Rich Crocco

Cuba is an Untapped Market for Many American Companies

Image via http://www.cnn.com/2015/04/11/politics/panama-obama-castro-meeting/
Image via http://www.cnn.com/2015/04/11/politics/panama-obama-castro-meeting/

Coming from someone who hadn’t been born yet when the Bay of Pigs invasion took place, U.S. relations with Cuba has always maintained a kind of surreal quality. It seemed like a concept having no beginning and no end. It just existed. Cuba was a strange place that supposedly had really good cigars. Now, with the Obama administration departing from the status quo Cuba takes on a new presence in our lives. Now it’s a real country two hundred miles off the coast of Florida. What can this country offer us? Should we have a relationship with a country having such a checkered past as well as real questions regarding the treatment of its citizens right up to the present day?

Cuba’s current leader, Raul Castro, replaced his older brother Fidel Castro in 2006 (who stepped done due to health problems). However this change didn’t represent much of a departure from the communist regime in place since 1959. After all, Raul was a leader of the Cuban Revolution right along with this brother. Last December however, the Obama Administration went public with an agenda to restore full diplomatic relations between Cuba and the U.S. An idea which has drawn the cautious support of Raul.  This change in U.S. policy has culminated in a face to face meeting between Obama and Raul Castro this past weekend at the Summit of the Americas in Panama. The most substantive dialogue between the two countries in more than 50 years. Read more…

Apple Pay Has Company: Samsung Pay, Android Pay

Image via http://www.forbes.com/sites/roberthof/2015/01/27/apple-pay-starts-to-take-off-leaving-competition-in-the-dust/
Image via http://www.forbes.com/sites/roberthof/2015/01/27/apple-pay-starts-to-take-off-leaving-competition-in-the-dust/

With the recent flurry of media surrounding Apple Pay, I decided to look farther into the product, see the details behind how it worked, how it might change customer behavior, etc. It didn’t take long to figure out that Apple Pay is not alone. Not only has Google Wallet existed since 2011, two more products are on the way: Samsung Pay & Android Pay. Let’s take a look at all these products to see how they compare.

Apple Pay
Some say this product will revolutionize the way we pay for products and services. Tim Cook, CEO of Apple, Inc. said 2015 is “the year of Apple Pay.” Apple Pay takes the upcoming Credit Card transition from Mag strips to chips (set for October 1st, 2015 in the U.S.) a step further by getting rid of the physical card altogether.

With Apple Pay your credit card information is securely stored in the iPhone Passport App and your iPhone effectively becomes your wallet.

To start making purchases with Apple Pay you do the following:

1) Input your credit card and/or debit card data into the Passport App on your iPhone 6 or 6 Plus (this data is encrypted and device specific).
2) Set up the Touch ID function on your iPhone. This feature allows you to sign-in to your iPhone and execute other functions such as Apple Pay with your fingerprint as authentication.
3) Simply hold the iPhone near an Apple Pay compatible reader, or contactless reader, when settling a payment. The iPhone will communicate with the contactless reader through ‘near field communication’ technology and will send an encrypted one-time use only code that represents your credit card information. The Touch ID will be used as authentication. Read more…

5 Things You Need To Know About Chip-Enabled Credit Cards

Image via www.canstockphoto.com
Image via http://www.canstockphoto.com

Chip-enabled credit cards, or ‘smart cards’ will be making their official U.S. début in only six months, on October 1st, 2015. This is the date of the so called ‘liability shift’ where banks and credit card issuers will be shifting the liability created by fraudulent credit card activity from themselves to merchants. Now this shift really only takes place when a merchant fails to upgrade to POS technology capable of processing chip-enabled cards. Nevertheless, this deadline allows for a credible line in the sand where the U.S. is officially following the footsteps of the Europeans in fighting credit card fraud.

With the deadline approaching I thought I would explain five of the major questions on this issue:

1. What benefit comes out of chip-enable cards?

The benefit of using a chip-enabled card (also known as an EMV card for Europay, MasterCard, and Visa) is the increased security that comes from the chip imbedded in the front of the card rather than the traditional mag stripe on the back. What the chip offers is unique coding for each transaction processed with that chip. Information held in the traditional mag stripes of credit cards is static, that is if someone steals that data it can be used to make fraudulent purchases over and over again until the card is turned off. With chip-enabled cards each transaction is unique. Therefore if the information is stolen, when the card is used again the transaction will be declined because the unique code that was stolen cannot be used again. Read more…

Yes, Apple is Going in the Dow; But Do You Remember How the Dow is Calculated?

Image via http://new.dowjones.com/products/dj-news/
Image via http://new.dowjones.com/products/dj-news/

It will be big news when Apple, Inc. is embraced by the Dow Jones Industrial Average on March 19th. Some might be surprised to find such a significant company was not already included in the statistic. Upon hearing the news I tried to remember exactly what companies are in the Dow, how it is calculated and what the history is. I’ve been over this plenty of times in school however it’s not something you think about everyday. I thought I might not be the only one in need of a refresher so I will look into these questions here.

What It Is
The Dow Jones Industrial Average is a statistic based on the stock prices of 30 of the largest US companies. The companies included are purposefully selected in order to cover the most significant and highly trades companies in all major industries of the US economy except Transportation & Utilities, as those industries have their own Averages. The Dow is one of many averages or indices available today. Some others include the S&P 500 & The Russell 2000, along with many foreign averages such as the Nikkei 225 in Japan.

There is no mathematical formal that determines which companies are included in the Dow, instead “a stock typically is added to The Dow only if the company has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors.” Read more…

One Way to Invite the DOL to your Business: Mess with Employees’ Tips

Payrolltips

While on vacation in Hawaii this week, I was searching for a local topic to write about that would relate to others reading this blog. To that end I came across a small article named “Hawaii steak house restaurants to return $150k to employees.” The restaurants named in the article were investigated by the U.S. Department of Labor for violations related to tip income. According to the article, “Tipped employees’ cash wages were reduced below the minimum wage of $7.25 and wait staff was required to return a portion of their tips to restaurant management.” It’s hard to decipher exactly what the violation was in this instance but it did get me thinking about reporting tip income in general.

Tip income can be a sticky subject for any tip related industry, from a federal compliance perspective to an employee relations perspective. Added to that is the fact that each state has their own rules regarding how tip income is to be reported. Businesses must have procedures setup to track employees’ tips i.e. credit card tips or rely on employees reporting their own tips to their employer. There are also Tip Agreement programs (such as TRAC) administered by the IRS that companies and employees can enter into. Visit IRS.gov for more information on available programs. I work in the Gaming industry in Nevada where one of the more popular forms of tip income reporting is the Tip Rate Determination Agreement (TRDA) or “Tip Compliance.” Read more…

‘Same Day ACH’ may be the Future of Electronic Payments

I’m hearing more and more about ‘Same Day ACHs’ and the idea might be a reality in the next year or so, therefore I thought I would explain the basics of the concept.

Generally U.S. companies have two basic options to execute electronic payments on a regular basis, wire transfer and ACH.  Wire transfers are executed directly between two banks on behalf of their clients. They can be costly ($15 to $35 per transaction) but are considered secure and settle almost in real time.  Wire transfers are effective for one-off payments or high-dollar transactions but are not something you want to use for recurring payments as the costs will most certainly outweigh the benefits of electronic payments in the first place.

ACH (Automated Clearing House) payments on the other hand, are much cheaper and are not executed directly between banks but are settled through the Federal Reserve. This is very efficient for financial institutions as there are roughly 80 million ACHs executed daily according to the article “Same-Day ACH and the Future of Faster Payments” from americanbanker.com and these payments can be aggregated by financial institutions with money transferred to and from institutions once per day rather than by transaction. While this is efficient for banks (and therefore cheaper for companies and individuals) it also comes with one byproduct, funds are settled and available on the next business day. Read more…

Do You Want Unlimited Vacation Days at Your Job?

Hawaii Sunset

Welcome to my new blog which will be investigating and analyzing financial topics that are relevant in today’s business world. Whether you work in finance, accounting or running your own business, this blog may be helpful in keeping abreast of and understanding key issues that businesses face.

The topic I am interested in today is company Unlimited Vacation policies. This small but growing trend in start-ups and small businesses is providing a new way to think about vacation policies.

We all know the traditional types of vacation policies we usually come in contact with in the workplace i.e. accruing a bank of vacation hours each year that employees can redeem, accruing fractions of vacation hours with each actual hour worked, or just receiving a set number of days off each year. These policies are also sometimes combined with sick time, personal time, etc.

The concept of unlimited vacation gets rid of the administrative aspect of enforcing and auditing a traditional vacation policy and instead the company trusts the employee to 1) not abuse the policy and 2) make sure taking vacation days does not reduce the effectiveness of his/her job.  With an unlimited vacation policy, employees take as much vacation time as they need as long as their work does not suffer.  This new trend centers around the idea of treating employees as “responsible, trustworthy adults” as mentioned in the money.CNN.com article “Unlimited vacation.  It may not be as cool as it sounds.”  How would your employees handle an open ended policy like this? Would they rise to the occasion of being treated with a higher degree of respect? Or would they look for ways to abuse the system? Read more…