LowCards.com Weekly Credit Card Update–August 12, 2016
Does Self-Checkout Make Customer Want To Steal?
As it turns out, the self-checkout line has a big drawback. It seems to be passively encouraging shoppers to steal. At least, such is the recent finding of a study out of the University of Leicester in England, which concludes that consumers going through self-checkout lanes create about 4 percent loss—about doubling the rate of customers who go through standard checkout lines. And given that profit margins in grocery around the world are in the 3 percent to 5 percent range—those big upticks mean big issues for the bottom line. The study sought to systemically answer a question that has been bandied about in retail in the decade or so that self-checkout lanes have become a popular alternative. Are such systems—which run on an honor system of consumers actually ringing through all of their own items correctly—making it more likely that consumers will take advantage? Story in PYMNTS.
Increasing Use of Credit Cards by Subprime Borrowers
The number of subprime borrowers who are obtaining a new credit card is growing at a significant rate. Roughly half of subprime borrowers-those with a credit score of 620 or less-now have a credit card compared to 60% in 2007, which means the number of credit card holders in this category is returning to pre-recession levels. A new report indicates this group is acquiring the greatest number of new cards because they were most heavily impacted by the recession. In 2010 and 2011, nearly half of all credit card closures affected this group, even though they only represented one-third of credit card customers. While those with low credit scores are opening the most accounts, they are getting the least amount of credit. Story by Bill Hardekopf for LowCards.com.
Australia to Crack Down on Prepaid Money Cards to Fight Terrorism Funding
Australia will strengthen the regulation of stored value cards as part of its crackdown on terrorism funding following revelations jihadists used prepaid money cards in the 2015 Paris attacks. Justice Minister Michael Keenan told a counter-terrorism financing summit in Bali on Wednesday that this was one of the reforms recommended by a review of Australia’s anti-money laundering and counter-terrorism financing legislation. The terrorists responsible for the Paris attacks, which killed 130 civilians, used prepaid money cards with small amounts on them to fund the carnage. Story by Jewel Topsfield for The Sydney Morning Herald.
Data Breach At Oracle’s MICROS Point-of-Sale Division
A Russian organized cybercrime group known for hacking into banks and retailers appears to have breached hundreds of computer systems at software giant Oracle Corp. More alarmingly, the attackers have compromised a customer support portal for companies using Oracle’s MICROS point-of-sale credit card payment systems. MICROS is among the top three point-of-sale vendors globally. Oracle’s MICROS division sells point-of-sale systems used at more than 330,000 cash registers worldwide. When Oracle bought MICROS in 2014, the company said MICROS’s systems were deployed at some 200,000+ food and beverage outlets, 100,000+ retail sites, and more than 30,000 hotels. Story by Brian Krebs for Krebs on Security.
CVS Pharmacy Launches its Own Mobile Payments and Loyalty Solution, CVS Pay
CVS Health today is launching its own mobile payments solution that will allow customers to pay for products, pick up prescriptions, earn ExtraCare loyalty rewards, as well as pay—just by scanning the barcode in the CVS mobile app. The idea, the company explains, is to eliminate the number of steps it takes today to complete a checkout, which today is a very manual process. Currently, customers have to either present their physical CVS rewards card at the register, or they have to say their name and birthday in order for the store associate to look up their account information. Then, after their purchases and prescriptions are run up, they have to pay. Now, all the verifications for the prescriptions and the payment—including name, birthdate, signature, and PIN—will take place in the app. Story by Sarah Perez for Tech Crunch.
Rio Olympics: Visa Tests NFC-Enabled Wearables for Mobile Payments
Payments using near field communication technology have been a promise for a while, but until now no application has been popular or good enough to replace plastic cards. With about 4,000 points of sale equipped with NFC, Visa is using the Rio de Janeiro Olympics to showcase the use of the short-range wireless connectivity standard to allow visitors and athletes to use rings, bracelets and watches to make purchases by tapping them at any NFC-compatible payment terminal. Story by Roberta Prescott for RCR Wireless.
Capping Credit Card Fees Would Save US Merchants $15 Billion Per Year
It is has been suggested that capping credit card fees would save US retailers $15 billion annually if rules such as those currently regulating debit card charges were quickly introduced, according to a new report from CMS Payments Intelligence, an independent consultancy. US credit card charges are currently considered the highest worldwide. CMSpi is looking to regulators to cap those fees in a similar style as debit cards follow the recent decision of a federal appeals court to dismiss the $7.25 billion proposed settlement between countless retailers and Visa and Mastercard. The report suggests that the new credit card interchange cap should be set at 22 cents per transaction plus 30.5 basis points for covered issuers. Story by Mike Dautner for Payment Week.
Samsung Pay Exploit Could Let Hackers Steal Your Credit Card
Although the exploit hasn’t been documented in the wild yet, security researchers have discovered a vulnerability in Samsung Pay that could be used to wirelessly steal credit card information. This exploit was presented at a Black Hat talk in Vegas last week. Researcher Salvador Mendoza took to the stage to explain how Samsung Pay translates credit card data into “tokens” to prevent them from being stolen. However, limitations in the token-creation process mean that their tokenization process can be predicted. Story by John Dye for Android Authority.
Brazil’s Hackers Win the Gold in Credit Card Crime
Forget about Olympic medals. The gold and silver sought this year in Rio de Janeiro are the colors of credit and debit cards. Brazil is arguably Latin America’s most digitally savvy nation, with more than half its 204 million population regularly using the internet. As many arriving tourists have quickly discovered, Brazil is also a leader in the use of digital technologies for the hacking of credit and debit cards. The U.S. cybersecurity research firm Fortinet warned that criminals have been ramping up for the Olympics, which run through Aug. 21. That means they’ve been setting up malicious websites that unwary users will click on and unknowingly deliver their passwords and PIN numbers to criminals who will then use them to hack into the users’ credit and bank accounts. Story by Kevin G. Hall for McClatchy DC.
Money Laundering Rule on Prepaid Cards Stalled after Industry Pushback
In 2011, amid a crackdown on international money laundering, the U.S. Treasury Department tried to close a loophole that authorities said allows drug cartels to move bulk cash across borders on gift and other prepaid cards. The department’s Financial Crimes Enforcement Network (FinCEN) proposed that money stored on these cards count toward a U.S. requirement to report cross-border movement of cash of $10,000 or more. But FinCEN later withdrew its proposed rule after pushback from the prepaid card industry, according to law enforcement sources. The move has not been previously reported. Story by Mica Rosenberg and Brett Wolf for Reuters.
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 14.63 percent, slightly higher than last week’s average of 14.62 percent. Six month ago, the average was 14.83 percent. One year ago, the average was 14.68 percent.