This report, the third in a <a href="https://www.centerforfinancialinclusion.org/series/municipal-cash-transfer-programs-design-ids-and-data-protection">series</a> on municipal cash transfers in the U.S., focuses on data protection for undocumented or mixed-status beneficiary households. In the context of cash-based assistance (CBA) programs, poor data protection practices could add additional risks for low-risk individuals by providing data trails that could pave the way for unauthorized access to applicant or beneficiary data or leakage of personally identifiable information. These could leave a digital footprint that can make it easier for law enforcement to target undocumented individuals.

Considering these risks, we have identified and detailed approaches and strategies used to protect applicant and beneficiary data through four programmatic phases: targeting beneficiaries, outreach and onboarding, disbursement and distribution, and ongoing monitoring and data storage/retention. Insights in this report are gleaned from CFI interviews with cities, community-based organizations (CBOs), debit card providers, and privacy advocates.

This report and the others in this series are intended to guide municipal officials and CBOs considering or developing programs to support undocumented or mixed-status households. The insights may also be of interest to organizations advocating for and supporting the rights of undocumented populations, students and academics, and anyone interested in access to financial and public services for all members of U.S. communities.

Protecting Beneficiary Data: Guidance for Municipal Cash Transfer Programs Responding to COVID-19

<h2>Panel Discussion</h2>
There is a strong push on the part of card companies and some merchants to eliminate cash in retail, citing reduced transaction times, crime, and worker headcount. But could cashless commerce deprive millions of unbanked customers from access to food and other goods and services? States and municipalities are starting to push back with proposals to restrict cashless commerce in New York City, New Jersey, Philadelphia and San Francisco. We’ll use this latest skirmish as a starting point for a discussion on the ongoing battle for financial inclusion. What is the current status of efforts to provide financial services to the unbanked? Will mandating the acceptance of cash help or hurt these effort?


Moderator:

Andy Lorentz, Partner, Davis Wright Tremaine LLP


Panelists:
<ul>
 	<li style="text-align: start">Matthew Homer, Consumer Data Access, Control, and Portability, Plaid</li>
 	<li>Devina Khanna, Manager, Center for Financial Services Innovation</li>
 	<li style="text-align: start">Eric Noggle, Senior Director, Research, Center for Financial Inclusion at Accion</li>
 	<li style="text-align: start">Leon Perlman, Founder and head of the Digital Financial Services Observatory at the Columbia Institute for Tele-Information, Columbia University</li>
</ul>

Registration 
https://www.nypay.org/event/your-moneys-no-good-here-progress-and-pitfalls-in-cashless-commerce/

&nbsp;

&nbsp;

Your Money’s No Good Here: Cashless Commerce vs Financial Inclusion

In Washington, DC—where much of the CFI team is located—more and more restaurants and small businesses have moved away from cash—some going so far as to not accept cash at all. In response, <a href="https://www.washingtonpost.com/local/dc-politics/as-restaurants-go-cashless-a-backlash-is-building-will-dc-intervene/2018/07/07/89f3f1d8-8098-11e8-b0ef-fffcabeff946_story.html?utm_term=.5540de3e4128">according to the Washington Post</a>, some city lawmakers have suggested a new law that would require businesses to accept cash as a form of payment. The proposal asserts that not accepting cash is a form of discrimination against the poor.

Financial exclusion in DC is certainly not as pronounced <a href="http://www.centerforfinancialinclusion.org/publications-a-resources/browse-publications/996-financial-inclusion-hype-vs-reality">as it is in many emerging markets</a>. Nevertheless, <a href="https://economicinclusion.gov/surveys/place-data.html?where=District_of_Columbia&amp;when=2015">according to a 2015 FDIC report</a>, bank account ownership in DC is lower than in most other places in the U.S., with 11 percent of the population unbanked. And 27 percent of people in DC do not have credit at all (including credit card, bank loan, or other forms of credit). This population—unless they gain access to a prepaid card—would be unable to purchase a salad at Sweetgreen, a taco at Surfside, or a frozen yoghurt at Menchie’s.

How does the retailer weigh going cashless against accepting cash? Jetties sandwich shop <a href="https://www.washingtonpost.com/local/dc-politics/as-restaurants-go-cashless-a-backlash-is-building-will-dc-intervene/2018/07/07/89f3f1d8-8098-11e8-b0ef-fffcabeff946_story.html?utm_term=.5540de3e4128">told the Washington Post</a> that 20 percent of its customers paid with cash. Jetties decided to stop taking cash, under the assumption that some of those customers would shift to using cards. But other similar restaurants that have employees paid in tips opted to continue to accept cash.

People choose to use cash even when they do have access to a full suite of financial services. Paying with cash is a common budgeting strategy, for example, ensuring that people only spend what they have physically available in their wallet. It’s also a way to pay with anonymity, protecting purchases from being known by credit card companies. (I personally pay cash sometimes around holidays when I don’t want my husband to see his gift on our joint credit card statement.) Consider some of these responses from DC residents via Twitter:

https://twitter.com/SilverSummerSun/status/1016479293013217280

https://twitter.com/flyingtiger1/status/1016480273893068800

https://twitter.com/hippiecahier/status/1016480766421807110

On the business side, going completely cashless might make financial sense. Credit card companies charge fees of around 3 percent to merchants. The cost of cash, on the other hand, includes employee time to count and manage money before and after opening hours, the cost of security when transporting cash to and from the business, and the cost of employee fraud or miscounting. Going cashless could mitigate these operating costs.

The debate over moving cashless is not limited to Washington, DC. Around the world, countries have—either naturally or with policy pressure—shifted toward eliminating or at least limiting the use of cash. In Sweden, five out of six major banks <a href="https://cointelegraph.com/news/sweden-to-become-worlds-first-cashless-country">refuse to interact with cash</a>—and businesses have quickly followed. Sweden is predicted to become the world’s first cashless country. The Economist <a href="https://www.economist.com/finance-and-economics/2016/08/11/emptying-the-tills">reported last year</a> that in many shops in Europe, only tourists pay with cash. United Nations-based <a href="https://www.betterthancash.org/">Better than Cash Alliance</a>’s goal is to move individuals, companies, and governments toward electronic payments and away from cash.

Some governments like this approach because eliminating cash drives shadow finance and informal financial activity into the formal sector. Eliminating cash from the formal financial sector makes moving cash from the informal sector to the formal sector much more difficult, driving down the use of cash in the informal sector as well.

While it may be the next step in our modern global economy, eliminating cash without making sure that everyone is able to meaningfully participate in digital finance can be discriminatory. For some city lawmakers, this is the primary concern. They recognize that full inclusion is a precondition to making a cashless economy work for everyone. Maybe one day we’ll see a cashless DC, but first we need to make sure all people in DC can participate.

I’d love to hear your perspective—are you Team Long Live Cash or Team Time to Let Cash Go? Leave your response in the comments.

&nbsp;

Cashless Backlash? Washington, D.C. Moves Back Toward Cash

“Would you like to save $10 today?” In the United States, it seems you can’t shop anywhere these days without hearing this question at the checkout counter. According to <a href="http://www.cardhub.com/store-credit-cards/">Card Hub</a>, there are at least 134 large retailers in the U.S. offering credit cards. And of course, these offers usually sound great. Who wouldn’t want to save money on purchases? All you have to do is fill out a short form on the spot… It’s easy.

These savings can come at a price. Here are a few of my concerns about credit cards offered by the likes of Target, Macys, Sears, TJ Maxx, and others.
<ul>
 	<li>Confusion between Rewards and Credit Cards – Many retailers provide rewards or loyalty card programs. For instance, you can earn points at CVS with a card or get gas reward points at Stop and Shop. These rewards and loyalty cards are often similar to retail credit cards in that they are offered at the register, you fill out a short form to join, and you present the cards when checking out. For customers with limited financial literacy or limited English language skills, the difference between reward/loyalty cards and retail credit cards can be very confusing. It’s blurred even more by the fact that most credit cards also offer rewards – like cash back or bonus air miles. Of course, there are big differences between a card that one swipes to simply “earn points” and a card that allows one to make purchases on credit.</li>
</ul>

<ul>
 	<li>Negative Impact on Credit Scores – Credit scores are extremely important for anyone wanting to get a loan, or buy a car or a home. Though how they’re calculated is based on complex and opaque calculations. However, just having a wallet full of retail credit cards can still negatively affect your credit score. You may be judged a higher credit risk if you have signed up for many retail credit cards – even if you don’t use them – because you have the ability to go on a huge spending spree. What’s more, just having your credit score checked, which happens when you sign up for a card, may negatively affect your credit score.</li>
</ul>
<ul>
 	<li>Cashiers Are Not Bankers – If you apply for a credit card with a financial institution, the setting itself prompts many people to ask about and make comparisons on things like interest rates, credit limits, and repayment terms. In fact, there are many websites (see <a href="http://www.creditcards.com/">here</a> and <a href="https://www.nerdwallet.com/">here</a>) to help consumers evaluate financial credit cards. The idea behind retail credit cards, however, is to attract decisions based on just one thing: saving money right away at the checkout counter. Obtaining retail credit cards are mostly impulse decisions, and little is done to disclose their terms and conditions. Moreover, if you do have questions about the terms and conditions of a retail credit card, the person you are asking is a store clerk, not a banker.</li>
</ul>
<ul>
 	<li>Over-Indebtedness – Despite the sophisticated credit bureau system in the U.S., <a href="https://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/">over-indebtedness is an issue</a>, especially among lower-income populations. Retail credit cards contribute to the problem of over-indebtedness in a number of ways:
<ul>
 	<li>They are ubiquitous – Everywhere you shop, every time you take a flight, a retail credit card is being offered at checkout or over a loud speaker, with incentives advertised front-and-center.</li>
 	<li>They have high APRs – The average APR on credit cards offered from America’s big retailers is <a href="http://www.creditcards.com/credit-card-news/retail_card-stores-survey-apr_2014-1276.php">23 percent</a> – a number that has recently gone up by more than 2 percentage points. For comparison, the country’s average for general purpose credit cards is about 15 percent.</li>
 	<li>They are inconvenient to pay – There is a movement to use technology to make paying bills easier. Yet, the industry lags, with retailers often mailing bills, which can get lost in the shuffle.</li>
</ul>
</li>
</ul>
Are all retail credit cards a bad idea, and should you never enroll for one? Of course not. But next time you shop you might want to think twice about saving those $10 at the checkout counter. From a client protection perspective, and given that this retail credit trend doesn’t appear to be going away, it’s essential that this corner of the industry puts equal emphasis on fair and responsible practices. For their own institutional sustainability and for their clients’ well-being, retail credit providers -- like all credit providers -- should incorporate the Smart Campaign’s <a href="http://www.smartcampaign.org/about/smart-microfinance-and-the-client-protection-principles">client protection principles</a> throughout their operations, especially including mechanisms for complaint resolution, transparency, prevention of over-indebtedness, and responsible pricing.

Have you read?

<a href="http://cfi-blog.org/2015/08/26/investing-in-native-american-communities/">Investing in Native American Communities</a>

<a href="http://cfi-blog.org/2015/09/24/discrimination-and-credit-underwriting-in-the-age-of-social-media/">Discrimination and Credit Underwriting in the Age of Social Media</a>

<a href="http://cfi-blog.org/2016/03/04/fintech-goes-to-the-festival/">FinTech Goes to the Festival</a>

The Trouble with Retail Credit Cards

&gt; Posted by Michael Miebach, President, Middle East and Africa, MasterCard

<a href="http://www.fi2020week.org"><img class="alignright wp-image-19409" style="border: 0 solid #000000" src="https://centerforfinancialinclusionblog.files.wordpress.com/2015/09/fi2020-week-logo.png" alt="" width="350" height="141" /></a>FI2020 Week is a global conversation on the key actions needed to advance financial inclusion, grounded in the findings of the recently launched FI2020 Progress Report. From November 2-6, 2015, stakeholders around the world are participating in more than 30 events and sharing their voices over social media, with #FI2020.

<a href="http://www.fi2020week.org/">FI2020 Week</a> offers a good opportunity to review the findings in the <a href="http://www.fi2020progressreport.org/">FI2020 Progress Report</a> and to consider actions the global community needs to take to advance financial inclusion. This is of particular interest to me as I work every day to expand MasterCard’s payments platform in the Middle East and Africa, and in a volunteer capacity, I also serve on the board of directors of Accion.

The report <a href="http://www.fi2020progressreport.org/technology/">asserts</a> that it’s not enough to “build the rails” to enable payment and transaction access, but that “providers, regulators and support institutions need to ensure that the financial services that follow provide value and quality to the passengers who climb aboard.” Here is where interoperability is essential—if last mile customers are to benefit. Banks, telcos, merchants, and governments must be connected—despite different rules and technologies—in a way that is seamless to the user. From a customer perspective, that means ubiquity, safety, and utility—the trifecta of success in financial inclusion. It won’t work if all the stakeholders are competing to create their own end-to-end solutions, or operating in silos. It won’t work if we are creating islands, where the unbanked transact with each other and where data is used in proprietary ways to support individual business models, rather than being shared as a public good.

Now, a parent in Zimbabwe sends money to his daughter studying at university in South Africa using a mobile money operator connected to the global banking system. All he needs to do is go to an <a href="http://newsroom.mastercard.com/press-releases/mastercard-launches-cross-boarder-remittance-service-in-zimbabwe/">EcoCash</a> agent and top up his mobile money account. His daughter then accesses the funds using a MasterCard debit card linked to the same EcoCash mobile money account to purchase text books, and pay university fees as well as other day-to-day expenses while at university in South Africa. This is ubiquity, safety, and utility put into action.


<img class="alignright wp-image-19955" src="https://centerforfinancialinclusionblog.files.wordpress.com/2015/11/thumb_4298b3a77f1a41819e09b1e02e4c3c59.jpg" alt="" width="300" height="200" />Equally critical is the focus on <a href="http://www.fi2020progressreport.org/client-protection/">client protection in the digital age</a>. The explosion of data brings new opportunities for inclusion, but it also requires trust in a system many have never used. The distributed trust model requires that both merchants and customers can trust in a secure transaction when making a purchase without cash. An expanded merchant acceptance network along with an expanded Internet add to the complexities. This will be even more challenging with the rise of P2P transactions, which will bring more micro merchants into the financial system. One solution for increasing protection and decreasing fraud is the use of biometrics. For many people, a biometric ID—using fingerprints or an iris scan—may be the first form of identification they have ever been issued. It increases security and transparency and can open the door to having a bank account, receiving government benefits, and even voting. In this case, biometrics can lead not only to greater financial inclusion, but also to greater social inclusion.

But the fundamental challenge ahead is <a href="http://www.fi2020progressreport.org/addressing-customer-needs/">addressing customer needs</a>, underscored by the gap between access and usage that proves there is still much work to be done despite many new accounts being created. Take the great leap forward of moving from cash to electronic payments for G2P social benefits. This is a good change all around—good for governments, which can reduce transaction costs, leakage and fraud, and good for customers, who can avoid the theft of their money and no longer have to wait in long lines either to receive their social benefits or to pay bills. Yet despite this advance, many customers don’t really take advantage of the service—at least not at first. Many people simply head to the nearest ATM to withdraw all of their funds. Yes, they have avoided the long lines to receive the payments, and the government still saves money—but the customers are not using the service to their own benefit.

This is where the Center for Financial Inclusion’s message about the need for providers to take the long view is key. Take the SASSA debit card in South Africa (the South African Social Security Agency electronic benefits disbursement program). The good news is that, over time, people started changing their behavior when provided with a tool they could learn with through use. We found that from year to year, POS purchases increased by 27 percent, cash withdrawals without a purchase decreased by 24 percent, and cash back with purchase transactions grew slightly by 3 percent. This, of course, means that beneficiaries were not simply cashing out as soon as they received their payments and were using the card to store value in a more secure way. And, along the way, merchants have seen as much as a 30 percent increase in sales in the first year of the card.

For all of us working on financial inclusion, the questions about technology circle back to the central question of the customer experience. If we keep in mind the need to create value for all stakeholders, the access/usage gap will be transformed, and we will move closer to a financially inclusive world.

Michael Miebach is president, Middle East and Africa for MasterCard. Based in Dubai, Mr. Miebach is responsible for driving the evolution of payments in markets across the Middle East and Africa region. Mr. Miebach recently joined the board of directors of Accion.

Image credit: Accion

Have you read?

<a href="http://cfi-blog.org/2015/10/13/the-data-story-in-the-fi2020-progress-report-on-credit-reporting/">The Data Story in the FI2020 Progress Report on Credit Reporting</a>

<a href="http://cfi-blog.org/2015/10/08/why-we-gave-consumer-protection-a-5/">Why We Gave Consumer Protection a 5</a>

<a href="http://cfi-blog.org/2015/10/05/toward-an-agent-free-world/">Toward an "Agent-Free" World</a>

Ubiquity, Safety, and Utility: The Trifecta of Success in Financial Inclusion

&gt; Posted by Allyse McGrath, Senior Associate, CFI

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The <a href="https://www.facebook.com/JPayInc">Facebook page of JPay</a>, a Florida-based company that provides a range of services to inmates in the U.S. prison system, is calling for visitation pictures – photos of families and their incarcerated loved ones. Happy images seem to echo the company’s statement that JPay is “the most trusted source for connecting incarcerated individuals with family and friends”. Money transfers are one primary element of the connection that JPay and others like it provide. JPay is one of the largest providers in the burgeoning field of financial services for the 2 million-plus inmates in the U.S. prison system. These providers are changing the way that families send money to their incarcerated loved ones and also the way in which inmates receive money upon their release. But has this change been good?

For those that might not know, money sent to inmates can be used in prison for things like making phone calls, sending emails, and buying food, toiletries, and winter clothes. To give you a sense, at the Clallam Bay Corrections Center in Washington State, phone calls begin at $3.13, and emails are 33 cents. When prisoners are released, money accumulated from work in prison or sent from family and friends can be transferred onto stores of value like debit cards.

The new companies shift inmates and their families from money orders and checks to presumably more convenient electronic and mobile payment options. However, they charge a high price for this convenience. In a division of the financial services industry where <a href="http://www.nytimes.com/2014/06/27/business/in-prisons-sky-high-phone-rates-and-money-transfer-fees.html?_r=0">common consumer protection laws do not apply</a>, fees are bloated and partnerships between providers and prisons are increasingly restricting options in what is far from a free market.

In some states JPay money transfers cost up to <a href="http://www.publicintegrity.org/2014/09/30/15761/prison-bankers-cash-captive-customers">45 percent</a>. For example, the cost of sending $10 to an inmate’s account at the Southeast Correctional Center in Charleston, Missouri is nearly $4. At the Illinois Youth Center in Chicago the cost is almost $6. Traditional means of purchasing and sending a money order can <a href="http://www.publicintegrity.org/2014/09/30/15761/prison-bankers-cash-captive-customers">run about $2</a>.

Over the past couple of years, many families have heard about the new way to transfer funds to their family members and friends in prison. For most, this message has centered on JPay, which first made electronic payments possible in prisons, and now covers about 70 percent of prisoners in the United States. While many can still use more traditional money transfer options or smaller competing providers, 40 percent are restricted to JPay as the only method of sending money, thanks to exclusive services partnerships.

Effectively, families are forced to bear these greater costs, and prisons take greater slices of revenue (“commissions”) from these payments. <a href="http://www.publicintegrity.org/2014/09/30/15761/prison-bankers-cash-captive-customers">The Center for Public Integrity found</a> that in some cases, prison operators receive up to $2.50 per payment – a sweet deal since they pay JPay nothing for their services.

Even after inmates leave prison, they face disproportionately high fees that remain unregulated by traditional consumer protection systems. Many prisons have switched from checks to “release cards”, debit cards which provide access to the funds that prisoners have accumulated up to their release. A variety of companies provide these cards, but they all feature high fees. As a snapshot, <a href="http://america.aljazeera.com/articles/2015/4/20/release-cards-turn-inmates-and-their-families-into-profit-stream.html">one card</a> includes the following: $3 withdrawal, $1.50 balance inquiry, $2.50 maintenance, $30 closing fee if the funds are transferred to a bank account. (It’s <a href="http://www.nerdwallet.com/prepaid/">typical for mainstream prepaid debit cards</a> not to charge for balance inquiries, and only to charge a few dollars for out of network withdrawals.) <a href="http://america.aljazeera.com/articles/2015/4/20/release-cards-turn-inmates-and-their-families-into-profit-stream.html">Al Jazeera highlighted</a> the case of a man who was only able to use $70 of his accumulated $120 after these fees. In most cases, inmates are not informed of these fees before their release.

It might feel natural to dismiss these facts, thinking “these are criminals who hardly deserve our compassion.” However, the punishment meted out by the justice system should not include financial services exploitation for the benefit of companies that <a href="http://www.nytimes.com/2014/06/27/business/in-prisons-sky-high-phone-rates-and-money-transfer-fees.html">often win contracts</a> not for the rates they can charge inmates, but the commission they can offer prisons! Do we want this already disproportionately poor population segment to be finally crippled as they try to start anew? A U.K. study found that in a sample of inmates who opened a traditional bank account, about 34 percent had re-offended within 12 months of their release – well below the national average of 47 percent. In recent years, the U.S. Federal Communications Commission has started to <a href="http://www.nytimes.com/2014/06/27/business/in-prisons-sky-high-phone-rates-and-money-transfer-fees.html?_r=0">clamp down</a> on the phone rates being charged to prisoners. On financial services for prisoners, release cards have faced <a href="http://www.publicintegrity.org/2014/09/30/15768/debit-cards-slam-released-prisoners-sky-high-fees-few-protections">criticism and litigation</a> in at least two states, and the New York Department of Financial Services’ consumer division is <a href="http://www.publicintegrity.org/2014/09/30/15761/prison-bankers-cash-captive-customers">reportedly reviewing</a> JPay’s practices. Regulation needs to step up and bring this financial services area into the fold.

Have you read?

<a href="http://cfi-blog.org/2015/02/04/keeping-score-the-client-protection-principles-vs-the-u-s-subprime-auto-loan-market/">Keeping Score: The Client Protection Principles vs. the U.S. Subprime Auto Loan Market</a>

<a href="http://cfi-blog.org/2015/04/09/helping-u-s-consumers-translate-financial-knowledge-into-better-financial-behavior/">Helping U.S. Consumers Translate Financial Knowledge into Better Financial Behavior</a>

<a href="http://cfi-blog.org/2014/11/13/an-innocent-visits-the-pawn-shop/">An Innocent Visits the Pawn Shop</a>

Are Financial Service Providers Gouging Inmates in the U.S. Prison System?

<h4>There is a need to enhance consumer awareness and confidence in doing electronic transactions</h4>
&gt; Posted by Smita Aggarwal, Senior Program Director, the Centre for Advanced Financial Research and Learning (CAFRAL)

The following post was <a href="http://www.livemint.com/Money/Z3e6k8laDUGeISI4lixpVP/Why-consumer-protection-makes-business-sense.html" target="_blank">originally published</a> on Livemint.

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On a recent visit to Sydney, Australia I needed some cash and I inserted my Indian debit card in an automated teller machine (ATM). Immediately after I put in my transaction request for cash withdrawal, I got a prompt that there would be a $3 charge for that transaction and I had to confirm with a “yes” before the transaction would be processed further. I withdrew my card and left. The e-payments code by Australian Securities and Investments Commission (ASIC), the unified regulator responsible for market conduct, requires all service providers to provide certain mandatory information, including fees and charges, to users before or at the time users first perform transactions.

The experience in Australia shows that the display of charges just before the transaction is done has altered consumer behavior, apart from significantly reducing complaints. Increasing the usage of electronic transactions through ATMs, cards, internet, and mobile phones is a critical step towards digitizing our economy. However, there is a need to significantly enhance consumer awareness and confidence in doing electronic transactions and there could be lessons we can learn from what Australia has done.

The e-payments code, which applies to all service providers offering electronic transactions, and not just banks, states that consumers are not liable for losses when they have not contributed to the loss. Moreover, for transactions with a passcode where it is unclear whether the consumer has contributed to the loss, the consumer’s liability is capped. There is also a framework for mistaken payments, i.e., when you make an error of entering the wrong account number and the payment goes to the wrong recipient. The framework provides for return of the money to the sender, provided the money is still in the recipient’s account, and encourages the users to report the error soon enough so that the likelihood of recovery is high.

Another example of altering consumer behavior through increased transparency is that all credit card statements in Australia are required to prominently state: “Minimum payment warning: If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance”. This is followed by an actual calculation of the amount you will pay in total and the number of years it would take to clear the current dues. The actual visibility on the statement of the implied loan amount and tenor (could be even 10 years or more) prompts the customer to make an informed decision about how much to pay and increases her confidence to use the credit card in a responsible way. The e-payments code also has tailored provisions to facilitate low-value electronic transactions. For example, providers are not obliged to provide a statement or receipt for low-value transactions and instead must provide access to users to view their balance and transaction history. Additionally, no personal identification number is required for small-value “tap and pay” transactions through near-field communication and the incidence of frauds so far has been quite limited.

Considering the significant influence advertising has on consumers and the natural tendency of providers to focus only on positives in advertising, as part of its consumer protection mandate, ASIC also tracks advertising of financial products. Omission in advertising could be misleading to the consumer. For example, an advertisement which says that a bank offers a credit card with no fees, but does not say prominently that the customer needs to have a mortgage loan from the same bank to be eligible to get this card, would be unacceptable to the Australian regulator. Similarly, while marketing products through Twitter, banks are expected to be truthful, despite brevity.

To read the rest of this post, visit <a href="http://www.livemint.com/Money/Z3e6k8laDUGeISI4lixpVP/Why-consumer-protection-makes-business-sense.html" target="_blank">Livemint</a>.

Have you read?
<a href="http://cfi-blog.org/2014/08/26/ecpps-how-a-principles-approach-to-client-protection-is-built-for-the-digital-age/" target="_blank">eCPPs: How a Principles Approach to Client Protection is Built for the Digital Age</a>
<a href="http://cfi-blog.org/2014/09/08/emerging-themes-in-responsible-digital-finance/" target="_blank">Emerging Themes in Responsible Digital Finance</a>

<a href="http://cfi-blog.org/2014/06/20/electronic-g2p-for-the-poor-does-electronic-social-protection-need-better-consumer-protection/">Electronic G2P for the Poor: Does Electronic Social Protection Need Better Consumer Protection?</a>

Why Consumer Protection Makes Business Sense

&gt; Posted by Jeffrey Riecke, Communications Assistant, CFI

<a href="http://www.occupycooperative.com/" target="_blank" rel="attachment wp-att-11830"><img class="alignright wp-image-11830" style="border:0" alt="" src="http://centerforfinancialinclusionblog.files.wordpress.com/2013/07/omc-header.png" width="350" /></a>A few months ago we shared a post spotlighting Walmart’s popular Bluebird prepaid debit card service, <a href="http://cfi-blog.org/2013/05/29/your-neighborhood-bank-walmart/" target="_blank">Your Neighborhood Bank, Walmart?</a> As of the past few days, there’s a surprising new entry into this expanding prepaid card space: Occupy. With the mission of providing quality, transparent financial services to everyone, especially to those who are currently denied service by larger for-profit banks, the Occupy Wall Street Movement launched the Occupy Money Cooperative, indicating its first product will be a prepaid debit card.

The Occupy Money Cooperative aims to provide services that differ from those of the U.S. for-profit banking industry, overcoming such annoyances as account-opening requirements, service fees, and lack of branch penetration. Much like a credit union, the Cooperative will be controlled and owned by its members. Unlike a credit union, the Cooperative won’t be a deposit-taking institution or be bound by common bond membership restrictions – anyone will be able to join. Here’s a few of the Cooperative’s pledges, taken from <a href="http://www.occupycooperative.com/" target="_blank">its website</a>.
<ul>
	<li>Will offer access to low cost, transparent, high-quality financial services to everyone</li>
	<li>Will actively and directly encourage the development of innovative financial services that will foster financial inclusion, and lead the field in terms of openness and fairness</li>
	<li>Will lead by example to affect a positive change for our members and stakeholders, and provide an uplifted standard of conduct for the financial community</li>
	<li>Will actively work with business partners and organizations that demonstrate a commitment to the well-being of their communities</li>
</ul>
The Cooperative is now signing up members and will soon be open to receiving start-up donations – from members and non-members. Once ample funding is secured, the prepaid debit card, to be called The Occupy Card, will be available. The card will have a monthly fee of $0.99. Additional details surrounding the card’s service charges remain to be disclosed. Prepaid debit cards often associate fees with ATM withdrawals, balance inquiries, and card re-loadings, among other services. The Cooperative hopes to offer checking and savings services to its members in time, but stated that due to the growing popularity of prepaid debit cards among the unbanked, this will be the first service offered.

Prepaid cards are indeed on the rise in the United States. Among the unbanked in the U.S, <a href="http://www.forbes.com/sites/laurashin/2013/07/23/the-occupy-movement-is-launching-a-money-cooperative/2/" target="_blank">use of prepaid cards increased</a> from 12.2 percent of unbanked households in 2009 to 17.8 percent in 2011. Among the total U.S. population, a 2012 <a href="http://www.nfcc.org/newsroom/FinancialLiteracy/files2012/FLS2012FINALREPORT0402late.pdf" target="_blank">financial literacy survey</a> found that 15 percent of adults had used a prepaid card within the last year. About three-fourths of this group cited convenience as their primary reason for doing so. About three-fourths indicated they enjoyed the cards’ preventing their overspending and the increased safety over carrying cash. Lack of other payment or banking options was cited as a reason for prepaid card use among roughly one-fourth of respondents.

Image credit:<a href="http://www.occupycooperative.com/" target="_blank"> Occupy Money Cooperative</a>

Have you read?

<a href="http://cfi-blog.org/2012/06/11/improving-prepaid-products-guidelines-for-a-growing-market/" target="_blank">Improving Prepaid Products: Guidelines for a Growing Market</a>

<a href="http://cfi-blog.org/2013/01/03/india-extending-inclusion-through-alternative-customer-identification/" target="_blank">India Extending Inclusion Through Alternative Customer Identification</a>

<a href="http://cfi-blog.org/2013/05/29/your-neighborhood-bank-walmart/" target="_blank">Your Neighborhood Bank, Walmart?</a>

Occupy Wall Street Movement to Offer Financial Services

Madeleine Longwell

Alexandra Rizzi

Eric Noggle

Sonja Kelly

Danielle Piskadlo

Rafe Mazer

Allyse McGrath

Smita Aggarwal

Jeffrey Riecke

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