LowCards.com Weekly Credit Card Update–June 29, 2018

LowCards.com Weekly Credit Card Update–June 29, 2018

June 29, 2018         Written By Bill Hardekopf

America’s Fastest-Growing Credit Card Is Also Its Least Favorite
Credit One Bank is America’s fastest-growing credit-card issuer. It’s also the most complained about. Customers filed more grievances about Credit One last year than Citigroup and JPMorgan Chase combined, although the Las Vegas-based lender has issued a 13th as many cards, according to Federal Trade Commission data. On a per-card basis, Credit One got twice as many complaints as Wells Fargo, even though that bank’s numbers include unrelated issues, like its fake-account scandal. Story by Jennifer Surane and Zeke Faux for Bloomberg

More Than 1 Million Children were Victims of ID Theft Last Year
We think of identity theft as an “adult” problem, but no one is immune from this crime. More than 1 million children in the U.S. were ID theft victims last year, resulting in losses of $2.67 billion, according to the 2018 Child Identity Fraud Study by Javelin Strategy & Research. No one is too young to be targeted. Javelin found that two-thirds of the victims were under the age of eight. Another 20 percent were eight to 12 years old. Story by Herb Weisbaum for NBC News

Supreme Court says American Express Contract with Merchants Does Not Stifle Credit Card Competition
The high court ruled that Amex has a right to block merchants from steering customers to other credit cards, such as MasterCard and Visa, that charge retailers lower fees. It said challengers failed to prove the practice had anti-competitive effects. The case dates to 2010, when 11 states and the Obama administration sought to let merchants steer customers to lower-cost credit cards as a means of spurring competition. The original lawsuit included as defendants MasterCard and Visa, which later changed their steering practices. Story by Richard Wolf for USA Today

Visa, Mastercard Near Settlement Over Card Swipe Fees
Visa and Mastercard are close to settling a long-running antitrust lawsuit with merchants over the fees they pay when they accept card payments, according to people familiar with the matter. Under the settlement, Visa, Mastercard and a number of banks that issue debit and credit cards including JPMorgan Chase, Citigroup and Bank of America  would pay the merchants around $6.5 billion, some of the people said. It is not clear how the payment would be split up. Story by AnnaMaria Andriotis for The Wall Street Journal

Citi’s Plan for its Fastest Growing Region: Fewer Branches, More Online
Citibank is closing down branches in its fastest-growing region, but the American banking group said that’ll actually help it do better than ever. The lender’s consumer business in Asia, its largest outside North America, registered its seventh consecutive quarter of growth in the first three months of 2018. Underpinning that momentum is the growth in Citi’s cards business, which the company said was largely a result of its decision about three years ago to “digitize” the way it operates. That means spending more of its advertising budget on digital ads, forming partnerships with e-commerce players and social media platforms, and building systems that allow people to apply for cards online. Story by Yen Nee Lee for CNBC

With Debit Card, Venmo Eyes Retail Partnerships as Path to Monetization
PayPal-owned Venmo is using a debit card to work with retailers, and (finally) make money. This week, it rolled out a limited-release Venmo debit card issued by the Bancorp Bank that customers can use anywhere Mastercard is accepted. It’s a lever the company can use to elevate the Venmo brand’s reach from the digital to the physical world, an entry point for profitable tie-ups with retailers.  While rolling out a physical card may seem odd for a mobile-first payment platform, it’s a recognition that mobile payments aren’t quite mainstream yet, and most transaction activity still occurs in physical stores. Story by Suman Bhattacharyya for Digiday

AmEx Extends Win Streak With Amazon Card for Small Businesses
American Express won the right to issue a new credit card for Amazon’s small-business customers, the latest win in a string of co-brand deals for the lender. Amazon will also provide line-item detail on transactions AmEx corporate and purchasing-card customers make on the retailer’s website, giving shoppers more data to control their business purchases. AmEx has been spending more to ink card deals after parting ways in 2016 with Costco Wholesale Corp., which was its largest co-brand partner at the time. Last year, AmEx won dual-issuing rights with JPMorgan Chase & Co. for Marriott International Inc.’s suite of cards and the exclusive ability to issue credit cards for Hilton. Story by Jennifer Surane for Bloomberg

Adidas Warns about a Potential Data Breach
Adidas said Thursday that it is alerting some customers who have purchased from Adidas U.S. website of a potential data breach. The data includes contact information, usernames and encrypted passwords. Adidas says it doesn’t believe credit card or fitness information was impacted. The company is taking steps to understand “the scope of the issue” and is working with data security firms and law enforcement on the issue. Story by Tonya Garcia for MarketWatch

Mastercard Wins Patent for Anonymous Blockchain Transactions
Financial services giant Mastercard was awarded several new blockchain patents this week, continuing its trend of embracing distributing ledger research even as it expresses open hostility to bitcoin and other cryptocurrencies. However, one particular patent is raising eyebrows. The patent, awarded by the U.S. Patent and Trademark Office on Thursday, outlines a system that facilitates anonymous transactions over a blockchain network. Mastercard first applied for the patent in Dec. 2016. According to Mastercard, the transparent nature of ordinary blockchain transactions is a hindrance to this technology’s adoption for everyday payments. Story in CCN

Wells Fargo Accused of Misconduct Again
Wells Fargo is once again being accused of misconduct, this time because it allegedly used complex financial investments to take advantage of mom-and-pop investors. The Securities and Exchange Commission said on Monday that between 2009 and 2013, Wells Fargo reaped large fees by “improperly encouraging” brokerage clients to actively trade high-fee debt products that were intended to be held to maturity. Wells Fargo Advisors, the bank’s brokerage division, agreed to pay a $4 million penalty over its handling of the products, known as market-linked investments. The bank must also return $930,377 of ill-gotten gains plus $178,064 of interest. Story by Matt Egan for CNN

Chase Pay Launches Exclusive Dining Experiences
Chase Pay is teaming up with Tock with customized culinary experiences in mind. Through the initiative, Chase Pay will integrate with Tock’s restaurant booking system and will offer Chase cardholders access to everything from “chef’s tables to winery tours” and curated menus. Tock’s features span a reservation engine, table management and other organization features for restaurants. In a press release, the firms said customers will be able to schedule Tock experiences through Chase Pay, via Chase credit or debit cards, points or by combining the two. Story in PYMNTS

What Can US Retailers Learn from China about Mobile Payments?
When it comes to mobile payments, it’s no secret that China is in the lead globally.  In 2016, mobile payments totaled $5.5 trillion in that country. In comparison, Forrester Research estimated that the U.S.’s mobile payments market was $112 million. The success in China is largely driven by consumers’ adoption of mobile wallets like Alipay and WeChat/Ten Pay, which make up the majority of the mobile payment market. While there are some mobile wallets in use here in the U.S., they are not nearly as widely adopted. Getting consumers to change payment behaviors can be challenging, but people almost always have their mobile phones with them. With the right motivation, merchants can capitalize on the growth opportunity and cost savings that mobile payments present. Story by Andre Malinowski for Mobile Payments Today


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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