LowCards.com Weekly Credit Card Update–September 9, 2016
People Really Don’t Like Those Chip Credit Cards
When it comes to mixing convenience and security at the cash register, we still have a long way to go. Credit cards with security chips have more or less become the norm over the past several months. But that doesn’t mean that people are happy about it. While transactions made with the chip-enabled cards are more secure than those made with an old-fashioned swipe, a survey from the mobile payments firm Square has found that 91 percent of debit card users and 87 percent of credit card users are frustrated with the new cards. The top reason? The extra security checks for chip cards means they take a while at the register — as anyone who has one can tell you. In a company blog post Thursday, Square said that about 75 percent of shoppers at its merchants are now using chip cards, up from 40 percent of shoppers at this time last year. Story by Hayley Tsukayama for the Washington Post.
Millennials Are Buying More Gift Cards Than Ever — For Themselves
Maybe millennials really are a self-centered bunch? New data suggests that they are buying more gift cards than ever before but then turning around and spending those cards on themselves. Millennials and women are fueling a surge in sales of retailer-specific gift cards, but it seems that they are purchasing more of these gift cards for themselves than to give away to others, as more and more retailers and brands entice consumers with loyalty rewards when they purchase these types of gift cards through apps. Millennials, specifically those between the ages of 25 and 34, seem to be fueling the rise in the purchase of retailer-specific gift cards, as three out of every five of the young adults surveyed reported buying at least one in the past year — an increase from 2015’s survey, as only about half of millennials reported buying the cards then. Story in PYMNTS.com.
Kimpton Hotels Data Breach Affects 60+ Locations
Kimpton Hotels confirmed that malware was found on payment terminals in over 60 of its hotels and restaurants, and that customers’ payment cards may have been compromised. Card numbers, expiration dates, verification codes and, in a “small number of instances,” corresponding cardholder names were stolen. The hotels were breached from February 16 to July 7 of this year. While other hospitality breaches, such as the recent hack at Omni hotels, occurred at the point-of-sale (POS) terminal, Kimpton said the malware was actually installed on the servers that process payment cards. Story by Bill Hardekopf for LowCards.com.
EU Commission to Help Refugees in Turkey via Debit Cards
As the EU Commission funds its largest humanitarian aid programme, another €348 million will reach Turkey to address the everyday needs of refugees, while preserving their dignity. The programme aims to provide humanitarian aid via direct cash transfers, in order for the refugees to cover their essential needs and adjust to everyday life in Turkey. Each refugee family will be granted a debit card, after opening a bank account, starting from October 2016. The system is already running in Jordan and Lebanon, assisting the refugee population there. Story by Irene Kostaki for New Europe.
Retailer Coalition Urges Congress Not to Repeal Debit Card Reform
Retailers from all channels are joining efforts to keep financial reforms included in the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act. In a letter to Congress, a coalition of 407 big and small retailers urged lawmakers not to repeal reforms aimed at curtailing global credit and debit card companies’ anti-competitive practices. The coalition includes convenience store retailers 7-Eleven Inc., Aloha Petroleum Ltd., CEFCO Convenience Stores, E-Z Mart Stores Inc. and RaceTrac Petroleum Inc. According to the Merchants Payment Coalition, the reforms “brought some competition to the market where card companies had blocked their competitors from having the chance to process debit card transactions and price-fixed the fees big banks charge merchants for those transactions.” Story in Convenience Store News.
Mobile Banking Use Continues to Rise
Fiserv’s report, ‘Expectations and Experiences: Consumer Payments’, found that 40% of the 3,048 U.S. adults with a checking account surveyed had used mobile banking in the 30 days preceding the survey. More than half said they used mobile banking more now than they did in the previous year. Millennials are key drivers of mobile banking, with almost 9 out of 10 reporting using it and 41% saying they would “leave their wallet at home if they could store all of the information they need in a digital wallet they could access and use anywhere”. Overall, more than half (51%) of all respondents said mobile will change the way they bank, and 44% said it has already done so. Story by Helen Leggatt for Biz Report.
How India is Bringing Mobile Banking to 1.3 Billion People
India is embarking on an ambitious project that hopes to bring banking to every smartphone user in the country. For decades, the country of more than 1.3 billion people has struggled to bring hundreds of millions of its citizens to a bank. The penetration of bank accounts, and by extension, debit cards and credit cards remain low in the country. But its new audacious payments system could bring banking and financial services to its entire population. India has launched a new payments system called Unified Payment Interface, or UPI, which is designed to make person-to-person and e-commerce transactions swifter and easier. UPI aims to propel the economy towards more cashless transactions. This would, among other things, help the government curb unreported money exchanges that aren’t subjected to tax. Story by Manish Singh for Mashable.
Meet the European Startup That Wants to Cut Up Your Credit Card
Credit cards in the U.S. are getting a new European challenger: Online banking upstart Klarna is now rolling out loans for U.S. online shoppers. Stockholm-based Klarna, one of Europe’s largest and most valuable financial technology startups, said it has inked a deal to begin offering U.S. credit via WebBank, a Utah bank that also works with LendingClub, PayPal Holdings, and other fintech firms. Klarna, valued at $2.5 billion in a 2015 stock sale, is the latest upstart to try to offer a U.S. alternative to credit cards, including a unit of PayPal and startup Affirm. These newer firms aim to give small loans paid down in installments to people via mobile apps or the web when needed for purchases. Klarna directly partners with retailers and also is now available via e-commerce platforms in the U.S. Story by Telis Demos for The Wall Street Journal.
Chase Puts the ‘5/24’ Credit Card Rule in Writing, Briefly
Sign-up-bonus chasers have known about Chase’s 5/24 rule for some time, but this week the issuer spelled it out in an official capacity for the first time — for a while, at least. A note on the application page for the Chase Sapphire Reserve℠ read, “You will not be approved for this card if you have opened 5 or more bank cards in the past 24 months.” That total includes cards from all issuers, not just Chase. The language was removed from the page on Sept. 1, but the rule is presumably still in effect, unwritten though it may be. Story by Ellen Cannon for Nerd Wallet.
Government Misuse of Credit Cards Affects National Security
On August 30, 2016, Military Times published an article about a Department of Defense (DoD) Inspector General (IG) report pertaining to the improper use of government credit cards. This report found that many people used their government credit cards in strip clubs and casinos and requested government reimbursement for their charges. Cardholders often used these credit cards to prevent their spouses from discovering their visits to either a strip club or a casino. Any time people conduct criminal activity, especially when they are embarrassed about a certain type of activity, the situation has the potential for blackmail. For counterintelligence personnel, this is a strong concern because it means that flawed employees could be potentially controlled by foreign intelligence entities (FIE). Story by James R. Lint for In Homeland Security.
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 14.64 percent, identical to last week. Six months ago, the average was 14.80 percent. One year ago, the average was 14.59 percent.