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BUSINESS Saturday 11 March 2017
A25

An aging bull market gets some birthday love Don’t fear your mobile wallet

STAN CHOE stock mutual funds and at the least no longer looks LAUREN SCHWAHN
AP Business Writer ETFs than they put in, ac- cheap. Analysts along Wall NerdWallet
NEW YORK (AP) — It took a cording to the Investment Street also say optimism Smartphones have replaced lots of other acces-
while, but investors are be- Company Institute. In the may actually be too high, sories — cameras, flashlights, calculators. But many
ginning to believe this bull first 10 months of last year, with expectations over- people are still reluctant to swap the wallets in their
can fly. pockets for their digital counterparts.
One of the greatest runs for A key reason consumers are hesitant to adopt mo-
the stock market in history bile payments like Apple Pay and Android Pay, sur-
is marking its eighth anni- veys say, is fear over security: High-profile retailer
versary, and this time inves- data breaches have made buyers wary of sharing
tors are joining the party. credit card information. But while there’s cause not
They’re putting more dol- to rely 100 percent on your mobile wallet just yet —
lars into mutual funds and lack of widespread acceptance by merchants, for
exchange-traded funds one thing — security concerns shouldn’t be holding
that invest in U.S. stocks, shoppers back, experts say.
a turnaround from earlier “I think some people get nervous about this idea of
years, even though critics ‘This thing is sending telepathic waves to that ma-
see a long list of reasons for chine to say that I’m paying,’” says Mark Ranta,
caution. head of digital banking solutions at ACI Worldwide,
It was on March 9, 2009 that a payment systems company.
stocks finally hit bottom in But your mobile wallet is arguably the safest way to
the financial crisis, after the pay, and it offers a few benefits to boot. Here’s why
Standard & Poor’s 500 index this payment method is worth considering.
lost 55 percent in 17 months In this March 9, 2009 photo, businessmen arrive at the New IT’S SAFER THAN YOU THINK
and gutted retirement and York Stock Exchange in New York. It was on March 9, 2009, that Contactless payment services can offer more secu-
other investment accounts. stocks finally hit bottom in the financial crisis, after the Standard rity than cash or traditional card usage.
The next day, the S&P 500 & Poor’s 500 index lost 55 percent in 17 months and gutted re- “You never have to take out your credit card or
perked up by 6.4 percent, tirement and other investment accounts. The next day, the S&P debit card, so there’s a lot less chance of someone
500 perked up by 6.4 percent, and it’s been racing higher ever
and it’s been racing higher since thanks to extraordinary stimulus from the Federal Reserve seeing it,” says Jason Chaikin, president of biometrics
ever since thanks to ex- and a recovery in corporate profits, with only a few interruptions security company Vkansee. “For every transaction,
traordinary stimulus from in between. (mobile wallets) create a random, one-time number
the Federal Reserve and a (AP Photo/Mark Lennihan) — a transaction token — and even if someone was
recovery in corporate prof- able to know that number, it’s not valid later.”
its, with only a few interrup- the trend continued, and done for how much Wash- Samsung Pay, Android Pay and Apple Pay each use
tions in between. investors yanked a net ington can do to help busi- this process, called tokenization. Although you load
A $10,000 investment in $109 billion out of U.S. stock nesses quickly. your card into the payment app, the actual card
the largest U.S. stock mu- funds. More elections around the number is not shared with the merchant when you
tual fund has turned into Then, the election hap- world are also on deck pay. Rather, a temporary code is issued in its place,
nearly $42,000 since the pened. Donald Trump’s sur- with the potential to upset similar to the way EMV chip cards work. EMV credit
bottom, and this bull mar- prise White House victory the global status quo, such and debit cards have chips that create a unique
ket for stocks has already in November raised hopes as in France. All the while, code, or cryptogram, when inserted into a mer-
outlasted all but one other that corporate tax cuts, the Federal Reserve will chant’s payment terminal. However, the card is in
since World War II. Only less regulation and other likely continue to raise in- view while the terminal reads the chip.
the 1990-2000 run, which business-friendly policies terest rates. That has many Mobile payments provide security measures on top
ran through the top of the would jolt the economy out along Wall Street calling for of existing bank protections that chip cards can’t
dot-come bubble, lasted of its slow-growth rut. Stocks stocks to pull back at some match. Full card numbers are not displayed in mo-
longer. surged, with S&P 500 index point this year. bile wallet apps, and users are able to authorize pay-
The long vault higher for funds packing roughly a Goldman Sachs strate- ments with their fingerprints, which can protect your
stocks has helped buy- year’s worth of gains into gists, for example, say the card information in the event your phone is stolen.
and-hold investors not only a few months, and inves- market may be close to its IT’S CONVENIENT — WHEN AVAILABLE
recover all their losses from tors quickly followed. Since peak for the year, and they Services like Apple Pay let users add multiple cards
the Great Recession but November, investors have expect the S&P 500 to dip a to their phones or smartwatches, theoretically giv-
also to add to them. The plugged more than $60 bil- few percent by the end of ing them the option to leave overstuffed wallets and
S&P 500 set a record earlier lion into U.S. stock funds. the year. purses at home.
this month, which means Slightly less than half of all At the same time, many But consumers don’t entirely trust mobile wal-
anyone with the fortitude U.S. households owned analysts remain optimistic lets partly because availability is limited, says Ranta.
to hold on through worries stocks in 2013, with much of about the long term and Not all cards and loyalty programs are compatible
about a double-dip reces- that concentrated among say any pullbacks for the with the payment services, and some stores are not
sion, the 2011 European the highest-income house- market will likely be only equipped to take mobile payments. Establishments
debt crisis and a series of holds, according to the temporary. It would take a such as bars and restaurants may accept only cash
other shocks is now sitting most recent data from the recession or a burst higher or plastic. Apple Pay has the highest retailer accep-
on more than ever before. Federal Reserve’s survey of in inflation, which would tance rate among the mobile payment services, at
Unfortunately, not every- consumer finances. force the Federal Reserve 36 percent, according to survey data from the retail
one held onto their stocks. Of course, even though the to raise interest rates quick- consulting firm Boston Retail Partners.
Through the years, many bull market is getting a bit ly, to kill the bull market, “We’re still very much in the early stages of this,”
investors remained leery of more love, it’s still doubted. and many analysts see Ranta says. “At the end of the day, you’re still kind
the market, with the mem- Critics say this flow back those scenarios as unlikely. of stuck in this merchant acceptance problem of a
ory of the financial crisis still into the market is happen- Stephen Auth, chief invest- two-sided equation. It’s still that awkward, ‘Do you
too painful. They stuck in- ing at a time when stocks ment officer for equities at accept it?’ and if (not), then you’ve got to find an
stead to bonds and other are already looking expen- Federated Investors, says alternative way to pay or just walk out of the store.”
safer confines. In 2015, for sive. Prices have risen faster this may be a bull market But when shoppers can use their mobile wallets, it
example, investors pulled than corporate earnings, that ends up running 20 can mean saving precious time at the register.q
$107 billion more out of U.S. which means the market years.q