Trending Financial News 9 August

Accept payments on your phone with NAB

National Australia Bank (NAB) and Melbourne based payments company Quest are trialling a new payment system that will let anyone with an Android mobile phone handset accept contactless Tap ‘n Pay and PayWave card payments.

Quest told IT News that the new system will be able to be used on Apple devices only through the addition of a Bluetooth payment P_[terminal.

“Australians are carrying less and less cash,” said NAB’s Andy Kerr.

“There are limited options for merchants such as market stall vendors, boutique retailers, sole traders and start-ups to accept payments.”

Facebook loses facial recognition case

Facebook could face billions of dollars in potential damages claims after a US federal court of appeal ruled in favour of a class action proceeding against the global social media company. The action alleges that Facebook broke the law in collecting the bio-metric data of users (their faces) without permission.

Each breach of the law is potentially punishable by fines of up to $5,000

Many iPhone users use facial recognition to open their phone and access their banking apps.

Banks want flexibility in lending rules

Banks want new responsible lending guidelines to be flexible and not prescriptive said the Australian Banking Association’s chief executive Anna Bligh.

Ms Bligh said strict rules could lead to perverse outcomes.

“A credit card customer might have had a high-rate card for 10 years, which they have managed with no problems,” Ms Bligh told a conference yesterday.

“They might want to switch to a low-rate card but under a strict serviceability assessment they might get knocked back, that’s not a good outcome.”

Banks don’t want to check on your income

Banks and the industry regulators are preparing to rewrite guidelines for responsible lending practices including how to verify an applicant’s financial situation.

The Australian Securities and Investment Commission is concerned that lenders are not doing enough to check whether borrowers can reasonably afford to repay their loan.

“We have observed since the start of the responsible lending regime instances where licensees have failed to take sufficient steps in order to comply with their obligations.”

The Australian Banking Association submission calls for “a principles-based approach to responsible lending” rather than specific rules that banks must follow.

“We believe a prescriptive approach will not provide a net benefit to customers,” said ABA chief Anna Bligh.

The ABA said new rules could mean delays in loan approval, increases in the cost of credit and limits on how borrowers can change credit providers.

Big turnaround in home loan sales

The value of home loan sales went up in June, for the first time in more than one year. The Reserve Bank cut interest rates in June and then again in July.

Seasonally adjusted, the value of new loan sales increased 1.3 per cent in June, up from a fall of 1.6 per cent in May according to Australian Bureau of Statistics.

The value of new owner-occupier loans was up 2.4 per cent while investor loan sales were up by just 0.5 per cent, not including refinancing.

There were 8,999 new owner-occupier first home buyers in June, up 2.4 per cent from May.