MONEY Viewpoint

Montel Williams Got Called Out On Twitter For Endorsing Payday Loans—And He Didn’t Handle It Well

Montel Williams
Danny Johnston—AP

You may have heard of Montel Williams, actor, producer, and host of the long-running but now-defunct Montel Williams Show. You may also know that Williams is a spokesperson for Money Mutual, a lead generator for so-called payday lenders.

On Thursday, that side-business got a little awkward for the former host when an education activist named André-Tascha Lammé called out Williams on Twitter for “Support[ing] the *most* predatory of loans in existence, PayDay loans. Designed to prey on the poor.”

Williams denied the charge, which prompted the following exchange:

150227_FF_MontelPayday_Tweet2
@Montel_Williams via Twitter

 

Montel is either being disingenuous—deliberately not addressing Lammé’s point—or he just doesn’t understand the real-world effect of payday lending. The truth is that a large portion of payday customers end up in dire financial straits because of these seemingly innocuous loans.

Here’s what happens. The average payday loan charges a fee of about $15 for every $100 borrowed. That might sound like an interest rate of 15%, but that’s the fee for a two-week loan. On an annualized basis—which is how most people think about interest rates, or should—that translates into a rate of 391%.

Montel apparently thinks it’s unfair to think about it this way, since borrowers are supposed to pay back their loan in two weeks.

But here’s the thing: Four out of five payday loan borrowers are not able to pay off their debt in such a short time period, so they go back to the payday loan shop and take out another loan to pay off the first one—for an additional fee, of course—and a cycle of debt begins.

In fact, according to the CFPB, the median payday customer is in debt for 199 days a year, taking out new payday loans along the way as they struggle to pay down the initial loan amount. That’s more than 14 times longer than the period Williams was talking about. As a result, more than half of payday loans are made to borrowers who end up paying more in interest than they borrowed in the first place. The median loan recipient ends up paying $458 in fees and an effective interest rate of 130%.

A representative for Williams defended the tweet, telling MONEY by phone that Williams was specifically referring to loans that are paid off within two weeks, and not payday loans in general.

But since that’s a only small fraction of payday loans, we’re wondering if Montel accepts only that portion of the fees he gets for endorsing this dangerous lending practice.

The rep also emailed this statement:

As someone who used short term lending while in College, Mr. Williams understands that a large number of consumers, like he once did, have no access to traditional credit products. His endorsement of Money Mutual – which is not itself a lender – is reflective of the code of conduct it requires the lenders in its network adhere to and its historically low complaint rate. Certainly we believe consumers should make sure they fully understand the terms of any financial product they may be considering and would note Money Mutual encourages consumers to fully review and understand the terms of any loan, including the cost of any renewals, offered to them via its network of lenders.

MONEY Net neutrality

Why Net Neutrality Isn’t Worth Celebrating

Federal Communications Commission Chairman Tom Wheeler (C) holds hands with FCC Commissioners Mignon Clyburn (L) and Jessica Rosenworcel during an open hearing on Net Neutrality at the FCC headquarters February 26, 2015 in Washington, DC. Today the FCC will vote on Net Neutrality seeking to approve regulating Internet service like a public utility, prohibiting companies from paying for faster lanes on the Internet.
Mark Wilson—Getty Images

Net neutrality doesn't fix the most pressing problem with our internet service.

On Thursday, the Federal Communications Commission officially approved net neutrality regulations intended to protect consumers and businesses from internet service providers.

The new rules, broadly outlined earlier this month by FCC Chairman Tom Wheeler, will restrict ISPs like Comcast and Time Warner from blocking or slowing down traffic to certain websites, or allowing certain companies to pay extra for better treatment.

These regulations are positive step, but those swept up by the hype might end up disappointed when the real thing finally arrives. That’s because net neutrality doesn’t seriously address anything cable companies are currently doing, nor will it help with the number one issue most people care about: the price and quality of their service.

What Net Neutrality Really Does

Let’s start with the restrictions against blocking or slowing down websites. It’s obviously good that cable companies will now be prevented from actively censoring content, but this isn’t something ISPs ever actually practiced.

“I think it’s funny that the three big rules are no blocking, no throttling, no paid prioritization,” Dan Rayburn, principal analyst at Frost & Sullivan and owner of StreamingMedia.com, told MONEY. “That’s all great, but do we have a single instance of an ISP doing any of those things?”

That might sound surprising to those who’ve heard Netflix’s repeated complaints that various ISPs, particularly Comcast, were intentionally degrading its service unless the company paid a “toll.” Isn’t that exactly what net neutrality is meant to stop?

Well, sort of. What Netflix and Comcast are really fighting over is something called “interconnection” or “peering,” where sites with especially heavy traffic have to pay more for extra capacity. Comcast says Netflix should be charged for using additional resources, whereas Netflix thinks it’s being strong-armed into forking over more than it should.

The new net neutrality regulations give the FCC some oversight over these agreements to determine if they’re “just and reasonable,” but that standard is so vague as to make an already complicated issue difficult to enforce. In Chairman Wheeler’s proposal, broadband providers are allowed to pretty much do whatever they want as long as they defend their actions as “reasonable network management,” which, as The Verge points out, is “a term which the ISPs have already been using to justify congestion at interconnection points.”

What Net Neutrality Doesn’t Fix

The upshot of all this is very little will change for the average U.S. internet user in a post-net-neutrality world. That’s a bad thing, because America does have a very serious internet problem desperately in need of regulatory assistance: namely, the fact that our internet connections are slower and costlier than the rest of the developed world’s.

The solution to this problem is simple: more competition. FCC data from 2013 shows 55% of American households have no choice in their broadband provider, and the agency has said Comcast will be the only broadband provider for nearly two-thirds of consumers if the company is allowed to merge with Time Warner Cable. It’s not hard to see why cable companies don’t have to compete very hard for your business.

Competition is scarce because it’s prohibitively expensive for a new company to build its own fiber network. The FCC could have fixed this problem by requiring “last-mile unbundling,” a policy that would force major broadband providers to lease their own networks to competing ISPs, when it reclassified broadband under Title II of the Communications Act. However, Chairman Wheeler explicitly ruled unbundling out of any net neutrality regulation.

This means the average internet user is going to be paying more for subpar internet for the foreseeable future. The Obama administration is planning to address this by encouraging cities to develop their own broadband networks, which, if effective, should create more competition and faster internet service. But such a solution is far away and will likely face significant legal hurdles.

Don’t get me wrong, I’m not saying net neutrality is actively bad. We’re better off in a world with these kinds of restrictions. That said, the new rules should be seen as little more than a preventive measure for abuses that have largely yet to occur. For more meaningful reform, Americans should throw their support behind other policies that will break broadband monopolies and actually improve their connections. The fight for a better internet isn’t over. It’s barely begun.

A previous version of this article said a Comcast/Time Warner Cable merger would increase the number of consumers with no choice in broadband providers to two-thirds of Americans. The FCC says a merger would indeed result in two-thirds of U.S. households having only one broadband provider, but this is not likely to be an increase.

MONEY

Jobless Claims Surge by Highest Number Since 2013

Unemployment filings jumped by 31,000 last week, taking many economists by surprise.

Initial jobless claims last week increased by the highest amount in roughly two years, according to the latest data from the Department of Labor. The numbers, released Thursday, show those filing for unemployment last week jumped by 31,000 compared with a week earlier, pushing up the total number of individuals reporting to 313,000 from 282,000.

The news comes as unemployment is broadly improving. The U.S. economy added 257,000 jobs in January, continuing a 12-month streak in which employers hired more than 200,000 workers a month. As a result, a sharp rise in jobless claims seemed to take economists by surprise. A Bloomberg survey of 49 economists predicted jobless claims would rise by only 8,000.

However, as the Associated Press notes, more unemployment filings probably isn’t a cause for alarm. Short-term surveys of the employment market can be uneven, and the 4-week moving average showed an increase of just 11,500 jobless claims, significantly less than the week-by-week numbers. Other employment indicators, like wage growth and gross domestic product, have also been increasingly positive, suggesting the job market will continue to broadly improve.

MONEY Autos

Why Apple Can’t Sell Cars Like iPhones

Apple employees prepare the newly released iPhone 6 for sale
Hannibal Hanschke—Reuters

Apple makes its money selling affordable luxury, but an Apple car would likely be luxury—period.

The Apple car! It’s Cupertino’s latest nonexistent product to drive the tech world into a frenzy. Ever since the Wall Street Journal reported that Apple has “several hundred employees” working on the production of a Tesla competitor (by 2020, no less, according to Bloomberg), pundits have been fighting over the viability of an Apple-branded automobile.

On Monday, Vox’s Matt Yglesias jumped into the fray, taking on what he saw as the prevailing argument against the Apple car: namely, that the car industry is a low margin business, and Apple needs high margins to keep making its usual hefty profits. Here’s Yglesias:

The misperception here is that Apple earns high margins because Apple operates in high margin industries. The truth is precisely the opposite. Apple earns high margins because it is efficient at manufacturing and firmly committed to a business strategy of sacrificing market share to maintain pricing power.

If Apple makes a car, it will be a high margin car because Apple only makes high margin products. If it succeeds it will succeed for the same reason iPhones and iPads and Macs succeed — people like them and are willing to buy them, even though you could get similar specs for less.

That’s sort of true, but it’s not the whole picture. To understand Apple’s business model, we need to take a step back. Apple earns high profits because it goes into high-volume industries dominated by low-margin players who sell relatively affordable products. Apple then makes a premium product, one where you can’t get similar specs for less—there is no other computer or smartphone with the software or build quality of an iPhone 6 or Macbook Air—and prices its offering a few hundred dollars more than the competition. Then it earns billions off this relatively small price increase by selling high quantities of units.

In other words, Apple makes premium versions of things everybody needs at prices most people can still afford. To quote a 2010 review of the iPad, by Daring Fireball’s John Gruber, ” ‘Affordable luxury’ is the sweet spot for mass market success today, and Apple keeps shooting bulls eyes.” A similar strategy for an Apple car then, would be to sell a premium-quality car with higher margins (Apple’s gross margin in 2014 was close to 40%) at a still-affordable price.

The problem for Apple is that it’s a lot easier to increase margins in a low-cost industry than a high-cost one. Even if an iPhone 6 costs 100% more than a cheap LG smartphone, it’s only $200. Same thing with the Macbook Air, which is twice the price of a low-end Windows laptop but still affordable at $1,000.

But trying to get similar margins in the automobile market means a price increase of thousands of dollars, not hundreds. Double the price of a $22,970 Toyota Camry, or ask for even a 50% premium, and you’re in BMW territory. (That company’s cheapest sedan costs $32,000.)

The typical Apple customer has enough disposable income to double their phone budget and buy an iPhone 6. Buy one fewer latte a week, and you’re pretty much there. Asking someone to double their car budget is a very different story. That’s not affordable luxury, that’s luxury—period.

This isn’t to say Apple won’t make an expensive high-margin car, just like BMW. The premium car market isn’t nearly as profitable as the cell phone market, but it’s not nothing. It’s also possible Apple will make a low-margin car while charging a slight premium over the likes of GM and Ford. The entire global automobile market in 2014 was about half the size of the iPhone market alone, meaning such an endeavor would be a lot of work for not much growth, but anything is possible.

But for Apple to do either of these things would be to abandon the affordable luxury strategy that has made it the most valuable company in the world. That’s worth thinking about when considering an Apple car’s chances.

MONEY

What Today’s Fed Testimony Means for Your Money

Federal Reserve Board Chair Janet Yellen prepares to testify on Capitol Hill in Washington, Tuesday, Feb. 24, 2015, before the Senate Banking Committee.
Susan Walsh—AP

Fed chair Janet Yellen is signalling a gradual interest rate hike this year. Here's how to be ready.

Federal Reserve Chair Janet Yellen’s testimony before Congress today bore her usual cautious language. But she signaled that an interest rate hike may still be on the table for later this year.

“If economic conditions continue to improve, as the Committee anticipates, the Committee will at some point begin considering an increase in the target range for the federal funds rate on a meeting-by-meeting basis,” Yellen said.

Yellen worked hard to assure lawmakers that any rise in rates would be gradual, and wouldn’t begin before June. The reason Fed chiefs take such care when talking about interest rates is that rates—and expectations about where they are headed—affect all aspects of Americans’ financial lives, from student loans and mortgages to inflation and retirement portfolios. And right now the Fed has an especially delicate task, because it is trying decide how to transition from the near-zero short-term rates it has stuck to since the 2008 financial crisis.

Here’s what could happen to your money when the Fed finally decides it is time to for interest rates to “lift-off”:

1. Home loans could get pricier

Higher rates make borrowing more expensive for banks, and they in turn pass that expense on to their own borrowers. That generally tamps down inflation but also means it’s harder to get loans for education, cars, and homes.

As a result, it’s a good idea to refinance your mortgage now while rates are relatively cheap. Interest on 30-year fixed rate mortgage remains much lower than before the financial crisis, but rates have been inching up as of late and would grow further if the Fed becomes more hawkish.

2. The “safe” part of your retirement portfolio could take a hit (but that might hurt you less than you fear)

Investors traditionally hold bonds to hedge against stock market risk, but a rise in interest rates will cause the value of a bond portfolio to drop. For those who have time to keep their money invested, however, the higher yields you’ll earn in the future will help make up for a drop in bond prices.

Short-term bonds are less risky than longer-maturity ones, and generally less sensitive to interest rate changes. But how your bonds perform will depend on exactly which interest rates change. The Fed directly controls short-term interest rates, so when they start moving those up, you can expect short-term funds to lose some value.

What happens to longer-term bonds is more ambiguous. They can have significantly more loss potential than short-maturity bonds. But MONEY contributor Carla Fried points out that it’s possible that even as the Fed tries to raise short rates, bonds like the 10-year Treasury could remain in demand by global investors, who see the U.S. economy outperforming Europe and Japan and want to hold a safe-haven asset. That would keep long rates down—bond prices and rates move in opposite directions—and for a time deliver comparatively better returns to investors in longer-term bond funds.

So for many investors, an intermediate-term bond mutual fund is a good way to balance the general riskiness of long-term bonds against short-term bonds’ specific vulnerability to a Fed rate hike this year.

3. The economy could slow down

Again, if the U.S. keeps growing, rising interest rates might be appropriate, and helpful in holding inflation and financial speculation in check. But it’s important the Fed gets its timing right, or a rate hike could stall the recovery—or even put it in reverse.

That’s what happened in Sweden, where the nation’s central bank trashed what was a promising recovery by pulling the trigger too soon. Like the U.S. Federal Reserve, Sweden’s Riksbank lowered rates during the recession in order to spur economic growth. Once that growth arrived in 2011, bankers decided to begin raising rates in order to thwart a real estate bubble. Soon after, hiring began to fall, deflation hit, and Sweden’s magic recovery was over. The country has yet to return to its 2011 level of growth.

In deciding when to get rates back to normal, that’s the scenario Yellen is trying to avoid.

MONEY Career Strategies

Why Your Potential Could Be More Important Than Your Accomplishments

trophy with crack in it
Jeffrey Coolidge—Getty Images

The surprising downside to achievement

Conventional wisdom is pretty clear on how to get ahead in one’s professional life. Rack up accomplishments, collect accolades, make your résumé as impressive as possible, we’re told, and rewards will follow. That all sounds nice—but it might not be true. In fact, social science suggests, the key to success might actually be to achieve less while promising more.

That’s the conclusion of a study by professors at Harvard and Stanford, who found that people tend to favor potential over demonstrated results. The researchers discovered that references to potential, such as “this person could win an award for their work,” appear to stimulate greater interest than similar references to actual accomplishments (“this person has won an award for their work”). This tendency, the paper states, “creates a phenomenon whereby the potential to be good at something can be preferred over actually being good at that very same thing.”

The professors demonstrated as much in a series of experiments in which test subjects were asked to choose between the proven and the possible. In one case, participants were asked to rate two job candidates: one with two years of experience and demonstrated leadership achievement, and the other with no experience but high leadership potential.

Despite the more experienced candidate having objectively superior credentials, subjects preferred the candidate with potential. They also implicitly predicted this candidate would be a better leader in his fifth year on the job than the more experienced candidate would be in his seventh year.

In another experiment, participants read two letters of recommendation for an applicant to a business Ph.D. program. Both versions were nearly identical, but one stressed possible talent (“Mark K. is a student of great potential”), while the other highlighted accomplishment (“Mark K. is a student of great achievement”). Once again, the subjects preferred the applicant with potential.

Why are people so drawn to the possible, even over proven results? The researchers suggest it’s simply a matter of uncertainty being more interesting than a sure thing. “Our finding is that people find potential to be exciting uncertainty,” says Zakary Tormala, one of the study’s authors and a professor at the Stanford School of Business. That makes a candidate with potential more stimulating than a safer choice, and often leads to a more positive impression.

Workers can use this quirk of psychology to their advantage by emphasizing their future value, in addition to past achievements, when applying for a job or asking for a raise. “One of the places we’ve encouraged people to make this happen is in their reference letters,” says Michael Norton, another of the study’s co-authors and professor at Harvard Business School. References “generally talk about what someone has done,” Norton says. “That’s not a bad thing to do, but it’s very important to also talk about their potential.” It can be particularly important for high achieving employees who might be more inclined to stress their accomplishments over their continued capacity for growth.

However, the professor notes, the allure of potential isn’t unlimited. In the recommendation letter experiment, researchers found that participants stopped favoring potential over success when claims of potential lacked sufficient evidence to back them up. Instead, it’s best to highlight a combination of past accomplishments and future possibilities, so no one suspects you’re hype without substance. “A mix is critical,” Norton explains. “There has to be some demonstrated sense that you’ve achieved things.”

Use it right, and our collective preference for potential can do more than get you a better job. Norton says it could also get you a date. “The classic terrible first date is the man drones on about achievements,” the professor jokes. “But if you talk about what you want to do, even if you’re not going to get there, it can be more exciting.”

MONEY stocks

The Problem With Stock Market Games? They Aren’t Boring Enough

150221_INV_game_1
Alamy

If you think investing is fun, you're probably doing it wrong.

People often say the stock market is a game, but a growing number of companies are taking that literally. A slew of new apps, like Ivstr, Kapitall, and Bux (the latter isn’t yet available in the U.S.), say they can teach you about investing by turning it into a short-term competition, complete with scoreboards and points.

The apps keep everything simple by having users compete to predict whether a stock, or portfolio stocks, will go up or down in the next few hours, days, or weeks. (Ivstr goes up to a year.) A few try and crank up the excitement a little further with head-to-head “battles” against friends and little encouragements like “OMG!” after a player completes a trade. It’s all fake money at first, but Bux and Kapitall let users move on to real dollars.

These ideas all sound kind of fun. But do they really teach what you need to know about investing? Stock market apps tend to center around choosing a group of stocks and trading frequently based on their performance.

The trouble is, you’ll do better with your real-life money if you skip all the trading and just buy and hold a low-cost, diversified fund. Research has shown even hedge funds run by market pros can’t beat the market in the long term. Mutual funds mostly don’t beat the index either. Warren Buffett is currently winning his $1 million bet that an S&P 500 index fund will outperform a fund of hedge funds, net of all fees and expense, over just one decade.

You can actually measure how much investors as group cost themselves by trading. According to the mutual fund research group Morningstar, the average U.S. equity mutual fund earned an annualized 8.2% over the 10 years from 2004 through 2013. But the the typical fund investor (as measured by adjusting for cash flows in and out of funds) earned only 6.5%, thanks to poorly timed fund trades. Its hard to imagine retail stock traders are any better at guessing market trends.

Still, maybe there is something to this whole investing as a game idea. We just need to tweak it a little.

Allow me to introduce MONEY’s forthcoming iPhone app, RspnsblFnnclPlnnr. Here’s how it works:

  • Instead of having users pick stocks and watch the market, you spend the first hour looking for funds with the lowest fees and setting up a scheduled deposit. Then it would close.
  • The game will let you come back to check your accounts once a year, to rebalance your stock and bond allocations. But each additional viewing would cost 1000 Investo-Points.
  • Every time you try to trade a stock, the game’s in-app avatar will shake its head at you and ask if you really, really want to do that.
  • You can compete with friends! Thirty years from now, you’ll all get badges showing your huge balances, which you can post on Facebook. Because there will definitely still be a Facebook.

Okay, I suspect my app will have trouble getting past the first round of venture funding. It’s not exactly the most exciting game in the world. Except for the parts where you get to send your kids to college and retire with a decent nest egg. That part is pretty fun.

MONEY credit cards

Why American Express Users Should Be Worried About Their Rewards

American Express card in wallet
iStock

A recent court ruling against American Express could put the company's vaunted rewards program in danger.

AmEx cardholders, beware. A new court decision may have put your rewards in danger.

On Thursday, a federal judge ruled the credit card company had violated antitrust laws by preventing merchants from encouraging customers to use other cards. That may not sound like a big deal, but it could cost American Express billions of dollars over time and seriously curtail the services it can afford to provide its customers.

What’s behind all of this? It comes down to something called interchange fees. For the last four years, American Express has been fighting with the Justice Department over how the company treats its merchants. Store owners must pay credit card companies an interchange fee—generally between 2% and 3% of an individual purchase—every time a customer swipes at checkout. The credit card companies take much of that money as profit, while also giving some portion of it back to cardholders in the form of cash back, airline miles, or other rewards.

American Express has historically charged higher interchange fees than Visa and MasterCard, making it theoretically able to give better rewards. That’s great for AmEx users, but not so great for store owners who would like to encourage their customers to pay with a different, less expensive card. Costco recently ended an exclusive relationship with AmEx due to cost concerns that likely included interchange fees.

American Express has thus far prevented this kind of revolt by specifically forbidding their merchants from giving cheaper cards special treatment, such as discounts, or even telling customers American Express is bad for their businesses. Thursday’s ruling says this kind of contract violates the law.

If the judge’s decision holds, Amex will likely be forced to charge lower interchange fees or risk merchants actively steering customers toward competitors. Less money for AmEx could in turn mean worse benefits for its users or higher membership fees to make up for interchange losses.

“Every time you start taking away from credit card companies they’re going to make it elsewhere,” says James Wester, a global research director at IDC specializing in payments. “If it’s not in higher [membership] fees, it may be in lower benefits or membership rewards.” He notes that the so-called “Durbin Amendment,” which limited debit card swipe fees, ultimately led to the demise of debit card benefits.

Some have argued lowering AmEx’s fees would be a boon for the general public, if not for American Express users themselves, because merchants would pass that savings on to the consumer through lower prices and/or discounts for those using cheaper cards. But the economics of that position don’t seem to hold up.

The difference between an Amex swipe fee and a Visa swipe fee is tiny, meaning any noticeable discount for users of low-fee cards would probably eat away any money the merchant would be saving. “It wouldn’t make sense to give 10% off a purchase if you’re saving 1% of an interchange fee,” says Matt Schultz, senior industry analyst at CreditCards.com.

Lower fees also don’t seem very likely to bring down in-store prices. “Retailers are seeing extra costs of their own these days with implementation with EMV terminals and extra technology for combating fraud,” adds Schultz. “Whether that money they would save on the interchange fees would end up coming back to the consumer, it’s hard to say.”

In the end, the ruling may simply transfer wealth from AmEx and its members to merchants and store owners with little impact on everyone else.

That said, don’t burn your American Express card just yet. While Judge Nicholas Garaufis did rule against AmEx, he didn’t impose his own solution. Instead, he essentially told the company and the Justice Department to figure out their own fix and come back to him later. It’s possible both parties will come to a compromise that doesn’t end up seriously reducing the company’s interchange fees.

AmEx has also said it will appeal the judge’s decision, meaning a true resolution to the whole affair is still far in the distance. “It’s certainly appealable,”said Steven Cernak, an antitrust lawyer at the law firm Schiff Hardin, who thinks another trial would take a year at minimum. “My guess is they will take another shot to convince a panel of three judges this judge got it wrong.”

MONEY payments

The U.S. Treasury Is Now Accepting PayPal

150219_EM_TreasuryPayPal
John Greim—LightRocket via Getty Images

But you can't use it to pay your taxes just yet.

What do eBay, Walmart, and the U.S. Treasury Department have in common? They all accept PayPal.

That’s the word from the Treasury Department, which announced on Wednesday that its Bureau of the Fiscal Service would begin accepting payments to federal agencies through both PayPal and Dwolla, an electronic payment network that lets users transfer money cheaply.

For now, the move exclusively affects Pay.gov, a website where citizens can pay things like court fees and Veterans Affairs health care co-payments, or donate to the National Endowment for the Arts. In other words, you can’t PayPal Uncle Sam your taxes just yet.

The new changes also appear to be limited in scope. In our own quick scan of Pay.gov, not every payment type listed PayPal and Dwolla as an option.

That said, the changes will still make a difference to a large number of Americans who were previously limited to debit and credit card payments. The Fiscal Service Bureau collected $3.73 trillion in fiscal year 2014 and processed 400 million transactions through multiple programs including Pay.gov. Adding more modern payment options should make government bills a little less painful for the site’s many users.

Beyond the immediate benefits, the news also shows the Treasury is slowly but surely entering the 21st century when it comes to moving money. Some of the fastest growing startups are centered on making transferring cash easier and more user friendly, and it’s nice to see the federal government isn’t totally oblivious to which way the wind is blowing.

“Digital wallets provide convenience, simplicity, and a trusted customer experience, while achieving cost effectiveness for the Federal Government,” said Corvelli McDaniel, assistant commissioner for revenue collections management for Fiscal Service, in a statement. “We are committed to operational excellence and continually improving our business processes; digital wallets help us achieve that goal.”

Today PayPal, tomorrow… Apple Pay?

MONEY salary

500,000 Walmart Workers Are Getting a Raise. Here’s How You Can Get One, Too

Walmart raise minimum wage $1.75
Gunnar Rathbun—Invision for Walmart

These 5 moves can help you make sure you get what you deserve.

Two corporate giants have made headlines recently for perking up their workers’ paychecks.

Last month, health insurance provider Aetna announced it would be raising the lowest wage it pays to $16 an hour, effectively giving raises to 5,700 of the company’s workers. On Thursday, Walmart followed Aetna’s lead, revealing it would be giving 500,000 associates a salary bump of at least $1.75 above the federal minimum wage.

While across-the-board wage increases such as these are unusual, other corporations are also expected to be more generous with pay this year. Among mid- and large-sized employers, the average increase in base pay is expected to be 3.0% in 2015, up from 2.9% in 2014 and 2.8% in 2013, according to HR consulting firm Mercer.

You can help your chances of boosting your pay with these five tips:

1. Ask at the Right Time

Choosing the optimal time to approach your boss about a raise will significantly increase your chances of success. Stay on top of your own industry’s salary trends and consider whether your company and division are doing well enough to afford what you’re asking for. It’s also a good idea to ask for a raise a few months before performance reviews so that salaries aren’t already set.

Read more: How to Tell if Now Is a Good Time to Ask for a Raise

2. Know What Others are Getting

Before you ask for a raise, you’re going to need to know what kind of raise is reasonable. Check sites like PayScale.com and GlassDoor.com to get an idea of the industry standard for your position, then consult your colleagues to see what the story is internally. For women, that means making sure to check with your male mentors as well. As MONEY’s Margaret Magnarelli writes, female employees tend to be underpaid relative to their male counterparts, and often remain unfairly compensated because they compare salaries with female colleagues who are also underpaid. Gathering a broad cross section of salary data can help break through the ceiling.

Read more: The Foolproof Way to Make Sure You Land a Big Raise This Year

3. Be Able to Prove You’re Better than Average

The 3% average bump that Mercer projects isn’t bad, but being better than the norm can be very lucrative. In 2014, Mercer said the highest-performing employees received a 4.8% raise—more than 2 percentage points higher than the average for that year. How do you show you’re the best of the best? Gather a portfolio of past endorsements and ask satisfied clients to write testimonials. Then do your best to quantify your accomplishments so that your boss has the hard numbers as well.

Read more: 5 Ways to Get a Big Raise Now

4. Identify Your Added Value

Think about what you do that no one else at the office can do—either where you’ve particularly excelled or what highly marketable skill you bring to the table—and then frame your ask around this added value. Jim Hopkinson of SalaryTutor.com suggests framing your requests as follows: “Not only do I have [all the standard requirements that everyone else has] + but I also possess [the following unique traits that make me worth more money].”

Read more: The Secret Formula that Will Set You Apart in a Salary Negotiation

5. Just Ask!

As Wayne Gretzky said, you miss you 100% of the shots you don’t take. According to CareerBuilder, 56% of workers have never asked for a raise, which is a shame because 44% of those who did ask got the amount they asked for, and 31% still got some kind of salary boost. It might seem daunting to ask for more money with the economy still in recovery mode, but job openings are the highest they’ve been in a decade, almost three-quarters of employers say they’re worried about losing talented workers, and raises are gradually getting larger. Being assertive can be scary, but don’t let fear stand in the way of a bigger salary.

Read more: New Study Reveals the Odds You’ll Actually Get the Raise You Ask For

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4 Ways to Hit Your Money Goals

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