Visiting Paris? Don’t leave home without these apps (VIDEO)

Visiting Paris? Don’t leave home without these apps (VIDEO)

Visiting Paris? Don’t leave home without these apps (VIDEO)

Posted: 10 Sep 2014 06:00 PM PDT

NEW YORK, Sept 11 ­— Kit Eaton reviews three apps that will help you better navigate Paris, from its transit system to the Louvre.—New York Times

Mexican tourists, Claudia and Oswaldo, pose on the Pont de l’Archeveche bridge, which is covered with thousands of padlocks, called love locks, near the Notre Dame Cathedral in Paris August 13, 2014. — Reuters picMexican tourists, Claudia and Oswaldo, pose on the Pont de l'Archeveche bridge, which is covered with thousands of padlocks, called love locks, near the Notre Dame Cathedral in Paris August 13, 2014. — Reuters pic

Apple Pay’s convenience could make you poorer — Cass R. Sunstein

Posted: 10 Sep 2014 05:58 PM PDT

SEPTEMBER 11 — The new Apple payment system has extraordinary promise. With Apple Pay, you might not need a wallet, and you can leave your credit and debit cards at home. In terms of ease and convenience, payment cards represented a big leap from the era of cash. Apple hopes its system will be a comparable leap from the era of cards.

Sceptics have focused on questions of security and privacy, but prospective users might want to pause over a different problem: When payment becomes easier, and when people don't see the money they're handing over, they tend to spend a lot more. And as payment becomes more automatic, people become less sensitive to what they're losing. Apple Pay users might find that their thinner phones are making their bank accounts thinner as well.

A little social science: People who use credit cards tend to give bigger tips at restaurants and spend more at department stores. They are also more likely to forget, or to underestimate, the amounts of their recent purchases.

A study in 2001 by the Massachusetts Institute of Technology's Drazen Prelec and Duncan Simester found that people pay a substantial "credit-card premium," meaning a higher expenditure for a given good simply because they are using a credit card rather than cash. Their experiment showed that the premium may be as high as 100 per cent, at least when the market price of the good is uncertain (such as tickets for a sold-out sporting event). Even for ordinary goods, where market prices are easy to find, they found a credit-card premium of as much as 36 per cent.

You might think that credit cards are special, because people are essentially borrowing money. Maybe the credit-card premium is a product of the time lag between consumption and payment. But a study in Denmark, made public this year, finds that when university students use debit cards rather than cash, they are willing to spend significantly more on coffee and beer.

Might electronic payments affect pricing decisions by sellers as well? MIT's Amy Finkelstein found in 2007 that when toll facilities use electronic collection, toll rates end up significantly higher. Adoption of electronic collection produces a 20 per cent to 40 per cent increase in rates, apparently because payment is less salient to drivers.

To be sure, electronic tolls are even more automatic, and less visible, than what Apple has in mind. But it is a safe bet that there will be an "Apple Pay premium." And if payment-by-phone turns out to be as convenient as Apple hopes, or even fun, that premium might be even higher than the credit-card analogue.

Of course, convenience matters, and all things considered, Apple Pay will probably be a great boon. But a warning for prospective users: When consumers don't use cash, and when payment is simple, they often ending up spending a lot more than they otherwise would — and regretting it later. — Bloomberg

* This is the personal opinion of the columnist.

Apple will be iTunes of contactless payment — Leonid Bershidsky

Posted: 10 Sep 2014 05:51 PM PDT

SEPTEMBER 11 — With typical immodesty, Apple presented yesterday its new payment system, Apple Pay, as if it had invented near-field communication — the more-than-a-decade-old technology that is already widely used for contactless payments.

The company's partners, banks and credit-card companies, played along with Apple's hype, because they support every player that puts effort into popularising a technology whose use they are struggling to expand. Essentially, however, Apple is just a middleman and will have a role only so long as existing payments industry players need help spurring consumers to adopt contactless payment.

The "amazing technology" Apple Chief Executive Officer Tim Cook demonstrated as an alternative to using credit cards with a magnetic strip — wave your phone and, hey presto, you've paid — is the same as MasterCard's PayPass or Visa's PayWave. These use near-field-enabled credit cards, issued by a multitude of banks. MasterCard also has a pilot program with some banks that involves the use of mobile phones. Visa, too, is introducing contactless mobile payments with partner banks. Needless to say, the phones involved mostly run Android, because Apple avoided using the technology in its handsets before yesterday's debut of the iPhone 6.

These efforts will not stop with the introduction of Apple Pay, nor will Korean tech companies and banks give up on their own contactless payment solutions — this form of payment is already the norm in South Korea and Japan.

Still, the major credit-card companies and a number of U.S. banks obligingly praised the project for the Apple news release, because the Cupertino, California, company is bringing its enormous, loyal user base to a fragmented market that needs a big marketing effort to develop. Paying with one's mobile phone, or even with a wave of a plastic card, means changing long-established habits, and people don't necessarily see any reason to do it. A Federal Reserve survey in March found that two per cent of smartphone users had already paid in a store using their phones, 21 per cent more said that they were likely to do so if they had the opportunity, and 44 per cent said they were "very unlikely" to.

The adoption rate of contactless payments by retailers, who don't see much new business resulting from an investment in the new hardware needed for contactless payments, has therefore been low. Here's a screenshot from MasterCard's application showing the location of PayPass-accepting merchants in downtown Berlin, which is chock-full of trendy boutiques and touristy restaurants:

Credit-card companies, banks and big retailers need help in persuading the technology's doubters, and that's where the popular appeal and huge marketing budgets of tech giants such as Apple can come in handy. Many of the same institutions that now back Apple Pay — notably, MasterCard, Citigroup, Macy's, Subway, Toys "R" Us and Walgreens — were also behind the 2011 debut of Google Wallet: Check out this joint news release to see if it reminds you of Apple's 2014 one.

With Softcard, PayPal's One Touch mobile payment system, Google Wallet, startups such as Square and Stripe, credit-card companies and banks already in the market, this is a crowded field. "It's an entire industry built on charging small, infinitesimal tolls," Jonathan Wall, the founding engineer of Google Wallet, told FastCompany magazine. "Everyone says, 'Well, if I can just use my current position to get into the role of erecting my own toll booth, wouldn't that be a great business?'"

Once the industry matures, however, it will grow more difficult to erect extra toll booths, and the traditional chain that includes a bank, a credit-card company and a retailer will not need middlemen to push the technology's adoption.

All of this suggests that Apple may play the same role in the payments market as it did in the music business: The iTunes store legitimised music downloads and saved foundering record labels, but the advent of streaming audio proved that it was a dead-end business model. Whether Apple can stick around in finance depends on its willingness to be more than an intermediary: It may have to become a bank or a credit-card company itself, if it wants to be in this market for the long haul. — Bloomberg

* This is the personal opinion of the columnist.

Bloomberg Video: Why is Twitter raising more money?

Posted: 10 Sep 2014 05:50 PM PDT

Duration: 1:52, Published 11 Sep 2014

Twitter is tapping debt markets for the first time, with plans to raise as much as US$1.5 billion (RM4.8 billion) to invest in acquisitions and expansion. Cory Johnson has more on "Street Smart."—Bloomberg

NYT Video: Three must-have apps before a visit to Paris

Posted: 10 Sep 2014 05:48 PM PDT

Duration: 1:48, Published 11 Sep 2014

Kit Eaton reviews three apps that will help you better navigate Paris, from its transit system to the Louvre.—New York Times

Asian stocks rise first time in six days as investors await Chinese inflation report

Posted: 10 Sep 2014 05:46 PM PDT

SINGAPORE, Sept 11 ― Asian stocks rose, with the benchmark index heading for its first advance in six days, after US equities rebounded and as investors awaited a report on Chinese inflation.

The MSCI Asia Pacific Index added 0.1 per cent to 146.87 as of 9.02am in Tokyo, climbing from a four-week low. The equity gauge declined 1.6 per cent in the past five days as investors weighed the outlook for US monetary policy ahead of the Federal Open Market Committee meeting on September 16-17.

"We're going to get some volatility until you're through the Fed meeting," Kirk Hartman, Los Angeles-based chief investment officer at Wells Capital Management, where he helps oversee about US$331 billion (RM1.05 trillion), told Bloomberg TV. "Everything looks good until the Fed starts raising interest rates. Any kind of rapid increase in rates is going to be a shock for the markets but I don't anticipate that."

Japan's Topix index rallied 0.5 per cent. Australia's S&P/ASX 200 Index rose 0.1 per cent before a jobs report and New Zealand's NZX 50 Index climbed 0.3 per cent after the central bank kept its benchmark interest rate unchanged. South Korea's Kospi index slid 0.2 per cent as it resumed trading following a three-day holiday. Markets in China and Hong Kong have yet to open.

China's consumer price index rose 2.2 per cent last month from a year earlier, according to a Bloomberg survey of economists. Reports on credit growth in Asia's biggest economy may also come as soon as today.

The MSCI Asia Pacific Index traded at 13.6 times estimated earnings at the last close, compared with 16.7 for the S&P 500 and 15.5 for the Stoxx Europe 600 Index.

Futures on the S&P 500 were little changed after the US equity benchmark gauge rebounded 0.4 per cent yesterday. The Nasdaq 100 Index advanced 0.8 per cent as a rally in Apple Inc lifted technology companies.

Fed policy

The Fed is gauging the strength of the economy as it winds down a bond-buying programme and considers raising rates. Data this week may show that claims for unemployment benefits fell, retail sales improved, and consumer confidence rose, strengthening the case for higher rates next year as the world's largest economy continues its recovery.

Ukrainian President Petro Poroshenko said Russia has withdrawn more than two-thirds of its troops from his country as the US and the European Union prepare their toughest sanctions yet against the Kremlin. ― Bloomberg