Month: September 2021

US tax return and a laptop
ArticlesFinanceRegulationTax

If You Freelance By the Hour, Should You Receive a Pay Stub?

US tax return and a laptop

As a freelancer, you are responsible for all the duties of your profession. But, you are not provided with benefits. When you freelance by the hour, it’s important to keep track of your time spent on various projects. You can use an online time tracker or download an app to help you see how much time is spent on each project.

Keep track of all this information so that you have it for tax purposes and invoices at the end of the year. If you have questions about whether or not you should receive a pay stub, read on to learn more about what they are and their importance.

 

1) Pay stubs help keep financial records tidier for everyone

If you have a client pay you a set hourly rate for a specific project, then a pay stub is something you can generate to help organize and track financial transactions. You’ll still deal in invoices, but pay stubs are a good place to keep track of hours you spend on specific projects.

Pay stubs are one of the easiest forms of documentation you can create for freelance work. They usually take about five minutes to create using an online paystub generator.

 

2) Pay stubs give you a place to categorize hours worked and help you reconcile your hourly compensation to your weekly cash flow

When you get paid for a project, you’ll have to come up with some way to track and reconcile the time you spent on a particular project with the money you received. You can think of an invoice as an itemized list of what you’re being paid for, but a pay stub can be easier to track and reconcile your hours spent on different projects.

Simply put, an important benefit of pay stubs is that they make it easy to reconcile the hours you worked and your hourly compensation.

 

3) It’s easier to establish proof of income and apply for credit loans

One problem freelancers have is showing proof of income when they want to apply for credit loans. In many cases, companies won’t consider your PayPal balance alone as proof of income. Pay stubs are one of the easiest ways to prove that you are being regularly paid and that your income level is reliable and consistent.

When you generate a pay stub, you can also include details such as the date, amount, time worked, and more. This will help you demonstrate that you’ve worked for a client and that the payment you received was for work that you did.

 

4) It’s an easy way to understand how you are going to bill clients, if you invoice a project separately from hourly rates for the same client

There are several different ways freelancers can bill for their work. Hourly rates are the most common, but many also choose to bill “per item” or “per project”.

If you generate pay stubs for a particular project or one of your clients’ projects, you can always break your hourly rate down into an itemized bill for clients who need more details, and you can easily split an hourly rate into an itemized bill for each client.

 

5) If you are paid on a percentage basis, it’s often more intuitive to receive a pay stub with the hours worked designated for that percentage

If you receive a client or project’s payment in a flat fee or per hour amount, it can be a challenge to calculate how much you worked. On the other hand, when you’re receiving payment for a percentage of the work that you’ve done, it’s much more intuitive to know how many hours you’ve worked and be able to divide that number by a particular percentage.

For example, if you work a certain amount of hours per week on a project, you’ll likely receive a bill based on an hourly rate, which makes it a lot easier to calculate how much you worked on a specific project. It’s a good idea to send clients a pay stub with the hours worked designated to a specific percentage.

 

6) Pay stubs help establish how much you are earning for each client, and therefore, why it makes sense for you to set up direct deposit

By utilizing your hourly compensation, you can know exactly how much you are being paid per hour for each client, and that can allow you to charge clients the appropriate hourly rates for their projects. If your client pays you per hour, you’ll know exactly how much they are paying you to perform each task. This is an important way to ensure you’re billing your clients appropriately.

Mortgage
ArticlesFinance

How to Boost Your Mortgage Borrowing Power

Mortgage

Home prices have been rising and will unfortunately keep rising for the foreseeable future. With this in mind it’s possible you might want – or need – a bigger mortgage. If you’re thinking about it, there are ways you can convince the bank that you deserve more borrowing power. Take a look at these strategies to get a bigger mortgage.

 

1. Show more income

Proof of more income can land you a bigger loan, but that doesn’t mean you need to storm into your boss’s office demanding a raise or get a higher paying job. If you can, sure it can help, but it’s not necessary if you can’t. There are other ways to show addition to your salary or wages with other sources of reliable income.

Show proof of interest or dividends from investments, income from rental properties, alimony or child support, social security income, and money earned from a part-time job or side business. The latter comes with the stipulation that you have to have earned from this job or business for over the last two years.

 

2. Pay off other debt

A lender will look at your debt-to-income (DTI) ratio when you apply for a mortgage. This is the percentage of your monthly income you are dedicating to your minimum monthly debt payments. A GTI ratio of less than 36 per cent is generally considered ideal but some lenders are comfortable with going higher.

Paying off credit card debt or an installment loan can make a big difference in this figure. It’s a quick and easy way to increase how much you qualify for.

You don’t have to pay it all off in one fell swoop. You can reduce it with a balance-transfer card or refinancing an auto loan to lower your payment. You can also consolidate your debt into an installment loan.

 

3. Raise your credit score

A lower interest rate and therefore a slightly larger loan can be obtained with a higher credit score, but only to a certain extent.

You can raise your credit score a number of ways. Check your credit reports, stay on top of payments, and avoid applying for new accounts too often, can all help you in raising your credit score. Take advantage of self-reporting apps like Experian Boost and UltraFICO and add accounts with positive payment history, boosting your score.

 

4. Put at least 20 per cent down

You can get a bigger loan if you don’t have to pay for private mortgage insurance (PMI). So, if you’re applying for a home loan like a Hong Leong Finance home loan and your down payment is at least 20 per cent of the house’s price, you won’t need to pay for PMI which protects the lender if you stop paying your loan.

Without the 20 per cent down payment, PMI becomes part of your monthly costs and can decrease the size of the loan you’re eligible for.

If you have the cash available after paying your 20 per cent, you can pay your lender a little more upfront to lower the rate of your interest.

 

5. Add a co-borrower

A co-borrower, especially one with strong credit and a steady income, can go a long way to convincing a lender that you deserve a larger loan. You and your co-borrower’s income coupled will increase the total income the lender can use to qualify you for a loan.

Co-borrowers can be spouses, domestic partners, friends, or relatives. But it isn’t just a name on a piece of paper. It’s for if people in both parties want their name on a property and agree to share the responsibilities of paying back the loan.

 

6. Build cash reserves

Having additional assets in the bank, or elsewhere, will help you qualify for a bigger loan, even if you don’t necessarily need cash reserves to qualify for a mortgage. If you have been putting away funds, you can prove you will be able to handle unexpected expenses and continue to make your mortgage payments. Without this, a lender would be concerned that one emergency could cause you to fall behind and will be less comfortable to offer you more.

 

7. Shop around

Keep an eye on comparison websites and visit various banks to get multiple rate quotes and loan offers. Comparison shopping will pay off over the course of a loan and if you get multiple preapprovals, you will get various offers and chances are they will have different amounts, allowing you to choose a lender that will offer the largest preapproved loan.

Plus, you can use your lower offers as leverage with a lender that preapproved you for a smaller amount. It’s possible they may reconsider and increase the amount they can offer you, allowing you to get the biggest mortgage at the lowest price.

Whisky
ArticlesCommoditiesMarkets

Success Never Tasted So Sweet – Expand Your MIND and Your ASSETS

Whisky

Scotch whisky is a symbol of British craftsmanship and tradition, of durability and reliability. And though it hasn’t been around for ever, it has been recognised throughout history. Its documented story begins in 1494, and tax records of the day show that a friar acquired eight bolls – about 2,500lbs – of malted barley, “wherewith to make aqua vitae”.

Although distillation processes may have changed over time, the value of this commodity has been driven by demand and maturation. As global appreciation of whisky has flourished, people are gradually discovering that limited edition and maturing casks from the most globally renowned distilleries could bring in top returns for those willing to hold their investment.

 

Why Whisky and Why Now?

The global landscape of investments has changed dramatically in recent years, with the general public now having a greater ability to take trading in to their own hands and invest and trade in a range of commodities through online platforms and investment advisors. Technology has led the way in a virtual environment to allow people to discover new and interesting markets which have previously not been explored. This being said, 2020 has also demonstrated the global volatility of stock markets and poor returns on extremely low interest rates, driving them to discover ways to diversify their asset portfolios.

A way of mitigating the risk of investments is to purchase luxury commodities which appreciate in price over the years. It has become increasingly common for people to invest in classic cars, coins, watches and artwork whilst other commodities have not been considered as viable investment opportunities. However, it is now becoming more apparent than ever that assets which have previously been considered as merely a consumer goods, have great potential for long term investors. One such luxury commodity is whisky, which has previously been washed away for our own satisfaction, is now showing great potential as an investment asset. Additionally, whisky is a tax-free asset which other traditional financial assets fail to offer investors.

Firstly, like fine wine, demand outstrips supply. Whisky that is collectible is also in demand for consumers, so a substantial proportion of any limited edition bottling will swiftly become much more limited as much of it is consumed by dedicated whisky lovers. Whisky is bottled after a period of maturation in oak barrels. Legally, this is a minimum of 3 years, but in practice, most whiskies are matured for a minimum of 8 years in order for them to develop their character.

Distilleries will usually have a ‘house style’ represented by a mass-produced bottling of a relatively young malt (such as Glenmorangie’s popular 10 year old). But they will also have older whiskies maturing at the distillery, and they can also bottle older whiskies such as a 15 or 21 year old. They might also bottle the product of a particular cask of vintage whisky, or they might offer different expressions of the whisky such as a ‘port wood finish’ or ‘sherry wood finish’ which means that in addition to being aged in traditional Bourbon barrels, the whisky has been ‘finished’ with a period of additional ageing in a port or sherry barrel which can impart different flavours. These different expressions of the whisky and older malts are the ones that are of interest to investors – production is limited, they are highly prized by collectors and consumers alike. Whiskies from some distilleries are much more collectible than others, so it is important to do due diligence on what will be desirable in the marketplace in a few years’ time when you seek to sell your whiskies on.

As with any investment, it is extremely important to make sure you’re in the best hands and have access to the best platforms in order for your investment to flourish. It is therefore imperative that investors have access to well-known distilleries which already have a reputation for investable whisky. This includes famous Scottish whiskies such as Macallan, Dalmore and Springbank, all of which Elite Wine& Whisky has strong relationships with. The collectability and rarity of whiskies is extremely important when considering investing in whisky and hence choosing the right distillery and age of cask or bottle is important when investing.

 

Whisky Market in 2020

In the last year, there was an extraordinary increase of between 15-20% on rare whisky bottle values, ensuring that it outperformed the established alternative asset investments such as watches, art and cars. In the last couple of years, we have witnessed some incredible whisky sales, including the following: An individual bottle of Macallan 1926 broke records at auction, selling for £1.5 million. In 2018, over £40.7m of rare whisky was sold at auction houses in the UK alone. A cask of Macallan distilled in 1989 sold for $572,000 last year – a record price for a maturing cask of whisky.

The Whisky Cask Index, a study generated by Cask 88, Braeburn Whisky and WhiskyStats.net, has shown steady growth across the previous year, as well as the rate at which casks appreciate annually being on the rise. This appreciating rate can be attributed to the positive impact of both the maturity of the whisky, as well as a response to the increasing demand as whisky supply is sold in to a more diverse range of global markets.

 

Comparison with Other Investments

Comparisons are made between the whisky cask market and other luxury commodities; however there are many features of whisky which make it unique. It is therefore challenging to analyse the market without considering variable factors, such as the characteristics of the cask that make it one of a kind. The complexity is also enhanced by the fact that, unlike a piece of art, or a collectible bottle of already-bottled whisky, the value of casks is not only dependent on demand, but also the maturation of the cask. Therefore a cask purchased this year will effectively become a new product as the years pass.

The Whisky Cask Index demonstrates the projected values of a sample of twenty casks from a variation of distilleries across the globe with varying age profiles. It is worth noting that in spite of the global pandemic which impacted the economy during early 2020, the Whisky Cask Index has remained optimistic, and even shown growth. In this data analysis not a single distillery index showed negative returns over the past 5 years, which is able to confirm that the market is relatively robust to negative impacts on the global economy.

 

Top 10 Distilleries

Overall Annual Capital Growth in this study across all distilleries and regions as of June 2020 demonstrated a 13% increase in value. This has further been broken down by distillery in order to understand the highest achieving distilleries by capital growth. The top 10 distilleries by capital growth are as follows; Laphroaig, Bunnahabhain, Staoisha, Macallan, Highland Park, Caol ILA, Springbank, Benriach, Bowmore and Jura.

It is extremely positive that no single Scottish distillery demonstrated a negative index in capital growth. Projections ranged from a predicted annual capital growth of 5.13% for a small Scottish distillery, Ardmore, to larger scale popular distilleries such as Laphroaig and Macallan, which both show projected returns approaching 20% per annum.

The top distillery by predicted annual growth is Laphroaig, in which demand is continually increasing past supply. The following two distilleries in the league table are both located in Islay, with both Bunnahabhain and Staoisha showcasing the popularity of this region. In terms of distillery territories, it is worth noting that whisky produced on Scottish islands dominate the top ten in the capital growth league table with only Macallan, Springbank and BenRiach representing mainland distilleries in this comparative list.

 

2021 Trends

As the whisky market grows and expands into new and established markets, it has been predicted that demand will therefore align with this growth and therefore will require supply to also increase. With increased worldwide demand of whisky, the value of whisky in casks will only increase, in particular more aged whisky, along with the value of whisky produced in 2020 and 2021 during the global pandemic due to the closures of distilleries which meant that there was reduced supply. It is therefore no surprise that name brand whiskies distilled in 2020 or 2021 will see an acceleration in growth due to the lack of availability over this time frame and increased demand making it highly investible whisky.

Recent data collated this year has been reflective of the trends which have been witnessed in the whisky market over the past few years, with extremely reassuring outcomes. This is particularly noticeable in the fact that the aforementioned whisky index did not record any negative returns throughout the period of the study. The projected annual capital growth across the distilleries is expected to continue in to 2021.

If growth continues at a comparable rate, the data suggests that investments made in to casks from one of the top ten distilleries, which Elite Wine & Whisky has access to, could see their investment double in value over the next 5 years. In times of great uncertainty, these findings provide great prospects for future days ahead.

 

How to invest in whisky

Whether or not you’re a passionate whisky drinker, taking the plunge in to whisky investment is extremely simple with the help of a financial expert who can educate investors in their investment. Once you have all the tools to make a well informed choice, the returns can be just as fruitful as the drinking.

Pension
ArticlesFundsPensions

Pension Awareness Day: Expert Advice for Tradespeople On How to Prepare for Retirement

Pension
  • One in eight (13%) older tradespeople (55-64s) have no financial plan for retirement 

 

Preparing for retirement can be challenging, and it can be difficult to know where to start. In fact, recent research by IronmongeryDirect found that one in eight (13%) tradespeople approaching retirement age (55-64s) don’t have any financial preparations for retirement. 

So, what do you need to know about saving for retirement? 

IronmongeryDirect has partnered with Fabian Taylor, senior associate and chartered financial planner in Nelsons’ wealth management team, and George Stainton, senior wealth manager at Hoxton Capital Management, to reveal helpful tips for tradespeople on how to prepare for retirement.

 

1. It’s never too late to start

While it’s recommended to begin planning for retirement as soon as possible, IronmongeryDirect’s research found that more than one in ten (13%) tradespeople approaching retirement age don’t have a financial plan in place. Thankfully, it’s never too late to make a start.

Fabian said: “Contributions to a pension attract tax relief from the Government. So, for every £80 you contribute, tax relief of £20 is added, making the total contribution £100. 

“As a general rule of thumb, you should try to save half the age at which you started as a percentage of your salary. For example, if you start saving at age 20, then you should contribute ten percent, but if you start at age 30, you should aim to save 15%.”

 

2. Saving early makes things easier 

While it’s true that you can start saving at any point during your career, it’s sensible to begin putting aside money for retirement as early as possible.

Many young people have the advantage of being able to use workplace pension schemes, but for those who opt out, are ineligible, or are planning on saving additional funds, starting early has major benefits.

George said: “If younger people are not contributing to a pension scheme, then they should make sure they have some sort of structured savings in place. Getting into the habit of saving for retirement earlier in your career will make life much more comfortable as you get closer to retirement. Let us look at a simple calculation to prove this.

“If someone needs to have a retirement pot of £500,000 at the age of 55, they will need to save £441 per month if they start at the age of 25 and see a 7% return on their investment each year. If they start saving at 35, this figure increases to £1,016 per month and dramatically increases to £2,783 per month if they start at 45 years old.”

 

3. Take advantage of workplace schemes

For tradespeople who work on an employed basis, they should look to enrol in their workplace pension scheme, if they have not already.

This means that they will be saving throughout their career, with additional top-ups from their employer, and while tradies should still aim to set up a private pension, a workplace scheme provides a safety net in the meantime. 

Fabian said: “If you are 22-years-old or older, earning over £10,000 and employed by a company, you will be automatically enrolled into your company’s workplace scheme. Through this, a minimum of 8% of your earnings, split between yourself and your employer, between £6,240 and £50,000, will be invested into your pension. If it is affordable, you should consider increasing contributions. If you opt out of this workplace pension, you are missing out on money from your employer.”

George said: “Thankfully, with the help of auto-enrolment, younger people are better equipped than ever to start saving for their retirement early. As the majority of the young working population will be contributing to some kind of workplace pension, they are able to benefit from the effect of long-term saving and compounded growth.”

 

4. Remember to plan ahead and save if you’re self-employed

Those working on a self-employed basis, unfortunately, do not have the same auto-enrolment to a workplace pension scheme that employed people do, so therefore it’s important that you make your own preparations and plan ahead for your retirement.

Fabian said: “Draw up a budget to see what you can afford to contribute each month, and do some research into the best place for you to put it that allows for investment growth and tax relief. Even if it is a small amount, every little helps.”

“Assuming a growth rate of five percent, if you were to contribute £50 per month to a pension at age 25, the pension could be worth £76,301 by age 65. However, if you don’t start saving until age 35, the pension could be worth £41,612 by age 65. The longer you wait to save in a pension, the more you may have to pay in later in life to save enough to meet your needs in retirement.”

Regardless of your age, it’s always best to prepare for retirement in advance. By ensuring that you’re making the most of workplace pensions where available, as well as saving privately, you can place yourself in the best position to enjoy retirement in comfort.

For more information and advice, visit: https://www.ironmongerydirect.co.uk/blog/tradey-retirements 

Fraud
ArticlesFinance

£32 Million of Fraud Stopped By Finance Industry and Police In First Half of 2021

Fraud
  • Banking Protocol scheme alerts local police to suspected scams.
  • Over 4,700 emergency calls were made between January and June 2021, protecting customers from losing an average of £6,672 each to criminals.
  • Use of the scheme has led to 934 arrests since its launch in 2016.


Branch staff at banks, building societies and Post Offices worked with the police to stop £32 million of fraud through the Banking Protocol rapid scam response in the first half of this year, according to the latest figures from UK Finance. This is up 65 per cent compared to the same period last year and brings the total amount of fraud prevented to £174 million since the scheme was introduced in 2016. 

The Banking Protocol is a UK-wide scheme, launched by UK Finance, National Trading Standards and local police forces. Branch staff are trained to spot the warning signs that suggest a customer may be falling victim to a scam, before alerting their local police force to intervene and investigate. 

The latest figures reveal that branch staff invoked the Banking Protocol 4,782 times between January and June 2021, saving potential victims an average of £6,672 each. Real life case studies from the first half of the year are included at the bottom of this release. Ultimately the scheme led to the arrest of over 90 suspected criminals, bringing the total number of arrests to 934 since the protocol began. 

It is often used to prevent impersonation scams, in which criminals imitate police or bank staff and convince people to visit their bank and withdraw or transfer large sums of money. It is also used to prevent romance fraud, in which fraudsters use fake online dating profiles to trick victims into transferring money, and to catch rogue traders who demand cash for unnecessary work on properties.  

Customers assisted by the scheme are offered ongoing support to help prevent them from falling victim to scams in the future, including referrals to social services, expert fraud prevention advice and additional checks on future transactions.  

Katy Worobec, Managing Director of Economic Crime, UK Finance, commented:   

“Fraud has a devastating impact on victims so partnerships like the Banking Protocol are not only crucial in helping vulnerable people, but it also stops stolen money from going on to fund other illicit activities including drug smuggling, human-trafficking and terrorism.  

“Criminals have continued to capitalise on the pandemic to commit fraud, callously targeting victims through impersonation, romance, courier and rogue trader scams. Branch staff and the police are working on the frontline to protect people from fraud and these figures highlight the importance of their work in stopping these cruel scams and bringing the criminals to justice.  

“It’s important that people always follow the advice of the Take Five to Stop Fraud campaign, and remember that a bank or the police will never ask you to transfer funds to another account or to withdraw cash to hand over to them for safe-keeping.” 

To build on the success of the scheme, banks and building societies are continuing to work with local police forces on expanding the process to cover attempted bank transfers made by customers through telephone and online banking. So far, 36 out of 45 police forces across the UK are signed up to the enhanced scheme. Staff working in call centres and in online banking teams notify the police when attempted bank transfers are being made which they believe may be the result of a scam.  

Temporary Commander Clinton Blackburn, from the City of London Police, said: 

“Criminals have continued to use the pandemic to prey on people’s fear and anxieties in order to steal their money, which is evident through the increase in how much the Banking Protocol has prevented being lost to heartless fraudsters so far this year. 

“The Banking Protocol continues to be one of the most vital ways of protecting vulnerable victims and preventing criminals from taking advantage of them, as banks are often the first point of contact when someone is about to fall victim to fraud. It’s also essential the public remain vigilant and follow the Take Five advice before parting with any money or personal details.” 

UK Finance is urging customers to follow the advice of the Take Five to Stop Fraud campaign, and remember a bank or the police will never ask you to transfer funds to another account or to withdraw cash to hand over to them for safe-keeping.  

Case studies 

Romance scam 

A woman tried to send an online payment of £2500 to the USA to a friend she had previously worked with in the UK. When the payment was blocked, she visited her local bank branch. She said she had been exchanging messages with this friend on a social media platform and that they had asked for the money to pay their hospital fees. Staff invoked the Banking Protocol, and the local police attended the branch. No money was lost to this scam. 

 

Courier scam 

A woman in her 80s received a telephone call from a male claiming to be from her bank. The male claimed there was an issue with the victim’s account and in order to help her with this he needed her to withdraw money (£2000) from her account. The victim was told to attend the bank to do so and call back when home for further instructions.  

The victim attended the branch and staff confirmed to the victim that this man had not been in contact with them, and it was in fact a scam. The staff refused the withdrawal and invoked the Banking Protocol, alerting local police. Officers attended and offered fraud advice to the victim. The bank also put measures in place to further safeguard the victim from any future frauds.   

 

Investment scam 

A man in his 90s visited his local bank branch as an international payment he had attempted to make online had been stopped. He had been contacted by a company who wanted to sell shares that he held in America, saying he could get a return of £60,000 but had to send $7000 dollars which he would get back. Bank branch staff invoked the Banking Protocol and the police visited him at home. No money was lost and the police are investigating this company further. 

 

Rogue trader scam 

A woman in her 80s had builders explaining that they had been working on her neighbour’s roof and noticed that her roof also needed repairing. The victim offered to show the builders her property and they told the victim it was an urgent issue which needed to be fixed.  

The builders quoted the work (£1500) and told the victim that they needed to take the payment in cash only. The victim explained that she would need to attend the bank to withdraw this.  

At her local bank, the victim explained to bank staff what the money was for which made staff concerned it was a scam. Bank staff invoked the Banking Protocol, alerting the local police force and refused the transaction.  

Officers attended and were able to offer the victim advice and ensured no suspects were still on the scene. Officers were also able to enquire with neighbours and ensure they were supporting the victim in future. A fraud caseworker has offered her ongoing support. 

Closeup of finger pushing a button on a computer keyboard that says
Articles

How to Stand Out in a Future of Seamless Payments

Closeup of finger pushing a button on a computer keyboard that says

 

When customers are shopping online or in-store, they may not pay attention to the simple process of paying for their purchases. But subconsciously, it could spell out the difference between a sale and a missed opportunity for a business. Nothing stings a merchant quite like shopping cart abandonment.

For an ecommerce business, seamless payments are vital. According to one study, 18% of US online shoppers have ditched their cart in the last three months due to long and complicated checkout processes. So how do we get this 18% back? How do we make them valuable (and paying) customers? Quite simply: up your seamless payments game.

Now is the time to improve seamless payments for your ecommerce business. Only by doing this can you guarantee your success and survival in an increasingly competitive online market space. So, let’s check out how you can improve your checkout.

 

Ways to pay

How do your customers pay when shopping on your ecommerce store? As of January 2019, 82% of shoppers in America used credit cards or debit cards to complete their online transactions. Meanwhile, only 11% of online shoppers in the U.S. would use e-wallets such as Apple Pay or Google Wallet. However, as fintech continues to innovate, we can expect the growth of digital payments to continue.

How can businesses offer a better user experience and create an improved seamless payment process then? The answer is choice. Giving customers the ability to choose will allow them to pick the way they want to pay. As e-wallets become more present in the online marketplace and more integrated with the devices we use to shop, it’s essential to offer a viable alternative to card payments and money transfer platforms. Digging out a purse, locating a credit card between IDs and loyalty cards, and finding the CSV number can be an arduous task. Just like that, it’s become a barrier that prevents a seamless transaction. Ultimately, this could be the difference between a sale or a cart abandonment.

Instead, the likes of Apple Pay and Google Wallet offer a quick and secure payment, using face scans or fingerprint checks to identify the payer. In an instant, you’ve got yourself a sale. So why does your ecommerce store not cater to the 11% of shoppers that use this payment option?

 

Seamless security

People want to know that their money is safe when they shop with you. Plus, as a business owner, you want to know that your customers are genuine. According to ecommerce protection platform Signifyd, 61% of all CNP chargebacks are payment fraud-related. Even then, your business could also be open to other avenues of fraudster abuse.

How can an ecommerce business create an improved seamless payment process while protecting the business?

It begins by understanding your customer. Patterned behavior and identity marks are recognized and can be collated as data. Is the delivery address of the order the same as usual? Has this customer made similar purchases before? And do they have a history of chargebacks? These are all questions that an ecommerce platform could ask and solve during the checkout process—without having to do any lengthy checks. In fact, Signifyd says that 98% of all online purchases today have been made by customers that their platform has seen before. A connected marketplace helps businesses to be more secure.

By using ecommerce protection platforms, your business can combine its seamless payment strategy with its fraud protection strategy. This makes it easier for your genuine customers to buy from you but more difficult for fraudsters to take advantage of you.

 

Getting ahead of the trend

While technology continues to make seamless payments easier, it’s important to remember how customer-centricity will be affected. While fintech is making transactions quicker and more secure, it is also allowing many people to gain access to financing options that had once been closed to them. This includes the development of Buy Now Pay Later (BNPL) platforms, where customers can delay or stagger payments for their purchases. These small, no-interest loans could create opportunities for fraudsters to abuse a convenient service.

As digital payment options have become so ingrained in our lives, it’s surprising to remember that services such as Apple Pay have only been available in 2014. Their existence is infantile compared to card payments. More payment options are likely to reveal themselves and creating a marketplace that accepts a variety of these options is essential. Ultimately, understanding consumers and their buying behavior is key to blocking fraudsters before they attempt to abuse your business.

Seamless payments aren’t just the future of online transactions. It’s happening right now. As the online market grows, your business must not get left behind. Start thinking about how easily you would like to shop at your store, and then think about how you could improve your processes. From frictionless checkouts, user experience, and fraud prevention, your growth strategy should center around a future of seamless payments.

Person using financial tech (FinTech) on their phone
ArticlesFinance

How Customers’ Attitudes to Fintech Are Shifting

Person using financial tech (FinTech) on their phone

 

It’s amazing to think how far we’ve come in terms of financial technology in a few short years. Only in 2018 did debit cards overtake cash as the most popular form of payment. Since then, the number of digital transactions, payment methods, and online sales have exploded.

According to a 2019 survey, while credit and debit card payments were used by 82% of people in the Americas, other digital payment methods are showing popularity. Sixty-six per cent use the likes of PayPal and Alipay. Meanwhile, 11% use e-wallets such as Apple Pay and Google Wallet. As our transactions venture further into the world of digitization, fintech innovation growth is accelerating among businesses.

Did you know that 96% of global consumers are aware of at least one fintech platform? It’s clear that customer attitudes toward financial technology are changing – and fintech is quickly catching up to more traditional payment methods. So, let’s take a look at how our behavior is shifting, how fast fintech is growing, and what we think about it.

 

A first time for everything

The global pandemic has changed many things in our lives, and according to a survey of American adults, we can see how perceptions of fintech have changed in the past year. The survey revealed that 37% of people ordered groceries online or through an app for the first time during the pandemic. Equally, 37% of people said they were likely to continue ordering their groceries online. The pandemic has not only changed what we buy, but also how we buy products online.

It’s important to understand that, while financial technology has been useful during the pandemic, it’s not going anywhere anytime soon. Fintech is here to stay. 73% of Americans say that fintech is the “new normal” for payments and managing money. The reasons for this are clear: 57% of people said fintech helps them save time, 42% said it saved them money, and 37% believe that fintech reduces the stress around money management.

But how has this increasing confidence in fintech evolved? And what will guarantee financial security and the technology’s viability in the future?

 

Safe and secure

After reasonable fees, security was named as the top feature that Americans expect from their financial institutions. But is there concern that fintech will not be able to ensure the same levels of privacy and security that traditional banking and payments currently hold? Innovation shouldn’t come at the expense of security, after all.

While fintech continues to innovate, online and digital fraud are becoming more sophisticated. For ecommerce businesses, this is represented in increased chargebacks and return fraud, which take advantage of digital and automated services. For consumers, identity theft and stolen personal information mean that fintech can appear as a risky alternative to traditional banking and shopping. In fact, in a survey of financial decision-makers, 27% of respondents said that safety and security was the top threat to fintech innovation. This was also the top concern, beating other threats to fintech such as regulation and technology itself. So, how is this being tackled?

One fintech business, Signifyd, believes that driving innovation in commerce protection is as important as increasing the capabilities of financial technology.

“Increasingly the future of commerce is online. As we continue to innovate to protect our merchant customers from payment fraud and consumer abuse we remain focused on protecting the commerce experience both for the merchants in Signifyd’s Commerce Network and for their customers,” said Stefan Nandzik, Signifyd senior vice president of brand experience. “This is best achieved through data and the technology that makes it actionable.  Today, 98% per cent of all online purchases are made by consumers that have been seen before on Signifyd’s network. That allows us to provide unmatched identity-centric fraud protection.”

 

Growing trust for trusted users

It’s clear that fintech services are becoming increasingly popular and more trusted. Since the start of the pandemic, every section of financial technology has increased its user share. Banking excels in the scene, with 23% of Americans using technology to access their money. This is followed by payment services, investment, and lending. Interestingly, payment technology services have the largest percentage of fintech users with more than one account. This shows how technology is allowing consumers to vary their payment options.

While only 16% of Americans use fintech for payments, 19% have more than one account with payment providers. This suggests that among fintech users, trust is growing. Those who find utility in the technology are more likely to continue expanding their use of platforms, applications, and online services to manage their money and payments.

 

Are you a fintech enthusiast? Or have you been using fintech all this time without realizing it? As financial technology continues to innovate and its use increases, it’s important that we shift the attitudes of customers to a positive view of this essential service. Fintech is only getting safer, more secure, more convenient, and useful for our everyday transactions and banking needs.

Woman in a cafe paying contactless through mobile on a card machine
ArticlesBanking

The Evolution of Frictionless Payments

Woman in a cafe paying contactless through mobile on a card machine

 

Frictionless payments are essential for e-commerce platforms to reduce the barriers between online shopping and completed checkouts. The buying process needs to be easier for both the customer and the seller, as an enjoyable user experience causes higher conversion rates and fewer abandoned shopping carts.

Effective frictionless payments are essential for both large and growing businesses, where the checkout process eliminates waiting times, creates a faster checkout experience, and reduces the barriers and steps towards a completed sale. Ultimately, frictionless payments should feel like a natural part of the customer experience.

Understanding how frictionless payments have developed and reviewing the history of buying processes allows us to recognize how businesses will be able to continue their growth in the digital age. Here, we explore the evolution of frictionless payments and predict how businesses will drive higher conversion rates and create better customer experiences in the future.

 

1950: Debit and credit cards

While the credit card was developed in the mid-twentieth century, it was only in 1973 when the system for using card payments was computerized. This frictionless payment reduced transaction times to just one minute and gave rise to the era of electronic consumer payments. Computerized payments would eventually allow for future online transactions to take shape, where e-commerce businesses could contact banks to finalize payments with ease. In 1994, Stanford Federal Credit Union was the first financial institution to offer online internet banking, leading the way for online transactions to begin in 1995.

 

1999: 1-Click

Bookseller turned global conglomerate Amazon patented an online transaction process called ‘1-Click’ in 1999. This allowed customers to buy products with just a click of a button. No items are added to a shopping cart, meaning that customers can buy a product in a flash. Voila: no shopping cart abandonment. Personal details and your bank account details are stored online, safely assuming that users are content with the same delivery address and bank account being used for every transaction.

The patent has since expired, meaning a flurry of businesses can now utilize this frictionless payment method. Given the global average rate for shopping cart abandonment is 69.8 per cent, skipping over the shopping cart means that e-commerce businesses can maximize their conversion rates and generate more sales through this simple process.

 

2003: Chip, pin, and tap

Going back to credit and debit cards, a more recent development contributed to the evolution of frictionless payments. In 2003, the introduction of Chip and PIN in the UK allowed cards to store data in a small chip on the face of a card. This data could then be accessed using a four-digit PIN, authorizing the payment. The American conversion to chip and PIN was announced in 2012 and completed in 2015.

Not only did this process increase efficiencies for both customers and businesses by automatically authorizing payments rather than signing a receipt, but it also curated a secure form of payment. Only those with access to the card and the secret PIN could access the account. This demonstrates how frictionless transactions can be made easier, but importantly, more secure at the checkout.

Contactless payments were introduced in 2007, further making the checkout process even easier. Today, one in five card payments is now contactless.

 

2011: The mobile revolution

As mobile phones became smaller, they became as much an essential accessory like a wallet or purse. They’re with us all the time. It’s unsurprising, therefore, that these handheld devices have become ingrained in the checkout culture. Leading mobile manufacturers, Google, Apple, Android, and Samsung all launched digital wallets between 2011 and 2015, allowing users to complete transactions in place of their debit or credit cards.

These transactions had the added security benefit of authorizing payments through a fingerprint or facial scan. Furthermore, these digital wallets could be used in-store or online, storing your personal data to automatically fill in those arduous forms with personal details, delivery addresses, and billing addresses. This helps to further speed up online sales and transactions.

 

Now and the future…

As online transactions become easier and quicker on the customer side, some obstacles for businesses to achieve a completely frictionless payment remain. Businesses must ensure that every transaction is genuine, blocking attempts of fraud and abuse.

As the popularity of digital wallets and one-click buying continues to develop, innovative ways to maximize sales without being affected by fraud have been developed. Commerce protection platforms, such as Signifyd, drive automated decisions on the best transactions, approving more good orders and recovering lost revenue from chargebacks. This streamlines the customer experience, limiting the need for authentication forms and processes. Overall, commerce protection platforms feel like a natural part of the checkout process, going unnoticed by customers, and they can increase conversion rates by four to six per cent on average.

 

Frictionless payments will continue to improve, creating better customer experiences and improving business performance. As more sales move online, and while transaction speeds and efficiencies increase, it’s important to tackle attempts of fraud and abuse. At every stage of the evolution of frictionless payment, new processes are helping to make every transaction safer and more worthwhile for customers and businesses.

Forex
ArticlesMarkets

Why the Best Lessons in Forex Trading Tend to be Self-taught

Forex

Learning to trade forex can be a daunting prospect for new investors and there is often an inclination to buy into expensive training courses to prepare for the world of finance. While some sort of education will stand you in good stead for your forex journey, there is no substitute for real life, self-taught experiences.

To get started, you need to select a forex broker that offers an MT5 Trading Platform with a range of features that will make trading easier for you. This is crucial if you are planning to rely on self-teaching as you will need high-quality tools, charts, technical indicators and order types to enter and exit the market at the right time.

 

Getting to grips with leverage

Another factor to consider at this point is leverage. You will be able to trade “on margin” in forex, which will make your initial deposit go further. Brokers generally offer higher leverage for forex, enabling you to trade large positions and potentially increase your returns. However, it can also magnify losses, so you should wield this carefully when you start out.

Using leverage effectively is something that you can only learn when you start trading with real money. While training accounts can help you to learn these concepts, it is much more difficult to put them into practice in a “live” environment. Learning the right lessons about leverage as you start out will make you a better investor in the long term.

 

Understanding the psychological pressure

Many lessons that are self-taught are also related to the emotional side of trading forex. Again, in practice, it is easier to swallow losses and not get carried away with a hot streak of gains, but when you start trading properly, working on your “soft” skills will help you buy and sell currencies in the right frame of mind. Correct decision making can be linked to your character and disposition as much as having the best information.

This also extends to the psychological pressure of making trades on a daily basis. This is something that you will only realize when you begin trading. Even the best courses cannot prepare you for what it is really like to make fast, hard decisions that could affect your finances. That’s why it is also important to implement some degree of bankroll management, so your positions don’t consume all of your money. Experienced traders typically follow a 1%-2% rule for investing.

 

Finding the right information

Promises about quick profits from “trading gurus” and experts can be enticing for new traders but rarely is there ever a get rich strategy that works quickly. Rather than spending money on vendors that over-exaggerate quick return on investments, you should instead focus on finding good information that you can make use of to complete judicious trades.

Partnering with the right broker is vital as you will need access to interactive charts, technical indicators and analysis charts to identify currencies for investment. By practicing and putting these features into use, you can learn more from them and prepare to trade forex with steady, long-term returns in mind.

 

Learning for free

It is important to remember that it is relatively easy for investors to trade forex. All you need to do is open an account and make a minimum deposit. The low barrier to entry means anyone with a small investment can learn to trade currencies for “free” without having to spend money on an education. Arguably, this is a great place to start as you will have a blank canvas to work from.

It is crucial that you read free articles, tutorials and guides to educate yourself about key forex concepts to build a specific strategy or style of trading that can eventually deliver consistent profits. Without this hands-on, self-taught process, you will struggle to make sense of the fast-paced forex environment.

 

Closing trades

Finally, traders are focused on making profits, but central to that is knowing when to close a trade and exit the market. This is something that only experience can teach. Even traders who have trained for months or even years can fall into a trap of waiting for the market to turn back in their favor. Financial markets are inherently volatile and irrational, so you need to act decisively when both entering and exiting trades. All of these self-taught lessons are invaluable and will give you a better chance of succeeding when trading forex.

Issues

Q3 2021

Welcome to the 2021 Q3 edition of Wealth & Finance International Magazine. As always, we endeavour to provide fund managers, institutional and private investors with the very latest industry news in the traditional and alternative investment spheres.

Having eagerly awaited the summer months and the hope of at least some levels of freedom after long periods of government restrictions, it seems almost mad that already we now face September and with it, the end of summer. Yet as we return to the grindstone, there remains a sense of enthusiasm, as businesses across the globe get stuck into developing the ideas and innovations born from the resilience and adaptability called for by global lockdowns.

In this quarter’s issue of W&F, we look at a selection of companies that have not only thrived during the pandemic, but have created solutions with lasting and positive impacts on the investment and financial services sectors. From delt.ai’s credit card and financial management product that has opened doors for small businesses across Mexico to Capital Connect’s automated payment solutions that have become the most valued asset to South African businesses, we are celebrating the best and brightest pioneers of the industry.

Thus, we hope you enjoy exploring the success stories of businesses across the world as they take the lead in this exciting industry. We wish you all the best for the months ahead and look forward to welcoming you back for the Q4 issue of Wealth & Finance International Magazine.

Recession
ArticlesFinanceMarkets

The Next Great Depression — Is Your Business Ready?

Recession

By Wisteria

We are living through extremely uncertain times regarding both public safety and the global economy. Even before the Covid-19 pandemic swept the world, we were teetering on the brink of a recession. Economists such as David Blanchflower compared the pre-Covid financial landscape to that of pre-banking crash 2008. If nothing else, this is a major red flag which should give you the motivation you need to take every possible measure to protect your business.

 

Is an international recession on the horizon?

At the very beginning of the year, the UN warned that we could be facing a global recession in 2021. That was before taking the impact of Covid-19 into account. Factors including trade wars, currency fluctuations, and Brexit were all amounting to an uncertain global economy and the Unctad report, “global growth will fall from 3% in 2018 to 2.3% this year — its weakest since the 1.7% contraction in 2009”.

Add the impact of Covid-19 to the already precarious situation, and we are now expecting to be hit with a recession rivalling even the magnitude of the Great Depression (and far worse than the 2008 financial crash). As of June this year, the global growth projection for 2020 has fallen to -4.9 per cent (1.9 per cent below the forecast made by the World Economic Outlook (WEO) in April). In addition, the road to recovery doesn’t look like it will be as fast as the WEO initially predicted, and they are now only forecasting a 5.4 per cent global growth for 2021, 6.5 per cent lower than the predictions before Covid-19. Low income households are expected to feel a particular acute financial impact, and global poverty, which has been significantly reduced since the 1990s, is likely to reach another crisis point.

Because of strain on the global economy, we are expected to encounter rising levels of debt in both developing and advanced countries, as well as a “global downturn that could increase unemployment and inequality”, as stated by Kristalina Georgieva of the International Monetary Fund. Redundancies and a decline in job vacancies on an international basis are expected to follow such a crash, with unemployment rates increasing at an alarming rate.

 

How hard will the UK be hit?

The OECD’s (Organisation for Economic Co-operation and Development) most recent reports do not look promising. Experts have predicted that the UK will likely be the worst hit country in Europe and the economy is forecasted to contract by 11.5 per cent after the first wave of the pandemic. If we end up seeing a second of Covid-19 later in the year, this contraction is predicted to increase to 14 per cent.

One of the major reasons why the UK is likely to feel such a stark economic impact is our country’s reliance on the service industry for our economic growth, a sector which has been particularly damaged by the repercussions of Covid-19.

In addition to the economic factors surrounding Covid-19, the US trade war with China has caused a larger drag on global growth than anticipated, and the UK will be on the receiving end of the economic repercussions. What’s more, the looming prospect of Brexit poses different threats to the UK’s economy. At best, the uncertainty caused by both Brexit and the Covid-19 pandemic has created a hesitant consumer base in the UK. Customers are spending less and are more cautious of businesses than ever. It is a difficult time to maintain customer loyalty, as would-be consumers are tightening their purses in the fear of a looming financial disaster.

 

Learn how to protect your business

Times may be challenging, but if you think ahead, you’ll be able to safeguard your business against a recession. Businesses that prepare for every eventuality are the ones that not only survive but thrive in the face of adversity. Leaving it too late to implement a recession strategy could be your undoing, so get ahead of the game and prepare for a period of great financial difficulty. Here are some key strategies that will help your business face economic uncertainty:

  • Focus on existing customers — as we have discussed, consumers aren’t spending as much due to lack of trust and growing apprehension. Because of this, it is essential that you focus on your existing customer base during testing financial times. This will increase brand loyalty and grow customer confidence. Offer them benefits and reasons to stay true to your brand.

  • Put some adjacency and extension strategies in motion — a recession is not the time to start looking into completely new avenues of profit. However, you can’t let your services become stagnant. Adjacency strategy is the optimum solution to this — find an area adjacent to your core product or services to expand into. Extension strategy is similar: take your current service a little further and offer new and exciting opportunities or products to existing customers. Ensure that you have a flexed forecast so that the business is fully prepared for all possible outcomes of this new strategy.

  • Forge some powerful alliances — mergers, acquisitions, and alliances are all key strategies during a recession. Alliances offer a great way to expand your business without investing in anything completely new during times of uncertainty.

  • Don’t be afraid to outsource — outsourcing key elements of your business can save you time, money, and financial anxiety during a recession. Outsourcing your accounts department may allow you create scale and flexibility within your organisation.

  • Reduce inventory costs — look to see if your business has the leeway to reduce costs without sacrificing the quality of the services or products it provides. This will help to take the pressure off your finances.

  • Don’t sacrifice your marketing budget — often, brands make cuts to their marketing budgets in response to financial anxiety. However, this will spell disaster for your company. There is no time more crucial to maintain your marketing efforts and show customers that your brand is tackling the recession and winning.

  • Tighten up on your corporate governance — companies that see a downturn in performance are more likely to survive if they have good corporate governance embedded into their culture. Part of this is ensuring that the company has had a financial audit. If in doubt, contact an accountancy from that specialises in audits, tax advice, and small business VAT.

No one knows quite what to expect over the coming months and years, but now is the time to start safeguarding your business against an imminent recession. The road ahead does not look easy, but if you put certain measures in place and react in a timely manner, there’s still time to recession-proof your business and come out on top.