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Exam2 Goncarenko

Exam Task №2. American Express Redefines Its Strategy
Transport & Communication Institute, 2022
Vitalijs Goncarenko
This work will allow the reader to get acquainted with
the study on the improvement of money transfer
systems, as well as the difficulties faced by
entrepreneurship in the field of banking.
The purpose of this work is to consider one of the
main economic products of the financial market - a
modern system of money transfers.
The reader will get acquainted with the main activity
of which is a comprehensive service for individuals
and legal entities, and will also have knowledge and
understand the mechanisms and tools for improving
modern money transfer systems, where new levers of
influence and development of payment systems are
required in connection with the development modern
money transfer systems in the global economic
The rapid and sustainable development of the
country's economy depends not only on the
introduction of new, more efficient production and
financial technologies, but also on the willingness
and ability of the population to accept and use such
Thus, it is necessary to constantly take care of
improving the financial literacy of citizens. The
effectiveness of public participation in the modern
economy directly depends on understanding how
new financial products can be used. Therefore, the
main task that the banking system is solving today is
to increase the availability of financial services for
citizens of the country.
The modern system of money transfers (VISA,
citizens of the country to have access to financial
services of the banking sector. In other words, any
banking system, expands remote banking (Internet
access to the bank account of an individual or legal
entity), which makes it possible to increase the
Clients of the banking sector, entrepreneurs and
persons who are interested in the banking sector
will be able to have a concept of modern money
transfer systems, including types of money transfer
The massive use of bank cards allows credit
institutions not only to expand their business, but
also to start providing financial services based on
payment systems. One of the main advantages of
payment cards is that international cards can, under
certain additional conditions, remain operational
even when the bank cannot conduct either
international or domestic settlements. For many
clients, this may be the first time they have access to
legal financial services, since legal services are
usually much safer and cheaper than their
For many clients, funds received through the system
make it possible not to be left without money at a
difficult moment. Those, for each client there is an
opportunity to choose a service or product presented
at a financial institution, which is one of the positive
aspects of the introduction of plastic cards.
In addition, there are many places in the world on our
planet where banking systems are limited due to low
economic interest, the legislation itself or other
conditions. In accordance with this, there is a
category of the population that is outside the power
of banking systems.
Therefore, there is no possibility of providing of
money transfer.
The main functions of modern
monetary systems
Payment cards are in demand in the retail payment
market. The main characteristic features of modern
monetary systems translations are:
Funds in money transfer systems are
“transported” to electronic form, but are
accepted and issued in cash.
The transfer does not require opening an
There is a reliable security system that
guarantees the transfer of funds only to the
recipient specified by the sender.
Various tariffs for money transfer, thus the
client has the right to choose a money
transfer system;
The money transfer market leaders specializing in
money transfers across different countries are
WesternUnion and MoneyGram, which have the
commission for the transfer does not depend on the
direction of the country where the money is sent.
The difference between state banks
and non-state.
What is pros and cons?
Any financial product has its advantages and
disadvantages. For example, the presence of a large
number of service points provides an opportunity to
serve a large number of customers. Preferential
programs allows to raise the rating, therefore,
customer has the lowest percentage of money
Today, the card business for credit institutions,
according to their own assessment, is profitable.
Therefore, the development prospects of the
payment card market is a priority for the use of
cards in everyday payments. One of the main factors
is an increase in the level of income of the population
and an increase in the number of trade and service
At present, along with classical bank transfers,
banks offer money transfer services without
opening an account.
For example, WesterUnion:
Points of deposit / withdrawal Availability of service points for sending
and receiving funds, which is available in
any city or any country where there are
branches of the system.
Online translation - In connection with the
transition to the Internet, many banks are
switching to the possibility of providing
services transfer funds electronically, it
saves time by not visiting bank branches.
Speed - Cash available for collection within
a few minutes after sending, which is a
hallmark of a state-owned bank.
Transaction security
security is a priority.
The non-profit banks, unlike state banks, face one of
the main problems that concerns the legislation
This is the lack of transparency of the
money transfer system for individuals or
legal entities. In other words, non-profit
banks do not give customers the opportunity
to compare services.
The second factor is the concealment of
information that may lead to unfair
Weaknesses in infrastructure - providing
a large number of points of issue of money
transfers, which require a large amount of
Insufficient level of development of
financial infrastructure - such a definition
is given for third world countries.
Another important problem is the development of the
legal framework for money transfers, because for
many countries the internal legislative acts are
different, so there are technical problems with money
transfers in a transactional operation (senderreceiver)
Phishing – A new way of scamming of
payment systems and banking systems
A lot of time ago, various electronic payment systems
appeared in the banking sector, which began to offer
Internet banking.
A new scam scheme, the purpose of which is to
defraud users of card numbers and passwords for
accessing bank accounts and payment systems
accounts. This method has become very popular and
profitable way to steal information. The real purpose
of this attack was access to other people's accounts.
Those. recipients received fake messages asking them
to provide a password to enter the system in order to
modify the information. Of course, just so
confidentialities, no one will leave.
How it works?
For these purposes, scammers buy a database of users'
email addresses and send out e-mails that contain
information or a false website that is asked to enter
personal data.
Most ignore, and some lose access to their accounts.
Therefore, the scammers are developing a new
website that repeats the design elements of the bank.
Emission. A new strategy approach in
the card business
Card issuance (emission) is the most common
business strategy in the world. The main reason for
using it is the low investment for entering the market.
The policy of payment systems encourages issuing
activity. The profitability of operations has changed
over the past few years, and now many people have
different points of view: some believe that the
issuance is profitable, others – it’s non.
The difference in the emission market is based on
several types, namely:
International (Visa, MasterCard)
Exclusive ( American Express, Diner Club )
Among all issued cards by AmEx cards, American
Express achieved the highest level of income. Such a
card is a financial instrument that includes:
Traditional financial services;
Settlement services;
Savings services;
Credit services.
Currency exchange services;
In other words, emission is a tool, but also a service
for the accumulation, saving and storage of funds in
various currencies on the accounts of individuals or
legal entities.
The system of money transfers is in demand in the
market and is an important tool for many people to
It is based on a strategy to find the needs of
customers, which leads to an increase in the
According to banking specialists, banks can
implement a strategy to increase the profitability of
their operations by up to 50% per client.
The main reasons that the development of payment
systems as a direction of banking, where various
bank divisions offer products to the same group of
customers, focusing on one product, in addition to
low costs.
Therefore, it turns out that there is no general
development plan. On the other hand, payment
systems are in demand in the market.
Money transfer systems, in my opinion, are
convenient because of the speed of transfer,
reliability, i.e. confidentiality, the minimum amount
of the commission fee and the possibility of online
transfer with a simplified system identification.