LowCards.com Weekly Credit Card Update–August 16, 2019

LowCards.com Weekly Credit Card Update–August 16, 2019

August 16, 2019         Written By Bill Hardekopf

More Consumers Using Credit Cards For Purchases Under $10, Though Cash is Still King
While about half of consumers still use cash for small purchases, many are turning to credit cards. Among U.S. adults, 16% say they usually pay with credit cards for totals under $10, according to new survey data from CreditCards.com. That’s up from 12% who said the same in 2018. Among people who have credit cards that come with rewards, such as cash back, miles or points, the share is 26%, up from 23% last year. Story by Sarah O’Brien for CNBC

Why Mastercard Is Set to Dominate Business Transactions
There is a huge business opportunity in business-to-business payments that nobody is talking about. Mastercard agreed to pay $3.2 billion for a digital payments platform based in Denmark. The news barely made a ripple but the transaction processor is building something big. Consumers can swipe or tap a plastic card or use our smartphones to buy goods and services instantly. Vendors get the money instantly, too. Now contrast that scale and reliability with B2B transactions. These transactions take an average of 45 days, according to a November 2018 report from Investor’s Business Daily. The process involves drafting checks and getting signatures, then mailing the payment to the vendor. Suppliers wait for the check, manually process it, and wait for it to clear before receiving payment. The process is hopelessly inefficient, and costly. Businesses shell out $2.7 trillion chasing payments. Businesses pay a staggering $16 to $22 to manually process each invoice. Story by Jon Markman for The Street

Capital One Hack Suspect May Have Breached More Than 30 Organizations
Federal prosecutors say the suspect charged in a massive data breach at Capital One may have hacked more than 30 other organizations. Paige A. Thompson, a 33-year-old former Amazon employee from Seattle, was arrested last month after the FBI said she obtained personal information from more than 100 million Capital One credit applications. There is no evidence the data was sold or distributed to others. The U.S. Attorney’s Office in Seattle said servers found in Thompson’s bedroom contained data stolen from more than 30 unnamed companies, educational institutions and other entities. Story on CBS News

Abortion Trade Group Announces Prepaid Gas Card Rewards Program for Women Seeking an Abortion
Well. This seems perfectly ghoulish. The abortion industry’s chief trade association is unveiling a program to award prepaid gas cards to women seeking to terminate their children. The Very Rev. Katherine Ragsdale, an Episcopal priest who serves as the National Abortion Federation’s interim president and CEO, hailed the rewards program. “In addition to helping patients cover the cost of their procedure, we also provide case management support and help covering travel-related expenses,” she said. “We have already seen an increase in distances patients have had to travel to obtain the abortion care they need and expect this trend only to get worse.” Story by Becket Adams for The Washington Examiner

Prepaid Cards Gain More Popularity
Prepaid cards gained more popularity last year, capturing nearly 5% of the U.S. market based on payment card annual dollar volume. Totally, purchase volume on credit, charge, debit and prepaid cards tallied to nearly $7 trillion in 2018. Very few, including payment executives, can name the big guns in prepaid. While there are some “plain vanilla” Visa and Mastercard prepaid cards, most are “white labeled” and/or issued for retailer branding, mostly stores and gas cards but the list is endless and growing. The Nilson Report provided this 2018 U.S. prepaid issuer ranking: #1 The Bancorp Bank; #2 MetaBank; #3 Green Dot; #4 Comerica Bank and #5 JPMorgan Chase. Story by Robert McKinley for CardTrak

49% of All Risky Online Transactions Come from Mobile Devices
About half of all risky online transactions appear to be coming from a mobile device, according to iovation. Specifically, in the first half of 2019 49% of all risky transactions came from mobile devices, up from 30% in 2018, 33% in 2017 and 25% in 2016. iovation came to this conclusion by analyzing the 30 billion online transactions it evaluated for fraud from January 2016 to June 30, 2019. Story in Help Net Security

Meet Bluetana, the Scourge of Pump Skimmers
“Bluetana,” a new mobile app that looks for Bluetooth-based payment card skimmers hidden inside gas pumps, is helping police and state employees more rapidly and accurately locate compromised fuel stations across the nation, a study released this week suggests. Data collected in the course of the investigation also reveals some fascinating details that may help explain why these pump skimmers are so lucrative and ubiquitous. Story by Brian Krebs for Krebs on Security

Venmo Can Now Instantly Deposit Money into Your Bank Account
Venmo has added the ability to transfer your balance funds into a bank account in mere seconds. The PayPal-owned peer-to-peer payments company has offered this instant deposit capability with Visa and Mastercard debit cards for some time, but opening it up to bank accounts adds more flexibility. As with instant transfers to a debit card, Venmo will take 1 percent of the money for itself. That’ll be at least 25 cents no matter how much you’re depositing, but there’s also a maximum of $10. The convenience of moving cash to a bank account instantly brings Venmo closer in line with Zelle. Story by Chris Welch for The Verge

China’s Digital Currency Is Unlikely To Be A Cryptocurrency
China’s adoption of digital payments has been astonishing. Alipay, owned and operated by Ant Financial, has more than 600 million average monthly users, an amount of people that is almost twice as large as the population of the United States. Now, the People’s Bank of China, the central bank that runs China’s monetary policy, is announcing that its own “cryptocurrency” is about to be launched, replacing the physical Chinese Yuan that is currently in circulation. Story by Roger Huang for Forbes

What Is a Debit-Style Credit Card?
Ever wish there was a way to build credit without the ever-present temptation to spend beyond your means? Maybe you seek the safety of making purchases with credit, but like being able to see your actual cash balance available for purchases on your debit card. A new type of card, called a debit-style credit card, could offer the best of both worlds. A debit-style credit card requires the use of an accompanying checking account. The credit limit of the card will reflect the amount you have in that checking account, preventing you from spending more than you could immediately pay back. Meanwhile, the card offers perks like building your credit history and allowing you to earn rewards. Story by Lisa Rowen for Lifehacker

More Mobile Payments, More Fraud Attempts: Visa, Forrester Study
“Wherever there is money, there are weasels, usually in direct proportion.” A new study released from Forrester and Visa gives this concept a note of credence, suggesting that, indeed, money-and mobile payments-draw fraud. As the number and type of digital payments options-including, of course, mobile payments-expands, so too will the threat of fraud. The report notes 61 percent of respondents believing that new payment technologies make them more open to potential fraud, and 68 percent were either concerned or very concerned about fraud potential in mobile banking bill payment options. Story by Steven Anderson for Payment Week

Why Are We All Paying a Tax to Credit Card Companies?
It’s fat times for credit card companies. Visa made $10.3 billion in profits in 2018, up from $6.7 billion in 2017. Mastercard, meanwhile, took in $5.9 billion in profits in 2018, up almost 50 percent from 2017. Why on earth are credit cards making so much money? In brief, payment card companies are piggybacking on public systems and guarantees to gouge the American public, especially with credit cards. They act as middlemen, skimming fees off transactions and using their size to bully businesses into accepting their terms, who then raise prices on all consumers. The associated profits, both for Visa and company and the issuing banks, are effectively a tax on everything Americans pay for. And it doesn’t have to be this way. Story by Ryan Cooper for The Week

bill-hardekopf

About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
View all posts by Bill Hardekopf
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