According to a research report by SBI, there is a misconception in the markets that there has been a decrease in the money multiplier due to the de-risking measures taken in the financial system, which are believed to have solely caused the sluggish growth in money supply. The report attributed the reduction in the money multiplier to the increasing digitisation of the banking industry. What is the money multiplier?In layman terms, a money multiplier is a measure to derive the maximum amount of money that can be created by the banks under the fractional-reserve banking system. Under this system, the commercial banks need to maintain a certain amount of cash reserves with the central bank, and the rest can be used for lending purposes. Impact of digitisation on the money supplyThe creation of money supply is largely endogenous in the Indian context, catering purely to low money demand. There has been a significant change in the composition of the reserve money (the money that has to … [Read more...] about Banks unable to maximise money, money multiplier declines
Dear Lifehacker, Venmo, Square Cash and other instant money-transfer services make sending a money to friends, splitting a check, or paying the rent easy. However, Venmo was just called out for its lax security, and now I'm spooked. Which of these apps are secure? Can I trust them? Advertisement Sincerely, Dear Mobile Moneymaker, However, whenever you grant a service access to your bank account, you also open the door to identity theft, stolen money, fraudulent transactions, or worse. Like you mentioned, last week Venmo, one of the most popular apps of this type (owned by Paypal), was got caught up in a nasty hack that ended up with one user out several thousand dollars. Subsequently, the company halfheartedly agreed to tackle its security problems. How Secure Are These Services Overall? Advertisement On the surface, all of these services do the right things. They all use SSL to protect your identity and activity when you use their apps and web sites. They all keep your … [Read more...] about Which Online Money Transfer Service Is the Most Secure?
PayPal is generally seen as the definitive way to pay people online, but it's not necessarily the best. There are plenty of other great services out there that offer added benefits with far less hassle. Here's a look at our favorites. Why You Shouldn't Use PayPal Why is PayPal bad? It's not, in theory. It's an easy way to send and receive payments using your email address and that's a great idea. I've been a PayPal user for over a decade and when it began it was a wonderful service. But like it often happens when companies grow very large, they start to suck. They like to make poor decisions in the name of security, such as holding your money under review for no reason, draining your checking account when you report fraud, putting 20% of your money in a rolling reserve account without asking, and much more. Personally, despite being a long-time user, I've had funds held for virtually no reason at all on several occasions and a number of other minor but nonetheless inconvenient … [Read more...] about Why You Should Ditch PayPal and Use These Other Services to Send People Money
Dear Lifehacker, Sincerely, Dear Spy Guy, Advertisement Google Wallet We may as well ride the news' coattails and start here. Google's entry into the money space allows anyone with a Google account to send cash to anyone with an email account. It's pretty neat! And, in fact, you can send the money from just about any of your financial institutions. Wallet allows you to add bank accounts, debit cards, or credit cards to fund your Wallet balance with. It's not perfect, though. Pros It's simple to send money. Just add an email address, an amount, and which account you'd like to send it from. No fees for transferring from a bank account or Wallet balance. You can potentially incur a fee if you send from a debit or credit card, but the rest are fee-free. Everyone knows Google. If you send money to someone who doesn't have a Wallet account, convincing them to sign up to receive your money won't be as hard as explaining why they need an account with some obscure company. … [Read more...] about What’s the Best Way to Send Money Online?
With peer-to-peer payment services like Square Cash, Venmo, and PayPal there’s no need to carry cash anymore. These mobile apps make splitting checks, paying friends back, and lending money to family members as easy as tapping your finger. Let’s look at them, and decide which one rises above the others. Advertisement Availability Square Cash, Venmo, and PayPal each have free apps for iOS and Android devices. Signing up for each service is quick and free, and you only need a connection to a data or Wi-Fi network to use them. Square Cash is available to residents of all 50 U.S. states, but no U.S. territories at the time of this writing. You must also be 18 years old and within the U.S. to use the service. Venmo is also available in all 50 U.S. states. PayPal, on the other hand, is available worldwide in over 200 markets and 26 currencies. Fees and Limits Signing up for all three services is free, and so is downloading their respective apps, but each service has … [Read more...] about Money Transfer Showdown: Square Cash vs. Venmo vs. PayPal