are absolutely necessary. “People all around the world depend on help they receive,” Paul stated, “and remittances are a critical part of their efforts to overcome poverty.” Whether or not these desired changes will be enacted has yet to be seen. What can be certain, however, is that awareness of this particular issue has increased dramatically.

Making the most of your money through multi-currency cards

The world of international travel and business has changed dramatically in recent years. Whereas, in previous decades, business owners could expect to engage in a few, if any, international money transfer transactions or exchanges throughout the year, this particular service has become an integral element of small, medium and large-sized enterprises across the globe.

In fact, a growing number of businesses are now dealing in multiple currencies simultaneously, largely due to opportunities for outsourcing and global collaboration, all made possible through the touch of a button. A multi-currency card is an excellent resource for those seeking to either hold or distribute a large number of currencies simultaneously without having to first enlist the help of a high street bank or private service.

One of the popular “perks” of the multi-currency card is the fact that individuals can buy the currency of their choice at a fixed exchange rate. Instead of worrying about price increases or reductions, a currency card allows individuals to “hold” money at the value they originally paid for it, thus enabling them to engage in business transactions and money transfer at a more sustained pace.

For travelers, a multi-currency card may be particularly useful, as it reduces the need for international ATM use which often results in substantial financial penalties. Additionally, it helps reduce the likelihood of identity theft and stolen cash while abroad.

A number of services are now beginning to spring up which are directly related to the multi-currency phenomenon taking the world by storm. Caxton FX, for example, is now offering users the ability to hold up to 24 different currencies at any one time. A new prepaid Mastercard is also available which allows for stockpiling of 15 different currencies as well as topping up via your preferred bank account. Moneycorp has also begun to offer a new prepaid card, dubbed the Explore, which allows customers to load up to 14 different currencies before and during use.

As can be seen, there are no shortage of options when it comes to selecting a multi-currency card. Hopefully, these products will become an integral element of international business and travel in upcoming years.

Where is the best place to exchange your money?

If you are thinking about travelling to an exotic location for the holiday season or buying a home in a foreign country, you may want to forget about Europe and consider countries in the lines of Brazil, South Africa or Malaysia. The reason for this being you will get more value for the money exchange.

Over the course of past 12 months, the Pound has gained considerable value against currencies from other countries. Topping the list of places where the Pound has strengthened most is Brazil with a rise of 42% against the local currency (Real). The above information is in agreement with data compiled by the Post Office. Their online exchange rates for purchases between £500-999 show that on the 17th of November this year, 1£ was buying 5.26 real as opposed to 3.71 real, the same time last year(2014).

Other countries on the top ten list include Russia, Turkey, Malaysia, S. Africa, Norway, Mexico, Australia, New Zealand and Hungary. Currently, the Sterling pound has gained against 75% of its best-selling currencies across the globe when its performance this year is compared with 2014’s; this is according to Post Office Travel Money’s, Andrew Brown.

In recent weeks, the pound has gained substantially against the South African rand and Malaysian ringgit; that is good news for holidaymakers visiting these countries as they will have over an extra £100 when they exchange £500.

The Euro, on the other hand, did not make it into the top ten list; nonetheless, the pound had gained 14.1% to it when it closed at 1.38 on November 17th, 2015 compared to 1.21 on the same date last year. Thus, leaving Britons with an extra £61.91 for every £500 money exchange transaction they make. This makes it high time to book your next winter break in Europe. Or, if you dream of buying a holiday home in the havens of Spain or France, you stand to enjoy buying at lesser prices. For instance a €350,000 house will go for about £253,623 unlike 12 months ago when it was £289,256; thereby saving you a hefty amount of about 36,000.

Despite the pound’s impressive performance against some currencies, it appears to have weakened against others. For instance, it had declined against the Hong Kong dollar by 3% that was considered its biggest fall against the currency. In November this year, £1 bought 11.05 Hong Kong dollars a drop from 11.38 during the same period last year. Other gainers against the pound include the U.S, U.A.E, Qatar, Oman, Barbados and Jordan. When comparing the pound against the US dollar, the pound lost 2.4% over the past 12 months. However, this is not something to stop Briton shoppers from utilising the pre- Christmas sale offers coming up in the coming weeks.

Holidays to the US more expensive due to the British pounds 30 year low against the dollar

British holidaymakers visiting the Atlantic are currently facing higher prices as the pound corrodes with the US dollar, say experts. For the first time, the Sterling has gone below $1.48 since April, which translates to 14% fall as compared to $1.71 it traded in the summer of 2014. This change has changed everything as meals, hotel rooms, theme park tickets and car hire have become more expensive for British families explorers to the United States.

Consequently, the currency analysts say that the worse is yet to hit the pound as it is at a risk of hitting a 30-year low estimated at $1.30. This will raise shopping trips’ costs to the level of New York and Disneyland in Orlando, and Florida’s holidays. However, these changes will raise British’ exports to the American market as products made in British factories like cars and Scotch whisky will be more affordable to American buyers.

They recall that the last time the British pound traded at a low rate of $1.30 was the time when Margaret Thatcher was British Prime Minister, and Ronald Reagan was the president of the United States. According to David Swann, who is Travelex’s bureau de change head of pricing, the rise in US dollar means that UK holiday travelers will see their pounds’ worthless in the United States. He added to say that it is unfortunate for the British travelers who have already planned a trip to America.

Travelex said that currently £500 exchanges for $725, which is $116 lower than its value in July 2014. If the pound’s value falls to $1.30 on foreign exchange markets, then it is estimated that travelers exchanging a £500 would receive less than $650, which translates to $200 less that its value in mid-2014.

Last month the Federal Reserve increased the interest rates for the first time in almost a decade now, from 0 and 0.25 percent to 0.25 and 0.5 percent. Bank of England is claimed to be raising interest rates this year in the UK. This will increase the mortgages’ costs and other loans for residents of the UK. However, analysts have given a warning against this step saying that if Britain hikes the rates, America will get more and this will lead to the pound dropping even further.

Is it harder for tourists to exchange money in Argentina?

For those who have been to Argentina in the last four years, it is evident that you have found out that the excellent deal is to have your money in big bills and exchange it illegally. Travelers from all over the world are currently receiving more for their currency, which is due to the Argentina’s banning of black and illegal markets that used to trade for 30% less that the required official rate. For Argentinian citizens who wanted the safety of dollars, they accepted lower rates from black markets as this was the only way to escape the government’s tight currency measures.

Currently, all these activities are taking another route. President Mauricio Marci, earlier this month, eliminated barriers on how many pesos can be exchanged for dollars and other currencies. The climax of those barriers led to Argentinian pesos’ official value to crumble overnight that dropping by 30% in less than 24 hours. However, on the black market, pesos rose slightly.

According to Dr. Federico Weinschelbaum, a professor and an economist at Universidad de San Andrés in Argentina, the abolition of this gap that exists will result in a steadier economy for Argentina on the long-run. On the short-run, Argentina’s economy that is running in the background is likely to rise. Those who are highly affected by this change are the ones who depended fully on the black market as the main source of income, which is clearly a significant amount.

The centre of Buenos Aires’s downtown, the extremely busy streets have been surrounded by shops and the unique ambient sound of women and men shouting “Cambio! Dolares, Reales, Euros, Cambio,” is common, giving both locals and foreigners the same best exchange rate as that of a black market for the past few years. These black market operators are referred to as “arbolitos” meaning little trees because they do not stay for long in one location as they exchange green paper. The currency that is exchanged on the black market is referred to as dollar blue. The arbolitos have been in operation for over a decade now, but in November 2011, they expanded into a big forest. The black market expanded vigorously, and it was successful to the extent that it was almost becoming legal.

Even if exchanging currencies in a location outside of a designated exchange place or an official bank is illegal, it is common in Argentina to see police officers on black markets, but they watch transactions take place without doing anything.

A 24-year-old confessed that he has been working as a black market exchanger for the past seven years. He said that he started off as a seller of city tours, but for the past two years he has been making huge profits as an arbolito. He further added that on each block there are over 30 arbolitos, which translates to about 500 arbolitos on a single street. However, it is strongly believed that these numbers are yet to reduce soon. He says that in about three to four months there will be a remarkable decrease on the streets. The arbolitos are currently suffering from the economic punch, but they are continuing with their black market business for as long as they can. For them, this means that they can go on with their businesses as long as no new law enforcement has been put in place.

Many are saying that they have been told anything concerning their black market business as illegal. Though, they have been once pulled by Argentina’s Federal Administration of Public Income. They normally don’t take anything serious as they demand identification and take some information and leave.

Pato, who is a middle-aged owner of a newspaper kiosk selling on Florida Street, also said that he just fell into the black market business because getting into it was very simple.

Is it possible to never use cheques?

TransferWise founders clearly indicated that they have never used cheques before. Kristo Käärmann and Taavet Hinrikus said that they have never written a single cheque before the internet age. “I can’t recall ever using a cheque,” says Käärmann, who is 35 years old. He further says that “For nine years that I have been in London, I have received several chequebooks during accounts opening. I wasn’t aware what to do with the chequebooks since we hardly used them in Estonia.”

Fellow Estonian Hinrikus and Käärmann, co-founders of TransferWise’ electronic foreign exchange system, have similar experiences. Hinrikus say that “The banks didn’t provide any chequebook, and I’m glad that I never touched one.”

The two were shocked to find that in their mission of preparing the launch of their foreign exchange system in the US at the beginning of this year, cheques remain operational and actively used in the US.

“Americans use cheques a lot,” says Käärmann. “The US financial system uses cheques on a weekly or monthly basis. Americans use banks differently from us. Apart from working hard to meet licensing requirements, there is a need to adjust our product to the American market. ”

This is one of the escalating pains of TransferWire that began as an easy technique of Hinrikus and Käärmann of avoiding foreign exchange bank rates when they arrived in London for work in 2007.

They exchanged between £2,000-£3,000 cash a month. They decided to bank the money in each other’s bank accounts so that they can calculate the exchange rates of British banks. Some other friends joined them and in two years together they had saved banking fee of approximately £10,000-£20,000, which gave them the idea of launching the TransferWire peer-to-peer currency exchange as an online platform in early 2011.

Currently, the business is operating in the same way. It runs some bank accounts all over the world, collects money in one currency from customers and gives counterparties in other currency, pays each country from its accounts.

According to Käärmann, the model has progressed but hasn’t changed. He says, “When we began it was just a simple idea that used euros and pounds only. Occasionally it took some days to make transfers a success. Nowadays, we are using 400 different currencies, and the transfers are very fast. Also, we are the only agent that can transfer money from the UK to France in 17 seconds or less. We have set records on speed concerning international transfers.”

Category: Money Exchange Software