Worcester Business Journal

Worcester Business Journal www.wbjournal.com 2016 Economic Forecast 35 B a n k i n g & F i n a n c e Client: Webster W.S.#: WEB26267 File Name: WEB26267_Business Location: Art Quarter: Q2_15 Artist: Ki AE/AC: ALL/SM Media: WBJ Size: 9" Color: 4C Date: 5/2015 Request for WorkZone AE/AC: PDF uploaded Holding Tank Revisions: Artist: • Free Elite Business Checking • Business Debit/Credit Cards • Vehicle/Equipment Loans • Merchant Services • Remote Deposit • SBA Loans • Real Estate Investment • Construction Loans • Lines of Credit • Bill Pay Service Webster First Federal Credit Union commercial services include: Our Business is Helping Your Business Succeed Webster First Federal Credit Union offers a variety of commercial services designed to help businesses meet their unique financial goals. Our dedicated commercial services team provides each business relationship with exceptional customer service and professional advice. WebsterFirst.com | 800.962.4452 Facebook.com/WebsterFirst @WebsterFirstFCU By the end of the year, the federal funds rate, which banks use to trade funds with each other, is expected to increase by 0.25 percent from near zero. This will directly affect the prime rate (which runs 3 percent above the funds rate and is used as the basis for other rates, such as those on home equity loans). "Whatever happens is not going to shake the system," said Brian Thompson, Commerce Bank president and CEO. "I don't know what normal is because we have been here for so long, but it isn't going to be 12 percent or 18 percent where it was in the past." While an increase could potentially slow growth, since the cost of obtaining loans for business expansion will creep upward with rising rates, the planned rollout of the increases will be so slow and gradual that they won't have a big impact on business decisions, according to Tim Garner, senior vice president of marketing and strategy at Digital Federal Credit Union. Some banks may also view a rate hike as an opportunity to grab market share by maintaining their current low rates. While that could be an option for the short term, it can lead to long- term consequenc- es. Keeping a short-term teaser rate low could help a bank by pulling in more customers, said Paulson, but allowing customers to lock in a low rate over the length of a long-term loan would come back to hurt the bank because it would cut the potential profit from that loan. "It's a bit like playing chicken," Paulson said. "You might win some market share, but you're going to hurt your bank." A pple Pay mobile is now available for UniBank Visa debit card users. UniBank said Apple Pay is more secure than making payments with an actual debit card because it uses an encrypted representation of the card data instead of the card data itself. Terminals that accept contactless pay- ments read this encrypted data from the digital wallet on the user's Apple device and pass it along to Visa and UniBank. Only Visa is able to decode the infor- mation that is transmitted, so even if a hacker obtains information it would be useless to them. User-established pass- code or Touch ID features on the user's device provide a further layer of security, according to the bank. Apple Pay is available on the iPhone 6, iPhone 6 Plus, iPhone 6S, iPhone 6S Plus and Apple Watch. The mobile payment technology can also be used within par- ticipating apps that sell physical goods and services. In announcing the launch, the Whitinsville bank also said it is looking into offering similar mobile payment solutions for Android users. n Brian W. Thompson, president & CEO, Commerce Bank 0% 1% 2% 3% 4% 5% 1/1/07 4/1/15 7/1/10 5.26% 0.19% 0.12% UniBank adds Apple Pay option The UniBank Visa payment option for the iPhone and Apple Watch. Flat-lining federal fund rates e rate that banks use to trade funds with each other hit 5.26 percent just before the Great Recession and hasn't recovered since. Source: Federal Reserve Bank of St. Louis

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