LowCards.com Weekly Credit Card Update–May 13, 2016
Walmart Sues Visa to Require PIN Use with Chip Credit Cards
Walmart, the nation’s largest retailer, has filed a lawsuit in New York against Visa, charging that the payments network had blocked implementation of a PIN system, favored by retailers, to make the new chip credit cards more secure. The suit, filed in the New York State Supreme Court, alleges the current system, in which a chip card user authenticates the purchase with a signature, is “fraud prone.” Story by Mark Huffman for Consumer Affairs.
Mobile Banking Drives Satisfaction and Growth
The biggest banks have significantly improved in overall customer satisfaction, while midsize banks have declined and regional banks have plateaued, according to the J.D. Power 2016 U.S. Retail Banking Satisfaction Study. Driven by a focus on digital offerings, improved personal interactions and winning with the key growth segments of Millennials, the emerging affluent and minorities, satisfaction with big banks rose for the sixth consecutive year, while satisfaction with midsize banks dropped for the first time since 2010. More concerning could be that midsize banks’ intended attrition has doubled over the past 5 years, and is currently the highest among the bank segments. Continued heavy investment in digital channels by the biggest banks is definitely being rewarded, with the largest banks showing significant improvements in all digital categories. Story by Jim Marous for The Financial Brand.
Why a Peer-to-Peer Loan Could Help You Pay Off Pesky Credit Card Debt
If you’re carrying a large amount of high-interest credit-card debt, you should consider a peer-to-peer loan for one simple reason: It can save you lots of money. Peer-to-peer loans won’t fix the core issue that draws people into credit-card debt spirals, which boils down to spending more than they have or can repay, leading to growing debt balances and costly interest. But for people trying to break a cycle of bad and growing debt, the combination of fixed and competitive interest rates make peer-to-peer loans a compelling option. The enthusiasm of investors looking to add consumer debt to their portfolios means you can find interest rates better than many credit-card firms will offer. Story by Philip van Doorn for MarketWatch.
Proposed Rule Would Allow Consumers to Sue Banks, Credit Card Companies
Consumers are set to gain new powers to sue banks under a proposal unveiled by the Consumer Financial Protection Bureau. The proposed rule would restrict the use of arbitration clauses in consumer financial contracts, shifting more power to consumers for a range of financial products, from credit cards to bank accounts to private student loans. The CFPB aims to prohibit financial companies from using mandatory-arbitration clauses as a way to block class-action lawsuits, in which a large number of plaintiffs with similar complaints band together. Companies would still be able to require consumers to enter arbitration to resolve individual disputes. Story by Yuka Hayashi and Christina Rexrode for The Wall Street Journal.
RushCard Agrees to Pay $20.5 Million to Customers Who Were Locked Out of Accounts
RushCard has agreed to pay a total of $20.5 million to customers who were temporarily locked out of their prepaid card accounts last year, according to court documents filed this week. The preliminary settlement, which still needs court approval, includes about $19 million to reimburse customers for fees and other costs they faced after they lost access to their accounts for days. The remaining $1.5 million will go toward attorney fees. RushCard, a prepaid card created by hip-hop mogul Russell Simmons, faced technical issues last October while it was transitioning to another payment processor. The glitch left more than 132,000 customers unable to access their accounts for several days. Some cardholders said they had transactions rejected or that they fell behind on bills. Story by Jonnelle Marte for The Washington Post.
How A Giant Restaurant Conglomerate Teamed Up With Banks To Stiff Its Workers
The struggling corporate giant behind The Olive Garden, Longhorn Steakhouse, and other national restaurant chains is forcing tens of thousands of workers to effectively pay rent on their own money. Workers at Darden Restaurants chains are routinely told they must accept prepaid debit cards instead of paychecks, according to a new report from the worker organization Restaurant Opportunities Center (ROC) United. A quarter of workers surveyed said they asked to be paid some other way and were told the cards are their only option. The restaurant conglomerate has roughly 148,000 employees in the U.S. Half of those workers get payroll cards in lieu of standard paper checks. Each card shaves about $2.75 per pay period off of the company’s overhead, saving Darden as much as $5 million per year. Story by Alan Pyke for Think Progress.
Citi Brings Beacons into Branches to Offer ATM Access, Hot Cider
Citigroup is testing Bluetooth beacon technology in a pilot that gives customers cardless access to branch ATMs after business hours, among other services. The beacons, small devices that communicate with mobile apps over Bluetooth, effectively turn mobile phones into “keys” that unlock the door when they sense a customer is near, removing the need to fumble for bank cards to gain entry to the ATM vestibule. Story by Tanaya Macheel for Payments Source.
Google To Ban Payday Loan Ads
Beginning July 13, Google will no longer accept ads for payday loan products on its site. Many financial experts feel these products exploit the poor by offering loans which must be paid back quickly at extremely high interest rates. According to Google’s policy, payday lending ads are loans in which repayment is required within 60 days, that have an APR of 36% or higher. Consumers will still be able to find payday loan information in the search results. Google bans ads for some other product categories such as guns, illegal drugs and tobacco. Facebook has also banned ads for payday loan products in August 2015. Story by Bill Hardekopf for LowCards.com.
Can Voice Authentication Tip The Mobile Payments Scale?
Could it be that the best way to authenticate the consumer is by leveraging two things that everyone has – their voice and a mobile phone? That’s inspiration for one company: SayPay, a voice recognition and biometric authentication solutions provider for financial transactions. It uses its tech and its one-time cryptotoken to process transactions via a mobile app. SayPay Payments, available as an in-house deployment or a cloud-based service, doesn’t send financial data to the merchant, which means account and card numbers remain out of reach of merchant point-of-sale systems. Story in PYMNTS.com.
MasterCard Survey Shows Russians Moving Towards Non-Cash Payment
Russians are getting more and more accustomed to cashless payments, according to a recent survey by MasterCard. A total of 59 percent of Russia’s population actively use bank cards, paying for their purchases this way once a week or more—despite the fact that just five years ago 82 percent preferred cash. According to the study, cardholders most often cite convenience, high payment speed, security and the ability to get a discount or a bonus among the main incentives for not using cash. Cards are used most frequently in supermarkets and hypermarkets, convenience stores and online shops, the survey shows. Story by Anna Kuchma for Russia Beyond The Headlines.
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 14.75 percent, identical to last week. Six months ago, the average was 14.62 percent. One year ago, the average was 14.50 percent.