LowCards.com Weekly Credit Card Update–April 28, 2017

LowCards.com Weekly Credit Card Update–April 28, 2017

April 28, 2017         Written By Lynn Oldshue

Apple Is In Talks To Launch Its Own Venmo
Apple’s on-again, off-again flirtation with building its own money-transfer service appears to be back on. The company has recently held discussions with payments industry partners about introducing its own Venmo competitor, according to multiple sources familiar with the talks. The service would allow iPhone owners to send money digitally to other iPhone owners. If it happens this time, the new Apple product would compete with offerings from big U.S. banks as well as PayPal, its millennial-popular subsidiary Venmo, as well as Square Cash in the increasingly competitive world of digital money-transfers. Chase’s QuickPay service processed $28 billion in transfers last year, while Venmo registered $17.6 billion in volume and is still doubling year over year. These services have typically been money losers for the new entrants in the space, but are seen as the gateway to the next generation of payment and personal finance services that could upend traditional consumer banking relationships. They are used for everything from splitting dinner bills to paying rent. Story by Jason Del Rey for Recode

Capital One Credit Card Losses Expose Weakness Among Consumers
If you were wondering when you should start worrying about weakening U.S. consumer credit, now is a good time. Consumers have been defaulting on their car loans in greater numbers over the past year, and some analysts have chalked this up to overly loose lending standards in the auto industry. But now some Americans are increasingly struggling to repay their credit card bills. This was on full display on Tuesday in Capital One’s first-quarter earnings results, which showed a much higher rate of loan losses among its credit card unit than both its management and investors expected. Not only did its provisions for losses in its U.S. card unit surge 33 percent from the preceding quarter, but Capital One also reported that its write-off rate in the unit rose to 5.1 percent, the highest in almost six years. In addition, the company changed its explanation for the rapid deterioration in credit quality, now attributing the weakness to consumer behavior rather than a surge in loan growth and aging loans. Story by Lisa Abramowicz for Bloomberg

Chipotle Warns Customers of Possible Credit Card Breach
As Chipotle continues to try to climb out of a massive sales slump triggered by a string of high-profile food safety disasters, it’s suddenly got a new pain point: a potential credit card breach. The burrito chain relayed the bad news to customers on Tuesday via a post on its website, explaining that it recently discovered unauthorized activity on its payment processing network. Translation: If you used a credit or debit card to pay for a burrito between late March and mid-April, it’s possible hackers may have stolen your card info. Chipotle is still investigating the breach. Story by Whitney Fillon for Eater

Shopify Launches Credit Card Reader for Brick and Mortar Stores
Shopify is an online sales platform and payment processor, but its latest venture is designed for offline purchases. The company announced the launch of a new chip card reader designed for brick and mortar stores, which will compete head-on with the Square reader. The Chip & Swipe Reader works with EMV chipped cards and magnetic strip cards. It is wireless and can connect to most smartphones or tablets using Bluetooth. Each transaction comes with a 2.4% processing fee, which is lower than Square’s 2.75%. Story by Lynn Oldshue for LowCards.com

South Korea To Begin Pilot Project For Coinless Society
South Korea plans to launch a pilot project for a coinless society this week, a move that could enhance convenience for ordinary people. Under the project set to begin Thursday, consumers can deposit small change left from purchases of goods into their prepaid or mobile cards at convenience stores, discount stores and department stores, according to the Bank of Korea. It means that consumers won’t have to carry coins in their pockets after making cash payments. The project, if accepted by ordinary people, could also lower the cost of producing coins, though the BOK said the outcome of the experiment remains to be seen. Last year, South Korea spent $47 million on producing coins. Story in Yonhap News

Mobile Wallets Kill Off Plastc’s Smart Card
After three years in development, the Plastc “smart” credit card is dead, without ever having been released to the public. Plastc was supposed to be able to store information from 20 cards, including credit, debit, loyalty and gift cards, on a single card-like device. But Plastc and similar products saw much of their prospective market eaten up by mobile wallets like Apple Pay, Android Pay and Samsung Pay. Unable to secure financing to finish development of its product, Plastc Inc. ceased operations on April 20, 2017, and announced on its website that it was exploring bankruptcy options. Customers who pre-ordered the product won’t have those orders  filled. Story by Melissa Lambarena for Nerd Wallet

For PayPal, Mobile Continues To Drive Growth
Mobile transactions continue to drive growth for payments giant PayPal. The company’s popular mobile payments app Venmo processed a record $6.8 billion in the first quarter, double the amount from the same period last year. Venmo, which lets users send money to each other instantly, much like PayPal’s core service, has been among the crown jewels in PayPal’s payments portfolio. It acquired the service, which is popular with younger users, three years ago as part of its $800 million acquisition of payment processing startup Braintree. Although Venmo is growing quickly, it’s unclear how much impact it has on PayPal’s financial results. It was only last year that PayPal started generating revenue from the service by letting merchants accept Venmo as a payments option. Merchants pay a small fee for each transaction. Although he declined to get into specifics, PayPal’s chief financial officer John Rainey said during an earnings call on Wednesday that the company expects a “steady” increase in revenue from Venmo. Story by Leena Rao for Fortune

The Latest American Status Symbol: Metal Credit Cards
If you’ve been in the market for a new, high-end credit card recently, you may have noticed something: Many of them look pretty much the same. Several credit cards that have debuted in the last year have incredibly similar designs: minimalist, with almost no writing or numbers on their fronts. And, instead of plastic, they are increasingly made of metal. They’ve become the newest status symbol for consumers who like their travel rewards. It’s difficult to track the number of metal cards currently on the market because credit-card companies are reluctant to say how many card members they have, but in the last several years, issuers’ interest in metal cards has spiked. Card companies targeting high spenders will go to great lengths to impress them and differentiate themselves from the competition, despite the fact that metal cards may cost around $30 to $50 to produce, about 10 to 20 times more than plastic cards. Story by Maria LaMagna for MarketWatch

More Homeowners Pay for Repairs With Credit Cards
Maybe those credit card rewards—airline miles, concert tickets, a new laptop—are just too tempting. A recent survey found that almost one-third of affluent homeowners, defined as those earning at least $100,000 a year, plan to use credit cards to pay for renovation projects, according to new survey. Of the 3,172 respondents in the study, 32% said they would pay with plastic, up from 26% in 2016. Story by Robyn A. Friedman for The Wall Street Journal

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 15.26 percent, slightly higher than last week’s average of 15.25 percent. Six months ago, the average was 14.60 percent. One year ago, the average was 14.76 percent.


About Lynn Oldshue

Lynn Oldshue has written personal finance stories for LowCards.com for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue
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