Tag Archives: paypal

Goodbye ING

Last month, Scotiabank purchased the on line bank ING Direct Canada for $3.1 billion. This un-bank as they called themselves started in 1997 and grew to 1.8 million customers through great savings rates, which were often double that of the big banks, competitive mortgage rates, and a lot of innovation.

Around the world our six Canadian no-service big banks are knows as being rather conservative. In some ways that was a blessing in the banking meltdown, but they’re also turtles in any innovation and modernization. Recently we talked about the technology that lets you just scan a cheque on your smart phone and have it instantly show up in your account. No need to head to the bank, just scan and done. Well, two of the banks had never heard of this when I contacted them. I guess they don’t watch TV as almost every US bank now has this in place already.

ING was instrumental in getting all North American banks to focus on on-line banking, customer service and the likes, or they still wouldn’t have much of it. Two of the biggest changes caused by ING’s success are just rolling out: Paypal, which everyone under age 30 is familiar with, is teaming up with Discover to become a bank. Plus, Amex and Wal Mart are in a joint partnership and will offer banking to the 40 million Americans who do not have any bank accounts. They’ll be able to get a pre-paid debit card, actual cheques, and be able to do all their transactions at any cashier in any Wal Mart. No fees, no overdrafts, no minimum balances – and it all started with ING leading the way.

Now our Canadian banks can slow down again, because one of them took out ING. Scotia won’t be continuing their operation and ING will disappear. Hopefully, if you were one of their customers, you’ll switch over to President’s Choice. Unfortunately it’s one of the only on-line banks left, even though they’re owned by CIBC.

Competition is great for us consumers. Unfortunately, another one bites the dust, and we’re all going to be worse off as a result. Scotia is betting they can retain most of these 1.8 million customers. But with all the banks, you have to remember that your loyalty will never ever be rewarded. The longer you deal with them, the more you’ll be taken for granted.

But the last thing we do is to shop around for a better rate, much lower service charges, or a place where it doesn’t take an appointment two days from now to see someone.

Technology Is Really Changing The World of Credit & Finance

We know technology is taking over more and more of our lives, and the area of credit, banking and finance is no exception.So I wanted to share two big inventions that you have to know will be pretty commonly used within the next year or two:

The first one is called person to person banking, or mobile to mobile. Starting in the spring, if you owe your buddy 20 bucks, or need to cover half of a restaurant tab, you’ll no longer need to find an ATM, or your checkbook. You just need to get your friend’s e-mail address or telephone number, and you can send the money directly from your cell phone in a few seconds.

It’s already rolled out in Europe and Asia, and will easily be embraced by tech people and the 20-something age group first, because they have grown up with the internet and on-line shopping. But the rest of us will follow, because over half the population now does some kind of on-line banking.

If you remember, the first big one is and was Paypal. An on-line company that allowed you to pay for your E-bay purchases from your credit card or bank account. That company was so successful, E-bay purchased them. It was also something the banks had no interest in at the time, thinking there’d really be no demand for on-line payment services. They were dead wrong, since Paypal now has 78 million active accounts.

But this time, when it comes to mobile person-to-person, the banks are at the front of the line to implement this technology. They’re thinking maybe 25 cents a transaction as a fee. Now, that might not sound like much, but like all their other fees and service charges, it’ll add up to a few bucks a person, and billions in total revenue.

PNC Financial and the credit union of Boeing are at the front of the line to roll out this new technology. MasterCard is working with a different provider, and Visa is already testing the program through US Bancorp.

Here’s how it works: You simply sign up for the service with your bank or another provider. Enter someone’s e-mail address or phone number to send the money, and it’ll be debited right from your account, just like any other bill payment you do on-line. The receiver just chooses to have the money deposited to a checking account or a credit card as a payment. And the great news is that cell phones are way more secure than any computer system. They are way harder to hack into, making this new person-to-person banking system safer than any of your current on-line payments.

The second one is very cool, as well. How would you like to do almost all of your banking in your housecoat, right from your computer? Within the next year, you’ll be able to make any bank deposit right from your computer at home without ever leaving your home, business, or office.

You just need to scan the cheques you’re depositing, and e-mail that scan to your bank. The financial institution processes the deposit with all those transit and account numbers on the bottom of the cheque. They’ve got the numbers on a scan, so they don’t need the original! You can literally throw the cheque away after it’s received. It really is that simple with just a computer and a scanner. Plus, going one step further, one bank in the U.S. has already started taking deposits done electronically with your smart phone.

A little less lofty is that one in five ATM’s in the U.S., not in Canada yet, scans your deposits the same way. You’re still leaving the house, but your ATM receipt is the actual scan copy of what you deposited as a receipt. Fidelity Investments ATMs were among the first, but it’s getting pretty common already. I’ve done it a number of times in the States and it’s really slick to have that copy as a receipt. What’s great is that this saves the banks a fortune, too. The payback on the software is only 14 months. But first the Canadian no-service banks need to get the software sooner, rather than later, please!

Back to School Does Not Mean Suspending Financial Reality

Back to school is a $50 billion industry this time of the year. But, by all accounts, it was a bust, in spite of some really great Staples commercials. And retailers are pretty freaked out as back to school is their best indicator of the Christmas season.

For one group of students, back to school didn’t end two weeks ago, and that’s University and College students. First, I know a bunch of students are still shopping for textbooks, and will again, for the next term. Here are nine great sites for comparison shopping on line. But first, start with your professor and ask if you can purchase a prior edition, which you’ll find used, if you try:

Cheapestbookprice.com Allbookstores.com Abebooks.com A1books.com Bookfinder.com Valorebooks.com Biblio.com and Textbook411.com.

There are also a number of U.K. sites for used science textbooks priced so cheap you’ll still be ahead, even after shipping. Finally, if you’re game to rent your textbooks, there is a new site that has saved students over $41 million as of July this year. It’s at chegg.com

While this may be your first few weeks of school, or the final year, do remember that the average student graduates with a degree, but also about $4,00 in credit card debt, and more than $20,000 of student loan debt. THAT will assure being broke for a lot of years to come, even after you start to earn a paycheque. And let’s be honest, it’s not the textbooks or course fees. More often than not, it’s the pizza and beer, the need to own a car, clothes shopping, or trips to the mall. But ask yourself some of these questions. And these questions aren’t just for students, but probably the rest of us that are broke or living paycheque to paycheque:

• Are you mature enough to delay pleasure?
• Are you prepared to be a winner with money?
• How long after graduation do you want to be broke?
• Are you prepared to say the four hardest words out loud: I can’t afford it?
• Do you believe that getting that free T shirt to sign up for a credit card is a better deal for you or the credit card company who now has you trapped and helping with that going broke project they have in mind for you?
• Exactly how do your marks go up when you think you need a plasma TV, or a 23 inch flat screen monitor?
• Are you prepared to live like a student for a few years, so later in life you can live like 95% of the world can’t afford to?
• If you need a car, is this an actual need, or a desire? If it’s legit, are you prepared to drive a “stay out of debt” student car for $2,000 max?

The great news is that you’re an adult now. So choose to act like it, financially. You’re smart enough to go to University! You ought to be smart enough to know that credit and getting into debt is not your friend.

Do you even believe that student loans count as debt? If not, you’re like most students. But you’re also kidding yourself, and will be financially doomed for at least a decade after graduation. No, you won’t think about that today. But you’ll remember my words in about five years or so, I assure you. 70% of the population lives paycheque to paycheque. This year, and for a few more years, you’ll be in a temporary state of broke. That’s part of being a student! Just don’t join the 70% of the world AFTER graduation when every dollar you finally earn goes to rent, food, student loans, and the hangover of credit card debt for stuff from years ago that you can’t even remember charging.

And one more thing for parents:

If you have a son or daughter across the province, or the country, who needs access to some money in a hurry, what do you do? Paypal has just developed a student account.
One of their VPs has six kids and got stuck trying to figure out how to send one of them some money.

The cost is 2%, so when you’re sending $100, $98 shows up at the other end. It’s in Beta testing, but you can get it right now if you already have a PayPal account. If not, you may have to wait. It’s great to have competition from PayPal. Right now, the banks and Western Union have a virtual choke hold on this area, and charge a lot of fees.

Another way is to set up a bank account where you and your son or daughter has a debit card. It can be your son or daughter’s account, but with your card and secret PIN number you can make a deposit into the account and they can access it at the other end.

Just make sure the account is set up without holds on the money, or they’ll be waiting two to six days to get access to it! What’s NOT a solution is to give you kid a supplemental credit card linked to your card. It’s too risky and too tempting. Don’t do it!