Beyond credit cards - is this a way forward?

We all buy things on-line all the time, and use credit or debit cards to pay on web sites all of the time. As a company we have taken cards with orders in the past, but now most of our business is ongoing services paid by Direct Debit.

Recently we changed the main account to which customers can send payment (when not paying by Direct Debit) to Monzo Bank. The reason, as I explained in my blog post, was that we get instant web hooks for incoming fast payments. I suspect this may be possible with some other banks, perhaps with OpenBanking, and that is something we do want to investigate, but it works well with Monzo.

Apart from allowing incoming payments to instantly be assigned to customer accounts, allowing sales and accounts staff to see the money and ship goods, place orders, or remove restrictions on an account, we also introduced a new feature for deposits with orders.

The idea was to take money by bank transfer as part of an order. This helps avoid some fraudulent orders, and means we have money up front. It also means we have bank details to validate correct Direct Debit instructions.

This was rather experimental - we had no idea how customers would react. We know people are familiar with a credit or debit card with an order, but sending money by bank transfer is not something that is at all common. We made it totally optional, but obviously having had payment with order it means we can progress orders a lot more quickly. Sales staff can immediately ship goods without waiting for our accounts department to check credit or get a deposit.

Over time we have gradually added to more and more types of orders and for lower amounts, and even for existing customers if they do not have a direct debit set up or working. In some cases we only ask for £1 or £2 deposit even, in others it is the whole cost of equipment being supplied.

To my utter surprise it is hugely popular - we have now handled many tens of thousands of pounds in this way. I recall only one case of someone specifically declining to pay a deposit with order so far, and I am frankly gobsmacked, this is excellent!

As a merchant

As a merchant this is a lot easier than taking credit or debit cards.

• No card processing fees.
• No delay receiving payment.
• No PCI DSS hassle (yes, obviously we comply with GDPR and have a privacy policy).
• No risk of a chargeback - it is just like cash.
• Allows us to validate Direct Debit details for on-going services, reducing mistakes and fraud.
• No choosing which cards to take or not take as any UK bank can send faster payments.
• No joke, scam, or fraudulent orders as they don't seem to want to send money up front.
• No real minimum, though some banks seem to dislike smaller than £1 (card fees often make small purchases by card less cost effective).

Overall it is a stupidly good deal for us - we get payment just like cash but don't even have the hassle or cost of handling cash! We can automate a lot of things, unlike cash.

As a customer

As a customer, are there advantages? Are there disadvantages? As we say, for a start, we make it optional (except in one case where we do see fraud with a particular VoIP service), but people do love it, which is great news.

• Faster order processing, we have the money so we can go ahead with the order, often automatically (so for VoIP, and L2TP these can be working in seconds any time of day or night, and for broadband the order for lines/circuits are even sent automatically).
• The UK banking system's "Confirmation of Payee" process means that the customer knows they are paying us, by name, and so they know who has their money (very often unclear when paying by card).
• If an order does not go ahead, or any other reason for refund, it can be instant, unlike (mostly) with card payments - though it does depend on us sending it back (which we do).
• If we refund, that is final - unlike cases I am now seeing where a card chargeback is now being disputed by the merchant months later, and I don't know for sure if my chargeback is "safe" yet.
• The lack of fees helps keep prices low.
• No need for address match - if wanting to send to a friend you can, as you have paid, just like cash.

Of course there are some disadvantages. With a card, a chargeback is possible, and it is also possible with a credit card for some amounts to hold the card company liable for failure. Obviously this also only works if you have the money and don't need credit from a card.

I really think there are businesses that could operate entirely like this without the need to take credit or debit cards at all. For small companies, especially struggling to recover after COVID-19, this could be extremely useful.

Teething problems?

Obviously the process was not without some issues, but we have it quite slick now. Most issues are around people who simply cannot type a correct payment reference.

• Monzo very quickly fixed a Confirmation of Payee issue with our company name, and are working on the missing ampersand at present.
• We created a system to allocate a payment reference (account number on our system) without customer details yet, and ensure that did not then change later for future payments.
• We created a system so that the ordering process can check for incoming payments on such an account number cleanly and get bank details for setting up Direct Debit.
• We created a system to refund (by BACS at present) any deposit if the order does not complete. Hopefully in future we'll have a faster payment means to refund, and I can do it manually (as I have been).
• We had to decide how much money to charge - if just a deposit for good will and Direct Debit details, or if paying the total up front. We fine tuned how much we ask in each case over some months depending on the type of service, the risk to us, the goods being supplied, etc.
• We decided to make the up front payment whole pounds to try and avoid typing errors, and this has worked well - we are selling ongoing services so any balance of pence just ends up part of the first Direct Debit. This will obviously not be the case when just selling goods (which we plan to do also).
• We discovered just how bad people are at typing a payment reference correctly - it is a real shame that the Confirmation of Payee system does not allow us to send a regex for the reference! However, when a payment is wrong, we can easily immediately return it with "Wrong reference". This worked well and for once customer they resent with the right reference, all during the order process!
• The real time payments, and the payer name and bank details, also help allow us to easily tie up a payment with an order if a customer does make mistakes. We allow the customer to say carry on without deposit and flag that they had issues with the order. That has worked well for those few cases.
• We have introduced a checksum system that makes it easier to ensure a wrong payment does not simply go to someone else's account (easy to spot, but more of a nuisance as we email that customer confirming payment). Sadly we do not yet have a means to instantly automatically return such payments, but one day we will I am sure.
• Not really for new customer orders, but we have added a system to automatically email a statement to any existing customer paying - we also set a system to cancel any pending Direct Debits that are possible when applying the new payment. We even set the system to automatically remove restrictions on service automatically once payment arrives. Customers have used this to pay by bank transfer instead, and the system is totally automatic now!

Barcodes?

I have suggested before that we need barcodes for this, and someone has pointed to a draft RFC (here).

This is similar to what I proposed in 2017. If it actually becomes an RFC that may be a good start to people actually understanding them. We just need banking apps to start handling payto: URLs and things will be a lot simpler.

Logic puzzle?

Someone posted on a Facebook group this image, and said that "My pedantic 8 yo needs to know whether Sophie is included in the total."

Now, the answer is that is pedantic 8 yo does not actually need to know whether Sophie is included in the total or not in order to answer the question. i.e. whether Sohpie is a passenger or not.

Now, to me that is blindingly obvious. What puzzled me is not, for a change, trolls on the Internet, but that so many people (indeed, I think all but one) comment that she may be the bus driver and suggesting that matters. One person said to put the answer and "assuming Sophie was driving the bus". It seems almost everyone assumed that it mattered if she was a passenger or not, and hence if she was included in the total.

I would to normally do this, but I'll explain the incredibly simple logic just to be clear to anyone that is in some doubt somehow.

• If she is a passenger, there are 17 passengers INCLUDING Sophie, and 21 are added making 38 total passengers including Sophie, as she is a passenger.
• If she is not a passenger, there are 17 passengers NOT INCLUDING Sohpie, and 21 are added making 38 (plus Sophie who is not a passenger).

Either way the answer is 38.

Of course, what the pedantic 8 yo should have asked (and kudos for asking questions at all), is are all the "people" that got on "passengers". After all, if they are, then why not say "21 more passengers get on"? Why use a different word ("people") in that part of the question.

Yes, if Sophie is one of the 21, and not a passenger (e.g driver), then just like any other case where the 21 are not all passengers, it changes the answer - but that because the 21 are not all passengers rather than Sophie's status as such.

Linked households and musical chairs

I was not sure whether to post this as people seem to think it is just about finding loopholes in the law to work around it, which it is not. We should all be taking this seriously and considering our own circumstances, and of those with which we might interact, and trying to be as safe as possible.

This is more about showing how badly thought out, and how badly drafted, these laws are.

Laws being brought in on emergency powers with almost no notice and zero parliamentary scrutiny. There is no excuse for this. The stages of relaxing lock down could have been considered, with the relevant legislation, months ago and agreed by parliament with agreed levels when each stage would come in to law. That would have meant everyone impacted by the changes would know what to expect well in advance, and the police would know what laws were coming so they could police them. Importantly the objectives and wording of each stage could have had careful scrutiny to avoid the stupid errors that we have seen in version after version of these laws.

However, today's new legislation is here. I.e. The Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 as of 15th June 2020.

It includes a little gem on linked households, a fun new concept. Basically, this extends the idea of a household to allow two households to be linked. That then allows them to have indoor gatherings with members of both households and even allows sleep overs at either house, which is what some people have been eagerly await for obvious reasons.

This sounds simple enough at first glance - ignoring children, two households (where one is only one person) can be linked if all the adults agree. Once linked you stay linked unless the rules for allowing linking break. Once unlinked, that is it, you can't link to any other household, a sort of link-ban, forever! What is hard to understand?

Well, there are several layers of issue here :-

Which household to choose, and who is left out?

Even taking the rules entirely as intended this poses problems. My household is 5 adults, and we know, between us, several other single person households with which we may want to be linked. Which do we choose? Who do we piss off by not choosing. How do we all agree on which we choose (as required). When do we choose - as this is permanent, do we wait until we need to have a link because we want to have someone at one or other household? What if we choose too soon and want to change our mind?

Does this make for the new chat up line: "how would you like to link households with me?", or the new euphemism "those two are linked households"?

No changing your mind, or is there?

There is no changing your mind - the rules are clear - even causing the link to terminate does not then allow linking by either household with any other.

Well, we assume not - but could you get a link annulled? perhaps on the basis that is was not consummated, by which I mean there was never an indoor gathering with members of both households present, i.e. there was no reliance on the linked household for any activity to be legal. Surely that would be valid, and as not terminating the link, it would allow the households to pick others to now link with maybe? Nothing outlaws that, does it? It basically does no mention that possibility. When is the link created - when parties agree the link? or when parties rely on the link to be legal in what they are doing (sleep over?). Or is it when they are caught relying on the link to be legal in what they are doing?

No record of linked households - Schrödinger's link?

Of course the issue of annulling a link is not really important - if all members agree that they are no longer linked, then who is to say that they ever were? Only if everyone is prepared to say they were linked, or had that on some sort of record, it only takes one person to say "we never agreed to be a linked household" and you cannot really prove the households were linked. So if you did link households, and then decide to change your mind, what is basically to stop you?

Essentially, until you are caught out you do not have to say you are a linked household.

Blackmail?

This, of course, opens some issues. If two households are linked, and someone is caught, i.e. seen by nosy neighbours entering someone else's house, then they can say they were linked with them (assuming one or other of the households is a single person, and so allowed). But that only really works if all members of the household agree. If even one of them says it is not agreed, the link did not happen, and you are nicked (fined). So now there is an opportunity, if you are questioned over such activity, for it to be worth something to you for the people in the household to agree the households were linked. A chance for blackmail, at least to the value of the fine.

What is a household even?

Defining an household should not be hard, and was not that important before. Essentially it is pretty obvious, a group of people all living in the same house. But the new rules create a state related to households, the state of being linked, and that means it matters what a household is, and was, and how it may change, or be created or dissolved and if that state moves or persists. It is not quite so simple is it? Remember, that moving house has been allowed all along, but assumed that simply staying over night is not moving house one day and moving back the next, so it is presumed you have to move house for several days at least to have actually moved house.

To add to the fun, children are exclude from the counts in the households. Except that there is a magic grey area. The single household can have children that are 18 after 12th June, and still count as children. However the other household which has no limits on number of adults could find they have an extra adult for a child becoming 18 after 12th June, and that adult has to have agreed to the link for it to be valid. What if they now don't agree, or did not agree when they were a minor. Why have children defined at a date for one part of the rules and not another part?

Moving house

Moving house is perhaps the biggest issue with this, and the whole concept of a household.

Let's make a scenario in order to try and work this out. Again, ignoring children.

• Single household A is linked with two person household B
• Single household C is linked with three person household D
• There is an empty house E

So, some questions to consider and not all answered by the law. What is the answer I wonder?

Person from house B moves to house A. This is clearly that they have left one household and joined another. Household B is now the remaining person from household B. Household A is now the group of A and that person. The two households meet the requirements for linking still (one is single) and assuming they all agree, they stay linked. Good, something pretty clear and obvious.

Person from house D moves to house C. This is clearly that they have left one household and joined another. Household D is now the remaining people from household D. Household C is now the group of C and that person. Now the two households are no longer allowed to be linked as there is not a single person household, so the link is broken and both households are now link-banned. Note that this person could sleep over at household C, but somehow need to make sure that they don't move house to household C if they want to stay linked. Fine line?

Person from house D moves to house B. This is clearly that they have left one household and joined another. Household D is now the remaining people from household D. Household B is now the members of B and the person that moved. Both the A-B and C-D linked households remain valid as they each have one single person household. Is that true under this law?

Person from house A moves to house C. This is clearly that they have joined a new household, and household C is now both of them. This breaks the A-B link as A no longer has a single person (it has none, does it even exist any more), so A and B are link-banned. This breaks C-D link (as C is no longer a single person), so C and D are link-banned.

Person from house A moves to house D. This is clearly that they have joined a new household, and household D is now all four of them. This breaks the A-B link as A no longer has a single person (it has none, does it even exist any more), so A and B are link-banned.  This does not break the C-D link. However, now, as this person is part of the C-D linked household, a sleepover at household C is allowed as long as it is not moving house. Now, try explaining how this is different to the scenario above where this person moved to house C. They are in the same place, but the C-D link now remains. This is an anomaly.

Person from house A moves to empty house E. Is this moving from one household to another, and so the A-B link is broken? Or has household A moved, and the A-B link (now E-B) remains?

If we consider in the above that the A-B link is broken, is the now empty house A still a household, and still link-banned. If someone now moves in to household A, are they now link-banned, or could they link to another household? Does that impact then house price of house A?

If we consider the house itself to hold the household when empty, what happens if link A-B is broken. A and B are link-banned. What if person in house A moves to household D? Do they carry the link-ban with them and so break the C-D link, or are they just part of the linked household D now? What if they then move to empty house E? Have they created a new household, or is their original house A link-ban still attached to them? What if they move back to house A, are they link-banned?

Cannot police

Basically there is zero way the police could police this. At best they could come down on an obvious "house party" or group of people from several households, and take some action as an illegal indoor gathering. They almost certainly need to be in a case where we are talking more than two households to have any chance of it suddenly being a linked household they are looking at.

Laws that cannot possibly be policed are bad, and this is an example of bad in so many ways.

Confirmation of Payee

UK banks have been rolling out a new confirmation of payee system recently.

The idea is relatively simple - when paying someone using your bank app or web site, you put not only the sort code and account number, but also payee name (the name of the person or business you are paying). The system can then advise if you have that right, or a "close match" which can then let you confirm the exact name.

As I have said before I think this is problematic at best - banks usually have shortened (18 characters) names for accounts, but companies and people have longer names, trading names, may use initials, or have joint accounts, and so on. It means a match may not work.

It may help typos, but then that is what check digits are for, but what concerns me even more is that scammers will simply change their tactics - telling their marks a different payee name, perhaps justifying as the holding or parent company, etc. That will then match. Indeed, I expect scammers to be slick and make paying them really easy, but normal businesses and individuals to run in to problems.

Just to highlight how stupid this is - I sent a payment from Barclays to Monzo, and Barclays set the payer name in that case to KENNARD AJ. I then sent payment back on Monzo, and it went through confirmation of payee on the (pre-filled) details, and Barclays failed to validate KENNARD AJ as my account name, not even a suggested alternative, even though it is what they sent!!!

This type of stupidity, where you have pre-filled or known correct details totally failing, will get people just doing "click through" of errors and warnings as a matter of course, just like cookie warnings. Some people will have so much trouble they tell payers "just ignore any errors". However, the fraudsters will know exactly how to make it work perfectly and what to tell people. This almost makes it worse than before!

Of course, as you may know, my company is Andrews & Arnold Limited, and like other companies with an ampersand in the company name, we have the occasional issue. Some times it is silly things like a delivery address on a parcel saying Andrews & Arnold Ltd or some such, but some times it is more severe, such as BTs back end systems simply not working for us initially as they forgot to escape the ampersand in XML.

I should not have been surprised, obviously, that the new confirmation of payee system would have issues. I am however shocked at quite how bad it is, and how it seems that several different banks are broken in different ways.

First off, the good guys - Lloyds bank. The app allows me to enter Andrews & Arnold Ltd as the company name, and confirms it is correct - yay!

 

Well done Lloyds, but other banks are more of a challenge!

Barclays web page was OK, but the app does not allow you to even type an ampersand in the name. This is crazy as an ampersand is not some new fangled unicode emoji, but something that is valid in ASCII, BACS, Fast Payments, even old fashioned mechanical typewriters. Apparently it dates back to the 1st century AD!

It seems Nat West mobile app allows an ampersand but then does not match, and we have reports of the same from Co-op bank.

The other odd issue is that when the account does not match, in some cases, the actual account name is advised, and you can pick that. The problem is that what gets advised is ANDREWS ARNOLD LIMITED,ANDREWS ARNOLD LTD



Of course, this long string with something like our name (missing ampersand) twice, does not then match even though it is what was suggested.

The solution?

Update1: By the end of the day of reporting this, Monzo had made a change that helps. The suggested name is now just ANDREWS ARNOLD LIMITED, and using the suggested name now works. This should stop customers having problems as they don't have to ignore the warning now.

Monzo are still working on the ampersand in the suggested name.
Barclays have not said any more, but obviously they need to allow ampersand to be typed.

P.S. It will be fun if ever Companies House allow unicode... Andrews ⅋ Arnold, anyone?

Mental health

I am no expert, and as I get older I start to understand some of the issues that can happen - but just touching the surface.

It is a strange subject in some ways - so many things in life we can try out and see for ourselves. I love that science and mathematics are things you can try and test and see and intuitively understand if you try. But mental health is not quite so easy.

You can't really experiment on others, or yourself, and see how it works. I wonder how people that do work with those with mental health issues cope themselves even. They may not be experimenting but they are experiencing the issues of others.

The lockdown, and isolation, we all face in the last few months has been unexpected, and is pretty much unprecedented for most people alive now. It is a change in the way we interact with other people, and that is new and different for most of us.

Interacting can be face to face, or via telephone, email, video call, irc, chat, etc. I am someone that does not interact a lot face to face - I spend my days in my "man cave". I do interact a lot by text means normally, but not a lot face to face. I am not a very social person, usually. Someone said I was asocial rather than anti-social.

So I expected that the degree of isolation would be no problem - I was not quite right on that. Just the little bit of social interaction almost every day (mainly cycling to Costa and having breakfast and a coffee) was enough, and now that is gone. Should that matter?

Video calling is a boon, it helps, but even that is more effort that it seems it should be, even just a few clicks on a portal. Going for a walk, even with no interaction with others, does help, but feels like hard work.

These are strange times, and I expect this is all something we can work to live with. I find some days I am fine, and some days I am not. I have my wife, and some of my family, here with me, but there are people that are really on their own. I wonder how they cope.

It is strange finding mental health is a thing I can observe and study in my self, but not an easy subject to study, and one that may mean drinking too much on occasion as well.

This must be a huge issue for those considering manned space missions in the future.

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The new rules (Wales, June 2020) - a little different to England

The new rules (here) come in two force 1st June, and are similar to those in England, but not quite the same. These are the main changes that I can see.

Section 8 covering leaving home is replaced. This now covers leaving or staying outside your local area, and being indoors with someone not of same household or carer. This is different to England which simply covers sleep-overs. There are a similar (non exhaustive) list of reasonable excuses as before. There is also an 8A which, unlike England, requires you to work from home if you can.

There is a similar restriction on gatherings, but unlike England allowing up to 6 outside from any household, 8B restricts to two households maximum in Wales.

What does this mean:

• Like England, gatherings from different households indoors are not allowed, except for some reasonable excuses. Note, Wales has a non-exhaustive list of excuses for such gatherings, so slightly better than England.
• Like England, being outside is now fine in itself - but you are restricted to your local area - so no trips to Barnard Castle for the Welsh. This means we could expect some police checks on people driving still, maybe, as they may want to check you are not outside your local area.
• Like England, gatherings are still not allowed outside, but the restriction is more than two households, not more than 6 people as in England.
• Welsh has not added the elite athletes exceptions present in English legislation.

I am unsure how this works if someone in England leaves their local area and goes to Wales. The Welsh rules cover being away from your local area, so that is probably not allowed.