Retail Payments Risk Forum
Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.
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January 23, 2017
Mobile Banking and Payments Survey Results
In the fall of 2016, the Atlanta Fed and six other Federal Reserve Banks asked financial institutions (FI) in their districts to participate in a survey to determine the level and type of mobile financial services they were currently offering or planning to offer. The Atlanta Fed conducted a similar survey in the district in 2014.
Financial institutions completed 117 surveys; they represent FIs of all sizes and types operating in the district (see chart below). The response rate of 8 percent should provide financial institutions with good directional information when comparing their own mobile banking and payments strategy. You can find the full report here. The Federal Reserve Bank of Boston will be preparing a consolidated report for all seven districts later this year.
Key learnings from the responses to this survey include:
- Mobile banking has become a standard service of financial institutions, with 98 percent indicating they currently or plan to offer mobile banking.
- Competitive pressure and the retention of existing customers are the primary reasons for offering mobile banking.
- Consistent with the 2014 survey and numerous other mobile research reports, FIs cite security concerns by consumers as the greatest barrier to mobile banking adoption.
- FIs identify biometric methodologies as the security tool most likely to be used in their program.
- Over half (59 percent) currently or plan to support at least one mobile wallet. Their primary reason for offering the service was competitive pressure as mobile payments appear to be gaining traction among some consumers.
- Most of the survey respondents have a long-term outlook (three years or more) for mobile payments to reach a customer participation level of 50 percent.
Supplemental results breaking the data into the six asset-size segments will be made available in early February. If you have any questions about the survey results, please let us know.
By David Lott, a payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed
January 17, 2017
Payments people start biting their nails when they hear "share more with more." They have been conditioned to keep payments information from ever being shared. But that is in the context of protecting legitimate payments system users from losing money while a fraudulent party benefits. At 7,000 members, the Financial Services Information Sharing and Analysis Center (FS-ISAC) is currently the largest financial services trade association in the world. I attended their Fall Summit last October, a month fittingly designated National Cybersecurity Awareness Month, and heard plenty about sharing. The mission of FS-ISAC is always strength in sharing; this year's summit focused on expanding the trust.
Payments people are used to looking for fraud by way of chargebacks and returns, one payment-channel silo at a time. Shhh. Don't let ACH people share information with wire people, and vice versa—the risk department will let us know if there is an issue. Of course, payments fraud is an ever-increasing battle, and we must remain vigilant. However, who is prepared to recognize payment events that from a bird's-eye view may look legitimate but, when analyzed, point to a threat of mass destruction?
Recent distributed denial-of-service (DDoSs) attacks highlight the scale of network bandwidth that can be unleashed on connected systems. Payments are just that, a network of systems that connect every aspect of our economy. There are countless examples of services or goods not being rendered when payments aren't received. Liquidity failures do tend to cause a state of panic. Even attacking one specific sector such as payroll processing on the first of the month could lead to disaster. As my colleague pointed out in a July 2016 blog, cash is alive and well, but payments systems today rely totally on telecommunications, which rely on our power grid.
Admiral James Stavridis, the keynote speaker at the FS-ISAC Summit, echoed the importance of expanding trust, along with the need to increase the resiliency of the nation in the event of a cyber-incident. Stavridis provided many encouraging solutions, one being that it is time for a cyber-force branch of the military. The United States Air Force was formed as a separate branch of the military in September 1947 under the National Security Act of 1947 as aerial warfare advanced. Stavridis proposed that now is the time for us to consider that cyber-incidents could be used as weapons of mass destruction. He applauded the current combat against cybercrime, yet encouraged new thought on what could be in store and how quickly it could arrive.
How do payments people continue down the path of protecting individual players while simultaneously protecting the nation from a crippling cyber-incident? It could be just a matter of whom you invite to the table. As I saw with attendance at the FS-ISAC Summit, the cybersecurity conversation needs to include diverse skill sets. There has been a trend in moving information security departments away from their information technology partners and under the risk and compliance umbrella so they can remain unbiased when scrutinizing payment transaction red flags and other systems. Additionally, legal barriers are being reevaluated to ensure that law enforcement can access information, most notably by FinCEN expanding Suspicious Activity Report requirements to include cyber events.
And, more deeply about whom we are trusting at the table, are we actually expanding the information shared? Could we make correlations by looking at payment volumes together with cyber activity and reports of fraud?
There is a growing sense that payment security equates to cybersecurity and national security. With Stavridis and others promoting the movement for "expanding the trust," new ideas continue to emerge. Hopefully, the technologies and strategies that are made to wow us (for example, the internet-of-things, machine learning, and the distributed ledger) can also serve to unite and protect us.
By Jessica Washington, AAP, payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed
January 9, 2017
The Year in Review
As we move into 2017, the Take on Payments team would like to share its perspectives of major payment-related events and issues that took place in the United States in 2016, in no particular order of importance.
Cybersecurity Moves to Forefront—While cyber protection is certainly not new, the increased frequency and sophistication of cyber threats in 2016 accelerated the need for financial services enterprises, businesses, and governmental agencies to step up their external and internal defenses with more staff and better protection and detection tools. The federal government released a Cybersecurity National Action Plan and established the Federal Chief Information Security Office position to oversee governmental agencies' management of cybersecurity and protection of critical infrastructure.
Same-Day ACH—Last September, NACHA's three-phase rules change took effect, mandating initially a credit-only same-day ACH service. It is uncertain this early whether NACHA will meet its expectations of same-day ACH garnering 1 percent of total ACH payment volume by October 2017. Anecdotally, we are hearing that some payments processors have been slow in supporting the service. Further clarity on the significance of same-day service will become evident with the addition of debit items in phase two, which takes effect this September.
Faster Payments—Maybe we're the only ones who see it this way, but in this country, "faster payments" looks like the Wild West—at least if you remember to say, "Howdy, pardner!" Word counts won't let us name or fully describe all of the various wagon trains racing for a faster payments land grab, but it seemed to start in October 2015 when The Clearing House announced it was teaming with FIS to deliver a real-time payment system for the United States. By March 2016, Jack Henry and Associates Inc. had joined the effort. Meanwhile, Early Warning completed its acquisition of clearXchange and announced a real-time offering in February. By August, this solution had been added to Fiserv's offerings. With Mastercard and Visa hovering around their own solutions and also attaching to any number of others, it seems like everybody is trying to make sure they don't get left behind.
Prepaid Card Account Rules—When it comes to compliance, "prepaid card" is now a misnomer based on the release of the Consumer Financial Protection Bureau's 2016 final ruling. The rule is access-device-agnostic, so the same requirements are applied to stored funds on a card, fob, or mobile phone app, to name a few. Prepaid accounts that are transactional and ready to use at a variety of merchants or ATMS, or for person-to-person, are now covered by Reg. E-Lite, and possibly Reg. Z, when overdraft or credit features apply. In industry speak, the rule applies to payroll cards, government benefit cards, PayPal-like accounts, and general-purpose reloadable cards—but not to gift cards, health or flexible savings accounts, corporate reimbursement cards, or disaster-relief-type accounts, for example.
Mobile Payments Move at Evolutionary, Not Revolutionary, Pace—While the Apple, Google, and Samsung Pay wallets continued to move forward with increasing financial institution and merchant participation, consumer usage remained anemic. With the retailer consortium wallet venture MCX going into hibernation, a number of major retailers announced or introduced closed-loop mobile wallet programs hoping to emulate the success of retailers such as Starbucks and Dunkin' Brands. The magic formula of payments, loyalty, and couponing interwoven into a single application remains elusive.
EMV Migration—The migration to chip cards and terminals in the United States continued with chip cards now representing approximately 70 percent of credit/debit cards in the United States. Merchant adoption of chip-enabled terminals stands just below 40 percent of the market. The ATM liability shift for Mastercard payment cards took effect October 21, with only an estimated 30 percent of non-FI-owned ATMs being EMV operational. Recognizing some of the unique challenges to the gasoline retailers, the brands pushed back the liability shift timetable for automated fuel dispensers three years, to October 2020. Chip card migration has clearly reduced counterfeit card fraud, but card-not-present (CNP) fraud has ballooned. Data for 2015 from the 2016 Federal Reserve Payments Study show card fraud by channel in the United States at 54 percent for in person and 46 percent for remote (or CNP). This is in contrast to comparable fraud data in other countries further along in EMV implementation, where remote fraud accounts for the majority of card fraud.
Distributed Ledger—Although venture capital funding in blockchain and distributed ledger startups significantly decreased in 2016 from 2015, interest remains high. Rather than investing in startups, financial institutions and established technology companies, such as IBM, shifted their funding focus to developing internal solutions and their technology focus from consumer-facing use cases such as Bitcoin to back-end clearing and settlement solutions and the execution of smart contracts.
Same Song, Same Verse—Some things just don't seem to change from year to year. Notifications of data breaches of financial institutions, businesses, and governmental agencies appear to have been as numerous as in previous years. The Fed's Consumer Payment Choices study continued to show that cash remains the most frequent payment method, especially for transactions under 10 dollars.
All of us at the Retail Payments Risk Forum wish all our Take On Payments readers a prosperous 2017.
January 9, 2017 in ACH , ATM fraud , cards , chip-and-pin , cybercrime , debit cards , emerging payments , EMV , fraud , mobile banking , mobile payments , P2P , prepaid , regulations | Permalink | Comments ( 0)
December 22, 2016
Why U.S. Card Fraud Is Now Present and Accounted For
Last year, I wrote a post called "Why Is the U.S. Card-Present Fraud Breakout Not Present?" in which I discussed the lack of publicly available information on the distribution of U.S. card fraud by type. I'm happy to report that more detailed data on card fraud in the United States is now present and accounted for in the Initial Data Release (IDR) of the 2016 Federal Reserve Payments Study.
As is common in other countries, card fraud can be categorized as follows across person-present and remote payment channels:
- Counterfeit card: Fraud is perpetrated using an altered or cloned card.
- Lost or stolen card: Fraud is undertaken using a lost or stolen card.
- Card issued but not received: A newly issued card in transit to a card holder is intercepted and used to commit fraud.
- Fraudulent application: A new card is issued based on a fake identity or on someone else's identity.
- Other: "Other" fraud includes account takeover and other types of fraud not covered above.
- Fraudulent use of account number: Fraud is perpetrated without using a physical card.
An extract from the fraud section of the IDR shows breakouts for card fraud by type across five countries.
As reflected in the numbers, the United States continues to be by roughly an order of magnitude a continuing and persistent target for card counterfeiters using stolen card data compared to other countries that have adopted much earlier counterfeiting controls using EMV (chip) cards. Use of chips makes in-person card fraud more difficult, because of built-in technology to thwart the creation of counterfeit chip cards. As adoption of chips for cards and terminals improves in the United States, fraud using stolen card data is likely to shift from person-present to remote channels as has already occurred in other developed countries. My colleague, Doug King, discusses these issues in detail in an interview conducted last year.
Look for other Take On Payments posts that highlight additional key findings from the 2016 payments study.
By Steven Cordray, payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed
December 12, 2016
Making Sense of Dollars, Part II
The first of this two-part post took us back to the '60s and a BBC clip that assumed we'd be a cashless society by now, given it was the dawn of the digital age. A half-century later, we're hardly closer to being cashless, and those who predicted an end to cash have been replaced by those who argue that going cashless or to less cash is "for the best." This post recaps oft-cited reasons for abandoning cash, amending them with counterpoints. I trust market determinations more than I do the wisdom of the well-intended, and the free market seems to be in complete disagreement with those who assert we'd all be better off without cash.
- Cash is expensive as a cost of acceptance for merchants.
I've talked to many retailers—large and small—who prefer cash because they say it saves them money, especially when compared to credit cards. But what do they know? Many studies show that cash is neither universally nor unanimously the most expensive payment method. Indeed, there seems to be more evidence than not that cash is among the least expensive payment alternatives.
- Cash makes tax evasion pervasive.
First, tax evaders have options; cash is not their only tool. Second, tax evasion seems correlated to high taxes (see the National Bureau of Economic Research working papers 6903 and 8551; there are others). Reading further, I find tax evasion is less about opportunity (afforded by cash, for instance) and more about bad tax policy. A revolt was ignited and a great country was born amidst the perception that taxes were too high and unjust. Eliminating cash would not likely have stopped that rebellion, and it's unlikely to fix today's problem.
- Cash complicates monetary policy.
Cash can only complicate monetary policy when those making the policy want to use negative interest rates to achieve desired ends. To date, there is little to no evidence that this policy path is effective; certainly it's no panacea. That makes it premature if not fully misguided to decry cash. Even if the policy proves useful, eliminating bills may or may not make it more difficult for savers to hoard. I assert they'll find a way.
- Cash encourages crime because it's too effective (too liquid, too widely used, "too anonymous").
By that thinking, once cash is eliminated, we'll need to determine what to do about oxygen and water as there is overwhelming evidence that malefactors use these things to good effect as well. The point is, cash works well for the unjust but also for the just. It accounts for 40 percent of all transactions, as measured by the Boston Fed's survey of consumer payment choice. Here the anti-cash crowd backs off the cry of "cashless," running out a "less cash" compromise. Large notes, some say, are used far more often for illegal activities than not, and the proof seems to be TV shows, movies, and pop culture. Seriously. Don't we have to do better than that before dispensing with a primary bloodline for commerce? There is no denying that the untraceable nature of cash frustrates crime fighting; it also frustrates surveillance against the just. Those who value liberty are likely to continue to value the option to spend anonymously.
There is at least one official push to rid society of cash, and its sponsors include card networks, who would stand to benefit were cash to disappear. Anyway, legislating safety that overpromises and hides the harm it can do holds considerable risk.
By Julius Weyman, vice president, Retail Payments Risk Forum at the Atlanta Fed
December 5, 2016
Making Sense of Dollars, Part I
A 1969 short on the BBC's Tomorrow's World made bold predictions about where computers would take banking. If you haven't seen the clip, I encourage it. It's fascinating, especially if you bear in mind that at the time, computers were still more the stuff of science fiction than reality while banking was staid and stubbornly unchanging. In the barely four minute segment, a card was "dipped" (not to mention authorized with a PIN) and a check was shunned—presuming its disfavor in the face of auto-charging and other electronic payment options. The obsolescence of paper filing systems was projected and branch/conventional banking was guaranteed to diminish if not utterly fade away. Among all the prescient predictions, they tossed in this throwaway: "If cash is to become the first major casualty of the computer revolution,…" Oops.
Amid relentless predictions of its demise, folding money remains. Prognosticators have left off predicting cash's downfall since its resilience has repeatedly put to lie such ideas. Instead, folks have taken to advocating against it. Even there, anti-cash champions seem willing, for now, to settle for us just agreeing to "less cash" rather than forcing us to go "cashless" in a lurch. Listed below are the main arguments of anti-cash advocates:
- Paper-based transactions are inefficient, making cash expensive as a cost of acceptance for merchants. While I see this argument less often than the others below, it pops up enough to earn a place on the list.
- Cash makes tax evasion pervasive and simple. For businesses that are cash intensive, it's difficult to verify sales and income. In some of the articles I've read, tax evasion deserves its place among the most heinous of crimes. It's stealing, no arguing about that, but for this post's purpose, the main point is that cash is at the heart of tax evasion…or so I've heard.
- The latest evil that cash has foisted off on the unsuspecting is it complicates monetary policy. Cutting interest rates below zero is made difficult by the existence of cash because savers can withdraw and hold cash outside of the banking system. This hinders if not fully defeats the purpose of taking interest rates into negative territory.
- I've saved the biggest for last: cash enables and encourages crime like racketeering, drug and human trafficking, terrorism, to name the headliners. Paper money underpins the vilest criminal enterprises because, among other things, it defines liquidity, is almost universally accepted, and provides absolute anonymity.
So there it is. Case closed, yes? Well, let's not say that quite yet. If you're interested in the other side, you will have to wait until next week's post. I rarely see the counterpoints other than for them to be mentioned and dismissed. Critical thinkers may be interested in seeing both sides before deciding the fate of cash.
By Julius Weyman, vice president, Retail Payments Risk Forum at the Atlanta Fed
November 21, 2016
Are Mobile Phone Payments Secure?
A consistent and leading reason consumers give as to why they don't use their mobile phone to make payments is their concern about the phone's level of security. While many consumers don't believe that mobile payments are as safe as other payment methods, is that actually the case? For more than six years, the Federal Reserve Banks of Atlanta and Boston have been supporting the Mobile Payments Industry Workgroup (MPIW). The MPIW was created to facilitate the development of a vision for a mobile payments environment that will be effective, secure, and ubiquitous. This group has met frequently to address the issues of technology, standards, security, privacy, functionality, regulation, and adoption barriers. The various deliverables from past MPIW meetings focus on security and risk and can be found on the Federal Reserve Bank of Boston's website.
As this blog has noted numerous times over the last two years, the migration to chip cards for in-person POS payments will shift more fraud over to the card-not-present (CNP) market. With the introduction of numerous mobile wallets since 2014 that can be enabled on smartphones, the MPIW believed that an assessment should be made of the risk issues associated with commerce generated through the mobile phone—or m-commerce—whether through a browser or a specific wallet application. Over the last eight months, Fed representatives and mobile payment experts have been working on the development of a white paper, which was released on November 8. You can access the full report here.
The MPIW's report provides an assessment and the future position of mobile payments as a part of the overall e-commerce growth expected in the United States. It groups the various types of remote mobile payments into four use cases and dissects the transaction flow for each use case with a description of the potential risk attacks in each key function of the transaction. We believe the report provides the payments industry with a sound primer of mobile wallet transaction security issues. While there are attack points in the mobile phone channel just as there are in other payment channels, the mobile phone offers features that can make a mobile payment transaction much more secure than many people currently believe. The MPIW will continue to assess the mobile CNP payments environment and produce presentations and other materials intended to educate the industry and consumers.
You can find additional MPIW white papers and other publications on the MPIW web page.
By David Lott, a payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed
November 14, 2016
"Good, Better, Best" in Understanding Merchant Payments
The marketing mantra "Good, Better, Best" from Sears in selling different grades of merchandise at different price points might serve as a guide for segmenting quality levels of information needed in understanding merchant payments. While attending several merchant-focused conferences and trade shows this year, I began thinking about this mantra in relation to the dearth of even "good," rigorous information on the payments experience of the important retail trade sector of our economy. Payment information such as person-present and remote payments, successful and unsuccessful fraud attempts, use of technology, cost of acceptance, and other information by type of payment instrument is simply not widely available. In cases where some information exists, it isn't representative of the entire retail industry.
Currently, there is a wealth of information available on payments for the overall economy through the previous and pending release of the latest Federal Reserve's Triennial Payments Study, the first of which was compiled in 2000. But the focus of this study is the broader landscape, with individual sectors of the economy not examined in detail. Today, the Fed continues to collect and publish aggregate survey information from payments providers (including some private-label card issuance information from retail merchants) via the payments study and from consumers via surveys conducted by the Consumer Payment Research Center at the Federal Reserve Bank of Boston. However, there is no major representative survey of quantitative payments information about businesses, of which merchants are a critical part since so many payments are made by consumers for purchase of goods/services.
How important is the retail trade sector to the economy? Using figures from the U.S. Census Bureau, these charts show the 1.2 million businesses engaged in retail, accommodation, and food services. Collectively, the businesses employ 27 million people and produce annual sales of $5.4 trillion. More to the point, the lion's share of retail payment transactions are thought to be accepted via this sector of the economy, making it the sector to be impacted the most by payment economics and policy.
Many government entities, including the Reserve Bank of Australia, have surveyed merchants in their own countries. The Bank of Canada has a report due next year; the European Commission surveyed 10 European Union (EU) states; and the European Central Bank surveyed 13 EU states. Colleagues of mine at the Federal Reserve Bank of Kansas City offer a comprehensive review and compelling case for "Measuring the Costs of Retail Payment Methods" here in the United States.
Below are some of the benefits of conducting a merchant study in the United States. Doing so could
- Narrow the gap in tracking merchant payments and payment fraud information compared with other developed countries.
- Offer detailed breakouts of point-of-sale and remote payments that provide information on fraud and other losses prevented and actual losses incurred.
- Help identify efficiency-improving changes in retail payments and strengthen the understanding of payments end to end for a sector with high impact in payments.
- Contribute to social welfare analyses by providing more facts about merchant benefits, costs, and fraud risks associated with different payment methods.
Perhaps we should apply the mantra of retail and move from good or better to best. Perhaps we should aspire to doing the best reporting we can muster for this important sector of our economy. What are your views on the value of such an undertaking?
By Steven Cordray, payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed
November 7, 2016
The Downside of a Wide Paintbrush
Fall is the time of the year that I normally do my exterior home painting and touchup. During the summer, I noticed that my deck and stair metal support poles were a bit dull and had some rust spots, so that was to be my project. The poles have a 4-inch diameter, so I was in a bit of a quandary over the best width paintbrush to use—a 2-inch or a 4-inch. The 4-inch brush would provide faster coverage so my football-game-watching time wouldn't be compromised, but the 2-inch brush would give me greater control and reduce drips and splatters. I went with the expedient choice, and it turned out to be a mistake, as my coverage was uneven with plenty of drips and splatters.
I mention this story because I recently appeared at the National ATM Council's (NAC) annual conference. NAC is an industry trade organization representing nonfinancial-institution ATM owners/operators in the United States. I was asked to speak primarily about the Fed's research into the use of cash as well as the current chip card and terminal deployment status. After my presentation and in the subsequent days of the conference, I was approached by a number of owners/operators telling me that their banks had recently terminated their longstanding relationships; they were deemed to be "high risk" since they were in the currency business. Many were scrambling to establish new banking relationships and wondering why this was happening.
Being an old ATM guy, I was a bit surprised hearing about this action due to the built-in controls on ATM currency settlement and reconciliation that severely limit the ability for an ATM owner/operator to launder money through an ATM. It would be very easy for the bank to spot an imbalance if the money being replenished far exceeded the currency paid out by the ATM. There is still the concern, of course, regarding the initial load (deposit) to establish the account to ensure that those are legitimate funds, but that concern exists with the establishment of all banking relationships by any type of business.
Financial institutions certainly have the obligation to develop a risk management strategy and determine which types of business activities they deem acceptable versus those considered high risk. Supporting ATM operators with their currency needs could be considered a niche business with some unique requirements and may not be the best allocation of resources for all financial institutions. At the same time, bankers may not want to paint a business with the wide brush of "high risk" just because they deal with currency as a major part of their business operation. To do so may force many of these operators to shutter their units, which often are located in areas where there is not a wide choice of ATM locations.
By David Lott, a payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed
October 31, 2016
Of Piggy Banks and Bank Branches
Fall is my favorite time of the year. Football season cranks into high gear, pumpkins replace chocolate in my desserts, and excellent payment-related events take place with great published content. On the content front, this fall has not disappointed. I have recently read several excellent reports, including the FDIC's 2015 National Survey of Unbanked and Underbanked Households. Although the focus of the survey is on the unbanked and underbanked population, there are some interesting findings concerning banked households, including their methods used for accessing their accounts. After seeing these findings, I began pondering the question, why do I still visit a bank branch for my deposit account needs?
According to the FDIC survey, 75 percent of banked households use a bank teller to access their accounts. However, a teller is the primary or main access method for only 28 percent of banked households, suggesting that over 70 percent of households prefer to interact through a non-face-to-face channel. The other physical channel, the ATM, is the primary access method for only 21 percent of banked households. The FDIC found that online and mobile banking usage is lower than the physical channels; however, nearly 50 percent of banked households' primary method of access to their account is digital (online or mobile). So while a majority of banked households still visit a physical location to access their accounts, almost half of them prefer to access their account digitally.
As I think about my own banking practices, I visit physical banking locations less and less. I will drop in to make a check deposit, but only if I am running errands and a physical location just happens to fall on my route. Or sometimes my kids want a sucker and I know my local branch will come through. They have even provided my children with piggy banks during visits! I use mobile check deposit more often than not. I still visit ATMs, but those interactions are substantially fewer today thanks in large part to being able to obtain cash back via my debit card at a number of retailers.
So I will visit a branch for my deposit account needs if it is convenient for me while running errands or if my kids want candy or some other treat. And these two reasons aren't necessarily sustainable. I am running fewer errands as more of my shopping takes place in the digital world (and my phone is becoming more convenient for check depositing). And unfortunately, I am not getting any younger, which means my children are growing up, and as they do, suckers and piggy banks will more than likely not stir up as much excitement as they currently do.
As a traditionalist, my past thinking led me to believe that the demise of bank branches was overblown. However, my thinking has changed. The bank branch will not disappear overnight or completely in the long term, though indications are that the number of branches will decline. As I contemplate the results of the FDIC study coupled with observations from my own behavior, it becomes obvious to me that the physical importance from a deposit account perspective is being diminished in this digital age. I am not sure what the branch of the future will look like, but I feel confident in saying that tellers, and even ATMs, focusing on deposit accounts will not be primary reasons for consumers to visit. Why will you visit your local branch in the future?
By Douglas A. King, payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed
- The Social Benefits of Biometrics
- The Five-Star That Flops
- ACH: No Trace Left Behind
- Pssst…Have You Heard about PSD2?
- Mobile Banking and Payments Survey Results
- Expanding Cybersecurity
- The Year in Review
- Why U.S. Card Fraud Is Now Present and Accounted For
- Making Sense of Dollars, Part II
- Making Sense of Dollars, Part I
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- account takeovers
- ATM fraud
- bank supervision
- banks and banking
- card networks
- check fraud
- consumer fraud
- consumer protection
- cross-border wires
- data security
- debit cards
- emerging payments
- financial services
- identity theft
- law enforcement
- mobile banking
- mobile money transfer
- mobile network operator (MNO)
- mobile payments
- money laundering
- money services business (MSB)
- online banking fraud
- payments risk
- payments study
- payments systems
- phone fraud
- remotely created checks
- risk management
- Section 1073
- social networks
- third-party service provider
- trusted service manager
- Unfair and Deceptive Acts and Practices (UDAP)
- wire transfer fraud
- workplace fraud