Cash is KING

Cash is KING

I always felt using my zero liability credit card was best option to pay and very frustrated when there is a difference between a cash price and credit price. I wondered why my shop around the corner did not like me paying for a pack of gum with plastic.Featured image

So, I did some research and here are a few facts. Let us first look at the companies who generate revenue from our credit card usage.

VISA and Mastercard are leading brands that make a small fee when you swipe a card. They simply broker the transaction between the retailer and the name of the bank on your card. No liability, nothing added in value to you as a customer.

VISA Gross profit in 2013 – $9B

Mastercard Gross profit in 2013 – $8B with $0 in R&D expense

The major banks like Citi, Chase who issue us our credit card are nothing more than a revolving loan provided every 30 days. They make money from the retailer who pays a fee on the customers behalf and if we our payment is late, we pay a late fee and an interest. Banks are in the business of lending money so, this is part of their risk portfolio.

So, who loses money? It is the retailer and the customer.

A retailer pays between 2%-3% on every transaction we do with plastic that comes out of their Gross profit. In addition, the compliance mandates from the credit card industry to protect their losses due to credit card fraud puts additional financial burden on a retailer’s profits.

Let us look at the recent security breaches in past 12 months and the financial impact.

Target loss – $146M

Home depot loss approx. – $100M

Other Retailers approx.. – $50M

Upgrade to new chip and pin technology – $200M by Target and Home Depot alone

Now, the card issuing bank like Citi bear majority of fraud losses but, they pass some of it to the retailers and the loss is insignificant compared to the financial crisis of 2008 “too big to fail”. Banks know how to makeup for their losses. The new chip and pin technology is to protect the bank’s loss from fraud that may occur at a retailer.

So, what does it all mean? If a retailer continues to lose money from paying credit card fees, fraud fees and possible increase in credit card transaction fee, this will increase their cost of goods and services and/or drive out small business. Retailers with razor thin margins cannot survive while offering payment choices to consumers.

I am sure most of what I wrote is common sense but, the next time you pay for anything under $25, please use cash or debit card. Debit cards with a pin are more secure than credit card. Although there is a myth that money can be stolen from you checking account in case of fraud, your liability is $50 if reported within 2 days and in many cases, it is waived if you report it promptly. Again, don’t sign for the debit transaction but, use you pin. It helps the merchant.

So, we as consumers may end up bearing the liability or the fees and so, there is nothing like “zero liability”.

Yahoo Bolsters Encryption Between Data Centers, Promises New, Encrypted Messenger In “Months”

Yahoo Bolsters Encryption Between Data Centers, Promises New, Encrypted Messenger In “Months”

Originally posted on TechCrunch:

This afternoon, Yahoo detailed progress relating to the encryption of its various web services and properties. Most importantly, Yahoo now “fully” encrypts data moving between its data centers, as of March 31.

Yahoo was one of two companies that the NSA targeted with its MUSCULAR program, which tapped data cables between the foreign data centers of Yahoo and Google. A similar program had been found illegal in the United States. Google has made similar efforts to bolster encryption.

For users searching from the Yahoo homepage, and across most of its network, searches that are executed by users will be encrypted by default. Looking ahead, Yahoo will release a new version of Yahoo Messenger that will feature encryption in the “coming months.” This should cover video chatting, as well.

In conversation, Yahoo’s chief information security officer, Alex Stamos, stated that the company’s goal is to have “all data” sent to…

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Thank you for disrupting me!


Over the years, I have been impacted by disruptive innovation and I would like to thank the leaders for doing so. Some of them are gone but, most of them continue to make my life better.

AOL – Thank you Mr. Case for sending me a CD in the mail for a dialup service. I also setup my first email account I sent the first email to myself and heard “you got mail”.

Dell – Mr. Dell allowed me to buy my customized PC from a catalog directly and delivered it to my door. Got my first PDA from Dell but, used it for a short time.

Yahoo – My home page for decades, my first search engine and has been my primary email account for 16 years. Thank you.

Netscape – This browser turned me into an online user. The rich feature set, the user design truly changed my experience on the internet. Thank you Mr. Andreessen and Mr. Clark.

Amazon – I ventured into the jungle of when I was trying to buy a book in late 90’s. I use it as my default store, am a proud prime member and continue to benefit from Mr. Bezos passion. Thank you.

E*TRADE – The trading fees and calls to the investor broker kept me away from Wall Street. Then, came E*TRADE. My first and only stock broker with simple fees, user experience and delivering Wall Street to my browser. Thank you.

Netflix – The pressure to watch a new movie in 24 hours for $3.99 from Blockbuster was relieved by Netflix. I started to look forward to the mail man. Family night was not defined by the video store. Thank you.

Blackberry – My first smart device with black and white email and a wheel. Used it for years for its reliability and simple feature i.e. emails. Then, Mr. Jobs and the apps changed my view. Thank you.

PayPal – I once had to pay a invoice to a small vendor but, the transfer fee from the bank was more than the amount. I have since, used PayPal and thank your for saving me money.

Google – I use it for more than just a browser. Google now, Google maps, drive and motivation for my Sunday hikes – Tracks. Thank you.

Apple – My Sony Walkman lived its life and was gifted my first iPod. Since then, there are cool white gadgets all around my house. Thank you for saving me money with $0.99 singles and getting rid of CD clutter in my car.

LinkedIn – This is my social media site. Spend hours on it and love the features. Thank you Mr. Hoffman and Mr. Weiner. They transformed business networking.

Twitter – I love to express my view in 140 characters. Helps my creative thinking.

I could go on with this list but, I would like to hear about your disruptions? Who has made your user experience and life simple?

Apple’s decision to ignore NFC is looking better every day

Apple’s decision to ignore NFC is looking better every day

Raj Raghavan:

Emerging payments fees can be more expensive than credit card fees irrespective of the technology.

Originally posted on BGR:

For years, Apple pundits’ favorite game was to guess when the iPhone would finally support NFC, or Near Field Communication. If only Apple would support NFC, then mobile payments would take off, and we could finally stop paying cash and credit cards. But Apple never did support NFC and it appears it made the right decision: According to GigaOm, major retailers Best Buy and 7-Eleven are ditching their NFC sensors in their stores. 

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Eureka! moments


Elon Musk in an interview with Fortune magazine recalled how he came up with SpaceX idea.  According to the magazine, His eureka! Moments happen every few months. Sometimes during his morning shower, sometimes late at night before sleep, sometimes, as on this occasion, waking at 2 a.m. 

According to Alice Flaherty, one of the most renowned neuroscientists researching creativity. “People vary in terms of their level of creative drive according to the activity of the dopamine pathways of the limbic system.” Dopamine is an ingredient for creativity.  Another factor according to Harvard researcher Carson: “a distraction may provide the break you need to disengage from a fixation on the ineffective solution.’’

Entrepreneurs, business leaders with a passion to change conviction are always dreaming. I have been trying to figure out how to capture these eureka moments that seem to occur at oddest moments.  Every entrepreneur will agree that their passion is embodied in them 24 hours a day but, somehow we cannot seem to have those moments during the day at our desk or in a meeting.  There is no app to record our thoughts although the fitbit can tell us if we had a good night’s sleep.

I started to analyze these eureka moments. It depends on what I have been working late in the night just before bed or early in the morning when I wake up.  I cannot seem relax when there is a crisis or problem on my mind that I need to answer.  I feel frustrated and often wish I could think out of the box but, in reality the more severe the problem, the more my mind is clogged.

On the other hand, if I am working on an new idea just before going to bed or when I wake up early, I seem to have the eureka moments.  Innovation or incubating an idea reenergizes my adrenaline.  I have a recorder next to my bed to record my thoughts, a note pad in the car, in my hiking bag to just note the thought and not write a blog.  These notes are serving as valuable tool when it comes to approaching a problem.

Sometimes, I just want to get out of the bed and start calling my customer, colleague or my employee to give them a download but, have learnt to measure my interactions in a polite manner.  I do this by email spam.  Another moment is driving in the car with just the radio on.  It generates ideas for my next blog, challenge and in some cases a passion to learn something new.

While sleepless nights for an entrepreneur is a trait, getting some sleep maybe the solution to next problem.  The next time the team cannot come up with a solution, maybe they can take a shower, sleep, or jump into the car.

A shout to entrepreneurs and business leaders. What was your eureka moment and where was it?