Bitcoin - A Comprehensive Analysis

With so much attention surrounding the cryptocurrency, many people may be aware of the bitcoin revolution as it took hold of the Internet a few years ago. However, while they may have heard about how it spread and took hold, many are still not aware of how it works and what purpose it serves online.

To learn more about the bitcoin, refer to the infographic below created by Stetson University's Online Master of Accounting Degree (Click to enlarge):

 
Stetson University Online Master of Accountancy Program

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United Kingdom Take a Step Forward in Regulation of Digital Currencies

Digital currencies are beginning to rise quickly in popularity with consumers increasingly looking into digital currency as a means of payment. The UK government, in their most recent budget report have announced their plans to support innovation in the nascent technology, whilst taking steps to prevent criminal use. Similar to the Consumer Financial Protection Bureau (CFPB), who recently proposed rules to help the development of the prepaid industry, the UK government are seeking to create an environment that will allow digital currencies to flourish whilst making it ‘a hostile environment for illicit users of digital currencies’.

At the beginning of March, cash was overthrown as the leading method of payment in the UK. More transactions were made digitally by credit, debit, or via other cashless methods than paying with cash. Predictions in 2023 show that digital transactions will have risen to a staggering 27 billion per year with cash being around 13 billion. With digital set to continue to be the leader in payments, the UK Treasury have seen the need for new regulation.

The main aim, just like with the CFPB’s new proposed rules, look closely at consumer protection as digital currencies in the past have been linked with many criminal activities. The bitcoin especially has been under a lot of scrutiny for its popular usage on the website Silk Road which was a marketplace for drugs, arms and other underground business. What many seem not to know is that bitcoins are not in fact anonymous; they can be tracked through the pseudonyms created by users to see every transaction ever made.

This budget announcement came soon after the Bank of England declared moves to undertake research into central bank issued digital currencies. Digital currencies have been pinpointed by the UK government as something with great potential but need a set of standards and best practices in order to decrease the volatility of prices in currencies such as bitcoins and to protect digital transactions that previously have not been particularly secure.

The UK’s move to embrace digital currencies shows that increased usage is expected in the future. The necessary regulation should allow consumers to feel more comfortable in becoming more reliant on digital transactions. Standardising digital currencies could help to adapt bitcoin and other virtual currency values for recording and transfers to help promote mainstream adoption.

It will be interesting to see whether other countries follow suit and devote more research into the support of digital currencies. However like with the CFPB’s proposed rules regarding prepaid payments, the standardising and regulation of digital currencies could mean a potential stifling in development and innovation within the industry that could limit longevity due to new innovations arising in the future.  

About the Author: Harry Kempe, a marketing intern at IIR USA, who works on various aspects of the industry including social media, marketing analysis and media. He is a recent graduate of Newcastle University who previously worked for EMAP Ltd. and WGSN as a marketing assistant on events such as the World Architecture Festival, World Retail Congress and Global Fashion Awards. He can be reached at hkempe@IIRUSA.com  

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APEX Europe Announces Its Newest Retail Keynote

Announcing APEX Europe's Newest Keynote:

Ankur Gupta

Ankur Gupta, Director - Big Data, Sears Holdings Corporation

Retail organizations of all sizes have a wealth of untapped data.

Big Data Analytics have revolutionized the shopping experience and the way retail organizations engage their customers. At APEX Europe, you'll learn what big data technologies can reveal on customers and shopping behavior.

By applying these big data tools and techniques, retailers can turn this data into actionable insights for buying behavior and a Customer 360 view. Your customers expect a modern shopping experience...are you equipped with the tools needed to provide one?

Ankur Gupta is just the latest speaker in an all-star line-up of executive speakers, with prepaid, retail and technology speakers hailing from 25+ countries.

Register by this Friday, 20th March to hear Ankur's presentation and lock in the lowest possible price - tickets go up on 21st March - Save €300 now!

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Will new prepaid payments rules improve or hinder the development of the prepaid industry?

Prepaid cards are growing in popularity in today’s payments world with consumers becoming increasingly reliant on prepaid products in order to purchase goods and access funds. Director Richard Cordray of the Consumer Financial Protection Bureau (CFPB) predicted a total dollar value of general purpose reloadable cards to grow to around $100 billion by the end of 2014. The CFPB decided in 2014 that there needed to better rules in order to help to protect users in a way that is more similar to the security that comes from a credit or debit card.

Towards the end of 2014, the CFPB proposed new rules for prepaid accounts that will create amendments to the Electronic Fund Transfer Act and Truth in Lending Act. The rules fall under 4 main categories:

1. Credit Protections – relates to credit products in prepaid accounts. Now means monthly billing statements, allowance of time to pay debts, late fees and limitations on fee and interest charges.
2. Prepaid Protections – allow prepaid users to have the same protection as they would receive with a normal checking account. This includes easy access to account information and lost-card and fraud protection.
3. Prepaid/Credit Distinction – rules to be implemented in order to distinguish between credit products and prepaid accounts.
4. Prepaid Fee Disclosures – rules in order to standardise upfront disclosures and that card agreements must be publicly accessible. 

The rules will exclude cards that are marketed and labeled as gift cards or certificates. Also excluded are flexible spending accounts, medical savings account, health reimbursement arrangements and health savings accounts.

So are these rules going to be advantageous in the prepaid payments world? The general consensus is yes; much of the 870 page proposal is widely considered to be reasonable. The rule allows credit to be offered and will mean a decline in hostility from regulators in regard to the prepaid industry providing credit, so a measure of regulatory consistency has now been provided. Providers are now allowing check writing and bill paying to help persuade cardholders to use prepaid payments as their primary banking platform.

However the issue that has been raised by many in the industry is that the rules will stifle any future innovations into digital wallets, person-to-person payment systems and cryptocurrency products. The CFPB, some believe simply have too much power and so rulings like these tend to go unopposed. The Bureau has the power to break businesses due to its huge influence. The industry tends to accept new rules and regulations in the fear that if they say no there could be negative repercussions.

To me, looking in from the outside of the industry, it looks as if the rules will be advantageous to the ever-growing industry at present. Providing security and the ability to pay debts, limiting interest charges amongst other plus points will continue to increase the popularity of prepaid payments. However stifling the potential for development and innovation may in the long run mean a limit to longevity if another disruptive innovation within the payments world comes along.

About the Author: Harry Kempe, a marketing intern at IIR USA, who works on various aspects of the industry including social media, marketing analysis and media. He is a recent graduate of Newcastle University who previously worked for EMAP Ltd. and WGSN as a marketing assistant on events such as the World Architecture Festival, World Retail Congress and Global Fashion Awards. He can be reached at hkempe@IIRUSA.com. 

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Digital Transactions Surpass Cash in UK

This past weekend saw the end of cash leading as the most popular payment method in the UK. On Sunday March 8th, more transactions were made via credit, debit and other cashless methods than that of cash.

The Payments Council had predicted that this switch would occur in the UK in 2015.

See the figures in the article from The Telegraph, one shows the total value of cash vs. credit transactions from 2014 and the credit transactions out valued cash at a rate of 250:1. This is due to the fact that large corporations who deal with high-value transactions rarely touch cash.

The figures also continue to show the decreasing average payment on a credit or debit card, the rise of contactless payments, and the decrease of average cash transactions over the last few years. These are telltale signs that cash is losing its grip on consumers and is being replaced by digital transactions.

It is suggested that by 2023, cash transactions will fall to just 13 billion and the cashless alternative will grow to a staggering 27 billion. 

The direction of the payments industry is hard to deny, as years pass cash will begin to become an obsolete payment method that is rarely used by the everyday consumer. As new technology continues to emerge, cash slips a little further from relevance.


How long will it be until cash is no longer carried by the everyday consumer? Only time will tell but right now it seems as if it is sooner rather than later.

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Top 5 Reasons You Can't Miss APEX Europe

At APEX Europe, you'll join an international community and get in-person insights, valuable face time with peers and partners and access to consumer research and case studies you won't hear anywhere else. This is where 250+ payments, retail and technology executives are convening to build the next generation of inter-connected commerce.

With a focus on consumer experience and intra-industry collaborations, All Payments Expo Europe is the most relevant gathering of Europe's payments players, including retailers, programme managers, card networks, processors, issuers/acquirers, financial institutions, payments start-ups, technology and investors.

The Top 5 Reasons You Can't Miss APEX Europe:

1. The only European payment & financial services event where retail, mobile, data and technology intersect to grow connected commerce
2. Partner with 250+ movers and shakers in the prepaid, retail & technology industries
3. Sharpen Your Strategies with insights from industry leaders
4. Design your company's solutions to challenges in regulation, consumer awareness and interoperability
5. Uncover new ways for payments technology to acquire new customers, deepen loyalty, leverage data and improve the financial health of consumers

Download the programme.

Register with the code XU2940BLOG by 20 March & save €300!

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