Tag Archives: consumer

Online Holiday Shopping 2015 – Shopping While Black

canstockphoto18667912Racial profiling is a reality. People of color have suffered from the idea that we are untrustworthy and dishonest by nature. Nothing could father from the truth. As a result of this hideous myth black people are more likely to be wrongly accused, wrongly prosecuted and wrongly convicted. And even with a trillion dollars of consumer buying power we face racial stereotypes even when spending our money. Its called shopping while black. The result is that many black people have taken to shopping online.

It doesn’t matter who you are or where you shop being black is a negative mark against the African-American consumer. Notable African-Americans including Oprah Winfrey and Condolezza Rice have been mistreated simply for shopping while black.

Milwaukee Bucks forward John Henson dropped by a Schwanke-Kasten jewelry store in Whitefish Bay, Wisconsin shopping for a Rolex watch.  The staff of the store reacted to the tall black man by refusing him entry into the store and calling police.  The police verified Henson’s identity but the store employees still insisted that the police supervise the professional athlete while he shopped.

The sad truth of this is that research indicates that black people are no more likely to shoplift than any other ethnic group. Statistics indicate that shoplifting is spread fairly evenly across all colors and economic categories. 

A recent Gallup poll revealed that African-Americans felt  more discriminated against while shopping than doing anything else. Twenty-four percent said they experienced discrimination in a retail setting, compared to while eating out, 20 percent, at work or during police encounters, 18 percent, and while obtaining health care ,12 percent.

Blacks have moved their shopping online to avoid the hassle and embarrassment of dealing with race while shopping. African-Americans are more likely to shop online using mobile devices than other racial groups. So the move to express our buying power online was a small one. However it should be noted that the overall trend among consumers is to shop online. African-Americans continue to be the fastest growing demographic of online shoppers.

African-Americans are savvy shoppers. According to Experian black people are deal seekers and 28 percent more likely to respond to social media advertising and 14 percent more likely to use social media to tell friends of products and companies they like.

Black people are also more likely to shop online using a mobile device. African-Americans have a higher mobile aptitude compared to other groups and use their mobile devices, smartphones, to comparison shop, to price match and investigate products. And after all is said and done African-Americans are actually more likely to buy online.

A 2013 report from Adweek showed black people shop online more than other groups. According to the magazine higher income African-Americans shop online in record numbers. Half of black people surveyed made at least 30 percent of their retail purchases online. And at least 22 percent of high income blacks made at least half of their retail purchases online.

Holiday shopping is bad enough without being treated suspiciously when you walk in a store. A trillion dollars in buying power is nothing to laugh at. Using the Internet permits black people to shop and buy with dignity. Blacks are showing our willingness to stay away from brick and mortar stores when we feel we are not being treated properly.

 

 

 

Secure Payments Arrive For Black Consumers

credit-card-safeHackers have been having a absolute field day breaking into store payment systems and stealing credit card data with impunity. The problem is intolerable for the consumer and costing everyone money everyday. Kaspersky Labs reported that over $1 billon dollars has been stolen from banks using sophisticated malware. Not to mention the additional billions lost in fraudulent credit card purchases and ATM fraud.  Last year that number topped $5 billion. In the end its always the consumer, that’s you and me, that pays for this fraud.

Securing the payment systems of American consumers has become the single most pressing cyber security problem for banks, pay services and merchants. Americans fear cyber crime and identity theft more than being murdered.

Thankfully credit card and technology companies are devising new more technologically advanced ways to combat data breaches and credit and debit card fraud. This is vitally important to African-Americans who are frequent Internet shoppers. And the last thing we tolerate is something funny happening with our money. As I have said many times before, black people don’t play when it comes to our money.

Black consumers, like all American consumers, should learn and quickly adopt the new ways that payments are being secured not only online but in brick mortar stores. Advances in technology allow payments to be made directly from a smartphone, new PIN and Chip technology prevents duplication of credit and debit cards and some systems are implementing single use tokens. The age of secure payments has arrived.

 

US-WhiteHouse-LogoThe White House Summit on Cybersecurity and Consumer Protection

This event, held at Stanford University, saw multiple companies and trade organizations announce new initiatives aimed at securing Internet transactions and reducing fraud.

A White House fact sheet revealed the efforts of the major players in the payment industry. Visa, for example, is committing to tokenization or substituting credit card numbers with randomly generated tokens for each transaction. They plan to initiate this system by the end of March.

The other payment giant, MasterCard, is investing more than $20 million in new cybersecurity tools that include the deployment of Safety Net, a new security solution that will reduce the risk of large-scale cyber-attacks.

SafetyNet is designed to add an extra layer of security by working with a bank or processor’s own security systems and detecting attacks before they happen.

Intel is releasing a new authentication technology that eliminates the password. The technology employs biometrics or personal physical measurements such as fingerprints or retinal patterns. American Express also announced a new multifactor authentication technology for consumers. MasterCard and First Tech Credit Union revealed a new pilot program that would allow consumers to authenticate and verify their transactions using a combination of biometrics, such as facial and voice recognition.

The president launched the BuySecure initiative in October of 2014. The initiative priorities include;

  • Securing payments across the economy, by advancing federal efforts to transition to more secure payment systems, building public-private awareness about more secure authentication, and calling on industry to enhance the security of their own systems and offer more secure options for their customers.
  • Helping Americans secure their good name, by improving resources to identify and remediate identity theft. This includes supporting credit score transparency and improving identity theft resources available to American consumers.
  • Enhanced information sharing, by enhancing the ability of federal agencies and industry to regularly exchange information about consumers’ compromised accounts.

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Apple Pay

The AACR wrote back in September of Apple’s debut of the new Apple Pay technology. While everyone was raving about the new iPhone 6 Apple murdered the credit card.

Apple Pay replaces your credit card and the traditional swipe at the register. Apple Pay has made the act of purchasing easier by allowing you to just wave your phone in front of a reader in order to make a payment.  Apple claims the system is more secure than regular credit cards since the number is never stored on the phone or Apple servers and no one ever sees it. The credit card number is replaced by a “unique device number.”

Your credit cards will be stored in Passbook. You can add cards to your phone by taking a picture of the card or typing in the necessary  information like the credit card number, expiration date, and security code. It works with pretty much all credit cards and banks. According to Apple over 220,000 merchants are currently accepting Apple Pay.

MasterCard

MasterCard announced in October 2014 that it was partnering with Zwipe to develop a payment card with a built-in fingerprint authentication sensor.

The card allows customers to make contactless payments, using their fingerprint to confirm their identity. This eliminates the need for PINs and passwords thus increasing security.

VISA

A recent study from Visa Europe indicates that the new generation of banking customers would rather use biometric security devices than PINs and passwords for authentication.

Visa found that 75% of 16- to 24-year-olds said they would have no problem using biometric security, with 69% expecting it to be faster and easier than a password or PIN.

Visa also launched the Visa Token Service (VTS) in September 2014. The one time use token replaces the 16-digit account numbers, expiration dates and security codes, with so-called tokens. The tokens are a unique series of numbers that can be used to make payments without exposing the sensitive credit data such as the numbers, security code and expiration date.

Over 500 financial institutions have already implemented VTS according to Visa. The service will be expanded this year to additional payment environments. Visa also says tech companies and device manufacturers will deploy VTS on mobile devices. Merchants will also start using the solution to secure transactions made through mobile payment applications. Online merchants are also expected to deploy the tokenization service.

American Express

Tokenization has also been embraced by American Express, and the retail industry is seeking to develop a universal tokenization standard.

Amex will replace traditional 16-digit credit card numbers with a digital token. Consumers using the card supporting the token can make purchases online, with a mobile application, or in person using Near Field Communication (NFC) devices similar to Apple Pay technology.

The movement to more secure payments methods comes as retailers see the October 2015 deadline to support chip-and-pin credit payments getting closer. Merchants are being crushed under repeated data breaches costing ten of millions of dollars in repairs and legal costs.

Breaking It Down

Alright so what took so long? If you read this article you saw that the credit card companies have until October of this year to move to the new PIN and Chip cards. They had no choice. This situation is bad for everybody. Everybody is losing money and everybody is getting sick of it and everybody sees that no end was possible as long as the hackers had the upper hand. These payment companies, merchants and banks were locked in a cycle of one data breach after another and each more expensive than the last. The government was going to force a change this so they decided to get ahead of the wave. They had no choice. They could look out from their lofty corporate towers and see the angry flames of consumer torches gathering in the street below. It was not going to be pretty and they knew it. So now after losing hundreds of millions of dollars and looking stupid compared to the hackers, they have decided to act. They had no choice. They want you to believe that they did this on their own. But this could have been done at least two years ago. Europe has had the PIN and Chip technology for at least five years. These companies decided that since no one was making them do it why do it. But then the bleeding started. Hackers were draining the life out of these corporate clowns and their bottomline. The math was starting to swing against them and the government was getting involved. That is the only reason they decided to act. They had no choice.

 

 

 

Online Holiday Shopping Series #1

It’s November and the holiday shopping season is upon us again. The African American Cyber Report is launching a weekly series focusing on online holiday shopping. Each week through New Year’s Day we will investigate a different facet of online shopping from safe and secure payments to the apps and websites that get you the best bargain. If we hear of a special sale or online event we will let you know about that as well.

African-Americans are a powerful consumer segment. According to a report from The Nielsen Company entitled The State of the African-American Consumer,” black buying power is nearly $1 trillion. How’s that for a U.S. consumer market segment? Black people are not only a significant market segment but they shop more than other groups, spend less money per trip and spend more time investigating the product before buying. Research indicates black people are smart, savvy shoppers.

Before we examine the choice of credit versus debit cards for shopping online we need to take a quick look at black people and their credit cards. According to a report from the NAACP and public policy research firm Demos entitled “The Challenge of Credit Card Debt for the African-American Middle Class,” approximately 42 % of black households are in debt. These families are borrowing simply to make ends meet and to pay for basic expenses, such as groceries, rent and utilities. Overall black people face greater credit restrictions and are more likely to be subject to harsh credit collection tactics. Many black people pay higher interest rates and fees for alternative financial services that includes pre-paid debit cards and check cashing services. So the picture shows that we have a powerful market presence but we also have problems managing and retaining credit. And I might add that it is not always someone else’s fault.

Credit vs. Debit for Online Shopping

Right off the bat the credit card wins hands down for shopping online. But lets not ignore the benefits of the debit card. Especially if you have a tight budget and need to restrict the spending of yourself or someone else.

Credit cards offer distinct advantages over debit cards.  And if you are holding a credit card now is the time to get real familiar with the protections that come with that card. Make sure you understand what security measures the card offers against fraudulent charges as well as the method for disputing purchases. There are going to be black people who order something from an online store only to discover that it is not what was advertised. As an African-American consumer make sure you know the dispute process . Study it before you hit those online sales. Its your money we’re talking about.

Carrying around a credit card from the right company offers some awesome benefits. These benefits can vary from one card issuer to another so it’s a good idea to study your account agreements for the details. Study that thing and make sure you know it. It can save you some headaches and provide some surprising benefits on everything from buying airline tickets to renting a car to getting a warranty extended. If you’re planning to travel over the holidays then you need to investigate the travel benefits of your credit card. Some credit cards offer travel services like getting a seat upgrade or discounts on luggage fees. Other benefits include rental car upgrades or insurance or hotel discounts and upgrades. Travel insurance is also available from some cards free of charge. Some cards offer help finding a doctor or lawyer. If you buy a product that has a warranty you can actually get that warranty extended for up to a year depending on the credit card. But keep in mind that these benefits are sometimes automatic and others you have to ask for. So studying your card agreement is extremely important. Didn’t I say that before?

The beauty of credit cards is that there is an extra layer between your real money and other people. A debit card or pre-paid card is the same as cash and that is where you find additional, and unnecessary risk. As soon as you make a purchase that money is out of your account.  Any problem with the purchase and its just you and the merchant. And that is a very weak negotiating position. The Better Business Bureau or your bank may be able to help but not much.

By using a credit card, you have a powerful company on your side. This makes disputing charges and getting satisfaction when having to return an item much easier. With a credit card the purchase in dispute is not yet paid for. The card issuer can refuse to honor the demand for payment and that leaves the merchant in a lurch. So that merchant is more likely to respond favorably to your demands. CreditDonkey.com, a credit card comparison website, offers a list of the best credit cards for shopping online.

For all you out of control spenders, credit cards are still better than debit cards. A frequent complaint about using credit cards as a primary form of payment is that the advantages are outweighed by disadvantages for many people. As I stated above many African-American consumers simply can’t handle credit cards without spending more than they can afford. And what happens? Higher interest rates, ruined credit scores, all that.

But overdraft protection on a debit card is even worse. Yes, you can over spend with a debit card. Over charging on your debit card results in multiple overdraft fees which are more than credit card interest rates and late payments. And unlike a credit card bill that arrives once a month your bank account takes the hit immediately. With a credit card, you can close your account and work out a payment plan, but with a debit card you don’t get that option.

Many pre-paid debit cards a very popular in the black community. But being popular is far different from being a good option. Many pre-paid debit cards, while intended to help the African-American community are often doing just the opposite. Pre-paid cards have been criticized for exploiting poor and dis-advantaged black people by charging higher, sometimes exorbitant fees. This is especially so when people make the mistake of thinking of the card as a credit card. But the pre-paid card is a huge and profitable market to the tune of about 500 million cards in circulation channeling billions of dollars in sales. You can find a list of the best and worst pre-paid cards here.

Another payment method you need to consider for your holiday shopping is the retail card. Be aware that these store cards can carry some pretty high interest rates. But at the same time you can take advantage of some pretty good deals by using the store credit card. Some stores will give you as much as 10% off your purchase if you apply for the card at the register. Using these cards does not carry a lot benefits at all. And they are dangerous to your credit report. For example when you fill out that card application it shows up on your credit report and if you close the account it stays on your credit report. But if you are looking for the best retail cards to shop with this holiday season you can find the top ten here.

So as you start hunting for those holiday bargains and eagerly wait for Black Friday or Cyber Monday be aware that there is a difference between a credit and a debit card. Make wise purchases and know what tools and weapons you have at your disposal when using that credit card as you shop this holiday season.

Now you know