The Microsoft Band actually looks very promising

When I talk about Microsoft in the mobile world, my articles often have an undertone of pity. It's not that I think Microsoft can’t accomplish anything, but it’s clear that over the past few years, when it comes to Microsoft’s position in the mobile world, it’s not nearly as overwhelmingly well-received as Android or iOS has been. For that, I have sympathy on the company and the struggling mobile OS. I really would like to see Microsoft succeed with Windows Phone more than it has been able to recently.

While Windows Phone may be struggling to catch up to the popularity of Android and iOS, though, one area where I believe Microsoft can rise above the rest in the mobile world is with its latest wearable: the Microsoft Band. Although I’ve been leery of smartwatches and fitness bands as of lately, I am actually rather intrigued by Microsoft’s addition to the wearables market.

To put it simply, Microsoft has managed to make a smartwatch/fitness tracker hybrid that does just enough of each to make it worth checking out.

The other day I asked whether you guys thought whether fitness trackers were worth the money or not, and many of you came up with some compelling answers. Between my lack of proper enthusiasm for fitness and health and my cheapskate tendencies, I currently haven’t found much of a desire to purchase a fitness tracker of my own. I’ve also talked about smartwatches and how only one of them seem worth the money for me in the end. However, after doing some more research on the Microsoft Band, I think that this wearable gives users the best of both worlds for a few reasons.

First and foremost, the fitness aspect of the Microsoft Band is just packin’. All of those things that cost a pretty penny in a lot of designated fitness trackers are all included in the Microsoft Band, including pedometer, GPS, heart-rate monitor, UV sensors, calorie burn, and sleep tracking. We’re off to a pretty good start here, and that’s just covering the fitness aspect of this new wearable. Combined with the Microsoft Health app, you’ve got yourself a pretty nice set of fitness features.

Then you have the smartwatch aspect of the Microsoft Band. A lot of smartwatches, I feel, are trying too hard to be complete smartphones without actually being able to work independently without a smartphone. The Microsoft Band has a few nice features that work with your smartphone, but I don’t feel like it’s trying too terribly hard. You basically have, well, the basics: text message, e-mail, and social media previews; visual incoming call and voicemail notifications; and finally you have calendar alerts as well. You also have the added bonus of being able to use Cortana, which can benefit you more if you use a Windows Phone. She still works if you use other platforms as well, though.

Which is another great bonus about the Microsoft Band: you can use it whether you’re an Android, iOS, or (of course) Windows Phone user. (Although, unfortunately this still leaves BlackBerry users in the dust once again - sorry, guys). Still, three out of four isn’t bad considering most only work for Android and iOS - but we could have assumed that Microsoft wouldn’t leave out its own mobile OS for its smartwatch. Either way, it’s still a decent investment if you’re looking for a smartwatch because you know that your Band will still be compatible with other platforms should you switch sometime in the future (again, unless it's BlackBerry). That’s pretty neat.

Finally, the last thing I like about the Microsoft Band is the design. Not everybody will agree with me here, but I’m attracted to the slimmer screen of the Band (also the same design seen in the Samsung Galaxy Fit). I’m hearing that the actual weight of the Band is pretty bulky, though, so maybe in future generations Microsoft can focus on making it a little more lightweight - but when it comes to the screen and the way it looks, I prefer it over the square face that a lot of smartwatches (such as the Galaxy Gear or the Pebble) have been going with. This probably has something to do with the fact that my hands are usually on a keyboard or in front of my face somewhere and it’s convenient for me to glance at it and see what it’s saying without turning my head.

One thing I don’t think Microsoft did well was, of course, battery life. I can’t really give them a pass on it, either, because other smartwatches have been able to extend battery life to at least three or four days; Microsoft claims that the Band is only able to get 48 hours on a single charge. Pretty abysmal, comparitively speaking. Battery life is an extremely important component (in my opinion) on any electronic, and I feel that Microsoft dropped the ball here.

Otherwise, though, I think Microsoft is on the right track for being one of the top contenders of having a great wearable. I’m thinking that within the next two generations of the Band, should Microsoft continue with this endeavor, we could potentially start to see some real progress with it. It certainly seems to be starting off on stronger footing than Windows Phone did in the smartphone world.

11:22 PM | 0 comments | Read More

America's dual economy

How's the U.S. economy doing?

If you're a glass half-full type, it's easy to point to the fact that the economy is expanding again and unemployment is at a six year low. Gas is back under $3 a gallon, the stock market is at an all-time high and this year's job gains are on track to be the best since 1999.

America is certainly better off than it was during the financial crisis, and the nation looks a lot stronger economically than Japan and Europe.

America has added 2.3 million jobs in 2014
But there's a glass half-empty side of this economy, too.

Wages aren't rising for most Americans. A middle class family is actually bringing home the same income as it did in 1995, and millions of people want full-time jobs but are stuck in part-time positions.

There's no denying the rich are getting richer and the rest are stagnating.

The fact is there is truth in both sides -- the result of a slow-burn recovery from the worst financial crisis in generations.

Why voters hate the Obama economy
 
Here are the three key stats to that drive home America's dual economy:

1. Lucky to be employed. 
 
On Friday the government reported another strong month of job gains. The unemployment rate is 5.8%, not far from what most economists think is typical rate of around 5% when the economy is humming along.

But the improving number masks the fact that the U.S. has 2.9 million people who have been out of work for half a year or more. That's double the number of long-term unemployed than before the recession.

Even more troubling is that the U.S. has over 7 million people who are working part-time but want full-time employment.

2. Wages aren't growing.
Americans are spenders. We like to buy things and that powers our economy. But people can't make purchases if they don't have money. That's why it's so worrying that U.S. wages aren't getting any bigger.
Wages today are about the same as they were just before the recession.

In the past year, wages went up about 2%, but that is just ahead of how fast costs have been rising so the gains are basically canceled out.

The complete list of companies that are open and closed on Thanksgiving
 
3. More gains went to Wall Street than Main Street.
The one area that has bounced back since the end of the recession is the stock market. It bottomed out in March 2009 and has been on an incredible tear ever since.
The S&P 500 -- the benchmark index that has a lot of funds that mimic or track it -- is up nearly 200% since that 2009 low point.

But the catch is that only half of Americans have any money in the stock market. So all those gains have only exacerbated the "have versus have not" economy.
Wealthy whites are the most likely to own stocks. And since the rich own more stocks, they benefited more.

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Jay Z likes $300 champagne. So he buys the company

Music mogul Jay Z appreciates the finer things in life, including high-end Armand de Brignac champagne.

 has purchased what could be described as the flashiest champagne company in the world -- Armand de Brignac.

The Armand de Brignac champagne company -- which sells its shiny gold bottles for about $300 each -- has long been favored by the rap artist and was featured prominently in one of his music videos back in 2006.

He's often seen in pictures sipping the drink with his wife Beyonce Knowles, and the couple famously hosted a fundraiser for President Obama that featured a wall lined with hundreds of Armand de Brignac bottles.

The owner of the brand -- New York-based Sovereign Brands -- confirmed the sale this week. The price of the deal was not disclosed.

The champagne -- also called "Ace of Spades" -- is crafted and marketed by a family-run vineyard in France that traces its roots back to 1763. The company employs fewer than 20 people.

Bottles of Armand de Brignac champagne.

Jay Z used to be a massive fan of Cristal, but that changed in 2006 when The Economist published disparaging comments from the head of the company that makes the champagne, Frederic Rouzaud.
"What can we do? We can't forbid people from buying it," Rouzaud told The Economist, when asked if hip-hop artists were tarnishing the high-end brand.

When Jay Z heard of the comments, he immediately stopped sipping Cristal and quickly switched to Armand de Brignac.

"We used their brand as a signifier of luxury and they got free advertising and credibility every time we mentioned it," he wrote in his 2010 book "Decoded." "We were trading cachet. But they didn't see it that way."

Related: The favorite brands among hip-hop legends
The 44-year-old New Yorker, born Shawn Carter, rose to fame through his music and now has business interests in fashion, entertainment and sports.

Forbes ranks him among the most powerful celebrities in the world, alongside Oprah Winfrey and LeBron James. But his wife Beyonce tops the Forbes ranking and was recently named the top-earning woman in the music industry after making $115 million in 2014.

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U.S. has added 2.3 million jobs this year

Employers added 214,000 jobs in October, continuing a trend of strong job growth this year that is on track to be the best for America since 1999.

The unemployment rate fell to 5.8%, according the government report released Friday. The rate fell below 6% in September for the first time in six years.

Economists are growing more optimistic about hiring. The consensus forecast from economists surveyed by CNNMoney was for a jobs gain of 233,000 jobs and an unemployment rate of 5.9%. While October's hiring fell short of expectations, experts still say it's positive.
"Anytime you're over the 200,000 mark, things are going well," says Rich Thompson, Chief Human Resources Officer at Adecco Group North America. "It's still good. It's consistently solid."

On average, the economy has been adding well over 200,000 jobs a month this year, a positive sign. There have been nearly 2.3 million jobs added so far this year.

"It also helped that October's gain was widespread, with nearly every industrial sector contributing to the job gains," says Paul Ashworth, chief economist at Capital Economics. Food services and health care had the biggest hiring sprees.

Wages still stuck: Americans, however, have not been as upbeat about the economy. Though unemployment has fallen from 7.2% a year ago, the economy remains their top concern and played into the midterm voting.

That's mainly because wages have remained stagnant. Average hourly earnings remained steady last month at $24.57. Wages are a key factor in how much money people have to spend, which drives economic growth.

While wages are up 2% over the past year, that's just slightly ahead of inflation, which means most U.S. workers don't feel any better off.


To put it another way, median family income in the U.S. has fallen back to 1995 levels.
Related: Why voters hate the Obama economy
 
Long-term unemployed: Another lingering problem for the economy are workers who haven't been able to find a good job for months, if not years. The number of long-term unemployed workers dropped 28% in October from a year ago, but it is still double its pre-recession level.
Another seven million Americans cannot find the work they need. The number of people working part-time jobs who really want full-time employment remained high in October and is one the reasons the Federal Reserve is hesitant to change interest rates.

Federal Reserve Chair Janet Yellen and other officials are closely monitoring the monthly jobs report. They are waiting for hiring and wages to become healthy enough before raising interest rates.
Although the jobs report is positive, employment and earnings both need to pick up, economists say.
"It's good. It's still not good enough," says Diane Swonk, chief economist at Mesirow Financial in Chicago. "Until we see wages accelerate, the majority of Americans are still going to feel left behind in the recovery."

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RMA taps into Kenya’s growing car market

Vehicle sales in Africa have risen significantly in the last few years, following growing demand among the continent’s burgeoning middle class that are trading up public transport and jalopies for new personal cars.

Competition is rife in the auto industry as existing global brands and new entrants fight off competition from second-hand cars.

Thailand-headquartered RMA Group expanded to Kenya earlier this year following an opportunity created by the review of the Jaguar Land Rover distributorship contract. Previously, the Jaguar Land Rover franchise deal was held by the CMC Holdings which is set to be acquired by Dubai-based conglomerate Al-Futtaim Group for US$86m.

According to Sanjiv Shah, CEO of RMA Motors Kenya, the group’s expansion in Africa has been driven by “simple mathematics”, adding that South Africa, which “is the biggest market for consumer goods in Africa”, and other countries such as Kenya and Nigeria offer immense opportunity.
RMA Group employs over 7,000 people worldwide and is one of the world’s largest Jaguar Land Rover dealers with businesses in more than 64 countries. In Africa, RMA has a presence in 20 countries with offices in South Africa, Liberia, South Sudan and Kenya.

“Our Kenya position [suits] us well to actually manage and look at other markets” as Kenya is a regional hub, has a port and national carrier Kenya Airways which offers direct links to the rest of the world.

RMA is targeting Kenya’s rising middle class and “a few established families” that are loyal to RMA’s brands. Shah explains that over 50% of RMA sales have been to private enterprise buyers and the majority of the balance has been to corporates. The Jaguar Land Rover brand competes with other premium products like BMW and Mercedes-Benz.

“The rising middle class are very assertive on what they like and what they don’t like,” says Shah. “The middle class in Kenya are particularly choosey. They like quality, they like design and they like exclusivity. All of these are in the heart of our brand values.”

Shah notes that while the rising middle class is a significant market for auto dealers, finding staff who are adequately trained and experienced to serve this market can be challenging.

“We have got customers that are extremely demanding and extremely fussy about what they want. So the biggest challenge we have at the moment is finding the right people that have got some experience – they don’t have to be boffins in our industry – that can join us and hit the deck running.”
Exorbitant taxation, Shah says, is also a major concern.

“Quite frankly, the duties and taxes on new cars are huge and as result of that the ticket price you see is not the manufacturer’s price at point of origin, and our profits are not that huge. A majority of the portion is duties and taxes. From a cumulative point of view… if you took $1, it turns out as a $1.83 plus duties and taxes because it’s compounded.”

To tap into this market, RMA has introduced purchase options such as lease and finance schemes that enable more people to access vehicles they feel would ordinarily be out of their reach.
After a successful year of setting up operations, interacting with customers and establishing a showroom, RMA Motors is confident it will make impressive sales next year.

“If we are able to fulfil the 200-plus numbers on the premium products for next year we will have done our job,” says Shah. “Money is the market [and we are introducing] the tools to make purchasing easier. I am always wary of competition so I am not going to sit on my laurels and I am not going to be complacent but I am quietly confident that we have an advantage at the moment and we need to materialise that.”

Shah advises other business leaders to strive to achieve a balance between business needs and their team’s needs.

“People are your biggest assets. If you attract the right calibre of people to join the business, everything becomes interactive; you have customer-to-team relationships becoming easier. Keep an open mind, interact with your team and understand your team’s needs.”
Noting that being a CEO is a “huge responsibility”, Shah says he is “excited and delighted” to be in his position.

“At times it’s very frustrating but it puts a smile on my face… I realise that I am in a very privileged position,” says Shah. ”I have every reason to be thankful and excited to be in this position.”

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Troubled Kenya Airways loses top boss as major shake-up continues

Kenya Airway’s commercial director Mohan Chandra has left the company, a few months after it shocked the market with a historic half-year loss.

Mr Chandra served his last day in the company’s management on Friday last week when his contract expired.

His exit, coming barely two months after the company appointed a new marketing director, Mr Chris Diaz, points to an ongoing management restructuring as the company fights to regain profitability.

The company communications manager, Mr Chris Karanja, was quoted in our sister publication, The East African, confirming Mr Chandra’s exit.

“Both parties agreed to mutually end the contract,” a different source within the company said.
It is, however, not clear whether Mr Chandra, 61, had applied for renewal of his contract.
He joined KQ in August 2009 after serving as an aviation advisor and chief operating officer at Emirates Post Group.

But it is at KLM — KQ’s largest shareholder — that Mr Chandra accumulated most of his experience in the aviation industry, having served for 27 years as the regional manager in charge of United Arab Emirates, Bangladesh, Sri Lanka, Maldives, Yemen and Oman station.
His exit comes barely three months after the company reported the biggest half-year loss by a listed company in Kenya on account of rising operation costs and falling passenger numbers.
In the six months to September 2012, the company recorded a Sh4.7 billion loss, down from Sh2 billion after-tax profit recorded over the same period in 2011.

“We were unable to predict what was happening in the market place correctly, and this is one of the reasons we had to pull out of daily flights to London.

“We have suspended operations to Rome, Muscat and Zanzibar in order to reduce loss-making routes,” Kenya Airways chief executive Titus Naikuni said when he announced the results.
Mr Chandra’s successor will have his or her work cut out to lift the company back to the profit-making zone in an industry faced with turbulency and competition.

KQ’s current head of strategic network planning, Mr Jim Kibati, will serve as the marketing director in an acting capacity as the company scouts for a replacement.

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Kenya has Sh300bn debt under Kibaki, says minister

Finance minister Njeru Githae has said Kenya has incurred a colossal Sh304 billion debt during the tenure of President Kibaki.

The minister said Wednesday the borrowing spree that the country went into when President Kibaki took over was to improve the country’s infrastructure and to also grow the economy.

The minister submitted a schedule of the debts that include the controversial naval ship, the Nairobi-Thika super highway, the Sondu Miriu hydropower project, the Geothermal power, the e-government project and dozens of other programmes in the Treasury, the Ministries of Education, and the National Security Intelligence Service.

The money, the minister said, came from China, Japan, Korea the World Bank, the International Monetary Fund, the Africa Development Bank, European Investment Bank, Saudi Development Fund, the International Development Association, the Arab Bank, among other creditors.

Mahmoud Sirat (Wajir South) had asked for the schedule to find out if President Kibaki’s administration had distributed the multibillion –shilling projects fairly all over the country.

Donor funds

“I confirm that the funded projects using donor funds are prioritised in line with the country’s development agenda and that they are distributed evenly in the country,” said Mr Githae.

The minister also told Parliament that the national public broadcaster was duped to buy “obsolete” equipment from Japan, an action that has left the broadcaster with a Sh22 billion hole in its books. 

“The Kenya Broadcasting Corporation has never remitted a single cent to the lender. KBC has no money. It will be a waste of time to ask KBC to pay the loan,” said Mr Githae.

James Rege (Karachuonyo) sought to know if the minister had taken any steps to ensure that the KBC loan was either converted into a grant or written off. The minister said the Treasury was working on it.

“In my view, the Japanese just dumped all the equipment in the country because they were obsolete. In such a case, you don’t blame the lender, you blame the borrower. It is sad that Kenya bought obsolete equipment,” said Mr Githae

The loan from Japan for the Medium Wave (MW) equipment was a government guaranteed loan.

Initially, when the equipment was procured (in June 28, 1989), it was valued at Sh2.3 billion (16 billion Japanese Yen) at a rate of Sh7.4 cts/100 Yen and an interest of 2.5per cent which was payable semi-annually.

When the project was completed in 1994, the debt stood at Ksh 8.2 billion with an exchange rate of Sh54/ 100 Yen. The fluctuation of the exchange rates therefore caused the increase of the loan to Sh22 billion.

Source: Daily Nation

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The Financial Aspects of A Devolved System

The next general elections will see Kenyans elect the county assemblies and governors. This will make establishment of devolved government a reality as envisioned in the new constitution. With devolution, powers will be transferred from the central government to county governments, and Kenya will be divided into 47 counties. The new constitution recognises one of the main objects and principles of a devolved government as the right of communities to manage their own affairs and further their development. This will give the people a sense of identity and self-empowerment, and they will feel recognized in their contribution to the growth of their own county. However, there is a lot that still needs to be done for the gains envisioned in the constitution and in particular the devolution process to be appreciated by all Kenyans.

The question then becomes, how will the resources be shared? The new constitution provides for equitable sharing of national resources. Specifically, the constitution requires that revenue raised at the national level be shared equitably between the national and County governments. It details a criterion to be followed in vertically determining the equitable shares of both the national and county governments on the one hand; and horizontally among the 47 counties. Thus once established, 15 per cent of the revenue collected by national government will be shared equally among the 47 counties; already there is hot debate on the allocation of the monies that shall go to the county governments. The Commission on Revenue Allocation came up with some indicators that will be used to allocate funds to counties which are: population, poverty levels, county land area, prudential financial management/performance index, and fund equalization index. However, the Commission on Revenue Allocation still faces stiff challenges as some of its suggestions are meeting varied reactions from Kenyans.

The issue of population has been met with mixed feelings. According to the Kenya National Bureau of Statistic, Nairobi’s population stands at 3.1 million, followed by Kakamega whose population stands at 1.7 million, Bungoma’s 1.63 million, Kiambu 1.62 million while Nakuru follows closely with 1.6 million people. Therefore, the Commission indicates that the higher the population of a country, the higher the funds it is going to be allocated. If approved by Parliament, Nairobi, Kakamega, Bungoma, Kiambu and Nakuru will get a lion’s share of funds due to their large populations. 

Areas with high poverty levels which according to the KNBS are majorly in the North Eastern parts of Kenya; Turkana, Mandera, Wajir, Marsabit, West Pokot and other areas known to face severe famine situations from time to time shall also be considered and a 12 per cent proposition has been made for the allocation on the various counties based on the poverty levels. The equalization fund from the national government has also been put in place to ensure that the development of all areas is looked into. Worthy to be noted is that 20 per cent of the fund will be shared equally among the 47 counties. Other counties that shall prove themselves worthy by exemplifying good performance shall get an extra 15 per cent of the fund that goes to the counties if the Commission’s suggestions are passed by Parliament.

The county governments will have power to raise and spend revenue. The Constitution through the taxation section gives county governments power to generate revenue. The county government may impose property rates, entertainment taxes and any other tax that it is authorised to impose by an Act of Parliament. In addition, a county government may borrow with the approval of the county assembly and only if the national government guarantees the loan. Once various taxes have been determined they will have to be collected. The practice has been that local authorities collect local taxes within their jurisdiction. Experience indicates that most of local authorities have limited capacity to discharge this function. 

With the new constitution, it is still a subject of debate whether the Kenya Revenue Authority will collect revenue on behalf of the counties or whether it shall assist the counties in building their own capacities to collect their own revenue. There has been dispute between the Ministry of Finance and that of Local Government over the management of the revenue of national and county governments. In the long term, if the county governments are suppressed leaving the control of finances in the hands of the central government, then the whole concept of devolution will be defeated. In fact, county governments without the power to control their own finances will be political and administrative units, negating the whole idea of devolution of the country into counties with more efficient financial management systems.

What will be cost of the devolution? The costs attributed to devolution are not new costs. There have been some funds (budget) which have been regularly earmarked for districts and the municipal/ county Councils. Most of the districts and the councils’ budgeted items in the existing central government budget need to be transferred to counties as the functions are equally transferred. The Salaries and Remuneration Commission also needs to establish realistic salaries for public officers at county level. For the members of county assemblies, the commission may consider providing for allowances, not salaries, as their functions will not call for full time commitment.

Would Kenya experience improvements in living standards that are associated with devolution? Where it is practiced, devolution affects the nationals of the country both direct and indirect. For example, UK experienced falling levels of poverty and improving employment rates across the country after ten years of devolution; there has been improvement of social housing; and on social care, devolution has enabled costs for older people on lower incomes to be reduced. Every living being with free will and self-movement seeks to find what is best for him and the community. If every individual would have the common good within them, then without doubt we would reap the positive effects of devolution.

Kenya has over the years since independence witnessed a culture of corruption, poor governance, negative ethnicity which has resulted in ethnic conflicts, insecurity is widespread and this has ensured that there is still widespread poverty. Political uncertainties, marginalization, excessive waste of natural resources, excessive political intolerance, gagging as well as cut-throat political competition has become the order of the day. The devolved government is therefore a new dawn and it is expected that Kenya will elected responsible leaders who are development oriented to govern the devolved counties.

Daniel Kamande is advisory manager at Ernst & Young, East African Region; views expressed here are solely his and not necessarily that of Ernst & Young.
Source: The Star

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Landlords to Pay Taxes: Government targets Sh90 billion

The government has finally roped in landlords into the tax bracket in its bid to raise additional funds to finance new governance structures.

In his budget statement, Finance minister Njeru Githae on Thursday said the Kenya Revenue Authority (KRA) would bring on board all landlords by mapping out all residential and commercial areas so that they are taxed. 

According to KRA, this may bring Sh90 billion in rental income taxes.
Already, the authority has unveiled plans to go after landlords, who have thus far evaded the taxman’s noose. 

Another measure that Mr Githae hoped, if implemented, would help in collecting more taxes is the planned restructuring of KRA. 

“We shall also undertake a holistic review of the administrative structure of KRA to give effect to the objective of these reforms,” said Mr Githae.

Key among them is making the Customs and Duty Department independent to help it “to mainstream its critical role of trade facilitation and border controls”.

“Kenya Revenue Authority will institute an effective excise tax management system to ensure that all products produced by licensed manufacturers are fully accounted for by type and quantity,” said Mr Githae. 

The minister also withdrew customs and excise duty exemption to constitutional office holders, whom he said had been abusing the system.

KRA is expected to collect Sh817 billion of the Sh1.45 trillion budget. 

“Revenue collection will have to intensify,” said the Ministry of Planning economic adviser, Prof Michael Chege.

However, latest figures indicate that KRA may fail to meet its 2011/2012 tax collection target with an expected Sh25 billion shortfall. 

For the 2012/2013 financial year, analysts project an equally dismal outlook.

In its review of the budget, Renaissance Capital said that expenditure pressures would continue to rise, driven by election and massive infrastructure projects.

KRA’s failure to meet targets comes at a time when donor inflows are waning due to an economic crisis in Europe.

The Organisation for Economic Cooperation and Development said major donors’ aid to developing countries fell by three per cent in 2011, breaking a long trend of annual increases.

Under such conditions, Kenya’s devolution plans may be constrained unless the taxman can seek alternative revenue streams.
Daily Nation

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Swipe to pay: How retailers could be conning you

How often do you check your receipt after having your debit or credit card run at a point-of-sale machine?

Many shoppers are likely to just pull out their plastic money cards and not think about the charges on the receipt. Well, as we found out, you could be losing money through unauthorised charges. 

Money has learnt that shoppers are being subjected to additional charges by some shop owners in what they claim to be a practice aimed at protecting their profit margins.
Ms Emily Kaiga, a corporate communications officer at Standard Chartered Bank, was once a victim of such charges. 

Several other local shoppers have suffered the same exploitation, especially in high-value transactions. 

According to contractual agreements between shop owners, often referred to as merchants in plastic money circles, and acquiring banks (the owners of the point-of-sale machines), shop owners should pay a commission to the respective bank as interchange fee for running a debit or credit card on the bank’s machine.

Additional charges
This is the additional charge that might have been subtly imposed on your card as shop owners shield themselves from parting with huge commissions to banks, given that the fee depends on the value of the transaction.

“According to our operating rules, only the transaction amount should be charged on customers. They should not pay anything above that,” said Mr Victor Ndlovu, Visa’s business development manager for East Africa. 

According to Mr Ndlovu, the main reason cards were introduced was to encourage the use of plastic money and reduce reliance on cash transactions that often expose shoppers to the risk of losing money through theft and other vices associated with carrying cash.

However, he admitted that shop owners have taken advantage of unsuspecting shoppers and are now turning the platform into cash cows at the expense of their clients.

This practice, according to Mr Ndlovu, is threatening efforts to promote the use of plastic money despite the fact that the mode of payment is relatively safe compared to carrying cash in shopping malls.

“By so doing, merchants think that they are protecting themselves against costs, but in real fact, they are discouraging the use of plastic money. 

“We have a universal process and procedure that indicates the manner in which merchants should conduct themselves and it also provides for punitive measures to be taken in case we suspect such a thing is happening,” said Mr Ndlovu.

Collusion
The illegal practice is growing and judging by the response we got from a member staff who spoke anonymously at Kenya Commercial Bank’s Card Centre, local banks could also be having a hand in it.

The employee told Money that Visa requires customers not to pay anything for running their cards on point-of-sale machines. 

However, this is allowable only if the shop owner discloses the intention to make an extra charge before running the card.

Daily Nation

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