A Q&A on Business and Merchant Accounts

by Alexis

One inquisitive reader of the Houston Chronicle is wondering what it takes to charge credit cards for attending a particular workshop.

Jacqueline Taylor, associate region director of the UH Small Business Development Center, addresses the reader’s concerns in her column.

Taylor starts out by pointing out the need for a merchant account, which can be acquired from banks, lending institutions or service providers like PayPal.

She also adds that credit cards make for faster payment processing, convenient customer payments and a reliable database of customer contact information.

There is, however, a catch.

“Credit card transaction fees are typically 2 percent to 5 percent of your credit card sales, depending on your sales volume and average size of your sales — the higher the sales volume and size, the lower the fee.”

Taylor points out another issue – that of actually acquiring a merchant account in the first place.

“If you are starting out, it may be hard to find a bank willing to provide an account to someone without a track record.”

Taylor goes on to recommend that there are lenders or service providers that work with smaller accounts, while an established relationship with a banker will come in handy in this situation.

Posted in Banking | Leave a comment

Stocks and Retirement: How One Forbes Contributor Connects the Dots

by Alexis

Many near-retirement employees rely on 401(k) and I.R.A. plans, but a lot of these folks are wondering whether they should pull out their assets and invest in safer bets like bonds or mutual funds.

Financial writer Kerry Hannon advises otherwise.

“If you get out of equities, you’re in danger of missing the upturn when markets turn around,” she says in her most recent Forbes column.

“Your 401(k) contributions buy more shares of stocks when prices are lower, so when the markets come back, you’ll see a bigger bump.”

Hannon goes on to note the long-term security of stocks, as they have historically returned around 2.6% to 10.6% a year for 30-year periods. Bonds, on the other hand, return at best 7.4% and lose at worst 2.6% a year for the same 30-year period.

She also recommends that investment portfolios strike a 60-35-5 ratio of equities, bonds and cash reserves.

“The goal is to hold some investments that have the potential to rise, balanced by more secure, lower returning ones that can act as ballast.”

Finally, Hannon advises retiring investors to carefully analyze the performance of assets instead of jumping out of the equities game altogether – especially when the markets take a serious blow like in the past week.

“Use that opportunity to prune any holdings that no longer pass muster– and not due to a drop in the market, but rather poor performance overall.”

Posted in Investing | Leave a comment

CFPB Offers One-Stop Shop for Credit Card Complaints

by Alexis

It may be intentional or not, but some credit card companies can be very difficult to work with on certain issues.

For individuals that cannot iron things out with their credit card issuer, they can contact the Consumer Financial Protection Bureau (CFPB) and file a formal complaint.

Consumers used to have to contact one of five different government agencies to file a complaint, with the bank’s charters dictating what agency will be responsible for complaints.

The CFPB will now handle all credit-card related complaints.

Credit card users with complaints can fill out an online for on the CFPB’s website or dial 1-855-411-CFPB (2372) toll-free, with advertising, billing, interest rates, fees and collection issued being some of the complaints consumers can lodge against their credit card issuers

The CFCB will conduct an investigation should the complaints end up unresolved, and will check to see if any laws were violated.

It is important to note, however, that the CFPB will first direct complainants to contact their issuer to resolve any dispute. Only when the consumer is not satisfied with the issuer’s actions will the consumer’s complaints be accepted by the CFPB.

Should this program prove to be successful, the CFPB will offer similar services for debt settlement, checking account and debit card complaints.

Posted in Personal Finance | Leave a comment

Banks “Quietly” Blaming Clients for Online Fraud Despite Mounting Losses

by Alexis

When an individual or an organization is hit by fraud resulting from identity theft, they can expect themselves to be left high and dry by their banks. Rhode Island Senator Sheldon Whitehouse describes online bank heists as “a pretty big bank robbery.”

And with small and mid-sized banks losing about $1 billion a year to “online bank robbers,” the issue is something that cannot simply be overlooked as rare and isolated cases.

What makes the whole process frightening, however, is that banks are keeping these facts away from the public eye. “It doesn’t even make the press. It just trickles through in FBI tip sheets,” says Whitehouse.

Some individuals are taking matters into their own hands.

Karen McCarthy, founder of YourMoneyisNotSafeintheBank.org, is herself a victim of online fraud and is organizing fraud victims to campaign for better online bank security. She involved herself in this cause because of how sluggish and ineffective her bank (Toronto Dominion Bank) dealt with her case.

Doug Johnson of the American Bankers Association indirectly addresses this issue. “Banks don’t like to sue their customers and customers don’t like to sue their banks,” says Johnson. “When disputes occur, it’s best to try to work together for an appropriate result.”

Unless banks learn how to effectively prevent and deal with the issue of online fraud, however, it would appear that only legal action would get them to take real action.

Posted in Personal Finance | Leave a comment

Anxiety Shows as Nervous Markets Await GDP Figure Release

by Alexis

Nervous investors will be carefully watching the release of second quarter GDP figures today. Initial indications are that the figure will marginally fall short of last quarters 1.9%.

Following on from the failure to reach an agreement on the debt ceiling and indications that the Republican Party will refrain from voting at all on the issue before the August 2 deadline is reached, this is bound to further unsettle markets and all asset classes.

This is significant. Earlier in the week there had been the unusual conflation of falls across all boards. Although a partial recovery was staged during the equity trading session, this later petered out.

The Dow represents a narrow range of well-heeled companies and although a totemic barometer of market sentiment, a broader picture is provided by Standard & Poor’s wider industrial index. The S&P is on the cusp of registering its biggest weekly fall since August and a third straight month of retreats. Giving further cause for concern as the situation moves from the oft quoted ‘jittery’ to more full blown anxiety.

Early morning trades in London on Morgan Stanley’s All-Country World Index also indicated declines and a realization that although this is a US situation exacerbated by European concerns, the sheer scale of the US and its continued dominance would ensure that almost no country would be spared from the fallout of an unprecedented American default.

GDP figures will be released at 08.30 Washington time. The markets may well have factored in a small decrease on last quarter. Any significant deviation will be seismic.

Posted in Investing | Leave a comment

ABA Bank Routing Numbers

by Alexis

Bank Routing Numbers are essentially sequences of nine-digit numeric code (eight digits and one check digit) used to facilitate the transfer of funds. These number strings are also called Routing Transit Numbers (RTN), or American Bankers Association (ABA) Number. It was designed in 1910, but continues to be used today. Note that other countries may use different number formats.

Bank Routing Numbers

A bank routing number – also referred to as Routing Transit Number (RTN) or ABA Routing Number – is a nine-digit numeric code (eight digits and one check digit) printed on the bottom of checks

Originally, these numbers were used by bank personnel to identify check processing endpoints. Today however, these numbers are printed in machine-readable magnetic ink, enabling faster processing and also improved security, benefiting not only those working in banks, but the average Love Money using consumer. The numbers are then used by the Automated Clearing House to verify checks and also record such transfers.

The bank routing number appears twice on a check. The first is the fraction form, found towards the upper-middle-right, or somewhere near the date field. It looks something like AA-BBBB/CCCC, and so it is called the fraction form. There may also be a branch number underneath it. The AA part is a prefix of two numbers that denote a location, though it is no longer used in processing. The BBBB part is the ABA Institution Identifier, or the ID number of the institution as assigned by the ABA. The CCCC section is the Federal Reserve Routing Symbol, which identifies both geographical location and also the type of institution.

At the bottom of the check, there is a series of numbers and other symbols. These are printed in a special ink that makes it possible for machines to read them, thus it is called the Magnetic Ink Character Recognition or MICR form of the bank routing number. The first 9-digit string is the Bank Routing Number, with the form CCCCBBBBD. The CCCC and BBBB are the same as in the fraction form. The single digit at the end, D, is a check digit. The check digit is used to verify the other numbers mathematically.

The check digit reduces the chances of money being sent to the wrong bank, and also works to provide some countermeasure against check fraud. Typically, a check where the MICR form is evaluated as “wrong” as per calculations using the numbers is automatically set aside for inspection and repair or further investigation.

Every six months, the ABA via Accuity publishes a codex containing all the routing numbers for banks and other financial institutions across the country. These codices contain all 22,000-plus active bank routing numbers in the Automated Clearing House database. Every financial institution in America has at least one of these numbers to their name.

www.1y8.net

FURTHER READING

  1. ABA Routing Number
  2. Routing Transit Number
Posted in Banking | Leave a comment