Time to Ante Up to Get More Chips on the Table

Today I got an email from my credit card provider. My new EMV—chip card—is on its way. Some of my friends have already received and have been using their chip card for months, others have not.

If you are a business that accepts credit cards at point-of sale and you haven’t already updated your POS system to accept EMV, you should consider updating to a system that handles both EMV and NFC (think ApplePay) technology.

EMV (Europay, MasterCard, Visa) credit cards have been around for a while now and have been used in other countries around the world for about a decade.  EMV uses the computer chip technology we’ve all heard about—the one that greatly reduces fraud by using a single-use code to validate each transaction instead of the 16 digit account number.

NFC (Near-Field Communication) is a type of wireless technology that allows mobile payments to be made over short distances. It’s the chip technology used by ApplePay, Android Pay, and soon to be launched Samsung Pay (September 28th).  Like EMV, NFC technology also utilizes single-use codes to keep your credit card information safe from fraudsters, plus requiring a password to unlock your cellphone adds an additional layer of protection if your device is lost or stolen. ApplePay also takes security a step further by requiring the use of the Touch-ID (thumbprint) home button to complete a transaction. 

Migration to chip cards won’t provide additional counterfeit fraud protection when it comes to card-not-present transactions such as phone or online purchases, but will virtually wipe it out at point-of-sale dealings.

Even though it is not mandated that businesses make the transition to EMV compatible systems, on October 1st there is going to be a liability shift from the credit card company to merchants—any business that doesn’t have EMV compatible terminals in place by that deadline will be liable for any fraudulent changes that take place at those terminals. 

If you haven’t upgraded your system yet, you’re not alone. I’ve read statistics¹ that estimate 75-80 percent of small to medium size businesses have not yet made the transition, and, as you might have guessed, cost of a new system is a predominant cause for the delay along with lack of time to research and setup the system, and general lack of knowledge on the subject.   

Systems that handle both technologies aren’t really any more expensive than the ones that just handle EMV. As long as you’re already upgrading, give your patrons more options for payment. If someone wants to buy something from you, you might as well make it as easy for them as you can.

If you’re looking for EMV compliant options, check out NerdWallet’s blog: POS systems: Find the Best System for Your Small Business. 

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 10 years.

1, Payment Week, Eight out of Ten Small Businesses are Not Ready for EMV, September  10th, 2015.

Don’t Need a Loan? High Credit Scores are Still Important

Last week, while out with some friends, the subject of credit scores came up. One of the younger members of the group had just bought a new house. She was excited about moving into their new home, but disappointed with the amount she and her husband had to pay for closing costs—over a $1000 more than they had anticipated—due to a recent drop in her credit scores. Now, some of the updates they wanted to make to the house were going to have to wait.  Then, another older member of the group said she was glad she no longer needed to worry about her credit scores.

I guess the look on my face said it all, because she went on to explain why: She and her husband, Frank, already had a home—with a low interest rate—which would be paid off in a couple of years, her husband drove a company car and hers was paid off a while back, and they no longer used or even had credit cards any more since they paid all of their bills online and used their bank issued debit cards for groceries and other purchases. (Don’t even get me started on liability differences between credit cards and debit cards, but check out a blog I wrote  for UCS about it here.)

She looked pretty smug when she finished with her list of reasons. And even though I was very happy for her—in two short years they would be living totally debt-free—I couldn’t help but feel concerned when she told us how liberating it was not to worry about due dates—she paid her bills whenever she got around to it.   

The thing is, achieving and maintaining a high credit score is important.  My friend may not need credit now, but what about in the future?  Circumstances change, oftentimes without warning: What if they end up with a serious issue with their septic system—a home improvement loan might be in their future, or maybe Frank’s company will push for an early retirement—there goes his company car. They might even decide, down the road, that their house is too much for them; most apartment management companies require a credit check before renting.   

Let’s say, for the sake of argument, none of these things happen and they never have to borrow money again, there are other compelling reasons to be careful with your credit scores:  What if Frank decides to work for a different business (after his forced retirement)?  Some businesses still check credit as a condition of employment. Car insurance companies are now known to use a person’s credit score when determining insurance rates. A drop in credit scores could cost you a lot in premiums. (Check out a blog about it here)

Obtaining and maintaining a high credit score is important whether you are starting out, or almost ready to retire.  Keep it as a lifelong goal because believe me, one way or another a high credit score is going to save you money as well as piece of mind.

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 10 years.

Is the Fee-For-Service Model to blame for America’s High Cost of Healthcare?

Everyone knows that healthcare in the United States is extremely costly, but what exactly is the cause of its high price?  When asked, many experts will tell you the fee-for-service reimbursement model is to blame.  I read an article last year in Forbes magazine called “The High Cost of American Healthcare: You Asked for It.” I thought it was clever when the article compared the fee-for-service model to hiring a contractor for a kitchen remodel. And instead of obtaining competitive bids and choosing what you want, you defer to his expertise and allow him to pick all materials as well as their source—whatever he wants to do—under a time and materials contract.  At the end of the day, you could not only end up paying for more hours than you were expecting (in part because he charged for the extra time it took to redo mistakes) but you could also be stuck with a heavily marked-up Sub-Zero refrigerator when you would have been perfectly happy with the much cheaper, Consumer Reports recommended brand you researched earlier. 

Like the “time and material” contractor, the fee-for-service financial model pays healthcare providers for the number and type of services they provide to patients—the more they deliver, the more they’re paid.  It’s long been thought that this incentivizes healthcare providers to do more—regardless of benefit—and that’s what’s caused the high cost of healthcare here in the States.

Provider-owned health plans join the insurer with the provider.  This integration has been touted as a way to get away from the fee-for-service model which many experts believe would lower insurance costs by reducing excessive spending from unnecessary procedures, tests or surgeries. 

HealthPocket, the health plan comparison company that provides unbiased information to consumers to help them make more informed decisions, wanted to calculate the actual health insurance premium cost savings that takes place when the fee-for-service model is eliminated. To do so, they compared the lowest premium costs for provider-owner plans in the Obamacare marketplace to nonprovider-owned plans within twelve counties (that contained both types of plans) spread across eastern, central, and western regions of the U.S.

Results were quite different than anticipated. The cheapest provider-owned health plans were on average more expensive than the cheapest nonprovider-owned plans. 

Bronze Plans: in 10 of the 12 counties, the least expensive plan was a nonprovider-owned plan.

Silver Plans: the cheapest plan was a nonprovider-owned plan in 8 of the 12 counties studied. 

Gold Plans: in 10 of the 12 counties, the least expensive plan was again a nonprovider-owned plan. 

Platinum Plans: only 3 of the 12 counties had provider-owned platinum plans, and 10 of 12 had nonprovider-owned plans. Only two counties had both provider-owned and nonprovider-owned platinum plans.  The cheapest provider-owned plan was more expensive in one of the counties, but less expensive in the other.

HealthPocket conclusion¹:  “The results of the provider-owned health plan premium investigation illustrate the sobering reality that the best intentions in reforming American healthcare do not necessarily produce the cost-savings imagined. Despite their theoretical promise of reducing expenses by elimination the waste associated with the fee-for-service model, a cross-country analysis found that far from being the least expensive health plans, the provider-owned health plans without fee-for service model were, in fact, more expensive on average than their nonprovider-owned counterparts.”  ¹HealthPocket.com infostat 8/20/15

 

I think we can all learn something from the “time and material” comparison. Can it lead to unscrupulous spending and inflated costs? Yes. But if employed by an honest, trustworthy contractor, it can also save money. When paid hourly, the contractor doesn’t have to add unforeseen problems into his bid. Not to mention the fact that some contractors receive price breaks on materials and pass them on to their clients.  To me, it’s more important to investigate the reputation or trustworthiness of a business—or healthcare provider—than their reimbursement model. In both cases you are going to them for their expertise, but it’s your kitchen, your health, and your money, ultimately the decision is yours. It is imperative that you ask questions and understand exactly what you are agreeing to.

A. Alliance Collection Agency, Inc. is a full service, licensed accounts receivable management and debt collection agency providing highly effective, customized one on one management and recovery solutions for our business partners.  Founded in northern Illinois in 2005, we have been proudly improving the bottom-line on behalf of our business partners in and around Chicagoland for over 10 years.