The Top 10 Mistakes Technology Companies Make
In working closely with technology providers over the years, I regularly discover that these companies are making common mistakes that devalue the company, leave revenue on the table, or jeopardize their long-term health. So this special article identifies the top 10 of these mistakes to help you avoid making them.10. Failure to register a federal copyright for company-developed softwareYour company has spent months, and maybe years developing the next-big-thing. You’re out there licensing it to customers, fighting off competitors, and trying to maximize your revenues. What would you do if a customer was misusing your software? What if a competitor was copying parts of it to use in its product? There are various ways to respond to these problems, but one of the easiest to way to strengthen your claims is to register a copyright for the software with the United States Copyright Office. Registration provides you with an enhanced ability to have a court prevent infringing use of your software, and a greater amount of damages that are recoverable. The best part is that registration is relatively easy and inexpensive.9. Licensing technology too broadlySo you’ve landed that big deal with that big customer. You’ve carefully priced the deal based upon your expectations of how the customer is going to use your technology – by a specific group within the customer’s large organization. You’re hoping that the success of this deal will lead to a greater adoption of your technology within the rest of the company, and ultimately more revenue for you. Unfortunately, you later learn that this one group is sharing your technology throughout the rest of the company, with no additional license fees to you, and there’s nothing you can do about it. Why? By failing to carefully and narrowly draw up the license grant in your agreement, you’ve unwittingly granted the entire company the rights to use your technology, and you’ve left a pile of cash on the table.8. Failure to provide detailed support and maintenance policiesToo often, once a company’s technology is ready to be licensed, determining how to support the technology becomes an afterthought. General and non-descriptive obligations like “providing telephone and email support” and “providing updates” are invitations for disagreements and missed expectations. When is phone support being offered? How quickly will you respond to problems? What is considered and update and what is a new product for which you would charge the customer separately? Many times, you need your customer to provide you with certain information about the problem before you can diagnose and fix it. Set the appropriate expectations in your support and maintenance policies and avoid these issues in the future.7. Not contracting customers to recurring support feesCustomers want and expect that you will be there to support your product, assist with problems, and provide them updates when you add features or fix bugs. Customers also expect that you will regularly charge them for these services, so why do so many technology vendors sell a product to a customer and fail to structure regular and recurring support fees? In general, a technology vendor’s highest profit margins are realized through a support fee stream, and not in the upfront license charge.6. Inadequate non-disclosure and non-compete agreements with employees and contractorsThe technology business is one of the most competitive industries in the market. Why take a chance losing your competitive advantage by not ensuring that your intellectual property, customer lists, trade secrets, and other sensitive information are properly protected through appropriate agreements with your employees, contractors, and vendors? Finding and using some form agreement that you saw floating around on the Internet somewhere may actually make matters worse if you don’t fully understand the terms. Moreover, simple steps can be taken to ensure that anything developed by your employees is, and remains, your company’s property.5. Giving away intellectual property ownership too liberallyMany technology companies develop customized technology for their customers, or make customized modifications to their existing technology on behalf of a particular customer. And most customers argue that if they’re paying for it, they want to own it. But giving away your company’s intellectual property in these instances can prevent you from reusing it for other customers – effectively shutting down a potential source of revenue in the future. And many times, your customers may not need to actually “own” the developments – a license right can often do the trick.4. Using overly broad or subjective acceptance testingIt is not uncommon or unreasonable for customers to want to “kick the tires” of your technology before they pay for it. Problems arise when the customer has an unreasonable expectation of what the technology is supposed to achieve, and either want to withhold payment, or force you to provide extra services to meet that unreasonable expectation. This especially manifests itself when a customer includes acceptance testing language in a contract which is not tied to objective and realistic standards. Although it can be a laborious effort, taking the time to objectify these standards with the customer in the contract can save you significant time down the road, and get you paid faster.3. Offering liberal source code escrow release conditionsFor software developers, you know that your source code is the “crown jewels” of your business. It is the core of your technology, representing months or years of your blood, sweat, and tears. Yet many software companies are willing to give it away, for free, to their customers. How? By entering into a source code escrow agreement with a customer and allowing it to be released to them in situations where the code still holds value for you. Many customers will demand the source code be released to them if you stop supporting the software, but the intellectual property in the code may still be used in your other products or technology, effectively giving your customer the tools it needs to duplicate your technology. Creating very narrow and specific source code release conditions can minimize this impact.2. Undervaluing technologyWhat is your technology worth? It’s a difficult question, and value can be measured and determined in many ways. Many new technology companies feel compelled to undercharge for their technology in an effort to break into the market. Although there is certainly some merit in that, I see vendors consistently undervaluing what their technology is worth, leaving significant revenue on the table. Understanding the impact and loss to the customer if they DON’T license your technology is the first key to pricing your product. Plus, under-pricing your product can create an impression that the technology is “cheap” – not a label that will build a positive reputation of your company in the long run.1. Using a form license and/or services agreement that doesn’t fit your business modelCapturing exactly how you want to provide your product or services to your customer, allocating the risks, and creating each party’s obligations and rights, is not a simple or quick process. Replicating some other company’s form agreement not only exposes you to risks that you may not be aware of, but potentially violates the other company’s copyright in their agreement, and raises the risks outlined in the other points of this list. Having a customized agreement created for you that aligns with your business processes, mitigates your risks, and addresses the laws that apply in your jurisdiction for your industry is a key component in running a successful technology business.
SEO Misconceptions – How to Tell If Your SEO Expert Is Really an Expert
Search Engine Optimization or SEO, is probably the single most important factor in determining the success or failure of a website. Yet the majority of web designers and web development companies know very little about SEO, and a lot of what they do know is inaccurate or outdated. There are several myths and misconceptions about SEO. If you are talking to a web designer about SEO, and they begin to talk about any of these popular misconceptions, walk away and find a real SEO expert.
SEO is about optimizing your pages, titles and meta-data and keyword tags. If this is your Web Designer / SEO experts idea of SEO, it is a sure-fire sign that they are clueless. Sure you will want to make sure your page has the right words in all the right places, but that is not the first or most important part of SEO. Research is the most important factor in a good SEO campaign. You have to know what those “right” keywords are. Most designers will ask you, “What keywords do you want us to use in optimizing your site?” This is an extremely flawed approach. Figuring out what keywords are best for you should be the SEO expert’s job, not yours. An SEO expert should be able to analyze hundreds if not thousands of keywords related to your business, determine the traffic and strength of the competition for each one and give you a list of the best keywords for your site. Research and find the right keywords before you start making any changes to your website.
Keyword stuffing. Every webpage has meta data, this is information about the page that is in the HTML source code, that search engines can read, but is not visible on the page. One the meta-tags is called keywords. This is where you can place all the terms that your page that are relevant. For example if you are a Border Collie breeder then, “border collie breeder, border collie, border collie for sale” are relevant keywords. This tag has been so misused and abused that Google no longer uses it to determine the placement of a website.
Having and using a Google AdWords account will help you rank higher. Don’t buy it. Using Google AdWords has absolutely no effect on your search engine results placement.
Masking text will improve your SEO. This is old technique where you add a ton of keywords to your site, but make them the same color as your background so that they are invisible. The logic here is that search engines (Google) reads the source code and sees the keyword “Border Collie breeders” (following our previous example) used many times on your page. Google then says to itself, this site must provide a lot of information on border collies and gives you a higher ranking. This is unfortunately a common technique. What Google really says is “wow, these guys think we are really stupid, and are using cheap and misleading tricks, we should remove them from our index completely and spare our users waste of time it would be to visit this site.” The technical term for this is to be de-indexed or placed in the Google Sandbox.
SEO is an ongoing effort. This one is partly true, and most SEO experts will say the exact opposite. As an SEO expert I would certainly love to have customers contracted to me for SEO work every month. In some cases this is necessary. A real estate agent in a very competitive market would likely need to continually work on their SEO in order to maintain a steady amount of targeted traffic coming to their site. On the other hand if you sell mail-order wheat grass cookies, one strong SEO campaign may keep you at the top of the search engines for years, so why pay for ongoing SEO services.
We will submit your site to over X number of search engines. This is a popular one. The truth is the three top search engines process 95% search requests, Google alone accounts for more than 80%. You used to have to submit your site URL to search engines and directories in order to get indexed. That is not the case any longer, in my experience submitting a site to Google results in a longer wait time before it is indexed that using my SEO methods.
Guaranteed SEO results. If your SEO expert owns Google or Yahoo, then a guarantee like that might mean something. I could accurately guarantee your site will be on the first page of Google, but what you won’t know is this;
It will be for a keyword so obscure that it has little to know competition.
I will use a Pay- Per-Click campaign to get your site placed on the first page of Google. In other words, we will buy you a place on the first page at a certain amount of money per click. This means either you as the customer must keep paying for each click, that by buying your way to the top, they met their guarantee and end the PPC campaign.
So how do you get real SEO results? The single best method is to get other websites to provide links back to your site. If these are quality sites, from several different IP addresses and ISPs then it will definitely improve your SEO rankings. Experienced SEO experts will employ various tactics and techniques to get this done in an ethical manner. They will have tools and services available to them to make this daunting task much easier. If you are willing to do much of the work yourself, you can do some cheap seo work on your own and get some fairly good results. What are the best methods and tactics for getting these backlinks? Well that’s a topic for another article.
Is Whole Life Insurance A Good Product?
Often times it seems the world out there is anti-whole life insurance, and radio has done a great job at promoting term insurance as the end all and best insurance out there. However, most of these so called “gurus” are being paid to promote term insurance. If term insurance is so good, do we really need whole life insurance?Let’s take a look at whole life insurance and some of the advantages and see if we can’t find something good in what paid spokesman are calling “crap.”Whole Life Insurance ExistsWhole life insurance exists for a reason. I mean really, if it was completely useless would it still be available? The obvious answer is no. However, there is more to it than just existing.By definition whole life insurance is meant to last your entire life. The problems is the mentality we have in America today, and the radio is doing a great job at promoting it.People really believe that it is easy to get a 12 percent rate of return on their money. This is a huge flaw in our thinking. So what happens, people are buying term insurance at a younger age, and then turning to whole, or permanent, insurance when they are older.What is the problem with this though? Well, insurance gets more expensive as you get older. So, people turn to term insurance when they are young, and then as they get older, and they see that they aren’t going to be able to retire when they thought they would, they still need insurance.The problem is that insurance is much more expensive. This is a huge blow to them.The World TodayMany American’s today cannot retire. Why? Because they ate up the buy term and invest the difference mentality and it killed them.Now they are working and many of them cannot afford insurance anymore. I’m not here to discuss the financial aspect of their decisions, so I’ll avoid that. But let’s talk about insurance.Term insurance is extremely expensive once you hit 60 plus. So what happens if you are in debt and still working at 70? Insurance to cover these debts is astronomical.So you just go uncovered and, if you die with debt, your family gets nothing. This is an unfortunate ending to a precious life.Many of these people believed their investments would do so well that they would be millionaires by the time they were 65. However, the markets weren’t so nice to them.Whole Life InsuranceSo how does whole life insurance help this sad tale turn around a bit? Simple, it’s always there.If you bought whole life insurance when you were young the cost would be higher than term insurance, however, that cost would not change. You would have that insurance for the rest of your life.However, there are some other benefits to whole life insurance you may not be aware of.Earnings On Your MoneyMost people are not aware that after around 15-20 years of owning a typical whole life insurance policy, they have build up a cash value equal to their premiums. What does this mean? Well it means you really haven’t lost any money if you put in the time.Whole insurance is meant to have a cash value, and that cash value is meant to grow. This can be a huge plus for you.There is also a way to shorten this time frame and actually use whole insurance as an investment, a strategy known as Becoming Your Own Bank, but you can look into that on your own.Planning AheadI often find that there is a different mentality with people who buy whole insurance. Often times these people are preparing for the future, not just right now.I am not saying whole life will change you, however there is something to the fact that many of these people are very “tomorrow oriented.” There is a huge need for us in American to be planning for our future, a thought process that we lack today.Your Entire LifeThe last point is that whole life insurance lasts your entire life, no matter what. I’ve never understood arguments against having insurance. If you knew that by putting 100k away over your lifetime you were guaranteeing you would pass 300k on to your heirs, where is the downside in that?Having the insurance to cover debts while you are young, and then just having it as a nest egg once you are debt free, is a very effective strategy-one that you and your family can be happy about.This nest egg will be guaranteed to be there when you die, whether young or old.Whole Insurance Is Not The DevilIn the end permanent insurance must be viewed as a tool. It is a very proper tool for certain types of people. In my opinion people need to understand permanent insurance more, and how whole life insurance companies work. You will find pretty quickly that many major banks invest their most trusted capital in whole life insurance companies because of the stability.Whole life insurance has some amazing benefits, and by looking into it yourself, you may find something new, and something that fits you well, that you never knew existed.
Accounting Software For Small Businesses
Every company, big or small, needs to keep track of where their money went, and where it’s going. While spreadsheets may do the job for keeping tabs on a few transactions in your basic accounts, your small business is eventually going to need a proper solution. This means that one program can keep tabs on inventory management, invoicing, payroll and customer relations management. The end result saves you time and money since you won’t have to purchase and task through different programs.Luckily, there are ranges of accounting software solutions available for small business that provide flexibility for your company. Small business owner and IT expert Susan Ward offers a few suggestions on the best of the bunch.Intuit QuickbooksQuickbooks is one of the most well-known accounting programs, and fits nicely into the accounting needs of small businesses. The program comes in a variety of configurations, depending on how big your business is. Intuit Quickbooks’ basic, online, pro and premier editions can be matched with your company’s specific need.The 2013 professional version of Quickbooks offers features such as the company snapshot, customizable vendor, customer and employee centres as well as the capability to quickly find any report, account or invoice with a just a few taps of the keyboard in its Quickbooks search box.Sage 50 AccountingFormerly called Simply Accounting, Sage 50 Accounting is a tried-and-tested accounting option for small businesses. For Canadian firms, Sage Accounting has all the options you need: calculating and paying GST or HST and PST or QST, and also preparing government tax return T-4s, ROEs or RL-1 through physical filing or efile. The software comes in English or French, letting you swap languages on the fly.Though there is a First Step version available, the Pro edition is preferred as it allows you access to features such as creating sales orders and quotes and is usable with multiple currencies.AccountEdge Accounting SoftwareThis software used to be named MYOB Accounting Plus, and can be thought of as the Swiss army knife of accounting solutions for small businesses. That means AccountEdge offers a high level of flexibility. Its inventory command centre grants you control over inventory using multiple pricing levels, negative inventory and also kit building. And when it comes to time billing, AccountEdge offers multiple billing rates for easily tracked chargeable and non-chargeable time.What’s more, AccountEdge has more than 200 financial reports that can be tailor to your needs, and is compatible with online store application Enstore. It even has a mobile app for iPhones and iPad devices.Connected Core Accounting SoftwareOne of the big features of this small business accounting solution is that it works across platforms. That means employees using either Mac or PC computers can simultaneously work on a data file. What’s more, that data file can be hosted on either one of the computers.Connected Core also hooks into Microsoft Office, and can be easily customized. And for tax purposes, it offers proper GST/HST accounting. If you need advanced features such as inventory management or job costing then Connected Core may not be the right option, but it’s a nice fit for firms that are quickly outgrowing entry level accounting programs.Sage BusinessVision AccountingSage BusinessVision Accounting lets you keep track of both your inventory and sales. It comes in five different editions, which are all easily customizable and scalable through its modular design. With its small business edition, Sage BusinessVision makes it easy to meeting accounting and management needs for your business.In addition, it has an e-BusinessVision add-on that lets you fuse an online selling system into your accounting software. This makes it perfect for wholesale, light manufacturing and retail companies. Though it has a higher price than other accounting solutions, remember that it meets more needs than a basic accounting suite.Microsoft Dynamics GPMicrosoft Dynamics GP is, like Sage BusinessVision, more than just a mere accounting program but rather a robust business management solution. It offers financial management features, supply chain management, business reporting and intelligence, payroll management and human resources as well as sales, service and project management. It also is tightly integrated with other Microsoft software, including Office, and lets you store data on site or in the cloud. Though prices depend on what package you choose, this software can be costly if you include many of its high-level features.
What are anti-ligature blinds?
Anti-ligature blinds are becoming increasingly popular in a range of different settings. The way these blinds differ from traditional blinds is that they are designed to prevent suicide by hanging.
Initially, uptake for this type of blind was largely restricted to high-risk environments such as psychiatric hospitals and prisons, where suicide is common. In mental health environments and detention centres, suicide via hanging is common and preventative measures must be implemented. A huge range of objects could be used to create a ligature point, meaning anti-ligature systems are highly important.
Over the years, anti-ligature blinds have been supplied to hospitals, schools, student accommodation and even hotels.
How do they work?
There are a range of different systems on the market, but the most reliable could well be the magnetic anti-ligature system. YewdaleKestrel® products utilise load release magnets which separate when a downward force is exerted on the product. This means that the product falls to the ground safely and prevents suicide via hanging.
The magnetic systems used in Yewdale’s products are highly reliable because magnets don’t lose their strength for hundreds of years, guaranteeing a lifetime of lifesaving functionality.
Anti-ligature blinds usually have a magnetic connection point above the blind’s barrel. The blind is easy to reconnect to the magnetic bracket after it has fallen to the floor.
If you are considering an anti-ligature blind, Yewdale is a highly recommended company. Based in the UK, Yewdale produce a wide range of anti-ligature products, commercial blinds, and healthcare products including hospital cubicle tracks and medical curtains.
Yewdale produce other anti-ligature products too including a soft, lightweight en-suite door and other accessories such as soap dispensers, toilet roll holder, shelves and artwork. You can see the full range on the website using the link below.
Complete weight loss strategy
For those who want to lose weight
Research on the causes of obesity, knowledge about weight loss, and various diets for weight loss are updated every year. However, with the update of knowledge and the release of diet pills one after another, the obesity rate continues to rise every year, and there is no sign of wanting to decline. I used to be very, very fat, and I am also a person who is prone to obesity.
So I understand the voices of fat people, I really want to lose weight, but I tried many ways to lose weight at that time without success.
I have tried the common boiled meals on the market, eating less and moving more, but it was not until I tried other diets that I managed to lose weight. After I lost weight, I began to study the essence and method of losing weight, and wrote him in this weight loss strategy article, hoping to help you.
A few key myths about losing weight
The weight loss myth of eating less and moving more
The phrase “eat less and move more” is actually true, but most people do it wrong. Many people think that they should eat less of everything, so they limit their calories to a very low level, and it feels a bit like eating an ultra-low-calorie fairy meal. Then, for the hyperactive part, the first thing that everyone thinks of is aerobic exercise such as running, cycling, etc., but in fact, this is a very short-term and easy way to regain weight, mainly because eating too little is an easy way to lose weight. The reason for the loss of muscle mass, coupled with the fact that aerobic training is not helpful for muscle mass growth, causes the metabolism to drop too much.
Maybe you can lose 5 kilograms in this way, but if your metabolism declines, you will easily regain the weight. And it’s all the fat that gets back up, not the muscle you lose that makes you look fatter than before. This is what we call the yo-yo effect, lose weight, get fat back, get fatter than before, lose weight, get back on Fat, get fatter than before.
Stop taking diet pills and meal replacements
At this time, you may start to seek other ways, eat weight loss meal replacements, taking diet pills, and so on. But believe me, most diet pills will inevitably hurt the body, especially the gastrointestinal tract. You may actually lose weight in the moment, but when your gastrointestinal tract is damaged, you will be fatter than before.
The key to understanding how to lose weight
You must have thought, why some people will not gain weight no matter what they eat, while some people will gain a kilogram the next day after eating a little bread? What is the cause of obesity? This is not a simple answer that can be solved!
You can see the link to the picture below, mainly talking about the influencing factors of obesity, which are very, very complicated.
Image source: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/296290/obesity-map-full-hi-res.pdf
In the middle of this picture is the heat balance
So we can know that calorie balance is very important
But this article doesn’t keep preaching that calorie balance is the key to losing weight like other sites
If you don’t know what calorie balance is, you can probably imagine that our body has calorie consumption (exercise, thermogenesis, basal metabolism), and calorie intake (eating).
When calorie consumption exceeds calorie intake, the weight will drop, so the truth of weight loss is to eat less and move more, very simple. In the short term, it is really possible to simply achieve weight loss by eating less and moving more, but simplicity is not simple, because the operation of the body is very complicated. Many people think that they can control their calorie consumption, that they can achieve a lot of calorie expenditure by running all the time, and that eating fairy meals (low-calorie meals) can reduce calorie intake and then easily lose it.
However, according to research, 90% of people who use calorie control, eat less and move more to lose weight will fail or regain the weight.
Because eating less and moving more for too long, metabolism will easily drop, hormones will easily become imbalanced, and muscle mass will easily be lost. Even if you lose 10 kilograms, you will easily regain weight.
When losing weight, the body is like a factory
For me, the key to long-term weight loss and maintaining good posture is the environment in the body, such as hormones, the level of inflammation in the body, and the gastrointestinal system.
Think of the body as a factory
-Your hormones are the managers and workers of factory operations
-Inflamed condition is how good factory machinery and hardware are
-Calorie intake is wages for factories as well as fuel
If the manager of this factory is an idiot, or if the hardware in your factory is completely rotten, then no matter how it works, it will create a pile of waste. Just as our hormones are already out of balance and the level of inflammation in the body is very high, no matter how much you eat, if you don’t solve the existing problems, it will easily accumulate into fat. It may be easier to understand with a few examples.
Hormones vs Weight Loss
This study looked at the effects of sleep and weight loss
Research source: https://www.ncbi.nlm.nih.gov/pubmed/20921542
Both groups of humans were calorie-restricted, but one group slept 5.5 hours a night and the other 8.5 hours. Both groups lost weight, but the group that slept less lost 55 percent less body fat and 65 percent more muscle mass than the group that slept more. It is equivalent to losing weight, but most of the loss is muscle mass, which reduces metabolism and makes it easy to regain weight later.
There is such a big difference mainly because poor sleep has a negative impact. The imbalance of the secretion of these things will easily increase fat and reduce muscle.
This next study looks at the effect of insulin sensitivity on body composition!
Research source: https://www.ncbi.nlm.nih.gov/pubmed/19471290
Basically, many chronic metabolic diseases, obesity, and poor muscle-building effects are closely related to low insulin sensitivity. Insulin is an anti-catabolic hormone whose main function is to store nutrients in cells. For example, after heavy training, our muscles will be more sensitive to insulin, and the nutrients we eat will be more easily absorbed into the muscles. When insulin sensitivity is low, the nutrients we eat are more likely to be stored as fat rather than absorbed into muscles.
We can simply say that the nutrients in the food eaten by people who are insulin insensitive are more likely to be stored as fat, and the relative fat mass will be much higher than the muscle mass.
To put it simply, the key to losing weight is actually to improve hormones, improve inflammation in the body, and add an appropriate calorie deficit. It is not difficult to achieve a calorie deficit. What is more difficult is how to choose the type of food that suits your body to improve hormones and achieve a long-term good body.
If you only pursue short-term weight loss and rely on a lot of calorie deficits to achieve the effect of weight loss, and then the hormones are still the same after the loss, then I can guarantee that you will gain weight very easily.
With so many ways to eat on the internet, which diet should I try?
When talking about losing weight in Taiwan 30 years ago, everyone would definitely want to use boiled meals
When it came to losing weight five years ago, everyone might think of using a low-sugar diet. When it came to losing weight in the past two or three years, everyone might directly think of the ketogenic diet.
I lost 30kg in 3 months on a low-sugar diet myself for the first time, so I used to believe that a low-sugar diet was the best way to lose weight
But after my long-term understanding of weight loss-related research, genetic cognition, and observation of students, there is no diet that is most suitable for everyone! Although it is said that high-carbohydrate foods will most stimulate insulin secretion, which in turn promotes the storage of nutrients into fat, some people are naturally good at metabolizing carbohydrates, so they can still be healthy and strong after eating high-carbohydrate throughout their lives.
For example, this study compared the responses of people with high and low insulin sensitivity to high- and low-carb diets.
Research source: https://onlinelibrary.wiley.com/doi/full/10.1038/oby.2005.79
The study concluded:
-For people with high insulin sensitivity, eating high-carb and low-fat to lose weight is very helpful
-However, people who are insulin insensitive use a high-carb low-fat diet to lose fat, but the weight loss effect is not so good.
But on the contrary, studies have also shown that people with low insulin sensitivity have a very good weight loss effect on a low-carb high-fat diet, which shows that improving insulin is very important for weight loss, and it also shows that people with insulin insensitivity are more suitable
Lose weight with a high-carb diet.
So if you have been obese for a long time, you know that you eat carbohydrates easily, or you know that you have diabetes in your family and want to lose fat, then I would suggest that you can start by reducing carbohydrates, which is what we call low carb diet!
The Negative Impact of E-Levy on Mobile Banking.
DEFINITION OF TERMS
Mobile Banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet.
Electronic Transaction Levy or “E-Levy” is a tax applied on transactions made on electronic or digital platforms.
ADVANTAGES OF MOBILE BANKING
Mobile banking offers numerous benefits such as ease of transaction, convenience, time-saving, managing your finances, and budgeting. Some advantages of Mobile Banking in remote areas include:
Financial Inclusion — mobile banking offers convenient and easy banking services to people in remote areas. Thus, it allows banking on the go and offers all benefits of a banking system to rural areas without the presence of a financial institution.
Accessing the bank 24/7 — Mobile banking provides ubiquitous banking services without the need to visit the bank to have access to services. This offers time to benefit and ease of transacting at a distance.
Cost-benefit — Mobile banking saves the banks the cost of building physical infrastructures (branches) and maintaining branches and staff. Also, reduced costs on the customer side since the burden of visiting the bank for services is eliminated.
Improving resilience in the face of poverty — Mobile money acts as both a savings vehicle and a means of transferring funds during times of economic or environmental shocks.
Strengthening the formal economy — For many micro, small, and medium enterprises (MSMEs), opening a mobile money account can facilitate access to formal financial services. Mobile money is well placed to address the issue of informality that blights many developing economies and hampers domestic resource mobilization efforts. Mobile Money enables ease of transacting, thus increasing business profits for MSMEs.
Facilitating economic growth — Mobile money has been shown to contribute to economic growth by increasing both productivity and per capita incomes
DISADVANTAGES OF E-LEVY ON MOBILE BANKING
The design of mobile money taxation policy appears to be the antithesis of a well-designed tax system. The disadvantages include:
Inequity — Mobile money taxes as currently structured to create inequity in the tax system. As the tax is mostly borne by the poor and users of the services are subject to additional taxation (unlike bank or cash transactions), the principles of both horizontal and vertical equity in the tax system are contravened.
Uncertainty -. Uncertainty and lack of transparency over taxation systems can have a direct impact on the operations of the tax authority, increasing enforcement costs, as well as discouraging investment.
Inconvenience — The administration of mobile money transaction taxes creates an inconvenience for MMPs who must calculate and collect the tax on the revenue authority’s behalf. There is an additional inconvenience for users of the service for whom remote digital transactions become more expensive or out of reach if they revert back to cash.
Inefficiency — Badly designed mobile money taxes have been shown to have a distortionary impact on demand for mobile money services. This in turn has had negative impacts on overall tax takes, as well as impacting the attainment of national economic and development goals.
EFFECT OF MOBILE BANKING — CASE STUDIES
The decision to impose taxes on mobile bank transactions will trigger so many problems.
Ghana — According to The Fourth Estate Ghana; Although the government projects a 24% decline in transactions when the levy is finally implemented, preliminary findings published by the bank of Ghana indicate the value of mobile money transactions had dropped by 3.2 billion in December 2021, less than 2 months after the proposal to introduce E-levy.
Uganda — An e-levy of 1% introduced in 2018 has led to an overall drop in the person-to-person transaction by more than 50%, and a 24% drop in industry transactions within the same year the tax was introduced according to a report by Global system for mobile communication (GSMA).
Congo — An e-levy of 1% was introduced in 2019. The government had to reverse the tax on cash outs only due to negative results of the levy on Mobile money users such as a decline in mobile money agents (unemployment) and high-value withdrawals by people.
Other countries include Benin (5%) and Cameroun (0.2%). In all these countries, the e-levy has imposed a negative effect on the economy and people. If we want to ensure the financial inclusion of people in rural areas, we need to ensure that we encourage mobile banking by withdrawing the e-levy tax.
Reference:
https://thefourthestategh.com/2022/03/16/e-levy-this-is-what-happened-when-other-african-countries-passed-it/
Purohit, S., & Arora, R. (2021). The benefits and challenges of mobile banking at the Bottom of the pyramid. Journal of Contemporary Issues in Business and Government Vol, 27(1).
Charles G. Kpan, Jr. is an Information Technologist with over 5 years of experience in the provision of Information Technology Services and an emphasis on Web Development and Visual Branding. He’s the managing Director of CYGEC IT SOLUTIONS INC. and holds a bachelor’s Degree in Information Technology from Blue Crest University, Liberia.