LowCards.com Weekly Credit Card Update–August 4, 2017

LowCards.com Weekly Credit Card Update–August 4, 2017

August 4, 2017         Written By Lynn Oldshue

Why Amazon’s a Threat to Mastercard and Visa
Visa and Mastercard hate cash, which is why they love that more people are shopping online. The rise of Amazon.com has been good for the major card companies so far, but that could change if Amazon decides it wants more control over how payments work on its site. “We believe that Amazon poses a real, albeit long-term, risk to Visa, Mastercard, and PayPal,” Bernstein analyst Lisa Ellis wrote. She sees several reasons why Amazon could become a payments disruptor, including its large user base, strong cloud-technology operations, and “sheer size,” accounting for perhaps 2% to 3% of all global card payment volumes. At the very least, Amazon “brings the risk of brand obfuscation” for Visa and Mastercard, since people don’t often realize which credit card they’re using if they pay with a saved card or order something via voice commands. The bigger threat, though, would occur if Amazon decided to create its own PayPal. Story by Emily Bary for Barron’s

Uber Partners With Barclays to Launch Co-Branded Credit Card
Riding-sharing company Uber plans to launch its own credit card, partnering with the British bank Barclays. The card will be coming later this year. Uber would be the first of the riding-sharing companies to have a co-branded credit card, which are a popular way for companies to cement customer loyalty. They typically give points or credits toward awards, with the most popular cards offering airlines and hotels. Uber rival Lyft has a partnership with Delta that offers miles, though it’s not via a card. Story by the Associated Press

Jack Dorsey Wants Wall Street to Know that Square Cash Can Be a Real Business
For years, Square Cash felt more side project than strategic for Square, Jack Dorsey’s payments and small-business services company. But, now, the service is starting to generate some revenue and the company wants the world, or at least Wall Street, to know. In its second-quarter earnings report today, the company for the first time gave some indication of the business that Square Cash is driving, albeit a very high-level indication. Money-transfer apps like Venmo and Square Cash are typically free to use, as long as you are connecting your debit card to the account instead of your credit card. But in the second quarter, “more than a third of active Square Cash customers conducted a fee-based transaction,” the company said. Translation: Square generated some revenue from more than one out of three Square Cash users. Story by Jason Del Rey for Recode

PayPal And Skype Team On Mobile Payments
PayPal, the online payment company that has been striking a flurry of deals in recent weeks, has teamed with Microsoft to enable money transfers in Skype’s mobile app. PayPal said that it is partnering with Skype to let users in 22 countries send money to other Skype users with PayPal via the Skype mobile app. Person to person (P2P) money transfers with PayPal on Skype rolls out Wednesday (Aug. 2) to PayPal and Skype users in the United States, United Kingdom, Austria, Belgium, Canada, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, San Marino, Slovakia, Slovenia and Spain. The P2P feature will initially be rolled out to Skype customers on the latest version of Skype for iOS and Android mobile devices. Story in PYMNTS

Fintech Startup Bread Raises $126 Million In Bid To Finance Big Online Purchases
When you buy something online, chances are you use your credit card. If it’s a bigger purchase, like a mattress or a washing machine, you might decide to pay it off over time. Bread is among the financial technology start-ups attempting to get you to ditch your plastic and instead opt to finance your purchase with a loan that has lower rates and predictable monthly payments. Bread said on Wednesday it has raised $126 million through a Series B funding round to expand the number of retailers that offer its financing. The New York-based company was founded in 2014 and offers white-label solutions for retailers who wish to offer convenient financing to their customers. The reason is simple: Customers are more likely to spend more money, on more things, when they have the ability to pay later. Story by Lauren Gensler for Forbes

Should the U.S. Ban Credit Card Surcharges?
New rules from the British government will soon prohibit retailers from charging customers extra for paying for their purchase with a credit card. The UK rule stems from an EU directive set to take effect on January 13, 2018, and, according to the UK Treasury Ministry, British consumers could save a sizable portion of the millions of pounds spent annually on card surcharges. Do they have a place in a modern America? Some states already say no. Currently, Puerto Rico and 10 states do not allow credit card surcharges (California, New York, Kansas, Florida, Maine, Connecticut, Texas, Oklahoma, Massachusetts, and Colorado). Merchants in the other states are generally allowed to pass on a surcharge that is equal to their costs associated with accepting the card (up to 4 percent). Surcharges on debit cards are already banned throughout the US via an amendment to the Dodd-Frank legislation. However, each card network has a specific set of surcharging requirements that retailers must follow in order to apply surcharges using that card brand. Combine different card requirements with differing state rules and you can see why relations between retailers, banks, credit card companies, and the credit card processors are complex and tense. Story by CBS News

US Bank Card Companies to Seek Licenses to Operate in China in Months
U.S.-based payment card companies, including American Express, MasterCard and Visa, are preparing to submit license requests to operate in China within months. The long wait for the U.S. companies is, though, unlikely to end soon. It may take as long as two years or more for the companies to clear all official scrutiny, including from banking regulators, and for them to pass a security review, as well as meeting other conditions. The move comes against a backdrop of growing economic friction between China and the United States. U.S. payment network operators have been waiting for more than a decade to get access to China. It is set to become the world’s largest bank card market by 2020, when the number of cards in circulation is forecast to rise to 9 billion from 6 billion in 2016. Story by Sumeet Chatterjee for Reuters

Google’s Payment Card Tracker May Violate Federal Privacy Laws
Google’s new payment card tracker, Google Attribution, may be under attack before it ever hits the market. The Electronic Privacy Information Center (EPIC) plans to file a complaint with the FTC alleging that Google’s mysterious data collection methods violate federal privacy laws. Google Attribution is designed to track online leads that generate offline sales. The service monitors 70% of credit and debit card transactions in the United States. According to Google, the data is collected with double blind encryption to ensure that payment card information does not get in the wrong hands. However, the EPIC is demanding more answers. The complaint also talks about how consumers do not have a way to opt-out of the data collection process. Story by John Oldshue for LowCards.com

The Surprising Truths and Myths about Microchip Implants
The tiny bump on the back of Dave Williams’ hand is barely noticeable; most people would miss the rice-grain-sized lump between his thumb and forefinger at first. It is only when the 33-year-old opens his front door with a wave of his hand that it becomes clear something strange is going on. Embedded under Williams’ skin is a microchip implant, an electronic circuit inside a pill-shaped glass capsule, that can be used much like a contactless credit card. Williams is one of a growing number of so-called “biohackers” who are choosing to augment their bodies with technology. In Williams’ case, he chose to implant a radio frequency identification (RFID) chip into his hand out of curiosity. The procedure has essentially turned him into a walking contactless smart card. By registering the tag with a variety of devices, he can use it to trigger certain functions, such as transferring his contact details to a friend’s mobile phone. Story by Richard Gray for the BBC

Love Food and Small Biz? There’s an App for That
Many small businesses involve food. The baker, the butcher, the coffeecake maker and the farmer-in-the-dell are all likely to be small businesses. But as small businesses, most of these food-related companies have the same problem: how do their owners get the cash they need to buy supplies before they actually make sales? Now, there’s a new app that helps food-related small businesses improve their cash flow and nurture customers at the same time, “Credibles.” The San Francisco-based start-up aims to help small food businesses by letting  customers pre-pay from a growing number of small food companies, essentially setting up a prepaid tab. The businesses then have that money to use without having to take out loans. Story by Rhonda Abrams for USA Today

How to Cash In on Cash Back Credit Cards
Before you throw away any more of the credit card offers landing in your mailbox, take note: You might be overdue for a credit card makeover. Adding a new card or two to your wallet can reward you for your spending or win you valuable new benefits, such as cell-phone insurance. Yet 20 million consumers have never changed their preferred credit card, and an additional 25 million have held on to their favorite card for at least 10 years. Among the most popular rewards is cash back for purchases. About half of all credit cards that offer rewards now offer cash back, up from around 25 percent in 2013. Unlike cards that compensate you with points or miles that can be redeemed only for merchandise or travel, cash-back credit cards refund a percentage (typically 1 to 2 percent, but up to 6 percent) of your charges, usually in the form of a statement credit, a check, or a deposit into your bank account. Story by Amanda Walker for Consumer Reports

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 15.43 percent, identical to last week. Six months ago, the average was 14.97 percent. One year ago, the average was 14.62 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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