LowCards.com Weekly Credit Card Update–June 26, 2015
Who’s Addicted to Mobile Banking
Are consumers addicted to mobile banking? Well, if pulling out a mobile phone to check a bank account balance during dinner–and even on a date–qualifies as addictive, then the answer is yes. A Chase-commissioned survey shows that when it comes to digital banking trends, consumers are more addicted to online banking sites than mobile apps, but that the trend is slowly shifting. The survey results for 1,502 U.S. consumers over 18 (not specifically Chase customers), showed that 33 percent more consumers are using their mobile device to access a mobile banking app, compared with a year ago. But online banking is seeing stronger growth too, as that figure is up 35 percent on the year. And, interestingly, 16 percent more consumers have visited a bank. Story in PYMNTS.
New Chip Credit Cards Putting Squeeze on Small Businesses
New credit and debit cards with computer chips are putting the squeeze on small businesses. The cards being rolled out by banks and credit card companies are aimed at reducing fraud from counterfeit cards. As chip cards are phased in, magnetic stripe cards, which are easier for thieves to copy, will be phased out. Businesses of all sizes face an Oct. 1 deadline to get new card readers and software that can handle chips. Most estimates of transition costs for small companies vary from the low hundreds to tens of thousands of dollars due to the wide range of equipment used. If businesses don’t meet the deadline set by companies including MasterCard, Visa and American Express, they can be held liable for transactions made with phony chip cards. The switch to new chips in credit and debit cards poses a threat for small companies because they can’t get the volume discounts on the new equipment that big retailers get. And they don’t have in-house tech experts to install the new systems. Story by Joyce Rosenberg for the Associated Press.
Consumers Still Confused about their Credit Scores
The vast majority of Americans (90%) recognize the importance of having access to credit. But a significant percentage (52%) of adults do not understand the most influential factors that go into a credit score, and almost 40% do not know their personal credit score. People who consistently check their score have a better perspective of a “good” credit score. Those who had previously checked their scores said 719 was “good” on average, while those who never check their score said it was 668. Of those surveyed, only 37% said their current scores will help them achieve their personal goals. Two out of three respondents would like to be able to improve their credit score during the next year, but only 35% have a plan they feel will allow them to do so. In fact, 22% admit they have never taken any steps to improve their score. Story by John Oldshue for LowCards.com.
Credit Card Firm Synchrony Financial Uses Analytics to Help Retailers Clinch Deals
Synchrony Financial, the $12 billion credit card company spin-off from General Electric, plans a September launch of personalized pricing and other mobile offers for shoppers. Synchrony handles private-label credit cards for Gap and other retailers and merchants. The analytics work reflects the central role IT groups can now play in building revenue-generating products and services. Story by Kim Nash for The Wall Street Journal.
India’s Government Proposes Income Tax Benefits for Debit/Credit Card Payments
India is looking to incentivise the use of credit and debit cards by offering tax rebates to merchant establishments and consumers, making high-value transactions mandatory through electronic means and imposing an additional levy on cash payments above a certain level to curb black money. The finance ministry has prepared a draft discussion paper proposing benefits such as an appropriate tax rebate or a 1-2% reduction in value added tax for establishments that accept electronic payments. Story in The Economic Times.
UK Debit Cards are a Scandalously Easy Target for US Fraudsters
It’s tempting to see credit and debit card fraud as an old-world problem nobody is interested in these days but every now and then a pattern jumps out of the morass of statistics that deserves our attention. A prime example is the volume of debit card fraud (i.e not including credit card fraud) being heaped on UK card-holders from the US, both against people visiting the US and, unbelievably, people who have never been there in their lives. According to a large sample of fraud looked at by US analytics organization FICO, the US accounted for almost half of all fraudulent cross-border transactions on UK debit cards during 2014 despite being a distant third on the list of total transactions. FICO didn’t break down US fraud by type in much detail, but the vast majority of these fraudulent transactions were card-not-present frauds carried out from the Internet or by phone. Cross-border fraud is a big deal, accounting for a third of all theft from the 52 million UK cards FICO sampled. Story by John E. Dunn for Tech World.
Green Dot Retains Wal-Mart MoneyCard Account
Green Dot reached an agreement with Wal-Mart Stores to continue as the issuing bank for the retailer’s prepaid reloadable debit card program for an additional five years. The companies had worked together on Wal-Mart’s MoneyCard program since its 2006 inception, but Green Dot shares have declined 25% so far this year through Monday’s close, partly on concerns about the possibility of losing the business. The new term, which became effective May 1, replaces an agreement that was already extended to the end of the year. Green Dot also worked with the retailer on last year’s rollout of a checking account service called GoBank, which doesn’t charge overdraft fees, unlike other the banks housed within the retail giant. Story by Josh Beckerman for The Wall Street Journal.
Atom is a New UK Bank That’ll Have No Branches, Just Apps
Banking is a bit of an old boys’ club dominated by a few huge, lumbering corporations, but up-start Atom thinks it’s time for a new player with a different approach. Atom wants to take mobile banking seriously; so seriously, in fact, that it aims to exist almost solely as a mobile app. The company has just been granted a UK banking licence and plans to launch later this year, first using mobile apps to offer its services before graduating to desktops in due course. Atom will have a 24-hour support team available by phone, email, webchat and social networks, but the idea is you can do everything, even open an account, from within the mobile app. Story by Jamie Rigg for Engadget.
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 14.62 percent, slightly higher than last week’s average of 14.60 percent. Six months ago, the average was 14.46 percent. One year ago, the average was 14.52 percent.