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<ul class="summary-list"><li>If you've gotten really into credit card rewards in recent years, you're not alone.</li><li>Some Americans go to great lengths to maximize points, sign-up bonuses, and cashback.</li></ul>Aaryan Desai picked up a hobby during quarantine: <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/best-credit-cards">researching</a> <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/transferable-credit-card-points-best-rewards-to-earn">credit card</a> <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/ways-to-use-credit-card-points-beyond-travel">rewards</a>.The 20-year-old swipes as much as he can. Right now he's <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/how-to-book-free-travel-cheap-deals-credit-card-rewards">banking points</a> for a concert in October and a big trip after he graduates from Georgia Tech.Desai is part of a new generation of credit card users: young, perks-focused, and ready to maximize. Today's credit cards, he said, are like the coupon books of yore. The perks might not always be the right fit, but, if you figure out a good configuration, you can find some big savings.For Desai and other <a target="_blank" class="" href="https://www.businessinsider.com/credit-card-rewards-points-friends-fights-brunch-money-payment-venmo-2024-7">rewards hounds</a>, the realization that they can perform a sort of points arbitrage was a real hook."Just using the money that I would be using otherwise or just getting together with friends and that, 'hey, I can just put it on my card and you can Venmo me later,' opening the door to getting 80,000 points from Chase or 175,000 from American Express — it was a new opportunity," he said, adding: "That's what got me into it."If it seems like the whole country suddenly has credit card point mania, you would be correct: An <a target="_blank" href="https://www.ipsos.com/en-us/majority-americans-value-their-credit-card-rewards">Ipsos poll</a> of 1,081 adults conducted from April 31 to May 1 found that 71% of respondents have a rewards or cashback credit card, and 68% said that they prefer using their credit card because of the rewards and points that they can earn.The poll found that a fifth of Americans ages 18 to 34 use their rewards to pay for things they wouldn't be able to afford otherwise. Younger Americans are flocking to previously fancy cards like <a target="_blank" href="https://www.businessinsider.com/american-express-platinum-card-gold-gen-z-millennial-rewards-2024-6">American Express</a>, willing to shell out hefty annual fees in exchange for perks like <a target="_blank" href="https://www.coachella.com/amex">exclusive access to Coachella tickets</a>.The rewards are a big reason <a target="_blank" class="" href="https://www.businessinsider.com/credit-card-rewards-points-friends-fights-brunch-money-payment-venmo-2024-7">credit cards</a> have become a cultural juggernaut among young Americans. As costs rise and <a target="_blank" class="" href="https://www.businessinsider.com/millennial-subsidy-uber-airbnb-prices-surge-pricing-dynamic-2024-8">the millennial subsidy fades</a>, credit card rewards help a new generation live lifestyles they may not otherwise be able to afford: first-class flights, hotel rooms, and VIP concert experiences. It doesn't hurt that social media is full of videos and blogs that offer the tantalizing promise of free trips, luxury lounges, and fancy restaurants — if you can cobble together the right puzzle of points and cards without digging yourself into too much debt.<h2 id="124d8b83-ad11-40eb-84a1-249d4ffa65bd">Living the high life on credit card perks</h2>At first, 29-year-old Willem Van Eck thought the rewards game was a snake oil salesman's gambit. Cut to: He's stretched out in a first-class seat, a glass of bubbly in hand."Wow," he thought, "this actually is a scheme that you can leverage with the right flexibility and with the right research," Van Eck, a software engineer in the Bay Area, said.Credit card rewards work as an incentive to get customers to swipe more. They can come in the form of cashback — which means you get a partial refund for a given purchase in the form of a credit on your bill or a transfer to another account. Or they come as points, which are more nebulous but can typically be used as currency for future purchases. And then there are other perks like hotel credits, airline miles, gift cards, and upgrades like Van Eck's.For instance, the Platinum Card from American Express — often considered one of the <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-cards/chase-sapphire-reserve-vs-amex-platinum-card#fees">top cards for rewards</a> — will cost you $695 in annual fees. In return, you'll get five points for every dollar spent on flights and a point for every other dollar spent. On average, <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-cards/what-are-points-miles-worth-value#amex-membership-rewards">per BI's calculations</a>, an Amex point is worth 1.8 cents. Say you spend $5,000, $2,500 of which went toward flights; you'd net 15,000 points, which could equal around $270 — a significant chunk of the annual fee.In addition, many cards will also offer substantial sign-up rewards. The Platinum Card offers 80,000 points for spending $8,000 in the first six months of holding the card. Those 80,000 points alone could be worth twice as much as the annual fee.Taking advantage of this system requires diligence and restraint to avoid paying more in interest and fees than you gain in rewards. According to <a target="_blank" href="https://www.federalreserve.gov/econres/feds/files/2023007pap.pdf">a paper</a> looking at who this system hurts and benefits, borrowers who carry balances and businesses — which pay a fee on each credit card transaction — subsidize the fun for the rest of us.Pre-pandemic, Van Eck was chasing cards with high sign-up bonuses, like the Chase Sapphire Preferred card, because they allowed him to transfer points to airlines so he could book business or first-class seats. During the pandemic, he took note of the <a target="_blank" href="https://www.wsj.com/articles/airline-cards-lose-luster-as-coronavirus-persists-11606991400?mod=article_inline">beefed-up bonuses and short-term benefits</a> that companies were offering in an attempt to lure customers; his Delta card offered a $15-a-month dining credit, for instance. That's when Van Eck noticed that more of his Gen Z and millennial friends starting to become adept at navigating their benefits.Van Eck is very cautious of lifestyle creep and ensuring that cards are worth his while, especially amid high interest rates, inflation, and recessionary fears."I've seen most of my peers, including me, reevaluate the value proposition of the cards," he said. Every year, he goes through his list of cards to see which ones paid for themselves without him changing his behavior. If one doesn't, he'll cancel it.But not everyone is as prudent as Van Eck. In the high-paying tech industry where he works, Van Eck still sees people changing their habits to maximize rewards, which he doesn't think is smart. This could be why delinquencies have been on the rise in recent years, with the youngest borrowers leading the pack. After all, credit cards are fun to use. No, really. Contrary to the belief that we overconsume with credit cards because they ease the pain of spending, <a target="_blank" href="https://mitsloan.mit.edu/experts/how-credit-cards-activate-reward-center-our-brains-and-drive-spending">research finds</a> that their bigger appeal is that they make our brains feel like we're getting a reward. All that stands between you and access to that first-class airport lounge are a few taps or swipes.<h2 id="0f454fca-2571-4637-a3e5-c54130cda971">Nothing good lasts</h2>Credit card companies aren't just giving away rewards for free.As Lulu Wang, an assistant professor of finance at Northwestern's Kellogg School of Management <a target="_blank" href="https://insight.kellogg.northwestern.edu/article/who-pays-generous-credit-card-rewards#">finds</a>, many businesses will pass on their costs to customers. For example, say you use a 1% cash back rewards credit card at your favorite local coffee shop on $100 worth of coffee for you and your friends. The shop pays a 2% fee on the transaction — $2 — to your card issuer. Then, your card issuer would use some of that 2% fee to give you your 1% back. To cover their fee, the shop might raise their prices."In some sense, when you benefit from those rewards, you're taking that money from some mix of the merchant and other cash and debit card consumers out there in the economy who are then not benefiting from those rewards," Wang said.Perks aren't always a great deal for everyone. Will Springer, a 41-year-old in Indiana, uses his Chase Sapphire Preferred and Amex Platinum cards primarily for perks like travel insurance and car rentals. Since he lives in a more rural area, an Equinox gym membership benefit is moot, and he can't really use the Uber benefit offered — he sometimes converts it into food delivery credit for Uber Eats.Other loyal credit card point users say you can't bank on your favorite perks sticking around. Brandon Zemel, a 32-year-old music producer in Las Vegas, puts pretty much everything on a credit card. He has two cards, the Chase Sapphire Reserved with a higher annual fee that's more travel-catered, and the Chase Freedom Unlimited, which has a fairly flat return on points. He said his travel card shaves hundreds of dollars off of his expenses, and he loves to use his points to get himself onto seat upgrade lists.But Zemel recently lost a hugely useful travel benefit: a "<a target="_blank" href="https://www.forbes.com/advisor/credit-cards/chase-sapphire-reserve-card-ending-priority-pass-restaurant-benefit/">priority pass</a>" that could be converted into a $28 dining credit for both him and a guest."It seems to be a thing these days that every year, two years, three years, these companies devalue their product or their perks provided by their product," Zemel said. "And I guess to some extent it's to be expected, but it does kind of remind you that the things that you currently enjoy are not necessarily going to be here long term."As Zemel has seen during his time as a cardholder, the rewards craze has basically "grown exponentially," propelled by popular blogs and TikTokers. That can also dim the appeal of previously exclusive perks, like overcrowded airport lounges."People got really used to anyone with a pulse basically having some kind of access to the lounge at the airports," he said. Now, Delta has <a target="_blank" href="https://www.cnn.com/travel/delta-ceo-bastian-skymiles-changes/index.html">recognized</a> that it had too many elite cardholders — leading it, in some cases, to restrict access to <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-cards/delta-sky-club-credit-card-access">lounges</a> to higher spenders.It's what Wang says is an example of "<a target="_blank" href="https://www.huffpost.com/entry/what-money-cant-buy_b_1442128">skyboxification</a>" — an increasing stratification of life among haves and have-nots, like a baseball stadium that's divided between crowds in the stands and richer fans in box seats."I can totally understand this looming dread that society is getting splintered into those who have access to this kind of stuff and those who don't," Wang said.I can relate to this sentiment. At a music festival this summer, I learned that my Chase Sapphire credit card would let me skip the line and access an air-conditioned tent with free water.However, when I arrived I learned a hard truth: I actually needed the card one tier above mine to get in. For one brief moment, as I gazed at the sparse crowd inside, I thought about applying on the spot. But I ultimately decided it wasn't in my best interest to incur a higher annual fee and open another line of credit.And yet, as I stood among the packed and sweaty masses, waiting nearly an hour to get food and water, I felt haunted by the skybox appeal. Would a new credit card do anything positive for my finances? Most likely not. Would it make me feel like a VIP at this event? Definitely. Maybe I'll try to get the Sapphire Reserve before next year's festival.Are you passionate about your credit card rewards? Have you gotten into debt trying to play the points game? Contact this reporter at <a target="_blank" href="mailto:jkaplan@businessinsider.com">jkaplan@businessinsider.com</a>.

Welcome to credit card points mania

<ul><li>Reserve Bank of India governor Shaktikanta Das today announced that users will soon be able to deposit cash using <keyword id="6358921" type="General" weightage="20" keywordseo="upi" source="Orion">UPI</keyword> at ATMs.</li><li>Users will also be able to make UPI payments via PPI wallets through third-party apps.</li><li>The governor-led MPC also proposed the launch of a dedicated mobile app for retail investors to access the G-sec market.</li></ul>Forgot to carry your debit card while visiting the ATM? Don’t worry, the Reserve Bank of India (RBI) understands your pain. On Friday, RBI governor Shaktikanta Das announced that bank account holders will soon be able to deposit money at ATMs using UPI, or Unified Payments Interface. Earlier, in January, RBI had announced that it would allow users to withdraw cash from ATMs using UPI. At the moment, cash deposits at ATMs can be done via two methods – using debit cards and manually entering the savings account number. Das announced RBI’s latest Monetary Policy Committee (MPC) meeting, where the central bank left the key repo rate unchanged. <cmsannotation type="cmsannotation" annotationid="Enhancing UPI features" comment="subhead" text="Enhancing UPI features">Enhancing UPI features</cmsannotation> Thanks to UPI’s widespread use, RBI has been expanding its features to include various options from setting autopay instructions for bill payments to creating mandates for IPO applications and more. After the previous MPC meet in January, RBI governor announced that cash withdrawals would be made possible through UPI ATMs. “This measure will further enhance customer convenience and make the currency handling process at banks more efficient,” said Das. In addition to this, RBI also announced that it will allow the use of third-party UPI apps for making UPI payments via prepaid payment instrument (PPI) wallets, like Paytm and GooglePay. With today’s announcement, the central bank looks keen on slowly but steadily replacing debit cards with UPI. <a href="https://www.businessinsider.in/business/news/size-does-matter-debit-cards-for-large-payments-upi-for-smaller-ones/articleshow/109002682.cms">Recent reports suggest that</a>, while UPI usage is growing exponentially, people continue to use Debit Cards, especially for large payments. <cmsannotation type="cmsannotation" annotationid="New app for G-sec market" comment="subhead" text="New app for G-sec market">New app for G-sec market</cmsannotation> RBI’s aim with this is to make it more convenient to use digital payments for small-value transactions. Lastly, the MPC also proposed the launch of a dedicated mobile app to access the Retail Direct portal. Das believes this will enhance convenience to retail investors and improve the reach of the government securities (G-sec) market. RBI launched the Retail Direct scheme in 2021 to make it possible for retail and individual investors to participate in the government securities market. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/markets/news/markets-trade-flat-after-rbi-mpc-leaves-repo-rate-unchanged-at-6-5/articleshow/109055645.cms">Status quo: Markets trade flat after RBI MPC leaves repo rate unchanged at 6.5%</a> <a href="https://www.businessinsider.in/finance/news/rbis-mpc-keeps-rates-unchanged-to-be-actively-disinflationary/articleshow/109053104.cms">We want the elephant of inflation to walk back to the forest: Shaktikanta Das</a> <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-and-airtel-add-nearly-5-million-subscribers-in-january-2024/articleshow/109040220.cms">Reliance Jio and Airtel add nearly 5 million subscribers in January 2024</a>

Not just withdraw, you can soon deposit cash using UPI at ATMs, promises RBI

<ul><li>These cards can be used at ATMs, point of sale (PoS) machines, and online merchants overseas. </li><li>Additionally, <keyword id="597447" type="General" weightage="20" keywordseo="rupay" source="Orion">RuPay</keyword> Debit, credit, and prepaid cards will be authorised for issuance in foreign jurisdictions. </li><li><keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>’s goalposts for Payment Vision 2025 has already outlined a roadmap for the global outreach of RTGS, NEFT, UPI, and RuPay cards. </li></ul>In a bid to provide more payment options for Indians travellers abroad, the Reserve Bank of India (RBI) has decided to allow Indian banks to issue RuPay <keyword id="1018384" type="General" weightage="20" keywordseo="prepaid-forex-cards" source="Orion">prepaid forex cards</keyword>. These cards can be used at ATMs, point of sale (PoS) machines, and online merchants overseas. “... Further, RuPay debit, credit, and prepaid cards will be enabled for issuance in foreign jurisdictions, which can be used internationally, including in India. These measures will expand the reach and acceptance of RuPay cards globally. Necessary instructions will be issued separately,” read the RBI’s statement on Developmental and Regulatory Policies, issued on June 8. Says Rajsri Rengan, India Head of Development, Banking and Payments, at FIS, a fintech company, “The permission granted to banks for issuing RuPay pre-paid forex cards opens up new avenues for seamless and flexible cross-border transactions. This development brings forth enhanced convenience and efficiency for individuals and businesses engaged in international trade.” RuPay, as the first domestic card payment network in India, has achieved wide acceptance across various channels such as ATMs, point-of-sale (POS) devices, and e-commerce websites throughout the country. By promoting electronic payments, RuPay aligns with the Reserve Bank of India's goal of fostering a "less cash" economy, encouraging banks and financial institutions to embrace technology and offer digital payment solutions.RuPay credit cards can now be linked to a UPI ID, thus directly enabling safe, and secure payment transactions. According to a report by merchant platform Pine Labs, it is projected that transaction volumes on the RuPay network will experience a compound annual growth rate (CAGR) of 20% over the next three years. By the fiscal year 2025-26 (April-March), transaction volumes are anticipated to reach 3.2 billion, a significant increase from the 1.8 billion transactions recorded in 2022-23. RBI’s goalposts for Payment Vision 2025 has already outlined a roadmap for the global outreach of RTGS, NEFT, UPI, and RuPay cards. Recently UPI has been integrated with Singapore’s PayNow, and Japan is expected to join the UPI system as well. UPI is also expected to be adapted by other countries as well.

RBI allows banks to issue RuPay prepaid forex cards

<ul><li>A threshold relaxation of ₹7 lakh per financial year from <keyword id="6357150" type="General" weightage="20" keywordseo="tcs" source="Orion">TCS</keyword> has been given only for overseas spending using international debit or credit cards. </li><li>TCS shall be applicable at 20% on forex cards and cash exchanges without any threshold limit unless a specific clarification is issued by the relevant authorities. </li><li>Individuals <keyword id="648371" type="General" weightage="20" keywordseo="travelling-abroad" source="Orion">travelling abroad</keyword> separately or as a family may separately spend amounts up to ₹7 lakh per financial year on credit and debit cards. Group tours are set to cost more.</li></ul>Tax collected at source (TCS), and not the IT giant, was trending earlier in May after the Finance Ministry issued a notification stating that international credit cards would also be covered under the liberalised remittance scheme (LRS) – meaning a TCS of 20% would <a href="https://www.businessinsider.in/personal-finance/news/credit-card-now-under-lrs-ambit-20-tcs-to-be-charged-on-spends-using-international-credit-cards/articleshow/100323990.cms">apply to credit cards as well</a>. After facing a backlash, on May 19, another clarification was issued stating that payments made using international credit and debit cards up to ₹7 lakh shall be excluded from LRS. Hence no TCS shall be applicable on payments made by international credit and debit cards up to ₹7 lakh in a financial year. Any payment beyond ₹7 lakh shall attract TCS at the rate of 20%. However, confusion still prevails, and there is uncertainty on how this will impact foreign travel. People are wondering if there are ways to minimise the impact. We spoke to experts to find out. TCS to apply on forex card, cash exchanges without threshold limit “No specific clarification has been provided on the threshold limits for applicability of TCS on forex cards and cash exchanges, it is assumed that new TCS rules shall apply on forex card and cash exchanges,” says Kunal Savani, partner at law firm Cyril Amarchand Mangaldas. Hence, TCS shall be applicable at 20% on forex cards and cash exchanges without any threshold limit unless a specific clarification is issued by the relevant authorities. Says Suresh Surana, founder of RSM India, an audit, tax and consulting firm, “Assuming that a forex card would generate foreign exchange liability, the same would be covered under the scope of LRS, and TCS under section 206C(1G) would be applicable on the same without the threshold limit of ₹7 lakh as applicable in case of international credit, and debit cards.” TCS @20% applicable on entire amount when booking foreign tours “In case of overseas tours the Finance Act has amended section 206C(1G) of the Income-tax Act, 1961 thereby making TCS applicable on such overseas tours at the rate of 20%. No threshold limit has been provided, and hence a 20% TCS shall be applicable on the whole amount,” says Savani. The tour provider shall collect TCS at 20% in addition to the tour cost. This was introduced in Budget 2023, and has not been amended. It should be noted that the threshold relaxation of ₹7 lakh per financial year (FY) from TCS has been given only for overseas spending using international debit or credit cards. “This relaxation shall not be available for any remittances made from India for tour booking; and TCS on tour operators shall continue to be levied from ₹1,” says Vivek Jalan, partner, Tax Connect Advisory, a professional services firm. For example, if two people are going on a tour, and if the total cost is ₹5 lakh, then this will come under LRS, and the ₹7 lakh exemption will not be applicable. However, if they spend ₹5 lakh overseas on shopping, with international credit or debit cards, then the exemption will be applicable. Exemption applicable on a cumulative basis on all credit, debit cards “The exemption of ₹7 lakh applies to payments made through credit/debit cards only, and not to forex cards. From a reading of the press release, it appears that it is a combined limit applicable to payments made through credit, and debit cards taken together,” says Riaz Thingna, partner, tax, Grant Thornton Bharat, an assurance, tax and advisory firm. So, let us say that when travelling abroad with family in a certain financial year, someone spends ₹5 lakh on a credit card, and ₹5 lakh on a debit card. The first spend of ₹5 lakh from the credit card will not attract TCS as it is below the threshold of ₹7 lakh. The next spend of ₹5 lakh from the debit card will attract TCS in the following manner – there will be no TCS on ₹2 lakh, but a TCS @ 20% will apply on the balance ₹3 lakh. “However, if one uses a forex card, TCS @ 20% will be applicable on the amount of the foreign exchange credited to the forex cards without any exemption limit,” says Riaz. Minimise the impact of TCS on a foreign vacation When booking a tour package, there is no way one can minimise the impact of TCS when travelling abroad. “However, one may book in components, such as flights, hotels, etc., instead of booking a whole tour package,” says Nishant Pitti, chief executive officer and co-founder of EaseMyTrip. If the booking is done through a credit or debit card, one can get the benefit of the exemption limit. Also, LRS is available to all resident individuals including minors. Further, effective 1 July 2023, these new regulations would be applicable on all aggregate card spends above ₹7 lakh in a financial year, calculated separately for each resident individual. “Therefore, individuals travelling as a family/individuals travelling together, may separately spend amounts up to ₹7 lakh per financial year on credit cards, debit cards, while travelling abroad. In that case, TCS would not be applicable since it is below the threshold limit for each individual,” says Rajesh Srinivasan, partner at Deloitte India. If the total spend is exceeding ₹7 lakh, one may use credit or debit cards of different family members for booking to not pay any TCS. How to claim tax credit on TCS From July 1, 2023, Reserve Bank of India (RBI)- authorised banks would need to collect TCS. They would need to file quarterly returns, and provide necessary details including PAN of the Indian resident individual, and the amount remitted under LRS. TCS amount collected by the authorised bank would not be a sunk cost, and can be set-off against the tax payable on the individual’s total income (or) claimed as a tax refund in India. “Once quarterly TCS returns are filed by the authorised bank, the TCS amounts would reflect in Form 26AS of the Indian resident individual. Form 26AS refers to taxpayer’s records as available to the income-tax office, and contains details of taxable amounts remitted, and corresponding TDS and TCS,” says Srinivasan. TDS refers to tax deducted at source. He says that, therefore, no separate records need to be maintained by the Indian resident individual to claim tax credit later. Based on the Form 26AS (available in the individual’s login on the income-tax portal), the Indian resident individual can claim TCS as a tax credit or tax refund, while filing his/her income-tax return for the financial year. Also, the Indian government recently announced that it intends to automate the process of granting immediate TCS credit in case of salaried taxpayers. “The government proposes to link, and grant 20% TCS as credit against the monthly TDS due on the salary income of taxpayers. Procedures, and further announcements in this regard are expected in the coming weeks,” says Srinivasan. However, there is something that one needs to keep in mind. “The foreign exchange spend should be in proportion to the earnings. A person who spends say ₹10 lakh on a personal foreign tour in a fiscal year cannot declare an income of say just ₹12 lakh, or for that matter ₹15 lakh, all other things being constant,” says Jalan. TCS will make foreign tour packages more expensive upfront. However, the good news is that you can avoid TCS on your expenditures abroad, and get a tax credit easily in case you pay any TCS. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/entertainment/news/ott-releases-to-watch-for-june-2023/articleshow/100643939.cms">OTT releases to watch for June, 2023</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sports/news/icc-top-brass-seeks-pcb-assurances-that-it-will-send-team-to-india-for-odi-world-cup/articleshow/100643947.cms">ICC top brass seeks PCB assurances that it will send team to India for ODI World Cup</a>

New TCS regulations may pinch your wallet while travelling abroad. Here’s how you can minimise the impact

<ul><li>There has been an increase in <keyword id="43991" type="General" weightage="100" keywordseo="financial-fraud" source="Orion">financial fraud</keyword> amid an increase in financial transactions.</li><li>People are storing important financial information on their smartphones without any security.</li><li>88% of the people surveyed have submitted their Aadhaar as proof for applications and bookings.</li></ul> The Reserve Bank of India (RBI) has revealed that 5,406 instances of financial fraud were reported during April-September 2022, up from 4,069 reports during the same period in 2021. According to the central bank, the modus operandi for fraud has shifted to card and internet-based transactions. According to a survey conducted by LocalCircles, people are still storing important financial information such as internet banking passwords, and debit and credit card PINs on their smartphones. <cmsannotation type="cmsannotation" annotationid="17% of people store financial information on their smartphone" comment="subhead" text="17% of people store financial information on their smartphone">17% of people store financial information on their smartphone</cmsannotation> Out of over 32,000 people surveyed, 9% admitted to storing important financial information on their phone’s contact list, and 8% admitted using the notes app on their smartphone. This means that 17% of people store important data without security. A similar survey in 2021 revealed that 11% of people were storing important financial data on their phones, meaning there has been an increase in this number, despite attempts by the central bank to raise awareness among the people. 18% of the people revealed that they store financial information on their computers and laptops. At the same time, 14% of the people claimed that they had memorised their financial information and had yet to store it anywhere. <cmsannotation type="cmsannotation" annotationid="24% of the people share their debit and credit card PIN with family" comment="subhead" text="24% of the people share their debit and credit card PIN with family">24% of the people share their debit and credit card PIN with family</cmsannotation> According to the report, 24% of the people share their debit and credit card PIN with one or more family members, and 6% share with their domestic or office staff. 67% of the people surveyed said they do not share this information with anyone. <cmsannotation type="cmsannotation" annotationid="88% of the people share Aadhaar for applications and bookings" comment="subhead" text="88% of the people share Aadhaar for applications and bookings">88% of the people share Aadhaar for applications and bookings</cmsannotation> Identity and address proofs such as Aadhaar, PAN, driving licence and others have become something we often share with government or private entities such as banks and hotels for various applications and bookings, be it in digital form or as a photocopy. Sometimes, more than one of these documents is shared, and there is an overlap. A staggering 88% of the people have revealed that they have shared their Aadhaar as proof in the last five years. This was followed by 58% of the people sharing their PAN and 47% of the people sharing their driving licence. Additionally, 42% of the people shared their passports, and 35% shared their voter ID. <cmsannotation type="cmsannotation" annotationid="Nearly half of the people have faced a financial fraud" comment="subhead" text="Nearly half of the people have faced a financial fraud">Nearly half of the people have faced a financial fraud</cmsannotation> According to the report, 42%of the people surveyed have claimed to have faced some type of financial fraud during the three years between June 2019 to June 2022. Worse, 74% of these people failed to get their money back. We recommend that users do not store sensitive financial information such as banking passwords and debit and credit card PINs on their smartphones and laptops. Instead, users should opt for secure applications or try to memorise this information. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/most-common-passwords-can-be-easily-cracked-by-ai-in-under-a-minute/articleshow/99379900.cms">AI chatbots are cracking the code: How PassGAN can break into 51% of common passwords in under a minute</a> <a href="https://www.businessinsider.in/tech/news/google-makes-it-easier-for-users-to-delete-their-account-and-data-from-applications/articleshow/99289621.cms">Google makes it easier for users to delete their account and data from applications</a> <a href="https://www.businessinsider.in/tech/mobile/news/how-to-block-your-lost-or-stolen-phone-and-how-to-unblock-it/articleshow/99207569.cms">How to block your lost or stolen phone and how to unblock it</a>

Despite a rise in financial frauds, 17% of people store financial information on their smartphones

<ul class="summary-list"><li>21-year-old Skylar Griffin has four credit cards, including and AmEx Gold and Platinum.</li><li>She got her first credit card as a freshman to build up her credit score and kept a strict budget.</li></ul>This as-told-to essay is based on a transcribed conversation with Skylar Griffin, a 21-year-old college student in Georgia. Griffin financial claims have been verified with documentation. The following has been edited for length and clarity.When I was a child, my mom often shared financial advice. She told us never to cosign for someone's loan and don't buy anything unless we could buy it twice.On several occasions, she advised us kids never to get a credit card unless we were responsible enough to pay it off each month.She didn't want us to struggle financially like she did as a single parent.In high school, I started watching YouTube videos about finances. I saw financial struggles firsthand, and I didn't want to be in that position as an adult. The videos taught me I'd need to build up my credit score to buy a car or a house or if I might need a loan.<h2 id="102ef261-a63c-412a-8936-6e2d5bc894d4">I got my first credit card before going to college</h2>In July 2021, I was preparing to study business management at Columbus State University in the fall. Without my mom's knowledge, I ordered a Bank of America student card. It was a Visa card with no annual fees. My mom wasn't happy. I reassured her I'd done my research and could handle the responsibility.During college, I worked at a call center during the school year, paid internships in the summer, and received refund checks because my scholarship was more than school costs. I also earned a bit of money doing social media content.My first card had a limit of $500. I would buy little things here and there, making sure I had enough in my checking or savings account to pay it off each month. I'd marked all the due dates in my calendar, and I was never late for a credit card payment. There were temptations to buy new clothes or tech, but I always fought it.<h2 id="fc7cfef9-313f-436d-be60-a1a46519f707">Getting an AmEx for the travel points</h2>I kept using the Bank of America card throughout my freshman and sophomore years of college, but in April 2023, I decided to take out an Amex Gold card as well.I'd heard about travel credit cards through watching financial advice videos online. If I used this card for buying groceries or dining out, my two main expenses in college, I would get four times the points to use on travel. Although I wasn't traveling much, I planned to travel. At the time, the card had a $250 annual fee, which was worth it for the points I felt.I only used my card for things I needed or had saved for. I never bought things just to earn points.In March 2024, I took a big leap and opened an Amex Platinum credit card. It comes with a high price tag — a $695 annual fee — but I thought the benefits outweighed the price. Because it was another Amex card, all of my points were added to the points earned from the Amex Gold.I only use this card for booking flights and hotels because this is what I get the highest points for. With the card, I get five times the points when booking flights and hotels, a $200 yearly airline credit, and a $200 yearly hotel credit.When I stay at Marriott or Hilton, I get 'high status' and often get my room upgraded. But my favourite perk is the CLEAR Plus membership which gets me through TSA quicker at the airport.I knew I was planning some big trips in 2024 to Japan and New York, and then a cruise to the Bahamas, so planned to make all my travel purchases on the Platinum. Since getting an Amex, I've been able to fly to Japan, New York, and Miami for free in 2024.With this card, I accessed airport lounges on the long trip to Japan and was part of the President's Circle with Hertz Car Rentals, so I was guaranteed a car upgrade when I rented a car to get around the country.<h2 id="ec2f29ef-d145-470e-972f-0e160d4e0cd5">I took out a fourth credit card so I could earn points for other purchases</h2>In June 2024, I decided to take out another Amex card — the Amex Blue Business Plus. This card means I can earn points paying for things like gas, that don't earn me points on my other cards.There's no annual fee, and I could only take it out because I'm considered a sole proprietor. I own a Mercari shop where I resell vintage clothes I find at flea markets.I only use my Bank of America card when Amex isn't accepted. I never use a debit card unless I'm pulling cash out of the bank.Even though I am confident and comfortable using credit cards, I still don't spend anything that isn't in my checking or savings account. I never base a purchase on the money that I'm expecting in my account, because you never know how finances could change.I put all my due dates in my calendar and aim to pay each of them off earlier than required. Sometimes, I feel the urge to overspend. But then I remember the interest rates on my cards, and I snap back to reality. Paying high interest because I can't afford to pay my bill in full is not worth the momentary satisfaction of shopping.In addition to all the benefits I've received when traveling, my credit cards helped me raise my credit score to 755.<h2 id="1abacec9-c073-4582-ac5e-15c3908118fc">I never stop learning about finance</h2>I think college students should consider getting a student credit card with no fee. They have low limits and can help start building a credit score. However, if you're impulsive or have poor spending habits, I wouldn't recommend it.My mom now says she's proud of how I manage my finances. I've always found personal finance interesting and the concepts easy to understand, but it takes dedication to stay on track financially. I never stop learning to make sure I'm doing what's best for my financial future.

I'm a college student who pays nearly $1,000 in annual fees for 4 credit cards. It's worth it for good credit and travel perks.

The popularity of online wallets and UPI apps has made payments quick and easy. Customers no longer have to worry about carrying cash or debit cards with them while going out. However, there are still many places that do not accept online payments and require cash. If you are in need of cash and do not have your <keyword id="6356475" type="UNKNOWN" weightage="20" keywordseo="debit-card">debit card</keyword> with you, there is still a way how you can get cash. Banks like SBI and ICICI allow users to easily <keyword id="2336858" type="PERSON" weightage="20" keywordseo="withdraw-cash">withdraw cash</keyword> without a debit card. Customers can also use PhonePe to withdraw cash from any bank account. <keyword id="7436655" type="UNKNOWN" weightage="20" keywordseo="how-to-withdraw-cash">How to withdraw cash</keyword> from <keyword id="8887222" type="UNKNOWN" weightage="20" keywordseo="atm-without-debit-card">ATM without debit card</keyword> State Bank of India customers If you are a State Bank of India user, you can withdraw cash by following the below steps: 
 
 <div type="image" title="SBI 1" msid="74547693" hostid="261"></div>





 <ul><li>Download and install the YONO app on your <a href="https://play.google.com/store/apps/details?id=com.sbi.lotusintouch&amp;hl=en_IN">Android</a> or <a href="https://apps.apple.com/in/app/yono-sbi-banking-and-lifestyle/id1231393474">iOS</a> device.</li><li>Enter your MPIN.</li><li>Open the app and enter your account details to login.</li><li>Now, open the app and click on ‘YONO Cash’.</li><li>Then, click on ‘ATM’.</li></ul>
 
 <div type="image" title="SBI 2" msid="74547716" hostid="261"></div>





 <ul><li>Now, enter the amount and click on ‘Next’.</li><li>Enter a six-digit YONO Cash Pin of your choice and click on ‘Next’.</li><li>Click on ‘I agree’ and then click on ‘Confirm’.</li></ul>You will receive a YONO Cash transaction number. You will also be able to see SBI ATMs that support YONO Cash once you have initiated the transaction. <ul><li>Go to an eligible SBI ATM and select ‘Card Less Transaction’.</li><li>Now, enter your six-digit YONO Cash transaction number and the six-digit PIN.</li></ul>ICICI Bank customers 
 
 <div type="image" title="ICICI" msid="74547728" hostid="261"></div>





 <ul><li>Download the iMobile app for <a href="https://play.google.com/store/apps/details?id=com.csam.icici.bank.imobile&amp;hl=en_IN">Android</a> and <a href="https://apps.apple.com/in/app/imobile-by-icici-bank/id375276006">iOS</a>.</li><li>Click on ‘Services’ at the bottom.</li><li>Now, click on ‘Cardless Cash Withdrawal’.</li><li>Now, enter the amount and a four-digit PIN of your choice.</li><li>Then, click on ‘Submit’.</li><li>Confirm the details and click on ‘Submit’.</li><li>You will receive an OTP.</li><li>Go to an ICICI Bank ATM and select ‘Cardless Cash Withdrawal’.</li><li>Then, enter your mobile number and four-digit PIN.</li></ul>PhonePe Customers of all banks can use the PhonePe app to withdraw cash from their account. For this, you can use the PhonePe ATM service. 
 <div type="image" title="PhonePe 1" msid="74547743" hostid="261"></div>





 <ul><li>Open the PhonePe app.</li><li>Click on ‘Stores’.</li><li>Now, click on ‘PhonePe ATM’.</li><li>Select a store and click on ‘Withdraw Cash’.</li></ul>
 
 <div type="image" title="PhonePe 2" msid="74547758" hostid="261"></div>





 <ul><li>Enter the amount and select the bank account from which you want to debit the money.</li><li>Now, click on ‘Pay to Withdraw’ and enter your PIN.</li><li>Then, go to the store and collect your cash.</li><li>Once you’ve collected the cash, click on ‘I’ve got cash’</li></ul>See also: <a href="https://www.businessinsider.in/business/startups/news/phonepe-logs-4000-crore-transactions-a-day-after-it-shifts-from-yes-bank-to-icici/articleshow/74545359.cms">Phonepe logs ₹4,000 crore transactions a day after it shifts from Yes Bank to ICICI</a> <a href="https://www.businessinsider.in/tech/apps/how-to/how-to-open-a-cryptocurrency-trading-account-in-india/articleshow/74490893.cms">How to open a cryptocurrency trading account in India</a>

How to withdraw cash from ATM without debit card

<ul><li>In a bid to make online card transactions more secure, the Reserve Bank of India is encouraging consumers to tokenize their cards.</li><li>The central bank has directed payment aggregators, wallets and online merchants to not store any sensitive card-related consumer data.</li><li>As per the mandate, cardholders can create ‘tokens or a unique alternate code’ instead of entering their card details.</li><li><keyword id="7207738" type="General" weightage="100" keywordseo="tokenization" source="Orion">Tokenization</keyword> would come into effect on October 01, 2022.</li></ul>When you buy something online, you share your credit card or debit card information with the e-commerce platform. This highly sensitive data, which is now stored by the platform, is vulnerable to data theft or leakage. In an effort to make card transactions more secure, India’s central bank, the Reserve Bank of India, has been <a href="https://rbi.org.in//scripts/FS_PressRelease.aspx?prid=53920&amp;fn=9">encouraging cardholders</a> to tokenize their cards. Simply put, tokenization is the process of substitution. It replaces sensitive data with unique identification numbers that retain all the essential information about the data without compromising its security. Imagine walking into a gaming zone or casino, where you pay with actual money in exchange for plastic coins, which hold no value outside the gaming zone’s premises. You can play Pac-man or win your favourite toys in a vending machine only with that token or coin. Similarly, with card tokenization, the idea is to mask card numbers and protect sensitive consumer data with tokens containing randomised numbers and alphabets. <div type="image" title="Tokenisation (2)" msid="93270932" hostid="261" caption="&amp;lt;p&amp;gt;Canva&amp;lt;/p&amp;gt;"></div> Currently, many businesses and merchants that are involved in an online card transaction chain store sensitive card information like its number, expiry date, etc, which is known as card-on-file (CoF), to enable smoother transactions in the future. However, the availability of card details with multiple entities increases the risk of your card data being stolen/misused. As per RBI’s new mandate, tokenization will replace sensitive payment credentials such as 16-digit plastic card numbers, names, expiry dates, and codes with a unique alternate card number, or ‘token.’ Merchants and fintech platforms cannot store your card details anymore, as per RBI. They can enable transactions through tokens, which won’t expose your confidential data but will add another layer of security. "India needs more secure online payment standards as there is an increase in digital payments. The future data protection standards that are presently being considered can eventually work with tokenization. It is a fundamental shift in the ecosystem that requires a large investment from stakeholders in the payment industry, banks, and card networks to adopt and adhere in full," Ravi Battula, VP - merchant acquiring business), Wibmo – a PayU company, told Business Insider India. As of June 24, about 19.5 crore <a href="https://rbi.org.in//scripts/FS_PressRelease.aspx?prid=53920&amp;fn=9">tokens </a>had been created. How can you create a token for your card? Domestic plastic card users can create tokens for their credit and <keyword id="6354770" type="General" weightage="20" keywordseo="debit-cards" source="Orion">debit cards</keyword> free of charge through any e-commerce platform or merchant website. Step 1: Visit any e-commerce/merchant website to shop your products and initiate a transaction. Step 2: As you select your payment mode, look for your preferred bank’s credit/debit card as the payment method and enter all details. Step 3: You will find a checkbox that says “secure your card” or “save card as per RBI guidelines”. Step 4: You will receive an OTP on your mobile or email from your bank or card company to finish the transaction. Step 5 – And voila, your token will be generated and saved instead of your sensitive card data. In the future, you can make your purchase by simply recognising the last 4 digits of your plastic card. This token, however, cannot be used for payment at any other e-commerce website. You can create various tokens on different e-commerce sites. Is it mandatory to tokenize your cards? No, as of August 01, the government has not made it mandatory for consumers to adopt tokenization. Those who do not wish to create a token can continue to transact as before by entering card details manually at the time of undertaking the transaction. As per RBI’s directive, by September 30, 2022 all stakeholders are advised to be ready for handling tokenized transactions, implement alternate mechanisms and create public awareness about the process of creating tokens and using them to undertake transactions.

RBI is encouraging cardholders to tokenize their cards: Here’s all you need to know about it

<ul class="summary-list"><li>My parents gave me a checkbook and a ledger to track my spending when I was younger. </li><li>I wanted to do the same with my son, but since now everything is digital, I gave him a debit card.</li></ul>To teach me about money, when I was 10 years old, my parents gave me a checkbook from their credit union and <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.insider.com/4-bad-money-habits-youre-teaching-your-kids-without-realizing-it-2016-5">taught me how to track my spending</a> in a handwritten ledger.Today, commerce is digital, and understanding how to use tech to budget, save, and invest is paramount for kids and parents alike. So I decided to get my 10-year-old a <a target="_blank" rel="noopener noreferrer nofollow" href="https://www.businessinsider.com/personal-finance/best-current-credit-card-signup-bonuses">debit card</a> to teach him how to manage money on a smartphone app. I figured it's never too early to learn.<h2>Why I decided to take my tween cashless</h2>My son's experiences with money had been relatively straightforward: petty cash in birthday cards or from the tooth fairy and whatever went into a piggy bank. To buy something, he'd swap his cash for a swipe of my card. His dad recently bought him a smartphone, and he's eager to learn more about saving, so the timing felt right.I didn't learn about money this way, so my first instinct when considering the switch for my son was pure confusion: How am I supposed to teach him how to keep track of invisible dollars in an online account when I barely use the banking apps on my phone?Experts emphasize the necessity of kids learning to manage money digitally but say the ins and outs are tricky without parental guidance."With only about 10% of the money in the world being actual paper and coins, it can be difficult for anyone (especially kids) to track financial transactions," Gregg Murset, the CEO and a cocreator of the <a target="_blank" rel="noopener noreferrer nofollow" href="https://busykid.com/our-team/">BusyKid</a> app, said.<a target="_blank" rel="noopener noreferrer nofollow" href="https://affiliate.insider.com?h=56d1b349880188fd7f82940c3329cbe9cc98a9c17cc1cf393f7621635e7c4eac&amp;postID=6452642224de3dd0a48578df&amp;site=in&amp;u=https%3A%2F%2Fwww.linkedin.com%2Fin%2Ffidelitykellylannan%2F">Kelly Lannan</a>, the senior vice president for emerging customers at Fidelity Investments, agreed."Kids typically model their parents' behavior, so many times it begins with the parents and how they model good money-management behaviors as well as a positive relationship with money," Lannan said.A recent Fidelity <a target="_blank" rel="noopener noreferrer nofollow" href="https://nam04.safelinks.protection.outlook.com/?url=https%3A%2F%2Fpreview.thenewsmarket.com%2FPreviews%2FFINP%2FDocumentAssets%2F637610_v2.pdf&amp;data=05%7C01%7Cktzeiler%40kaplow.com%7Cde82e05689224631b87d08db2ef60d58%7C93b0c85081f942c5ad665080650b614f%7C0%7C0%7C638155406565439746%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;sdata=daFT%2FGnTUp3zZE7lCi8FTJN55183aJZQwRk6Smeo76U%3D&amp;reserved=0">survey</a> indicated that mothers were the top financial role models for teens and young adults.I initially felt like a less-than-capable role model, but the more I learned during this process, the more confident I became.<h2>Choosing the right card</h2>Picking a card was more involved than I had anticipated. The options available are overwhelming, each with a laundry list of features and perks to research. To cut through the noise, I texted my aunt and uncle for advice — they're parenting three kids ages 9 to 18 and were quick to suggest their favorite card.I briefly considered debt-card options connected to my accounts, but age restrictions and the fact that my credit union didn't have the most user-friendly app led me to look for a debit card with its own platform. I could have opened a checking account with another bank, but it was most efficient for me to pay a small fee for the card we ultimately chose.What mattered most to me was having access to parental controls where I could set spending limits and view or limit transactions. I also wanted an easy way to transfer money to my son's account. Outlining my priorities when looking for the right debit card made a big difference.<h2>Looking forward</h2>It's been about 3 months since I opened my son's account and handed him the digital reins. Tracking his money in an app is second nature and more straightforward for him than I could have imagined. He's been responsible so far, always asking before making a purchase. I've enjoyed being able to transfer funds directly from my account to his for chores, and he's learning more about how money works "IRL," as he says."While these new advancements may simplify our money, it's critical for children who may have grown up playing video games, watching TikTok videos, or receiving online education to understand the tangibility of money and the impacts of earning and spending money in the real world (rather than the virtual)," Lannan said.So far, this experience has highlighted that need for me and my son.I want him to learn, but I'll guide the process for now. Like with most things in childhood, this stage is fleeting, and he will be managing his own money without my help in no time. Until then, I'll keep my app notifications on and help keep him on track.

I gave my 10-year-old a debit card. I want him to learn early how to manage money. 

In mid-March, a scammer in California tried to buy $150 worth of <a target="_blank" href="https://www.businessinsider.com/trying-wingstop-first-time-review-photos-2022-9">Wingstop</a> using my debit card. Aside from being impressed at the sheer size of the order, I was relieved because Citibank, which issued my card, declined the transaction on the spot and alerted me to the fraud. In minutes I was able to shut off my card, heading off any more purchases by the scammers, and order a new card. All's well that ends well.When I went to Buenos Aires in April, I figured I might <a target="_blank" href="https://www.businessinsider.com/personal-finance/why-was-my-credit-card-declined">run into a similar situation</a>. Sure, the banks say you don't have to call ahead when you travel anymore, but I assumed I'd still have some purchase flagged as potential fraud, as had happened in past trips abroad. Miraculously, everything went off without a hitch. I don't know how JPMorgan Chase knew that I would spend $200 on Botox in Argentina, but it did. (No, I didn't book my flight on the same card, and whatever, <a target="_blank" href="https://www.businessinsider.com/botox-injections-fillers-plastic-surgery-gen-z-social-media-filters-2024-5">everybody gets Botox now</a>.)It's great that banks and credit-card companies are getting better at discerning which payments are fraudulent and which are legit. Many people have some horror story about having their credit card stolen or having their own legitimate transactions flagged as suspicious. And it's nice not to have to spend 20 minutes on the phone before a vacation explaining where you're going and when. Credit-card fraud protection is still far from perfect, but there's no denying that the technology is improving. On the flip side, it's also kind of wild to consider just how much financial institutions must know about you to make the right calls.I was curious about how it all works — and, frankly, a little creeped out. So I reached out to some credit-card companies and academics to learn more. Why don't people have to alert their credit-card companies about travel anymore? And, more broadly, just how have banks gotten so good at figuring out what's normal about our spending habits and what isn't?The Federal Trade Commission receives thousands of card-fraud complaints each year. The Nilson Report, which tracks the card industry, says payment-card fraud resulted in $33 billion in losses worldwide in 2022 and $13.6 billion in losses in the US. As such, credit-card issuers and banks are keen to do what they can to spot fraud. They want to keep their customers happy, and, more importantly, they want to stem their losses. In the US, the major credit-card issuers and banks <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-card-lost-stolen-what-to-do">generally have a zero-liability policy</a>, which means that when a customer gets scammed, the organization, not the customer, has to eat the cost.Years ago, whether a transaction went through was based on things like whether a physical card was present, whether you had enough money to make the purchase, and (if the cashier wanted to look) whether your signature on the receipt matched the one on the back of your card. In some cases, the cashier may have even asked for ID or called the bank to verify the funds. We've come a long way from those bad old days by using the same tools that power most innovations: data and computers. Credit-card companies and banks know a lot about us — where we shop, when we spend, and how much we're usually willing to pay for things — and they're getting better and better at turning that knowledge into action. While it's <a target="_blank" href="https://www.businessinsider.com/generative-ai-exaggeration-openai-nvidia-microsoft-chatgpt-jobs-investors-markets-2024-3">all the rage to talk about newfangled forms of artificial intelligence</a>, fraud detection owes a lot to machine learning, a field within AI that's been around for years. A bunch of data gets dumped into computer systems, and algorithms figure out patterns and relationships. The algorithms create decision trees to predict the likelihood of different outcomes and identify what may be considered normal or fishy. It's not that your credit-card company knows that you, specifically, would blow a bunch of cash on A and not on B — it knows that customers with your profile are in the "likes A" camp and not the "likes B" one."It's looking at what's happening that is very much out of the ordinary for your general behaviors," said Tina Eide, an executive vice president of global fraud risk at American Express. "And when I talk about general behaviors, it is generalized, right? It is not down to the specific purchase or to the specific merchant." Eide added, "The models are evaluating a trillion dollars' worth of transactions a year."The machines know more now than ever. Mike Lemberger, Visa's regional risk officer for North America, said that over the past five years the number of data points people generate with their credit cards has grown tremendously. People are increasingly using cards over cash. And they don't just have a physical card they're pulling out at the store — they've got their card credentials in their Amazon account, Netflix account, iPhone, etc. The more purchases the card issuer can analyze, the more accurate the fraud detection will be."Visa, we don't have consumer information — that's your financial institution that has that — but what we have is this triangulation of all these data points," Lemberger said. "We can create more and better scores, layer on top of that machine learning and AI abilities, and it becomes a much, much more powerful predictor, which we then feed into all of our partners to say, 'Hey guys, if you want to make the best decisions, here's a whole bunch of really good information.'"Visa isn't going to block your card directly, but it'll alert your bank that your purchase looks suspicious or that fraud has been detected at the merchant you're dealing with.This all seemed pretty simple until I talked to Yann-Aël Le Borgne and Gianluca Bontempi, a pair of researchers at the Université Libre de Bruxelles in Belgium who <a target="_blank" href="https://fraud-detection-handbook.github.io/fraud-detection-handbook/Foreword.html#authors">work on machine learning and card fraud</a>. They emphasized the vast scale of this fraud-detection technology. Companies and their algorithms are ingesting millions of transactions and creating so many decision trees to categorize certain activities that it can defy human logic, they said. Basically, the computer may be right that your transaction looks funky even if it's made in your home city at a fairly innocuous vendor, or it may be right that the transaction is fine even though it's made in a faraway place — but when humans try to figure out what did or didn't sound the alarm, nobody will really be able to pinpoint why."Machines can consider many more features, and at the end of the day it's not clear if all those features have meaning for humans," Bontempi said. "Humans are used to working with two, three features, at most five features, while machines can work with hundreds of features. So there are really different levels between what a machine can do."There are human-written rules, which are generally interpretable, and there are machine-written rules, which can be a black box. They're more accurate, but they may be harder, if not impossible, for people to reverse engineer. And banks may be using several different algorithms, making this even more complicated. Data scientists are the ultimate decision-makers, but the information they're dealing with is based on highly complex tech. When I explained to experts my somewhat embarrassing wings-versus-wrinkles conundrum and asked what may have triggered one alert and not the other, they offered up different explanations. Eide, from American Express, said that even though I hadn't booked my trip to Argentina with the credit card I used to buy the Botox, something else had probably tipped off the system that I was there. I realized I'd also bought a package of spin classes in Buenos Aires on my phone with the same card. I had also paid for a meal in the city. Lemberger, from Visa, emphasized that it's about all the data and spending patterns and said that given my spending patterns, the Botox likely matched my profile more than the massive delivery order."I hate to say this to you, but at the end of the day, all these data points build personas. Just like in marketing somebody would use personas to market to you, we're using that same technology to protect you," he said. "And the fact is that we use those data points to not just secure you but the whole ecosystem."At some point it occurred to me that the supercomputers that credit-card companies and banks are working with could know more about me than I even know or understand about myself."It's probable that the exact reason why a transaction caused your card to be blocked has no straightforward interpretation," Le Borgne said.I also asked whether there was a big difference in credit-card protections and debit protections and was told not really — maybe banks will be a little more restrictive about credit because they're technically lending you money that's not limited by your actual cash balance. I also asked if companies don't worry about preclearing travel because they don't care as much about losing money to fraud anymore, to which the answer was a hard no."At the end of the day, somebody's got to pay for the fraudulent activity," Lemberger said. Credit-card companies will give you your money back if you're a victim of fraud, but they'll find another place to recoup that money, <a target="_blank" href="https://www.businessinsider.com/credit-card-late-fees-cap-swipe-mastercard-visa-jpmorgan-rewards-2024-4">just as they always do</a>.Instinctually, I am not a technology-is-awesome person — if the AI really is going to kill us, I feel like we should unplug it. I'm not super freaked out about the privacy stuff, but I also don't love the idea that AmEx and JPMorgan and Citi have me so pegged. But it's cool that companies really are making fraud detection better, especially in a world where fraudsters themselves are constantly getting better. I don't want to be like "Yay, banks!" but maybe here the answer really is a little "Yay, banks!" At least that's the case until the next major data-privacy breach, at which point I will regret everything.<a target="_blank" href="https://www.businessinsider.com/author/emily-stewart">Emily Stewart</a> is a senior correspondent at Business Insider, writing about business and the economy.

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<ul class="summary-list"><li>A teenage girl in China spent her family's life savings on mobile-game transactions.</li><li>She spent some $64,000 from January to May through her mother's debit card, per Elephant News.</li></ul>A 13-year-old girl in China spent around $64,000 of her parents' money on mobile games this year, wiping out their savings account without their knowledge.Gong Yiwang learned about the spending spree in late May after receiving a call from a teacher at her daughter's boarding school, who worried the child was addicted to pay-to-play games, according to <a href="https://weibo.com/1769216315/N2GiFg0Qq?layerid=4906392613816498" target="_blank" rel="noopener">Elephant News, a regional TV channel in the Henan province</a>.When Gong checked her bank account, she realized it was left with a bank balance of only seven cents.She later discovered that from January to May, her daughter had spent around $16,800 buying game accounts and almost $30,000 on in-game purchases, per Elephant News. The girl also transferred money to at least 10 classmates who wanted to buy game products for themselves, bringing the total cost of the child's monthslong binge to around $64,000."I never thought a 13-year-old girl could do this," Gong told Elephant News. "I'm in a daze; my head feels like it's going to explode."Weeping as she spoke, Gong's daughter told Elephant News that she had linked her mother's debit card to her mobile phone but didn't know where the money came from or how much she was spending. She said that she remembered her mother telling her the account's password from a previous occasion when she asked to buy something else.She said her school friends noticed her newfound spending power and pestered her for money."If I didn't send it to them, they would bother me all day. If I told the teacher, I was afraid that the teacher would tell my parents and that my parents would be angry," she told Elephant News.She also deleted chat and transaction records to hide the payments from her parents, per the outlet.Gong said she reached out to several payment platforms to request refunds but had yet to recoup her losses on the full sum.The story of the girl's spending habits went viral in China in late May, receiving more than 140 million views on Weibo, China's version of Twitter, per data seen by Insider.Gaming addiction among youth in China is so prevalent that the country has <a href="https://www.abc.net.au/news/2021-09-04/china-cracks-down-on-children-online-video-gaming/100428138" target="_blank" rel="noopener">introduced internet restrictions on teenagers and children</a>. Teens in the country aren't supposed to play video games for more than three hours a week, a goal the Chinese government said it <a href="https://www.bbc.com/news/technology-63730316" target="_blank" rel="noopener">was progressing steadily toward</a>.

A teenage girl found her mom's debit card and spent $64,000 on mobile games, wiping out her family's life savings

<ul class="summary-list"><li>As a police officer, Paul Alex decided he would be better off by investing in cash-flowing assets.</li><li>He initially bought six ATMs and scaled to 30 with the profits he earned. </li></ul>Paul Alex entered the police force as a trainee with the plan to build a career in law enforcement in the San Francisco Bay Area.Alex, 35, hit the ground running, eventually becoming a detective in the narcotics task force before being assigned to the special victims unit. By 2020, he had scaled his way up to a salary of $133,000, with benefits bringing him up to an annual salary of over $272,000, according to California state archives viewed by Insider. While his career set him up for financial stability, his weekly working hours could range from 60 to 100 hours."I didn't have any personal freedom," Alex said. "I was neglecting my personal life. I wasn't hanging around my family who I love. I'm a big family guy. And at the end of the day, I realized, this can't be life."The deeper realization that a salaried career wasn't going to be his future was during periods when overtime was paused, which would cut his pay drastically, he said. Some months, his biweekly paycheck would be $2,000 after deductions. This meant he always had to save for those low months to cover his bills, which could range from $5,000 to $6,000 a month, he said. "What really was a morale killer was the fact that you want to move ahead in life. And I feel it kept you static when that happened," Alex said. He decided that investing in cash-flowing assets would be a way out of the paycheck volatility. He could then use his salary for discretionary purchases such as vacations, cars, and additional investments. He initially considered real estate but felt that it would require a lot of cash and a mortgage that would create more debt. Plus, he believed that the overhead expenses of maintaining a property would add to his stress. He'd have to hold any rental income in cash in case he had to cover the mortgage due to missed rent or repairs. In 2017, Alex came across the idea of investing in ATMs through a colleague who had been researching the business. He began joining social media groups about it, watching YouTube videos from others who had done it, and reading any material he could. It was a business model that was out of his comfort zone because he knew nothing about it. But the draw of it was that it had a low-cost barrier to start; relative to buying real estate, an ATM could cost less than $3,000. It also had lower risk because if the ATM wasn't generating a return, he could relocate the machine, which he refers to as a floating asset. And finally, it was a quick way of starting a side hustle because once a machine was placed on location, it could start generating a profit almost immediately. Alex decided to pursue it as a side hustle in 2018. By March 2021, he had left the police force and made it his full-time job where he provides the ATMs for those who also want to embark on this business. From January 2021 to April 2023, Alex's profit and loss statements viewed by Insider show a total sales of $12 million and a net profit of about $3.5 million for his company ATMTogether, a provider of ATM machines and services. His company Merchant Task Force, which provides credit-card terminals, shows an income of $844,000 and a net profit of $742,000 for the same period. <h2>Scouting locations</h2>In 2018, Alex took two weeks off from work and used that time to scout the city for ideal locations. He looked for high-traffic areas that had an incentive to have an ATM on site. This included tourist areas and city spots that were populated with nightclubs, restaurants, and valets to target zones where staff was tipped. He also looked for small businesses that offered cash back at checkouts, which was a nuisance to the business because they had to be sure there would always be enough dollar bills in the register. Alex would pitch the businesses as though he was offering a service. He would be responsible for providing and maintaining the machine at no charge to them. He recalled cold calling over a hundred businesses and physically walking into over 20 locations. "When I started this and I had gone out there and I was getting nos and yeses, wins and losses, It was very difficult for me to go back to work and not think about my business. And I think that's what caught me, was just the fact that I was growing something for myself and I wanted to continue to grow it."He initially had the idea of starting with three ATMs but by the time he was done, he was able to secure six locations: three liquor stores, two barber shops, and one nail salon in the San Francisco Bay Area. The first three were incentivized by cashback and the last three by cash tips. Once the machines arrived on location, he loaded each ATM up with about $2,000 to $3,000 in cash.Not every location was a grand slam. Alex noted that a decent minimum return on an ATM should be at least $200 a month per machine. Within the first month, Alex could already tell that the only three machines producing a return were the ones he placed at the liquor stores. They had a net profit of about $250 to $500 a month per location from fees charged for withdrawals. In contrast, the lower traffic locations were only producing $25 to $100 a month. He let the machines sit for two months before deciding it was time to move them. Alex also found a mentor from Facebook who was successful in the business. Based on his mentor's advice, he moved the three machines to two convenience stores and another liquor store. From there, they began to bring a net profit almost immediately, with the highest return being $600 a month, he said. He suddenly had six operational machines that brought in roughly $3,000 a month in net profit, he said. It took him approximately six months to get a return on his investment. <h2>Funding the businesses</h2>While Alex had enough cash saved to purchase the machines, he realized he would need the bills to stock the ATMs. So instead, he signed up for two personal credit cards and used them to buy the hardware, he said. They were cards that specifically offered zero-interest for the first 12 months, he noted. This would give him enough time to create cash flow without incurring interest every month. When he purchased his first set of six machines, Alex assumed he got a good discount, which was $2,100 an ATM. He would later realize it was a bad deal because it required him to pay a 30% commission from the fees his ATMs charged. While the sales agent he worked with told him it was standard practice, he later realized it wasn't the only way. The next set of machines would be purchased from his mentor. They were both new and refurbished and cost between $1,800 to $2,200 depending on the model. Additional costs for the ATMs included an internet wireless modem for $150, a monthly internet charge of $6.99, and installation by a technician of $300. Alex would gradually use the profits from his ATMs to buy more machines. And by 2020, he had accumulated 30 ATMs across the San Francisco Bay area that were operative. Each brought in anywhere from $250 to as much as $1,500 a month in net profit.Altogether, these little assets cash flowed anywhere between $9,000 to $12,000 a month in net profit, he said. While his side hustle didn't make up for his salary, he was fully able to cover his bills with the profits. This was enough to make him want to leave his job in 2021 to build a business in this sector. During this time, he met an ATM provider who he partnered with and they scaled to become a provider of ATMs. This allowed him to sell off his machines so that he could become remote. Even while in the act of building his side hustle, Alex still had doubts running through his mind. The chatter from those around him kept him questioning his ability to carry this through. Some of his colleagues thought it was a bad idea to invest in an unknown business and told him he should just pick up extra hours instead. In hindsight, he's glad he kept going. "Invest in yourself. Self-education is everything," Alex said reflecting on his journey. "All this started from a friend of mine, giving me an idea, and then me taking that idea and doing my due diligence and just researching it, buying books, watching videos, reading, reading, reading to the point where I was comfortable enough to execute it on my own." This story was originally published in June 2023.

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