Category Archives: Breaking News

Credit Suisse Expresses Regret Over Helping Customers to Evade Taxes

Credit Suisse Expresses Regret Over Helping Customers to Evade TaxesThe head of Credit Suisse expressed regret Wednesday that his bank helped US clients hide billions from the tax man, but blamed the wrongdoing on a small band of rogue employees.

The bank could and should have done more to stop workers from aiding and abetting tax evasion on behalf of American account holders, chief executive Brady Dougan said.

“Credit Suisse acknowledges that misconduct, centered on a small group of Swiss-based private bankers, previously occurred at our bank,” Credit Suisse said in a statement to a US Senate panel that led a years-long investigation of “Swiss bank secrecy.”

A Senate inquiry found that the bank, Switzerland`s second largest, undertook elaborate efforts to help thousands of wealthy US clients evade billions of dollars in taxes.

“Credit Suisse`s management team regrets very deeply that despite the industry-leading compliance measures we put in place, we have some Swiss-based private bankers who appear to have violated US law,” said Dougan, the first American to lead a major Swiss bank.

“While I am extremely dismayed by the conduct, Mr Chairman, I also believe that leadership requires facing up to the past, and taking responsibility for what our employees did.”

An internal probe found no evidence that Credit Suisse management was aware of the problems, the bank said.

The Senate report, based on a two-year investigation, maintained that Credit Suisse had “nearly 19,000 US customers with hidden Swiss assets totalling nearly $5 billion” as of 2006.

That represents some 85 percent of the bank`s more than 22,000 US customers in 2006 with Swiss accounts whose assets, at their highest, exceeded $13.5 billion, the report said.

That amount is more than “twice as much as what was said so far,” Swiss business lawyer Douglas Hornung told AFP, speculating that Credit Suisse could face US fines reaching $2.0 billion.

This would dwarf the $196-million fine Credit Suisse was slapped with last week by regulators for providing unregistered brokerage and investment advisory services to US clients.Senator Carl Levin, chairman of the subcommittee that led the investigation, took Credit Suisse to task for failing to live up to promises of transparency after a similar 2008 investigation.

“It`s five years later, and the sad truth is that the era of bank secrecy is not over,” Levin said, adding that efforts to collect unpaid taxes on hidden offshore assets seem to have “stalled.”

Levin demanded that the bankers “turn over the names of the people you aided and abetted in tax evasion,” noting that so far they had given only 238 names.

Among the practices revealed by the Senate, several Swiss bankers were sent to the United States to secretly find new clients, leaving no paper trail, at events like golf tournaments sponsored by the bank.

Levin said former Credit Suisse clients were taken to meetings in Zurich on remote-controlled buttonless elevators, received bank statements hidden inside magazines, and were issued secret US credit cards allowing them to draw on their Swiss accounts.

“We should have caught it,” Dougan said of the misbehavior.

Dougan testified alongside Hans-Ulrich Meister, who heads Credit Suisse`s private banking division; Robert Shafir, in charge of the bank`s US business; and chief council Romeo Cerutti.

Meister said his bank shared “absolutely the same goal” as US authorities in ending secretive accounts.

Levin countered that banks continued to hide behind Switzerland`s secrecy laws, but he also expressed regret that US authorities have yet to make arrests in the case.

From 2008 to 2011, after a tax-evasion scandal broke at Swiss bank UBS, Credit Suisse began phasing out its evasive practices, asking clients to close their accounts or declare them.

By late 2013 the number of Swiss accounts held by US clients at Credit Suisse fell by 85 percent, the report said.

Swiss President Didier Burkhalter played down the harsh tone of the hearings and noted that the US Senate has yet to ratify a double-taxation deal to underpin closer cooperation on tax issues between the two countries.

Credit Suisse is one of 14 Swiss banks under US investigation for allegedly accepting tens of billions of undeclared dollars from US citizens.

 

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Credit Suisse Blamed of Helping US Customers to Dodge Tax Payment

Credit Suisse Blamed of Helping US Customers to Dodge Tax PaymentCredit Suisse “helped its US customers conceal their Swiss accounts” and avoid billions of dollars in American taxes, a report has alleged.

It claims the bank opened Swiss accounts for more than 22,000 US customers, with assets totalling $12bn (£7.2bn) at their peak.

The report alleges bankers helped clients create offshore shell entities and design transactions to avoid arousing suspicion.

Credit Suisse declined to comment.

“From at least 2001 to 2008, Credit Suisse employed banking practices that facilitated tax evasion by US customers,” the report by a US congressional committee said.

It said the practices included “opening undeclared Swiss accounts” or accounts to “mask their US ownership”, as well as sending Swiss bankers to the US to recruit new customers and “service existing Swiss accounts without creating paper trails”.

US prosecutors are chasing 14 Swiss banks for allegedly helping wealthy Americans dodge US taxes.

Credit Suisse’s private banking and wealth management division has already put aside 175m Swiss francs (£118m) to fight a US investigation into hidden offshore accounts in Switzerland.
Secretive methods?

The bank has said it was “working towards a resolution” with US authorities but has not given a time-frame of when that resolution might be reached.

The report has also published details of the way, it alleges, the bank worked to keep the accounts concealed from the US authorities.

It said some bankers even applied for US visa waivers, claiming they planned to visit the country for “tourism” instead of “business” purposes.

The report listed one incident where a client was handed bank statements hidden in a Sports Illustrated magazine.

It said the bank also used sponsored events, including the annual “Swiss Ball” in New York and golf tournaments in Florida, to recruit more customers.
Strict action

The committee has called upon US regulators to take strict action against banks that help US customers avoid taxes.

“For too long, international financial institutions like Credit Suisse have profited from their offshore tax haven schemes while depriving the US economy of billions of dollars in tax revenues by facilitating US tax evasion,” said Senator John McCain, a member of the subcommittee.

“As federal regulators begin to crack down on these banks’ illicit practices, it is imperative that they use every legal tool at their disposal to hold these banks fully accountable for wilfully deceiving the US government and seek penalties that will deter similar misconduct in the future.”

The US Justice Department issued a statement saying it was investigating various Swiss banks over the issue.

“We won’t hesitate to indict if and when circumstances merit,” it said.

 

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Target Data Breach has Hardly Affected Shoppers’ Buying Habits

Target Data Breach has Hardly Affected Shoppers' Buying HabitsThe massive data breach of credit and debit card holders at the point-of-sales of Target Corporation during the recent shopping season has shocked many consumers for sure. But the act did not stop them from following their regular buying habits. Though the breach led to leaking of sensitive data of more than 110 million people and hacked confidential details of 40 million card-holders, shoppers are positively continuing with their purchases.

Consumers did express their worries after being the victims of credit card fraud and identity theft. After the hacking event took place at the outlets of Target Corporation and Neiman Marcus, more than half of the adults in America had said that they are extremely concerned about their personal information while paying for their purchases through debit or credit cards at the outlets. The figure was revealed in a poll conducted by Associated Press-Gfk.

Leading American daily The Wall Street Journal had reported recently that the financial institutions in the United States of America have spent heavily on neutralizing the trouble arisen out of the data hacking. The institutions have spent more than $200 million on the Target episode. Majority of the costs, around $172 million, is allocated for the replacement of the credit and debit cards that have been hacked.

Bill Cheney, the chief executive of Credit Union National Association, said, “Credit unions have replaced or will replace 85% of their cards affected by the Target breach at no cost to their members. The combined $200 million cost borne entirely by banks and credit unions shows the extent to which financial institutions will go to protect their customers and members.”

Being said that, just a small portion of shoppers have changed their shopping habits in order to be more secure while transacting and prevent being victims of Target-type attacks. In the poll conducted by Associated Press, around 37% of buyers preferred paying for their purchases through cash rather than using plastic money. While a very small portion of buyers have bothered to change the passwords of their accounts on a retailer website. Also, not many have requested for new debit or credit cards.

According to a survey conducted in Minnesota, the headquarter of Target Corporation, just 5% shoppers said that they would stop shopping at the retailer chain. Around 82% people said that they would continue with their old habits while shopping at Target while 11% said that they would decrease their volume of shopping at the retailer chain but would still continue shopping there.

 

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U.S. Farm Credit reports 19 pct rise in 4th quarter net income

The U.S. Farm Credit System, a government-sponsored enterprise and the single-largest lender to U.S. agriculture, on Wednesday said fourth-quarter earnings rose nearly 19 percent, boosted by strong demand for farm products.

The System, which uses proceeds from debt securities issued to domestic and foreign investors to fund farmers and agribusiness, earned $1.141 billion for the quarter ended Dec. 31, up from $960 million in the same period a year earlier.

Annual earnings for 2013 climbed to $4.640 billion, or 12.7 percent from $4.118 billion in 2012, a drought year for U.S. farmers.

“Strong global and domestic demand for U.S. agricultural products continued throughout 2013, enhancing the earnings of agricultural producers and contributing to solid earnings,” Tracey McCabe, chief executive officer of the Federal Farm Credit Banks Funding Corporation that funds FCS’ securities, said in a statement.

“Capitalization remains strong and the System is well positioned to withstand adverse changes that may arise in future agricultural economic conditions,” she added.

Full-year earnings reflected a 3 percent rise in net interest income to $6.674 billion due to higher loan volume and a loan loss reversal of $31 million. That compared with a provision for loan losses of $313 million in 2012.

Offsetting these partially was an increase in noninterest expenses of $139 million.

For the fourth quarter, Farm Credit’s net income increased by $181 million, primarily reflecting a loan loss reversal of $40 million in 2013, compared with a provision for loan losses of $125 million in the fourth quarter of 2012.

DEMAND FOR REAL ESTATE LOANS RISES

Gross loans grew by $9.156 billion, or 4.8 percent, to $201.06 billion at Dec. 31 from the end of 2012. Demand increased for real estate mortgages, production, processing and marketing loans.

“Real estate mortgage loans increased primarily due to continued strong demand for cropland in the Midwest,” the System said.

Overall, borrowers’ financial conditions remained very favorable due to the high levels of farmers’ net cash income over the past several years, the System said.

FCS cited the U.S. Department of Agriculture’s 2014 forecast for farmers’ net cash income to decrease to $101.9 billion, a $28.2 billion decrease from 2013 but $11 billion above the 10-year average. The projected decrease is primarily due to an expected drop in crop receipts of $26.7 billion, according to USDA.

Farm Credit also reported cash and investments rose by $4.965 billion to $51.893 billion at Dec. 31, compared with a year earlier.

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U.S. Farm Credit reports 19 pct rise in 4th quarter net income

The U.S. Farm Credit System, a government-sponsored enterprise and the single-largest lender to U.S. agriculture, on Wednesday said fourth-quarter earnings rose nearly 19 percent, boosted by strong demand for farm products.

The System, which uses proceeds from debt securities issued to domestic and foreign investors to fund farmers and agribusiness, earned $1.141 billion for the quarter ended Dec. 31, up from $960 million in the same period a year earlier.

Annual earnings for 2013 climbed to $4.640 billion, or 12.7 percent from $4.118 billion in 2012, a drought year for U.S. farmers.

“Strong global and domestic demand for U.S. agricultural products continued throughout 2013, enhancing the earnings of agricultural producers and contributing to solid earnings,” Tracey McCabe, chief executive officer of the Federal Farm Credit Banks Funding Corporation that funds FCS’ securities, said in a statement.

“Capitalization remains strong and the System is well positioned to withstand adverse changes that may arise in future agricultural economic conditions,” she added.

Full-year earnings reflected a 3 percent rise in net interest income to $6.674 billion due to higher loan volume and a loan loss reversal of $31 million. That compared with a provision for loan losses of $313 million in 2012.

Offsetting these partially was an increase in noninterest expenses of $139 million.

For the fourth quarter, Farm Credit’s net income increased by $181 million, primarily reflecting a loan loss reversal of $40 million in 2013, compared with a provision for loan losses of $125 million in the fourth quarter of 2012.

DEMAND FOR REAL ESTATE LOANS RISES

Gross loans grew by $9.156 billion, or 4.8 percent, to $201.06 billion at Dec. 31 from the end of 2012. Demand increased for real estate mortgages, production, processing and marketing loans.

“Real estate mortgage loans increased primarily due to continued strong demand for cropland in the Midwest,” the System said.

Overall, borrowers’ financial conditions remained very favorable due to the high levels of farmers’ net cash income over the past several years, the System said.

FCS cited the U.S. Department of Agriculture’s 2014 forecast for farmers’ net cash income to decrease to $101.9 billion, a $28.2 billion decrease from 2013 but $11 billion above the 10-year average. The projected decrease is primarily due to an expected drop in crop receipts of $26.7 billion, according to USDA.

Farm Credit also reported cash and investments rose by $4.965 billion to $51.893 billion at Dec. 31, compared with a year earlier.

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Massive Credit Card Data Breach at Target May Cost Financial Institutions $200 million

Massive Credit Card Data Breach at Target May Cost Banks $200 millionFinancial institutions seem to have been hit badly by the massive credit card data breach that occurred at Target Corporation in the month of December last year. As per the latest reports, the hacking event may have cost banks as high as $200 million. And the figure may even rise further. As per the data collected by Credit Union National Association and Consumer Bankers Association, the overall costs financial institutions may have to bear due to the breach has already exceeded $200 million.

Credit Union National Association as well as Consumer Bankers Association also said that around 21.8 million of the 40 million hacked credit and debit cards have already been replaced. The Consumer Bankers Association estimated that the overall cost the banks in the country would have to bear for replacing cards of their customers has touched almost $172 million. Initially, the cost was estimated as $153 million. The association represents the largest financial institutions and many regional banks in the United States of America.

On the other hand, the Credit Union National Association said that the credit unions will have to bear a cost of $30.6 million to repair the damage. Initially the cost was estimated as $25 million.

The main point to note is the estimated costs do not take into account the financial losses that may have to be suffered due to the occurrence of the fraudulent act. These costs only consider the measures that the institutions need to take to replace the hacked cards with more secure ones. The financial burden on the associations is likely to soar further once these costs are considered as consumers won’t be held liable for the losses occurred due to the breach.

Leading US retailer Target Corporation had previously declared that as many as 40 million credit and debit card accounts have been hacked during the recent festive season between November 27 and December 15. Hackers managed to steal sensitive personal data like the name, contact number, mailing address, and e-mail address of around 70 million customers.

As a measure to prevent such events in future, the retailer has been offering free credit monitoring services for the victims of the data breach.

 

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DIY Credit Repair – A Step By Step Guide

There are many options available if you need to repair your credit. Credit repair companies will help you, but they do charge a fee. Some of these companies really do a good job, but many do not.

Repairing your own credit is entirely possible. If you’re persistent and organized, you can do just as well as any company available for hire.

Follow these steps to successfully repair your own credit:

1. Get copies of all your credit reports. Equifax, Experian, and TransUnion are the big 3 credit reporting firms. You should obtain all three reports.

* You can obtain a free copy once a year from each of these companies at https://www.annualcreditreport.com/

* If you’ve recently been denied credit or a job for having poor credit, you can also get a free copy of your reports, even if it has been less than a year since you got a copy.

* Find out what these companies are saying about your credit worthiness.

2. Find any errors. Once you obtain your credit reports, look for any negative information, even if it’s true. Nearly everyone has at least one error on his or her credit report.

* Remember that the credit bureaus just report information. They don’t take the time to verify it.

* Make a list of everything you want to dispute.

3. Dispute all the negative items. While it won’t do any good to dispute true items still carrying a balance, everything else is fair game. Items with a balance will just reappear the following month anyway.

* All disputed items should be documented in writing. Do not use the forms that are available online on the credit bureau’s website. That just makes everything too easy for them.

* There are many form letters online that you can use for your dispute. You basically just want to say that you don’t agree with the items and wish to have them verified.

* The credit bureau then has 30 days to go back to the creditor and verify the accuracy of the item or else the item must be removed from your credit report. This applies if they fail to accomplish this task in time, for any reason. It’s the law!

* Be sure to send all of your correspondence by registered mail or some equivalent. You want to be able to prove when the item was received by the credit bureau.

* If they don’t verify the items in time, remind them of the law and demand that the items in question be expunged from your records.

4. Don’t give up. Persistence and being organized are the keys to success. You must send your letters, follow up, and document everything. Keep copies of your letters and their responses. You just might need all of this information at a later date.

5. Realize the truth of the situation. Credit bureaus make money by selling credit reports, not by responding to your inquiries. The last thing they want to do is spend time and resources on you. If you’re a pain in the neck, you might eventually get what you want.

6. Don’t be afraid to use the court system. Taking the credit bureaus to court and suing them can sometimes be the best solution.

* Anytime you have a mistake on your credit report that the credit bureau refuses to remove, there is a $1,000 fine. The same $1,000 fine applies for any item that they fail to verify and refuse to remove.

* Credit bureaus have a long history of caving in at the last minute and giving the consumer everything they want.

* Don’t hesitate to file a lawsuit with your local small claims court.

* You might have to actually show up to court before they are willing to deal. But these credit bureaus don’t want to get stuck with thousands of dollars in fines, especially when they have nothing to gain. Give it a try.

Do-it-yourself credit repair is something that anyone can do. It really is very simple and effective. It can take months to see any real improvement, but it’s much faster than just waiting out the many years it takes for the items to fall off the list naturally.

Boost your credit and better your life. You’ll be happy you did!

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Target Data Breach May be Planted Through a Target Vendor

Target Data Breach May be Planted Through a Target VendorInvestigators are of the view that the massive Target Breach that lead to identity theft of millions of card-holders might have actually started through the computer system of one of the vendors of the retailer. The investigation says that the hackers may have launched a malware-based e-mail phishing attack on the accounts of the employees of HVAC firm. HVAC is one of the many vendors doing business with the US retailer.

Last week, a leading computer blog KrebsOnSecurity, had said that the investigators investigating the data breach case are of the view that the root source of the attack may be linked to the network credentials that Target had given out to Fazio Mechanical. Fazio Mechanical is an air conditioning, heating, and refrigeration company based in Sharpsburg, Pa. several sources involved in the investigation now further say that the credentials issued by the retailer were stolen through the malware attack on Fazio. The stealing might have started as early as two months before the hackers engaged themselves in launching the massive attack on Target and stealing data of more than 110 million card-holders.

A few sources close to the developments in the investigation said that the hackers may have used a malware called Citadel. Citadel is a bot program capable of stealing passwords. It is said to be derived from ZeuS banking Trojan. The information about the use of Citadel could not be confirmed though. Both Fazio and Target declined to comment anything on the developments saying that the investigation is on.

Fazio had mentioned is its statement last week that it was “the victim of a sophisticated cyber attack operation.” It further added that “our IT system and security measures are in full compliance with industry practices.”

From the developments in the investigation, one thing has become very clear that like Target even Fazio Mechanical has been the victim of the cyber attack. But its statement that its security arrangements were in full compliance with the current industry standards has not sound to be too convincing for the investigators. The investigators said that it took so long for Fazio to detect that its systems were attacked by a malware because the company had been using a free version of Malwarebytes Anti-Malware.

 

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Fitch May Consider Lowering the Credit Rating of USA

Fitch May Consider Lowering the Credit Rating of USAOne of the country’s three major credit rating agencies signaled Tuesday that it could downgrade the United States’ rating, citing the impasse in Washington over raising the debt ceiling.

Fitch Ratings put its opinion about the creditworthiness of U.S. government debt on what its calls “rating watch negative,” a reflection of the increasing risk of a near-term default if the debt limit is not raised in time. It gave itself until the end of the first quarter of 2014 to decide whether it will actually cut the rating from AAA.

“Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default,” the rating agency wrote in a statement.

S&P 500 futures fell 9.6 points while Dow Jones industrial average futures sank 60 points and Nasdaq 100 futures fell 7.5 points after the announcement Tuesday.

Still, Fitch reaffirmed its belief that an agreement to raise the debt ceiling will be reached, allowing the U.S. government to pay its bills by borrowing beyond the $16.7 trillion limit currently in place.

Fitch is the only one of the three major credit rating agencies to have a negative outlook on the U.S. sovereign credit. Standard & Poor’s downgraded the rating to AA-plus with a stable outlook during the last debt ceiling impasse, in August 2011.

The three have all warned, in varying degrees, that the United States’ rating could be cut if it hit the Oct. 17 deadline when Washington is expected to run out of cash to pay its bills.

Fitch previously said if the debt ceiling isn’t raised in a “timely manner,” meaning several days prior to that, it would launch “a formal review of the AAA rating and likely lead to a downgrade.”

“It seems like what we saw from S&P just before the downgrade, they were essentially warning us that the debt ceiling standoff will not be tolerated and this is not in line with a country that maintains an AAA credit rating. It’s citing these artificial default risks as the main reason …. They are essentially saying, ‘Get this done now,’” said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.

Fitch reiterated that the delay in increasing the borrowing capacity of the United States raises questions about the ability of the United States to honor its obligations.

Moody’s Investors Service rates U.S. government debt at Aaa with a stable outlook.

The U.S. Treasury has said that on or about Oct. 17 the government will reach its borrowing limit, thereby putting at risk its ability to pay its bills.

Fitch is operating under the assumption that even if the debt limit is not raised before or shortly after Thursday, there will be sufficient political will and capacity to ensure the United States will honor its debts.

A Treasury spokesman said Fitch’s decision is a reminder for U.S. lawmakers that the United States is dangerously close to defaulting on its obligations.

Negotiations between President Barack Obama and congressional leaders cycled through a stop-start process again Tuesday, but no agreement was reached to reopen the government and raise the debt ceiling.

Last week Fitch said that it would only consider the United States in default if it failed to make payments due on interest or principal of U.S. Treasuries.

“It lets investors know that this kind of risk is on the horizon. We’ll see what happens. I was hopeful earlier today that sides were moving to an agreement, but now, I don’t know,” said John Carey, portfolio manager at Pioneer Investment Management in Boston.

The warning came after the U.S. stock market closed for the day, after a volatile trading session in which benchmark U.S. equity indexes fell amid the political uncertainty.

In late New York trade, the U.S. dollar dropped to session lows against the yen and trimmed earlier gains against the euro.

“This is not the way the dollar behaved during the Lehman crisis or during the debt downgrade by the S&P in August 2011. So we think yes, the more the U.S. credit rating is called into question, the worse it will be for the U.S. dollar,” said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.

U.S. Treasury prices, already weak ahead of Fitch’s announcement, held their losses on the day.

“The United States has the absolute capacity to pay its debt. This action is not about ability to pay. It is about governance and willingness to pay. In that category the United States has reached the brink of political failure,” said David Kotok, chairman and chief investment officer at Cumberland Advisors in Sarasota, Florida.

 

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PayPal president’s credit card hacked for shopping spree

PayPal President David Marcus said on Monday that his credit card details were stolen and the information was used to finance a fraudulent spending spree.

Marcus said the card was probably “skimmed” at the hotel he was staying at, or at a merchant he visited, during a recent trip to the U.K.

“They then cloned it and went on a shopping spree,” the executive wrote on Twitter.

Marcus noted that his credit card had EMV chip technology, a more secure system currently in use in Europe. But that didn’t stop the data from being stolen and used for a “ton of fraudulent” transactions, according to the PayPal chief.

A skimmer is a device fixed to the front of an ATM or point-of-sale terminal that secretly swipes credit and debit information when customers slip their cards into the machines to withdraw cash or pay for something. This malicious technology has been around for years, but skimmers are constantly improving it, according to cyber security expert Brian Krebs.

PayPal’s Marcus did not waste an opportunity to tout his company’s security benefits, saying the breach would not have happened if the merchant had accepted PayPal as a form of payment. PayPal says it does not share card or bank account details with merchants when shoppers use the service to buy something.

PayPal is trying to expand from its online roots to become a common way to pay in physical stores. The security of card transactions in retail locations has been questioned recently by the massive theft of customer data from Target.

“Obfuscating card data online, on mobile, and now more and more offline remains one of PayPal’s strongest value props,” Marcus added on Twitter.

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