Wednesday, July 7, 2010

Highest household debt since 1929

It was interesting to read the "The Morning After" article in the June 26, 2010, issue of the Economist, which talked about the recent bloating of personal debt levels.

According to the article, household debt approached 100% of GDP in 2007, a level only seen once before, back in 1929 during the onset of the Great Depression.

The article explains that America is not alone in embarking on this debt spree as Britain household debt rose from 105% of disposable income in 2000, to a whopping 160% in 2008.

And in Spain the ration rose from 69% to 130% over the same period.

You might be asking "what does this have to do with making online payments and the online payments industry?"

Over the past decade consumers have become tapped out on credit spending. In plain English it means people (in the US, UK and in many European countries) have spent far too much on their credit cards. They spent more than they could afford to and the hen has now come home to roost.

Many online payment services provide the convenience of using a credit card to facilitate online purchases.

On the surface, this seems like a convenience. But this convenience does come with a dark, underlying cost that many people might have overlooked.

The ability to pay with credit card results in impluse purchases behavior, and the ability to pay with credit card online (or offline) results in over spending, which in turn results in some people getting deeper and deeper in debt.

With CashSender, all payments are made with funds from your bank account. CashSender does not facilitate credit card payments for another good reason: The costs of credit related fraud and chargebacks would have to be passed on to website users by way of higher fees.

Our mantra is to offer the lowest fees possible, and if we were allowing credit card payments, we simply couldn't offer the rock bottom fees for which we are known.

A major shift is underway with consumers looking to save and economize as much as possible. The ability to make each dollar stretch a bit further is become a key factor when consumers compare goods and services.

At CashSender, we reaching to help online payers meet this objective in providing the lowest fees possible. And the removal of credit cards from our business model is one of the main driving forces that helps us help you.

Henry Tenby, founder

Friday, July 2, 2010

To Pin Or Not To Pin - That is The Online Security Banking Question

You might have noticed that logging in to your CashSender account is a bit more complicated than logging into a PayPal account.

The reason for the extra hurdles is that we’re more protective of your online security than our competitors, and our account security protocols closely resemble those used by most reputable major banks.

Other online payment services (including PayPal) don’t provide your account with security it well deserves. I shall explain.

First of all, you might have noticed that you don’t login to your CashSender account with your email address. Instead, we require all site members to select a unique and confidential user name, and the login process requires your unique user name along with your password.

Your unique CashSender user name is only known by you. None of your friends or customers know your user name, so it is extremely unlikely that your user name could be compromised and brute force tested by cyber criminals.

If you think about it, sites that require login with an email address are guilty of account security violation number one in the first degree. Why? Because everyone you do business with and communicate with online knows your email address. And email addresses are compromised every time someone’s pc gets hacked.

Once a cyber criminal has an email address, he can use brute force software along with your email address to try and muscle his way into your PayPal account, or any other online account that uses your email address for login.

A cyber criminal is already half way in to your online accounts once he has your email address. That's if you use online banking and payment services that use email addresses for login.

For this very reason, most major banks do not use email addresses as part of the account login process. Instead, banks require you to select your unique user name, which will be used along with your password to access your online bank account.

It makes perfect sense. If a cyber criminal doesn’t know your user name, he can’t get past first base in trying to brute force crack your password and access your account.

Most major banks also add a third level of online account security in the form of 4-digit pin number, which is required in addition to user name and password in order for customers to access a bank account online.

This extra level of security makes it all the more difficult for cyber criminals, who will devote their nefarious efforts on other less secure websites.

We at CashSender employ pin number use during account login, as well as to make account changes and move funds. You might think it over-kill, but we want to do all we can to best protect your account from un-authorized use.

We even take the pin feature one extra step. When entering your pin on the CashSender website you might have noticed that a javascript keypad opens on screen. Using your pointer, you select the four numbers of your pin on the javascript key pad (instead of entering numbers using your keyboard).

This technology is employed to prevent cyber criminals from leaching your pin number if they’ve installed a keystroke logger on your infected pc. Which happens all the time.

These extra hurdles may take a few extra seconds when you want to login to your CashSender account or make account changes and send funds, but just remember cyber criminals don’t like all this extra stuff either.

So they’re going to spend their time on less secure websites, where lax online security protocols make their life a lot easier.

Banks knows this. And we at CashSender know this too.

If online security is very important to you, specially as it pertains to your online banking and online payment services, then you might want to only use banks and online payment services that adhere to these security protocols.

I hope you will allow CashSender to be of service.

Henry Tenby