Wednesday, July 16, 2008

What is the cross border fee?

Usually a percentage out of a transaction ranging from 1 to 3. Say for example you have a purchase of $50 and an additional $0.5 next to it showing related to that purchase then that $0.5 is the cross border fee.

It is something supposed to keep processing costs low but in fact it`s a fee that goes straight into the banks pockets.

Stoping this fee seems to be a major hassle since both Merchants and Customers don`t appreciate it yet banks often don`t admit to being the ones that actually charge it.

It`s incorrect to believe that it is a fee charged by the Merchant e.g. Flight Tickets Company but it also is incorect to be billed on against your Account.

A good idea is to ask your issuing bank to stop it or use a bank that doesn`t charge this fee. After all, during a 1 yeatr period you might end up paying a lot more than you should.

If you are a Merchant the same applies, business might be negatively impacted and need to take it with the banks as Customers don`t have anything to do with it.

Currency trading at Saxo Bank

A currency market that is fluctuating is an opportunity as opposed to when the market doesn`t fluctuate. The reason for that being in currency trading one trader could only make profit when the pair is moving.

As an example I would like you to imagine the EUR>USD pair. A country`s currency is never quoted in itself. It always gets a quote - or a value - in report to another country`s currency. In this case, the EUR>USD has recently reached a 1,6000 range and above.

That was from 1,4000 some 6 moths ago. At the same time the GBP>USD has reached the $2 per 1GBP.

The question that comes to mind is how can someone take profit in a moving currency market? The beautiful thing about it is that a pair can go both UP as well as DOWN and you can still make money on it. Why would that be?

Take this as an example you have a "lot" of 30 000 EUR USD that you invest. Meaning if you have proof/ reasons/ strategy to indicate the dollar will gain strength against the EUR then you should BUY the dollar. That is actually done for the EURUSD pair by SELLING the Euro which at a rate of 1.6000 will mean 18750 EUR paid for 30000 USD. Say the dollar gains and gets to be 1.5000 then you would buy back the EUR but 30000 USD would now buy 20000 EUR meaning you got a profit of 1250 EUR.

Caution please as this kind of move (1000 pips) does not happen over night - it takes months and this should probably be a long term position.

A really interesting experience is with Saxo Bank as they provide a really good platform and good leverage too. Plus their positioning in Denmark leads to the conclusion that Saxo is a pretty safe option to go with.

Thursday, July 10, 2008

A decent explanation of why oil price rose today

Apparently the rise in the oil price as well as the fall of the USD is to be explained through the so called long range missiles tests shown on Iranian national television.

It`s geo - strategical location close to the Hormuz strait enables Iran to impact oil prices. It is believed that 40% of the world`s crude oil passes through that area. Having control over it or posing threat to it would lead to impact on the oil prices and currencies attached to it (almost all, mostly USD).

The full story can be previewed here.

Wednesday, July 9, 2008

UK House of Lords committee blames banks

Very interesting decision coming from a ruling body such as the UK`s Lords commitee. Someone eventually realized that in order to fight this phenomenon is better to start by adding some ownership to it.

After all it involves money - everybody`s money so they basically stress on two things:
1) Banks should be liable for all electronic fraud;
2) Reports to the police need to be made for e-fraud rather than the banks.

Examining these two points of view I would consider that the second is very appropriate while the first is a little bit exaggerated.
Banks cannot and will not be made fully liable for e-fraud as 90% of the loss in fraud related activities would have to be supported by them. While right now 90% of the e-fr is supported by the merchants.

The second would be reporting to the police which is happening in increasing numbers as opposed to previous years is a very good point the House of lords has made. This way police would be invested with the necessary power to investigate and eventually prosecute cutting down this invisible mafia that is the 21st century type of organization.

You can see the nice clip by clicking here here.

Monday, July 7, 2008

What should I do when I don`t recognize a charge? ...or a practical giude to chargebacks

Most people check their charges only once a month or once every 3 months (3 months is not recommended however as it`s way too long and you might end up abused by fraudsters). Some other people check it online before the statements are being issued which is more adequate as one could thus see potential multiple billing, fraudulent charges so on..

Then the next thing that is advisable would be to check for the contact phone number next to the charge. The reason for that is simple - in over 40% of the cases the charges are legitimate just that showing under a different brand than what you are used to call the store. Say for example you had a charge for $7.55 showing from COFFEE RET. 888-555-2343 but you don`t remember having paid it to Coffee anything but do remember a $7.55 charge from STARBUCKS. It is just an example of how charges might show - I`m not by no means implying that`s how Starbucks charges show.

Considering it helpfully for Consumers and Companies both to be aware of this misunderstanding I have put together a list of merely suggestions on how can things get straightened out before any of the parties ends up with loss.

Step 1) Look for the phone number next to the charge.
Why would you do it? One good reason is because sometimes the Merchant that shows on your statement and the name of the store (online or not) may be different.

Step 2) Call the number in case you are having doubts on the legitimacy of a charge. Once you call that number ask for what that Company sells or what their area of business is. This way you ensure you will not dispute/ chargeback a legitimate charge.

Step 3) Once you know what the Company does or sells decide whether you or some secondary cardholder (usually family members) used it to pay for the respective Goods or Services.

Step 4) Check with your family (if you have a spouse, child or another member as authorized user of your account) if they purchased the respective product or if they know/ recognize the respective charge.

Step 5) If you do recognize the charge eventually than everything is clear and you don`t need to chargeback anymore. Usually chargebacks raise tension between a company and the respective chargeback account holder. The reason for that is the chargeback fee on top of the Amount. Companies cannot accept overlooking the chargeback fees as these come included in the monthly loss Amount. You might find yourselves in the situation that a Company will deny future business from you on the basis of a irresponsible chargeback.
is nothing but loss of time and money for both parties involved if you chargeback a legitimate charge that you temporarily don`t recognize and rush to report it to the bank.

Step 6) If neither you nor any other authorized user of your account recognizes that charge then go ahead and fill in the corresponding forms with your bank. The banks usually respond quick to chargeback requests and issue it without to much investigation solely upon Card holder`s request. Some other banks actually encourage their Customers to check with the Merchants before a credit card dispute.

Step 7) Even if a chargeback is filed that doesn`t make it final. The whole process entitles the Merchant to provide evidence that the respective person actually participating in the transaction. If pertinent proof is provided then it gets reversed and the Card owner gets billed again for the Amount of the Conditional credit he or she had previously been given.

Wednesday, July 2, 2008

Expuse Code from Paypal - a definition

There is sometimes hard to find a correct answer to a simple question. For this reason alone I consider this article would make sense.

PayPal Expuse Code = A 4 digit Code that reflects on a cardholder`s statement (or even online statement) that shows next to a TEST Charge from PayPal. The charge is usually a small Amount of $1 or for cards issued in Euros is 1,5 EUR. The purpose of this test charge is that PayPal Validates or links the Cardholder to their bank and to the actual credit/ debit card.

The PayPal Expuse code is a smart choice for online validation of a person. The main reason behind it is that a bank will not release you this Expuse Code over the phone, or is not supposed to do so at least. Thus it consolidates the link between a bank and it`s Customers. A cardmember/ cardholder usually gets or obtains this code by paying their bank a visit in person rather than waiting for a whole month for the statement to be issued and sent out.

This practice is actually valid worldwide, it`s meant to increase responsible usage of online payment means and reduce fraudulent attempts.

No matter where a specific card is issued (be it San Diego, California or Johannesburg, South Africa) the Expuse Code will be the same - a four digit code next to a charge that is called Expuse Code.

Hope this is a satisfactory explanation and if more info is necessary on the matter please leave a comment and I will try my best to obtain pertinent answers.