LowCards.com Weekly Credit Card Update–April 8, 2016
Facebook Messenger May Soon Become a Mobile Payments Platform
Facebook Messenger may soon become a hub for mobile payments. Code hidden within the application itself hints that Facebook may choose to make the app a mobile commerce tool, contrary to what the company had said in the past. Facebook has shown strong interest in mobile commerce, but had not intended to make the Messenger app into a new payment platform, opting instead to focus on other solutions. This may be changing, however, as Facebook begins to feel the need to compete with other companies in the mobile commerce space. Story by Stephen Vagus for Mobile Commerce Press.
Trump Hotel Reportedly Hacked Again, Credit Card Systems Likely Breached
Presidential candidate Donald Trump’s luxury hotel chain Trump Hotel Collection is yet again the victim of a hack, which has possibly compromised its credit card systems. The breach on Trump Hotel Collection was first reported by Brian Krebs, a cybersecurity writer, who revealed that three sources in the financial and banking sectors let on that the attackers had breached the credit card systems at some – if not all – of the group’s properties. The credit cards have been used at multiple Trump Hotel Collection properties in the past two to three months. The properties include Trump International Hotel in New York, Trump International Hotel and Tower in Toronto and the Trump Hotel Waikiki in Honolulu. Story by Anu Passary in Tech Times.
Settlement Approved in Sony Pictures Data Breach
A judge approved a multimillion-dollar settlement in a class-action lawsuit filed by former Sony Pictures Entertainment employees whose private information was stolen in a massive data breach. The U.S. government blamed the hack on North Korea in an attempt to derail the release of the North Korean-focused comedy “The Interview.” U.S. District Judge R. Gary Klausner approved the agreement that gives identity theft protection to roughly 437,000 people affected by the breach from the time of the 2014 hack through 2017. Under the deal, Sony agreed to provide the theft protection–as well as an optional service that will cover up to $1 million in losses—and create a fund to cover any additional losses. An exact figure for the settlement is not yet available, since a deadline for workers to sign up for credit protection and reimbursement hasn’t yet passed. Story by the Associated Press.
AmEx Risks Losing Its Starwood Card Deal
American Express may lose yet another valuable credit card partner if Marriott completes its acquisition of Starwood Hotels & Resorts. The AmEx Starwood Preferred Guest card, which accounts for 4 percent of the company’s loans and 2 percent of total spending, is at risk of extinction now that Marriott has bested Anbang Insurance Group in a bidding war for Starwood, analysts say. Marriott has its own co-brand deal with JPMorgan Chase, the largest U.S. credit card lender, and Visa, the world’s biggest payments network. American Express Chief Executive Officer Ken Chenault shook up management and reorganized divisions amid the lender’s worst stock slump since the financial crisis, and the loss of key co-brand partnerships including Costco, JetBlue and Fidelity Investments. The Costco partnership, which now belongs to Visa and Citigroup, had accounted for 20 percent of AmEx’s worldwide loans and 8 percent of card spending. Story by Jennifer Surane for Bloomberg.
Google is Shutting Off Support for its Google Wallet Debit Card
Google announced it would no longer support its Wallet Card starting June 30th. The prepaid debit card, which launched back in November 2013, let you pay for things in person and online using your Wallet balance at any retailer that accepted MasterCard. It also let you withdraw money from ATMs. In an email sent to Wallet Card owners, Google says it wants “to focus on making it easier than ever to send and receive money with the Google Wallet app.” Essentially, Google is removing any and all features that let its Google Wallet service function as it did in the past. That makes sense, as Android Pay has become the company’s new platform for mobile in-store and in-app purchases. So a world where a debit card can be preloaded with cash from your computer no longer makes all that much sense. Story by Nick Statt for The Verge.
Card Not Present Fraud Reshaping Online Shopping Habits
The skyrocketing card-not-present (CNP) fraud is reshaping online shopping behaviors, consumer security concerns and payment card usage, according to a new study. The study found that card-not-present credit and debit fraud increases consumer anxiety and negatively affects their online spending habits, which hurts e-commerce retailers’ bottom lines. In fact, 56% of the survey respondents said they took some action after a fraudulent event, including closing payment accounts (15%), decreasing online shopping (12%) and reducing payment card usage (12%). Story by Bill Hardekopf for LowCards.com.
Can Costco Attract Customers With Its New Partnership With Visa?
Last year, Costco announced that it was ending its 16 year old partnership with American Express and was tying up with Citigroup and Visa to replace American Express with Visa cards in its stores. While this switch was been delayed and did not meet the March 2016 deadline, the company announced that it will now happen effective June 20th, when Costco will accept only Visa cards apart from cash and checks in its stores. Visa had a nearly 60% market share in 2014 in terms of purchase transactions globally, compared to the 7% figure for American Express. More users prefer Visa over American Express, since the latter has stricter issuing guidelines to ensure that more credit worthy borrowers are part of its network. This often makes the younger population ineligible for an American Express card. As Costco partners with Visa, it can benefit from the latter’s large network including the younger consumers who might be attracted to Costco post this deal. Also, given Visa’s network and a wide range of Visa reward cards, users should be able to maximize their rewards while shopping at Costco, giving them additional incentives to increase their transaction volumes at the store. Story in Forbes.
The Real Reason Wal-Mart & Starbucks Want You to Get Their Rewards Debit Cards
Starbucks and Wal-Mart are looking a lot more like banks lately. Starbucks just announced a new debit card that sounds a lot like an airline miles card, while Wal-Mart is about ramp up its cash-back and other benefits on some transactions run through its plastic. What’s in it for these big retailers? And for you? The “for you” part is pretty easy: free money, or free stuff. Now, what’s in it for them? Well, in a generic sense, all retailers have to act more like banks nowadays, says Gartner payments analyst Avivah Litan. Payment processing is expensive, and big retailers are tired of sharing revenue with big banks. Story by Constance Brinkley-Badgett for Credit.com.
Prepaid Shifts Toward Digital
The prepaid category is expected to continue to grow in 2016, but the rise of digital gift cards could impact convenience store sales of physical gift cards. Mercator Advisory Group projected that the total open-loop prepaid card market will have a compound annual growth rate of 7% through 2018. Closed-loop overall will have a compound annual growth rate of 3% through 2018. The slower growth on the closed-loop side is due to the market being more mature. Story in Convenience Store Decisions.
Trends to Watch in Mobile Payments This Year
Mobile payments are rapidly becoming the next big thing. In 2015 users spent $376 annually using their mobile phone as a payment gateway and the number is expected to triple in 2016. With consumers spending more time on their phones rather than desktop devices and businesses offering better mobile experiences, it comes as no surprise that the mobile payment industry is about to experience another growth leap this year. Just like bank checks and solid cash has been replaced by credit cards, the latter are soon to be pushed over by eCash, digital and cryptocurrencies and multiple mobile payments options. Why is this happening and what changes should be expected in 2016? Story by Dianna Labrien for Tech.co.
LowCards.com Weekly Credit Card Rate Report
Based on the 1,000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.80 percent, identical to last week. Six months ago, the average was 14.58 percent. One year ago, the average was 14.48 percent.