LowCards.com Weekly Credit Card Update–February 15, 2019

LowCards.com Weekly Credit Card Update–February 15, 2019

February 15, 2019         Written By Bill Hardekopf

Debit Card Use on the Decline
The number of consumers who use debit cards for purchases has declined steadily since 2011, the year following enactment of the Durbin Amendment, and now stands at 54%, according to a newly released report from Mercator Advisory Group. This is in spite of high consumer ownership of debit cards and the increasing likelihood that a consumer who opens a checking account will receive a debit card for that account. Only half of debit card users reported using their card for online purchases. Their main reasons for not using debit cards online: 41% had a perception of greater online security with credit cards; 30% had a fear of checking account compromise; and 30% due to the lack of debit card rewards. Story in ATM Marketplace

Key Trends Reshaping Credit Card Marketing in 2019
The latest data on card marketing trends points to some significant shifts in the consumer finance space including a 21% decline in card applications. The Mintel report, based on input from 3,000 consumers, confirms that direct-mail response rates to credit card offers have been declining. One-fifth of all credit card applications originate from a direct mail offer, even if a growing number are completed digitally so direct mail can’t be ignored by financial marketers. And they haven’t. Mailed offers were up an estimated 32% from June through November. The percentage of consumers receiving a credit card offer rose from 54% to 67% over nine months last year, suggesting that card marketers are making efforts to either reach new demographics or under-served segments. Some of this outreach could be targeting the subprime category. Story by Bill Streeter for The Financial Brand

EMV Cuts Card-Present Counterfeit Fraud By 80%: Visa
Merchants saw a drop in card-present fraud due to the increased adoption of EMV chip cards, Visa said. Merchants who have upgraded to chip technology saw a decrease of 80 percent in counterfeit fraud dollars in September of 2018 when compared to September of 2015. Also, total counterfeit fraud dollars went down by 48 percent. More than 3.1 million merchants now accept chip cards, which is an increase of 692 percent since the beginning of EMV migration, and almost 70 percent of storefronts in the United States now accept chip cards. Now, 71 percent of Visa credit and debit cards have chips. Transactions on chip cards are also on the rise. About 98 percent of overall U.S. payment volume in December was done on EMV cards. Story in PYMNTS

Kroger Continues to Resist Apple Pay as it Launches New ‘Kroger Pay’ Platform Based on QR Codes
One of the larger Apple Pay holdouts, Kroger, is debuting its new mobile payment option today in Columbus and Colorado, with a nationwide rollout by the end of the year. The grocery chain continues to resist Apple Pay, instead going with a QR code-based Kroger Pay system. Kroger has announced a single-use QR-based system called Kroger Pay. The QR code can be scanned during checkout to pay for your groceries and access your loyalty card. The QR code can be found within the Kroger Pay app and can be linked with any major credit or debit card. Story by Peter Cao for 9 to 5 Mac

Capital One Offers Free Business Credit Reports for Everyone
Capital One is making it easier to check your business credit report for free. That’s a big deal, especially since some business credit reports can cost upward of $40 a pop. On Thursday, the issuer announced that it launched Business CreditWise–an online portal that gives folks free access to their business’ credit report – to the public. Previously, it was in beta testing and available only to select customers through email invitation. The issuer quietly made it available to any U.S. business, not just Capital One customers, earlier this week. Story by Claire Tsosie for NerdWallet

Mastercard Launches Its Audio Brand Identity
Mastercard has launched its audio identity, a complex sound architecture that represents the most recent brand evolution. No matter the place where consumers interact with Mastercard–in the physical, digital or vocal environments–the Mastercard song, distinct and easily recognizable, will offer them a familiar feeling. The launch of the audio brand identity comes in the context in which the company made recently the transition towards the Mastercard Symbol and represents, at the same time, a stage in the evolution of its brand identity. The audio brand identity is composed of the Mastercard song and the acceptance tone used at the selling points. Story by Romanita Oprea for Business Review

Amazon, Western Union Debut PayCode to Sell Goods in Emerging Markets and Let Shoppers Pay in Cash
Amazon has partnered with Western Union to set up a service called PayCode, which lets people shop and pay for Amazon items using local currencies that would not have been accepted on the site before, starting with services in 10 countries: Chile, Columbia, Hong Kong, Indonesia, Kenya, Malaysia, Peru, Philippines, Taiwan and Thailand. Specifically, shoppers in these markets will now be able to go into Western Union outposts and pay for their Amazon purchases in cash, which also means that payment cards or other virtual payment methods will also not be required to buy from Amazon–one of the barriers to expanding the service up to now into more emerging economies, where card and bank account penetration is much lower than in developed markets like the US and Europe. Story by Ingrid Lunden for Tech Crunch

Good News, Credit Card Rewards Lovers: Financial Institutions Are Upping Their Loyalty Game
There’s no question that rewards programs are a powerful driver of consumer behavior in the credit card space. A recent J.D. Power study found that 47% credit card holders who had switched to a new card issuer in the last year did so for a better rewards program. To raise the bar on their loyalty programs, banks and credit unions are beginning to leverage emerging technologies like predictive data, artificial intelligence, geo-location and real time point of sale. These tools arm financial institutions (and their retail partners) with the ability to provide rewards redemption opportunities that are on par with the on-demand, frictionless experience customers now expect, while simultaneously optimizing the value of rewards programs for the financial institution. Here’s a closer look at how the savviest financial institutions are using technology to rewrite the rules of the credit card rewards game. Story by Bob Legters for Forbes

What El Chapo’s Trial Revealed: The Inner Workings of a $14 Billion Drug Empire
The trial and conviction of the notorious “El Chapo” revealed in remarkable detail the inner workings of the criminal empire he built. The cartel used debit cards that could be loaded up with as much as $9,900 per card. Unlike cash, which is made of linen that can absorb drug residue and attract drug-sniffing dogs, debit cards can be easily cleaned. After the cards arrived in South America, the cartel hired workers to withdraw the money from ATMs. Story by Nicole Hong for The Wall Street Journal

Red Flags Emerge as Americans’ Debt Load Hits Another Record
The U.S. household debt and credit report, published Tuesday by the Federal Reserve Bank of New York, showed that the overall debt shouldered by Americans edged up to a record $13.5 trillion in the fourth quarter of 2018. It has risen consistently since 2013, when debt bottomed out after the last recession. While mortgage debt, by far the largest slice, slipped for the first time in two years, other forms of borrowing rose including that of credit cards, which at $870 billion matched its pre-crisis peak in 2008. Story by Jonathan Spicer for Reuters

Card Issuers Offer Virtual Card Numbers for Added Security But Many Consumers Don’t Know
One of downsides of shopping online or over the phone is not knowing whether you can trust an unfamiliar seller with your credit card information. If you have a credit card from certain major banks, you might have a free security solution you don’t even know about. They’re called virtual credit card numbers. A virtual credit card number is a temporary number that automatically links to your primary card number. When you type in the temporary number at check out, the money is charged to your primary card but only the temporary number appears online. Story by Connie Thompson for KOMO News


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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