Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.
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November 22, 2021
We Are Thankful For…
Two years ago, prior to Thanksgiving, I asked each Risk Forum member to provide me the one thing they were thankful for in payments. This year, I posed a bit of a different question to my colleagues and asked them what payment innovation they are most thankful for. Without further ado, the Risk Forum presents our 2021 Thanksgiving week "What payment innovation are you thankful for?" list.
- Nancy Donahue, project manager: I'm thankful for innovation in voices contributing to payments because it's through these different and diverse viewpoints that the industry develops solutions that are inclusive of all consumers!
- Claire Greene, payments risk expert: I am thankful for the electronic receipt of bills and automatic bill pay. As a payments expert who doesn't want to think about her personal payments, I remember the monthly stack of envelopes on my dining room table.
- Scarlett Heinbuch, payments risk expert: I am thankful for the innovation of dongles and payments apps that make it easy for small businesses and individual sellers to accept credit card payments.
- Douglas King, payments risk expert: I am thankful for innovation in payroll that makes my payday afternoons more flexible through the ability to receive my paycheck via direct deposit. Prior to direct deposit, I distinctly remember receiving a check at my job and then heading to a bank only to wait in a long teller line on Friday afternoons with others to deposit our paychecks.
- Dave Lott, payments risk expert: I am thankful for the ability to make contactless payments with my debit card at stores and gas pumps as it is much faster.
- Sally Martin, senior business analyst: I am also very thankful to be able to schedule payments electronically, either once or as many times as I want out to infinity. Keeps me honest and doesn't allow me to rob Peter to pay Paul as easily. Also, I don't have to think about doing it every month when the due date comes along.
- Catherine Thaliath, project management expert: I am thankful for digital wallets that make it convenient to store my credit cards, boarding passes, concert tickets, loyalty cards, etc., all in one place!
- Jessica Washington, payments risk expert: I am thankful for mobile deposit capture. When I do get lucky enough for someone to give me money (outside employer) and it is a check (whah, whah) I love that I can pop that moolah into my account right after I open the mail or birthday card.
And we are thankful for YOU, our readers of Take On Payments and supporters of the Risk Forum. We sincerely appreciate your comments, kudos, and criticism, and hope that you all find value in the information we provide and share. As we enter into these crazy last weeks of 2021, we wish you and yours a wonderful holiday season.
November 1, 2021
Diversity and Inclusion in US Currency
My interest in coins started at a young age. My grandfather would share his coin collection with me and point out the details: the dimes and quarters made with real silver before 1964, and the wheat backs on the pennies (1909–58). He took pleasure in showing me the buffalo nickel (1913–38) with the Native American image on its front.
My grandfather was proud of his Cherokee roots from North Carolina. His profile resembled the image on the coin, and I remembered feeling proud because, from my child’s viewpoint, I thought it was him.
Images on US currency that reflected his heritage meant something to him, which I understood to mean that Native Americans were included and honored in our nation’s monetary system.
These memories came to mind when I saw two recent news stories about greater diversity in our inclusion initiatives. The first announced that poet Maya Angelou’s image is going to appear in a new American Women’s Quarters series, a four-year program starting in 2022. The other women will be astronaut Dr. Sally Ride, Cherokee Nation chief Wilma Mankiller, educator/women’s rights activist Nina Otero-Warren, and film star Anna May Wong.
The second announced that the Federal Reserve Board joined the Central Bank Network for Indigenous Inclusion to help raise awareness of economic and financial issues with Indigenous economies. The network is a collaboration with the Reserve Bank of New Zealand (Te Pūtea Matua), the Bank of Canada, and the Reserve Bank of Australia. Other participants include the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis and the Economic Education Partnership with Indian Country at the Federal Reserve Bank of St. Louis.
While these new initiatives are notable, there are examples from the past. The first appearance of an identifiable woman on a bank note was in 1865 with the image of Pocahontas, featuring her baptism, printed on a $20 note. The next woman to appear on a bill was Martha Washington, on a $1 Silver Certificate in 1886. Harriet Tubman’s likeness is proposed to take Andrew Jackson’s place on the $20 bill, currently projected for 2030.
As for coins, in 1979 Susan B. Anthony was the first identifiable woman to appear on a coin in 1979, in this case a $1 coin. The Sacagawea golden dollar issued in 2000. Then in 2020, Elizabeth Peratrovich appeared on the $1 coin as part of the Native American $1 coin program, which began in 2009.
Remembering my grandfather’s pride at seeing his heritage reflected in our nation’s coins made an impact on me at a young age. When we discuss financial inclusion in our payments systems, noting the diverse images that appear on our coins and currency as a reflection of our society, our norms, and our values can be an important part of the discussion, along with tangible efforts to open the dialogue for all groups within our nation. What do you think?
April 26, 2021
Financial Literacy: Talk to Me Like I'm a Fifth Grader
Kids adapt to technology by repeated exposure, usually starting with interactive games, and can learn about money and payment choices in the same way.
While there are initiatives for teaching financial education in high schools, the age to learn about money may be around the time kids tap on their first iPad. A study by the University of Cambridge reveals that kids form money habits by the age of seven.
April is Financial Literacy month. As my colleague Doug King noted in a recent post, financial literacy rates are low among adults, declining from 42 percent in 2009 to 34 percent in 2018. Open conversations create greater understandings and can lead to a more financially literate population. Early learning about money and our payment systems fosters those conversations and increases financial knowledge.
As kids learn more about money and finances, they also learn about risks and how to better protect themselves from fraud. Starting with cash and coin literacy, there are several options to explore from the agencies that produce them. These simple introductions to our currency could help kids become more comfortable and familiar with our units of payment.
The U.S. Mint introduces kids to currency and all the details that go into making coins, including the design, weight, materials, and locations of the actual mints. It's fun and informative for kids and adults.
The U.S. Treasury provides details for kids on paper money. More details are found at the Bureau of Engraving and Printing in Washington, D.C., and Fort Worth, Texas. The site explains how they print billions of dollars yearly that are delivered to the Federal Reserve System, which helps kids to understand the interaction of the U.S. Treasury with the Federal Reserve.
The U.S. Currency Education Program sponsors a Currency Academy, which is managed by the Federal Reserve Board, for K-5 classrooms. The program includes videos, games, and activities for kids along with lesson plans for educators. The site notes the materials are best suited for kids in grades two through five.
The Richmond Fed's My Money workbook introduces young children to the characteristics and functions of money. They learn how to identify the different values of coins. Activities included in the workbook teach children that people earn money at jobs to use the money they earned to buy goods and services.
As kids learn about currency, they can extend their knowledge to other forms of payments they may see their family members use, including debit, credit, or prepaid cards, checks, and alternative payment methods such as Venmo, Square, CashApp, Paypal, or Zelle, among others.
You can order print copies of the workbook and other resources from the Federal Reserve Education's site. The St. Louis Fed has developed many parent reading guides to accompany popular children's books. These books and their associated parent guides include age-appropriate themes that encourage positive financial behaviors.
March 29, 2021
SNAP Continues to Pop
Over the last year, a number of our Take on Payments posts have expressed industry concerns about the impact that the major shift to digital payments propelled by the COVID-19 pandemic will have on the un- and underbanked population. While several governmental assistance programs have modified their programs to accommodate remote enrollment and ongoing participation, the actual use of these benefit funds was largely limited to in-store purchases of foods, drugs, and other items authorized by those programs. My colleague Catherine Thaliath authored a post last July reviewing how the Supplemental Nutrition Assistance Program (SNAP) had moved from a one -state, pilot program in 2019 to supporting online purchases by SNAP cardholders in six states by early 2020.
I'm excited to report that the expansion of SNAP's online ordering program has continued aggressively through the pandemic with the participation of 47 states and the District of Columbia. Only Alaska, Louisiana, and Maine are not currently participating in the digital payment program; Maine has plans to go live later this year. In most states, the major grocery retailers that were already supporting online ordering are participating. SNAP funds can be used only for the purchase of the eligible food items and not for delivery and any other convenience fees.
With the digital expansion of the assistance program, program administrators at the federal and state levels are well aware of the increased risk of fraudulent activity that comes with the buy-online-pick-up-in-store option (sometimes referred to as BOPIS). The SNAP program requires that online retailers support PIN entry, which helps to mitigate fraud risk. The retailers follow a number of traditional steps to ensure that the person picking up.
It is encouraging to see how agencies are adopting technology for social good in this challenging time.