LowCards.com Weekly Credit Card Update–February 3, 2017
Credit Card Thieves Move Online as Chips Thwart In-Store Fraud
The adoption of credit card chip technology by U.S. retailers is having an unintended consequence: Criminals are moving from brick-and-mortar stores to the internet. The use of stolen card data to pay for merchandise on websites, in mobile apps and by dialing call centers surged 40 percent last year, according to a report from Javelin Strategy & Research. That’s forcing merchants to spend billions on online fraud protection in an effort to detect when a crook is using someone else’s card number. Issued by banks, cards containing the so-called EMV technology are much harder to counterfeit, which cuts down on in-person fraud at stores. With worldwide e-commerce surging and more stolen data available on the black market, retailers are ramping up spending on online security. E-commerce merchants and financial institutions will spend $9.2 billion annually in fraud-detection solutions by 2020, up 30 percent from current levels, according to Juniper Research. Story by Olga Kharif and Lindsey Rupp for Bloomberg.
RushCard Customers Will Get $10 Million in Restitution
The tens of thousands of RushCard customers who were affected by a 2015 service disruption are getting some financial restitution for their troubles. The Consumer Financial Protection Bureau ordered Mastercard and UniRush, which manages the RushCard, to pay around $10 million to consumers who weren’t able to access their funds or were financially hurt from the disruption. The RushCard, which was co-founded by hip-hop pioneer and entrepreneur Russell Simmons, is a prepaid card, which means it’s not linked to a bank account. In 2014, Mastercard became the new payment processor for the RushCard. The conversion to the new system in 2015 did not go smoothly, due to what the CFPB called “a rash of preventable failures” by the companies. While an outage during the process was expected, it lasted longer than anticipated. Story by Kathryn Vasel for CNN.
ATM “Shimmers” Threaten Chip Credit Card Security
Credit card skimmers are devices used by criminals to steal your debit or credit card information when you slide it into the sleeve of an ATM or gas pump. These devices are relatively bulky and difficult to conceal, making them somewhat impractical for identity thieves. Unfortunately, a new threat has reached the market, a thin, virtually undetectable reader designed to target chip-based credit cards. Known as “shimmers,” these devices sit between the chip reader in an ATM or register and the chip on the card. They cannot be used to collect chip information, but they can gather the magnetic strip data from the card if it is replicated inside the smartchip. Story by John Oldshue for LowCards.com.
Russell Simmons’ RushCard Company Being Sold to Green Dot
RushCard, the prepaid debit card company founded by hip-hop mogul Russell Simmons, is being bought by rival Green Dot for $147 million. Green Dot said Monday it will buy UniRush, the parent company of RushCard as well as the Rapid! payroll debit card. Simmons started RushCard in 2003 as one of the first prepaid cards to focus on minority customers and charge lower-than-average fees. Prepaid debit cards are largely used by the “unbanked,” or those who do not have a checking or savings account and largely rely on cash to pay their bills month to month. RushCard is perhaps best known for a software upgrade that went haywire in 2015, cutting off more than 400,000 customers from their funds for days and even weeks. Story by Ken Sweet for the Associated Press.
61% Of People Access Mobile Banking On A Regular Basis
According to the Mobile Ecosystem Forum’s recent Mobile Money Report, mobile banking has gone mainstream. The report said that 61% of people use their mobile phone to carry out banking activity, with 48% using a dedicated banking app. The most common activity within a mobile banking app is to check a person’s balance. Since MEF last studied the mobile money landscape in 2014, the number of people who check their balance on a smartphone has increased from 28% to 44%. People are also more comfortable with paying bills in an app-29% in 2016 compared to 20% in 2014-with 22% sending money to other people through the app-an increase of 6%. Story by David Bolton for ARC.
PayPal Q4 Mobile Payment Transactions Grow 53%
Mobile payments accounted for almost one-third of all money moving through PayPal in Q4, covering $31 billion worth of transactions, the company reported. Mobile represented 31 per cent of PayPal’s total transaction value for the quarter, with the $31 billion processed up 53 per cent on the same period of 2015. Among its busiest periods for the year were the days between Thanksgiving (November 24) and Cyber Monday (November 28) when the company processed more than $2 billion worth of mobile sales – one-third of the combined transaction value across all of its platforms during the five day period. Story by Chris Donkin for Mobile World Live.
Fitbit Kills Off Its ‘Coin’ Payment Service
Last year, wearable fitness tracker/fitness watch company made a surprising acquisition, buying the payment company Coin with no plan to continue its products. Instead, Fitbit planned to kill off Coin’s own product and integrate the company’s payment technology into its own wearable devices. Now the service will be shutting down next month, and Coin magnetic stripe devices will work for as long as their batteries last, or until your payment card number changes. Coin never really caught on, but it was a cool idea before the chips that make contactless mobile payment work became commonplace at retailers and in our phones. It was a small device the size of a normal credit card, which could imitate a magnetic strip, allowing you to carry multiple forms of payment, including credit cards, debit cards, and gift cards, on one device. Story by Laura Northrup for Consumerist.
Mastercard Is Curing Hepatitis C—With The Power Of Payments
Mastercard inked a Memorandum of Understanding with Gilead Sciences to explore how to use the Mastercard Aid Network to simplify the delivery of hepatitis C treatments in those countries with limited resources. The Mastercard Aid Network is the card network’s in-house technology solution designed to streamline the distribution of humanitarian aid for individual donors, NGOs and not-for-profit organizations. Its secret sauce is that it works in the absence of payments or telecommunications infrastructure, enabling at-need populations in remote locations to secure basic necessities through local merchants with the dip or tap of a card. Story in PYMNTS.
Judge Rules Prepaid Calling Cards are Telecommunication Services for Tax Purposes
An administrative law judge in Texas has recently concurred with the Federal Communications Commission and at least one prior U.S. District Court ruling regarding the tax status of prepaid calling cards. In a recently published administrative ruling released in January, an administrative law judge ruled that prepaid calling cards sold in Texas should be viewed as a telecommunication service and not an intangible product, which the Internal Revenue Service defines as any “property that has value but cannot be seen or touched.” While the cards in and of themselves do not provide the service directly, they allow for use of local exchange telecommunication services or exchange access services tied into the federally regulated telecommunications network. They accomplish this by acting as a physical store of an intangible pre-purchased value that is transferred via a PIN or other similar feature to a local access point when it is used. Story by Christopher Knoll for SE Texas Record.
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 14.97 percent, identical to last week’s average. Six months ago, the average was 14.62 percent. One year ago, the average was 14.88 percent.