LowCards.com Weekly Credit Card Update–February 28, 2020

LowCards.com Weekly Credit Card Update–February 28, 2020

February 28, 2020         Written By Bill Hardekopf

Venmo Prototypes A Debit Card For Teenagers
Allowance is going digital. Venmo  has been spotted prototyping a new feature that would allow adult users to create for their teenage children a debit card connected to their account. That could potentially let parents set spending notifications and limits while giving kids more flexibility in urgent situations than a few dollars stuffed in a pocket. Delving into children’s banking could establish a new reason for adults to sign up for Venmo, get them saving more in Venmo debit accounts where the company can earn interest on the cash and drive purchase frequency that racks up interchange fees for Venmo’s owner PayPal. Story by Josh Constine for Tech Crunch

99% of Merchants in the U.S. Who Accept Credit Cards Now Take American Express
The most recent Nilson Report, a leading credit card industry resource, found that 99% of credit card-accepting merchants in the U.S. can now accept Amex. This is a significant change from just five years ago: Amex has increased merchant acceptance from 3.7 million in 2014 to 10.6 million U.S. merchant locations at the end of 2019, which is the same as Discover. In comparison, Visa and Mastercard were accepted at 10.7 million U.S. locations in 2019. Last year, almost a million new U.S. locations began accepting Amex. Story by Alexandria White for CNBC

More Than a Third of Families Rely on Credit Cards
About 69% of families with children say they make sacrifices to keep up with their medical expenses, according to an Aflac survey. Thirty-seven percent of families rely on credit cards to pay their bills and deal with the aftermath. If health care expenses drive you to have an unhealthy relationship with your credit cards, your best bet is to rethink your budget and build some emergency savings. That way, you’ll have cash reserves to tap when your medical bills come in higher than expected. Account for those one-off situations that may pop up on occasion, such as a hospital visit. Aflac reported that 37% of families who went to the hospital within the past two years had to pay $500 or more out of pocket. Twenty-three percent spent $1,000 or more, so if your costs are similar, divvy that figure up among 12 months, so you set money aside as you need to. Story by Maurie Blackman for USA Today

Fintechs Circle As Visa Readies Interchange Rate Increases
Visa is reportedly gearing up to overhaul the interchange rates it charges retailers in what will be a direct blow to online merchants and an opportunity for financial technology startups. Under the plan, the interchange rate on card-not-present transactions including online and over the phone will go up. Fintechs are circling, seeing a fresh opportunity to disrupt another area of the financial markets. They have already begun to rid the world of trading commissions and banking fees and are eyeing the small and medium-sized business market, which have long been ignored by the traditional players. Helping merchants lower interchange fees is the next logical step. Online merchants, particularly small ones, can’t negotiate lower interchange fees and as a result, are more open to change. The fintechs have responded by providing just that. Story by Donna Fuscaldo for Forbes

Facial Recognition Biz Clearview AI Suffers Data Breach
A controversial facial recognition company has just informed its customers of a data breach in which its entire client list was stolen. Clearview AI leapt to fame in January when a New York Times report claimed that the start-up had scraped up to three billion images from social media sites to add to its database. That makes it a useful resource for its law enforcement clients, which can query images they capture against the trove. Now those clients have been exposed after an unauthorized intruder managed to access the Clearview AI’s entire customer list, the number of user accounts those companies have set up, and the number of searches they’ve carried out. Story by Phil Muncaster for Info Security Magazine

Mastercard’s Next CEO to Continue Company’s Push Beyond Cards
Mastercard’s pick for its next chief executive puts more muscle behind the company’s effort to expand beyond its legacy cards business. The company said Tuesday that Ajay Banga, its chief for nearly a decade, will be replaced by Chief Product Officer Michael Miebach effective Jan. 1. Banga has focused on transforming Mastercard from largely cards-based payments to a range of payment technologies. New competitors that let consumers bypass cards have been a driving factor. In Asia, for example, mobile wallets like WeChat Pay and Alipay have grown rapidly, allowing consumers to shop with money moving directly from their deposit account to the merchant. Apple, Amazon and Google aim to grab a bigger piece of the market, raising the prospect that cards could play a smaller role in payments in the future. Story by AnnaMaria Andriotis for The Wall Street Journal

Chase and United Extend Cobranded Card Partnership through 2029
The longstanding relationship between Chase and United will carry on for at least another decade, as the two companies announced an extension of their cobranded credit card partnership on Friday. The agreement continues a relationship that has spanned over three decades and is now slated to run through at least 2029, ensuring that Chase will continue to be the exclusive issuer of United MileagePlus credit cards. The news comes less than a year after Delta and American Express announced a similar extension of their contract and displays just how lucrative these relationships can be. Story by Nick Ewen for The Points Guy

Visa Says Fuel-Pump EMV Upgrades Are ‘Doing Pretty Well,’ But Others Are Skeptical
With just over seven months to go before a crucial liability shift, just how well is the conversion of U.S. gasoline pumps to accept EMV chip cards going? It depends on whom you ask. Visa says it’s progressing nicely. Visa’s vice president for consumer products said “10% of automated fuel dispenser transactions in the U.S. right now, according to Visa’s data, are chip-on-chip.” Chip-on-chip refers to a transaction in which the payment-accepting device reads an EMV card’s chip. By October, AFDs at gas stations and convenience stores are supposed to be chip-ready. Otherwise the merchant acquirer-and ultimately the merchant-will bear the cost of counterfeit fraud, which chip cards are highly effective at thwarting, from chip card transactions at pumps capable only of reading magnetic stripes. The card networks had set their fuel-pump liability shifts for October 2017, but in late 2016 they postponed them by three years because gasoline retailers complained about the high cost and complexity of retrofitting or replacing pumps for chip acceptance. Story by Jim Daly for Digital Transactions

Meijer, Citi Retail Services Introducing Co-Branded Credit Card
Citi will become the exclusive issuer of the Meijer private label and co-branded credit card program beginning Feb. 24. Existing Meijer cardholders can expect to receive new cards in the mail in mid-February, and customers who aren’t cardholders can apply for the Citi Retail Services-backed Meijer credit card beginning March 1. New cardholders will get $10 off their first purchase at Meijer, save 10 cents per gallon at Meijer gas stations, earn a $10 reward for every $750 spent and take advantage of exclusive savings. Meijer operates more than 245 supercenters and grocery stores throughout Michigan, Ohio, Indiana, Illinois, Kentucky and Wisconsin. The company is No. 7 on PG’s 2019 Super 50 list of the top grocers in the United States. Story by Bridget Goldschmidt for Progressive Grocer

Wells Fargo to Pay $3 Billion over Fake Account Scandal
Wells Fargo, the nation’s fourth-largest bank, agreed to pay a $3 billion fine to settle a civil lawsuit and resolve a criminal prosecution filed by the Justice Department over its fake account scandal. Under pressure to meet sales quotas, bank employees opened millions of savings and checking accounts in the names of actual customers, without their knowledge or consent. Since the fraud became public in 2016, the bank has faced a torrent of lawsuits. The scheme lasted more than a decade, Justice Department officials said, and was carried out by thousands of Wells Fargo employees. The Securities and Exchange Commission said $500 million of the settlement would be used to compensate investors who responded to the bank’s promotion of its “cross-sell” strategy – selling more products and services to existing customers. Story by Pete Williams for NBC News

QSRs Leverage AI To Fight ATOs And Credential Stuffing
Restaurants are diving head first into digital innovations, such as mobile ordering and rewards programs. Recent research found that nearly half of surveyed restaurants’ online and mobile ordering solutions require only usernames and passwords to log in, a known security weakness given that customers often use the same passwords for multiple accounts. Fraudsters target mobile order-ahead apps for many reasons and use several methods to do so, including credential stuffing, which sees bots automatically entering usernames and passwords stolen from other websites to try to find matches, and account takeovers (ATOs), which allow them to skim personal details like passwords and credit card data and use that information to carry out cybercrimes. Rewards programs are especially popular among hackers as they can hold large amounts of valuable data, including payment information. Rewards points are also valuable as bad actors can either spend them or sell them on dark web marketplaces. Story in PYMNTS

The information contained within this article was accurate as of February 28, 2020. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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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.