Credit Card, PayPal or Cash App? How You Pay Matters | Kanebridge News
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Credit Card, PayPal or Cash App? How You Pay Matters

A guide to weighing security, convenience and benefits of each payment option

By IMANI MOISE
Wed, Aug 9, 2023 8:39amGrey Clock 4 min

Buyers have more ways to pay for things than ever before: Apple Pay, Venmo, credit cards and dozens of other options. What you choose might matter as much as the purchase itself.

Each of the different payment methods provides various conveniences, perks and protections from fraud. Credit cards have long been the default option of choice. But higher interest rates have now raised the cost of carrying a credit-card balance.

Money-transfer apps such as Venmo and Zelle processed nearly $900 billion last year, and the Consumer Financial Protection Bureau expects that number to reach $1.6 trillion by 2027.

These apps and services provide easy instant payments, usually for free. The downside is that these options offer fewer protections from scams and unfulfilled orders.

“The U.S. consumer is very driven by convenience. They may not be directly driven by security,” said James Anderson, managing director at Paze, a bank-owned digital wallet.

Payment apps are among the fastest-growing sources of fraud reports and losses, according to Federal Trade Commission data. Overall fraud losses have increased more than fivefold to $1.2 trillion since 2019. Losses tied to payment apps jumped from $5 million to $47 million over the same period, according to the FTC data.

As new payment options gain acceptance, consumers should try to educate themselves how to use these methods safely, said Seth Ruden, director of global advisory at BioCatch, a fraud-detection software company.

“The channel itself is not the villain. The bad actors are the scammers, the social engineers and exploit artists,” he said.

Here’s how to weigh the security, convenience and benefits of each payment option:

Credit and debit cards

When you swipe or tap your card or authorise a card transaction online, the merchant’s bank communicates with your bank through a card network such as Mastercard or Visa to ask permission to withdraw a certain amount. Your bank then decides whether to approve the transaction based on your available funds or credit and the likelihood the transaction is fraudulent. If approved, your bank puts a hold on the funds until they are sent to the merchant’s account, usually within a business day.

Credit cards can be the most rewarding way to pay online. Card issuers use the revenue from transaction fees to fund perks for customers such as cash-back deals, travel points, access to airport lounges and fraud protection.

A credit card can be expensive if you don’t pay your balance in full, and higher interest rates have now raised the cost of carrying a credit-card balance. Paying off a $1,000 balance in 12 months at the current average annual percentage rate of 22.16% means $103 in interest, compared with $77 roughly a year ago when the average was 16.65%, according to estimates from the Federal Reserve.

Debit cards don’t offer the same rewards as credit cards since their issuers make less money from each transaction. They do come with similar fraud and payment protections as credit cards.

Federal regulations require issuers to reimburse customers for unauthorised transactions of more than $50 and allow customers to dispute charges within 30 days. Many credit cards also provide purchase protection, meaning you can ask for reimbursements directly from your issuer if something you buy is lost, damaged or inconsistent with what was advertised.

Few people make the most of their credit-card benefits, payments experts said. After finding most people don’t bother to read the fine print when they sign up for a new card, Mastercard is now notifying customers of benefits in real-time.

“If I have to read a big booklet or call a number to understand what my benefits are, I’m not doing it,” said Chiro Aikat, executive vice president of U.S. market development at Mastercard.

Digital wallets

Digital wallets such as PayPal or Apple Pay are among the safest and easiest ways to pay online. Checking out with a wallet is typically faster than paying with a credit card directly since one doesn’t have to re-enter billing information and shipping address.

All of the protections and benefits associated with the underlying card are still in effect for wallet transactions, so it is best to connect these wallets to a credit card directly to maximise your protection, said Corie Wagner, an analyst at Security.org, a safety-product review site.

If a digital wallet gives you the option to link a bank account directly, you should read the policy agreement to make sure you understand what is protected. For example, PayPal offers an extra level of purchase protection, but Apple Pay and Google Pay don’t.

Wallets also offer additional layers of security through encryption and biometric verification and many don’t share sensitive financial data such as your 16-card number with individual merchants. “Use as many authentication factors as possible” such as Face ID or personal identification numbers, Wagner said.

Peer-to-peer payment apps

Apps such as Venmo, Cash App and Zelle were designed to help people send money to friends and family, but they are now used in more settings. They move money more quickly than card payments because, instead of waiting on banks to approve the transaction, the payment is authorised once the sender hits submit. It is almost impossible to get money back once it has been sent.

These payment methods aren’t regulated as heavily as cards, so users might still be on the hook for unauthorised payments if a swindler gets control of their accounts.

“Use it to pay people you know, and trust,” said Meghan Fintland, a Zelle spokeswoman. “They’re not meant to have the credit-card security.”

Bank transfers

Businesses are increasingly offering ways to pay with your bank account directly since Automated Clearing House, or ACH, transfers are much cheaper to process than cards. This option should only be considered in exchange for a discount, payments executives said.

Consumers should be selective in sharing their bank information with merchants since wire transfers don’t have the same protection guarantees as cards.

If a business requests a direct bank transfer instead of a card payment, choosing a slower option over the newer instant methods such as Zelle might be best. ACH transfers typically take a few days to settle, giving you a few more days to try to stop the transaction before the money leaves your account.

“The slower it is, the greater likelihood is that you’ll be able to get recourse,” Ruden, at BioCatch, said.



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AACCI’s Strategic Vision for Enhancing Australia-Arab Trade Relations

The Australian Arab Chamber of Commerce & Industry (AACCI) is fostering robust trade relations between Australia and Arab countries.

Mon, May 20, 2024 5 min

In an era where global trade and international relationships are more crucial than ever, the Australia Arab Chamber of Commerce & Industry (AACCI) serves as a bridge, for cooperation and growth between Australia and the Arab nations. Led by its Chairman, Mr. Mohamed Hage, the AACCI has taken on projects aimed at strengthening relationships and fostering development across borders.

This exclusive interview explores the initiatives implemented by the AACCI to expand its presence and influence in the region including the significant establishment of a new operational hub in Dubai. We also delve into how the Chamber embraces education through training and research, its participation in major international exhibitions, and its active support for both large corporations and small businesses.

Looking towards tomorrow, Mr. Mohamed shares his vision for broadening AACCI’s reach emphasizing the importance of the on-ground operations and cultural understanding in building business connections.

-Could you elaborate on the Australia Arab Chamber of Commerce & Industry, including its objectives and main areas of focus?

The Australia Arab Chamber of Commerce & Industry (AACCI) plays a fundamental role, in promoting business partnerships and trade between Australia and the 22 Arab countries. As a member of the Union of Arab Chambers affiliated with the Arab League, AACCI focuses on strengthening trade and investment ties, across these countries.

To nurture these connections effectively AACCI has outlined four objectives: facilitating trade and investment activities, certifying documents, educating stakeholders, and offering marketing assistance.

Our initiatives are designed not only to empower trade and investment endeavors but to also ensure engagement with specific sectors that drive these activities. With an understanding of the characteristics, strengths and preferences of each country, AACCI prides itself on its specialized knowledge customized to suit the distinct business environments of these nations.

– As the AACCI approaches its 50th anniversary, what have been some of the key milestones and achievements?

I believe one of AACCI’s accomplishments is the opportunities it has opened up for numerous Australian companies to access markets, in the region. Moreover, the strong bilateral trade relationship that has developed between Australia and the 22 Arab nations over the five decades has led to trade transactions amounting to billions of dollars.

This extensive trade covers industries such as food and beverages, luxury hotels and many more services. Each successive generation, within AACCI has built upon the foundation laid by its predecessors enriching their knowledge base and expanding their range of services.

– How does the AACCI leverage its diverse leadership team to enhance trade and investment opportunities between Australia and the Arab region?

Since taking on the role of chairman, my main focus has been on expanding our presence in the region. This led to the idea of opening an office in Dubai, which symbolizes our dedication to deepening our engagement in that area. We have successfully secured the license to open our first office in Dubai after 50 years, which will serve as a gateway to the GCC and North Africa.

I strongly believe that building two-way trade and investment ties requires more than a degree of business connectivity; it demands having local representatives present in each region. With trends emphasizing strategies the value of face-to-face engagements cannot be overstated.

Setting up offices in the region is essential for the Chamber to truly serve as a link and support system for business activities. Ultimately this expansion will bring benefits to our members and partners by providing them with access, to dynamic markets and diverse prospects.

– Can you discuss the significance of AACCI’s role in cultural and business exchanges between the two regions?

The importance of understanding cultures in our operations cannot be overstated. To address this, we have included a training platform within the Chamber to strengthen our cultural awareness initiatives. This new program offers our members access to modules on our website focusing on global business practices.

Furthermore, we have set up a Center of Excellence specifically dedicated to researching areas like food security and cultural awareness. These research endeavors are essential for promoting knowledge between the two regions.

By combining the resources of the Center of Excellence, our training resources, and the forthcoming local office in Dubai, we’re providing cultural awareness not only in the region but also in Australia. This approach ensures that our members are well equipped and knowledgeable boosting their effectiveness and involvement, in markets.

– What is the objective of your on-ground presence at conferences and events?

Participating in conferences and on ground events is very important for increasing awareness in industries like construction where knowledge of opportunities in the Arab world may not be widespread. When we see projects such as NEOM or notice the construction boom happening in the region it becomes important for organizations like the Chamber of Commerce to highlight these prospects. By taking part in large scale expos such as the Sydney Build Expo we position ourselves at the forefront of these advancements.

Our presence at these events enables interaction giving entrepreneurs a chance to visit our booth engage in discussions and learn more about the region in an approachable and personalized manner. This plays a role in simplifying the process and making opportunities concrete.

– With such a diverse membership base, how does AACCI tailor its services to meet the needs of both large corporations and small startups?

When it comes to discussing business it’s important to grasp how influence and vision come into play. Businesses looking to expand are often motivated by a desire to achieve something whether they are big companies or small enterprises. Small businesses typically aim to raise their brands profile while larger corporations seek recognition and market dominance.

Standing out in this area can be tough mainly because the key driving force is the passion to showcase the brand and products on a platform. This determination serves as a motivator for entrepreneurs.

At the Chamber we make a point of recognizing the needs of both big and small players by understanding each members individual situation. We ensure that every member is well informed about the opportunities and risks that come with expanding. For small businesses, this means being aware of the financial demands, while large businesses are advised on the necessity of both financial and emotional resilience.

– How does AACCI plan to expand or evolve its services in the coming years to further support its members?

The importance of having resources on the ground cannot be emphasized enough. Having local staff is key to establishing connections with the communities we serve. Without a presence in the area staying updated on events and activities becomes quite challenging.

This is why, as I’ve mentioned before, we have established an office in Dubai, staffed with personnel dedicated to supporting our members. This local office will help us effectively bridge the gap between Australia and the Arab world. And our members will benefit from insights and assistance from someone who truly knows the landscape.

In Australia we have equipped offices throughout the country staffed by individuals who play a significant role in our operations. This strong domestic network complements our efforts ensuring that we provide support to our members both locally and globally. This strategic approach is crucial, for nurturing business relationships and fostering continental understanding.

 

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