LowCards.com Weekly Credit Card Update–June 12, 2015
Hackers Go After Little Fish, Too, While Trawling for Credit Cards
Hackers are going local in their efforts to steal credit card information from United States customers, hitting small businesses with as much frequency as retail giants. Take Eataly, the operator of more than two dozen upscale food halls in New York, Chicago, Italy, Japan and elsewhere. The company disclosed last month that the systems at its store in the Flatiron district of Manhattan had been breached. The hackers unleashed malicious software into its payment processing system that enabled them to potentially steal customer credit card information for several months of this year. The breach at Eataly reflects a trend that security consultants and law enforcement officials have seen for several years: Bent on stealing credit card information, hackers are going after small retailers and restaurants as well as big national chains like Target and Home Depot. Story by Matthew Goldstein for The New York Times.
Free Credit Monitoring After Data Breaches is More Sucker than Succor
After companies announce they’ve had a data breach, they often offer customers “free credit monitoring services.” But who does this really benefit? When Target and Home Depot announced their mammoth data breaches–70 million customers in 2013 and 56 million customers in 2014, respectively, were affected–the companies offered free credit monitoring to those impacted via services such as ProtectMyID and AllClearID. But this service actually doesn’t help the customers very much, experts say. It often enriches the credit monitoring companies, though. Story by Kathleen Burke for MarketWatch.
Google’s Android Pay will not Collect Card Transaction Fees
When Google finally launches Android Pay, its mobile phone payment service, it will not get a cut of the interchange fees on transactions. This is drastically different than Apple Pay. When Apple Pay was introduced, banks and merchants were clamoring to be part of the innovative new payment system. As a result, Apple was able to negotiate a .015% cut of every credit card transaction and a 0.5% fee on debit card purchases. Part of the reason Android Pay will not get fees is that Visa and MasterCard have made a card security feature called tokenization free to all users. Story by Bill Hardekopf for LowCards.com.
Unfair Credit Card Fees Cripple Local Small Business Owners
Because there are so many transactions these days and the technology is so cheap, it costs the banks only a few pennies every time a customer swipes a card to make a purchase. Yet the banks charge a 500-percent profit margin on debit cards, according to a recent study using the banks’ own figures, and up to 10,000-percent on credit cards. That’s a sizable profit compared to those in the supermarket industry, where profit margins are around 1 or 2 percent. Banks are able to charge such a pretty penny because Visa and MasterCard control most of the credit card market, which lets them price-fix swipe fees in secret for their member banks. Retailers across the country, big and small, are being gouged every time a consumer uses a card to buy milk or meat, but few even know about these fees. Story by Darwin Metcalf for AL.com.
Apple to Add Cards From Discover, Some Stores to Apple Pay
Apple Inc. said it is expanding its Apple Pay mobile-phone payments service to accept cards from Discover Financial Services Inc. and certain retail stores, such as department-store chains Kohl’s Corp. and J.C. Penney Co., and warehouse club BJ’s Wholesale Club. The company also said that it is extending Apple Pay next month to the U.K., where it will be accepted at more than 250,000 locations, including the London transportation system. Story by Robin Sidel for The Wall Street Journal.
Consumers Now Prefer Mobile Banking over Branch Banking
The banking system in America has officially reached a turning point. According to a new report from Javelin Strategy & Research, more consumers prefer mobile banking over branch banking. Mobile banking is now the second leading way people access their checking account, second only to online banking. The study shows that 23% of consumers choose to use their smartphones as a primary access point for their checking accounts, compared to 17% who still prefer to visit the branch. 39% of those surveyed prefer online banking. Story by Bill Hardekopf for LowCards.com.
Uber Continues To Finance Its Drivers With New Gas Credit Card
Ride-hailing service Uber already connects its drivers, even those with bad or no credit, with car loans. Now drivers can also get an Uber credit card. The Uber Fuel Card, issued by MasterCard and FleetCor, will allow qualified drivers to get discounts of up to 15 cents a gallon on gas purchases at thousands of U.S. gas stations, the company said Tuesday. Drivers are limited to $200 of gas purchases per week, which will be automatically deducted from their earnings. Only drivers who completed 200 rides the previous month (or have done 200 rides in their first month) can use it—a tactic Uber’s vice president of strategic initiatives David Richter called a “driver retention strategy.” Story by Ellen Huet for Forbes.
Square Unveils Mobile Wallet-Friendly Credit Card Reader
It will take years for smartphone-based wallets, like those offered by Apple and Google, to have a chance to truly catch on with mainstream consumers. But with the help of payments processors, mobile wallets may catch on a bit faster. To that end, Square, the San Francisco-based payments processing start-up, unveiled a new credit card reader on Monday, one capable of accepting mobile payments like those made through Apple Pay and Android Pay, among other methods. The new reader, which Square said will be widely available this fall, operates wirelessly for merchants who want to accept contact-less mobile payments. It also accepts so-called EMV enabled credit cards, a technology that includes a chip built into credit cards for added security. Square said the new reader will cost $49. Story by Mike Isaac for The New York Times.
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 14.60 percent, slightly higher than last week’s average of 14.55 percent. Six months ago, the average was 14.46 percent. One year ago, the average was 14.48 percent.