LowCards.com Weekly Credit Card Update–October 2, 2015
Ready or Not, it’s Credit Card Chip and Dip Time
Thursday marks a milestone in the effort to shift the U.S. to the use of microchip-embedded credit cards, a more secure alternative to traditional cards that require the swipe of a magnetic stripe. But not to worry if your new chip-enabled card has yet to arrive in the mail. The October deadline is more a call to action for retailers than a cutoff, electronic payment experts say. Chip, or “EMV,” cards are more secure than those with just a magnetic stripe because they produce a unique code for each transaction, making them harder to counterfeit and preventing the card from being used for future fraudulent purchases. Story by Charisse Jones for USA Today.
Trump Hotels Hacked, Credit Card Data at Risk
Hackers snuck a computer virus into Trump hotels across the United States and Canada, potentially stealing customer credit card data for an entire year. Apparently, hackers managed to hide inside the company’s computers for a long time. The hotel chain warned that anyone who visited a Trump hotel between May 19, 2014 and June 2, 2015 “may have been affected. “The list of hotels includes two locations in New York and one in each of the following cities: Chicago, Honolulu, Las Vegas, Toronto and Miami. Story by Jose Pagliery for CNN Money.
CFPB Fines Fifth Third Bank for Illegal Credit Card Practices
Fifth Third Bank became the 11th credit card issuer to be slapped with major fines by the Consumer Financial Protection Bureau for illegal practices in the marketing or administration of credit card add-on products and services. Fifth Third Bank will have to pay back an estimated $3 million to nearly 24,500 consumers who purchased a “Debt Protection” credit card add-on product. From 2007 to 2013, the CFPB discovered the bank’s telemarketers deceptively marketed credit card add-on product during calls. In some cases, the telemarketers did not tell some cardholders that by agreeing to receive information about the product, they were being enrolled and would be charged a fee. Some kits sent out from the bank contained incorrect descriptions of the product’s cost, benefits, exclusions, terms and conditions. Story by Bill Hardekopf for LowCards.com.
The Rise of Corporate Prepaids–No Flash in the Pan
Say the word “prepaid” and the image that may spring to mind is one of, say, a phone card, or perhaps another card, commonly used by the underbanked individual. That image would be an erroneous one. Prepaid solutions are growing in Europe, as the view of prepaid in general is shifting away from a “subprime” mindset that may carry negative connotations, and toward a technologically advanced platform that can help a range of enterprises manage time and money more efficiently. That includes governments – and of course corporate clients – being able to monitor employee spend in real-time fashion. For corporate clients seeking to operate with greater visibility into, and oversight of, corporate and employee-driven expenses, the prepaid solution may be an ideal one. Corporate prepaid cards, can be managed via fully customizable Web-based platforms that can allow companies to issue and load cards online. And they can be viewed, in a sense, as being universal: Among the greatest benefits to prepaids is that they can be issued to any employee, contractor or government/corporate agent without a credit check. Story in PYMNTS.
Samsung Pay Officially Launches in United States
After being tested in its home market of South Korea, the Samsung Pay mobile payment service has now gone live in the United States with some major new features. Currently, Samsung Pay works only with the Galaxy S6 Edge Plus, Galaxy Note 5, Galaxy S6 and Galaxy S6 Edge. In order to use Samsung’s new mobile payment service, these devices are also required to be on either AT&T, Sprint, T-Mobile or US Cellular in the United States. Samsung Pay requires a Visa or MasterCard issued by Bank of America, Citibank or US Bank, or an American Express card, and allows a user to add up to 10 cards. Samsung Pay uses tokenization for making transactions and does not store any account numbers or credit card numbers on the device. Using Near Field Communication (NFC) technology, Samsung Pay processes payments at tap-to-pay terminals and works with every point of sale system, including NFC, magnetic stripe and EMV (Europay, MasterCard and Visa) terminals for chip-based cards, according to the company. However, Samsung Pay does not work with readers where users are required to physically insert their card into a slot, like the ones at gas stations or on an ATM. Story by Sanjit Dutt for MNR Daily.
Face-to-Face Interactions Keep Bank Branches Open
Most Americans still want to visit a physical branch to do their banking business, according to a new survey. In fact, 61% of American consumers visit their bank once a month, and 73% believe they’ll still need a bank branch 10 years from now. Respondents said they enjoy the face-to-face contact when they visit a branch (28%) but many others indicted they are worried about the safety of online transactions. 56% of Americans believe face-to-face transactions keep their account information safer than online banking, and 33% believe it is “significantly” safer. Story by Bill Hardekopf for LowCards.com.
Mobile Payments Data Breaches Will Increase, Say Cybersecurity Experts
A majority (87 percent) of cybersecurity experts expect to see an increase in mobile payment data breaches over the next 12 months, yet 42 percent of them have used this payment method in 2015. A survey of 900 cybersecurity experts, conducted by ISACA, suggests that people who use mobile payments are unlikely to be deterred by security concerns. Only 23 percent respondents believe that mobile payments are secure in keeping personal information safe, while nearly half (47 percent) say mobile payments are not secure and 30 percent are unsure. Almost 89 percent see cash as the most secure payment method, but only 9 percent prefer to use it. Story in First Post.
U.S. Court Hears Challenge to $5.7 Billion Visa, MasterCard Settlement
A U.S. appeals court on Monday weighed whether to uphold the approval of an estimated $5.7 billion antitrust settlement by MasterCard and Visa with merchants over credit card fees despite the objection of several major retailers. A lawyer for retailers including Target and Amazon.com urged the 2nd U.S. Circuit Court of Appeals in New York to reject the deal, saying it forces merchants to give up their rights to sue over various policies and practices. The settlement, the largest in a U.S. antitrust class action, resolved lawsuits by merchants pending since 2005. The lawsuits accused Visa and MasterCard of fixing the fees they were charged each time customers used credit or debit cards. Merchants also claimed Visa and MasterCard prevented retailers from encouraging customers to use cheaper payment methods. Story by Nate Raymond for Reuters.
MasterCard Introduces Fast Bitcoin-like Global Payments to Consumers
MasterCard has launched MasterCard Send, a personal payments service that enables funds to be sent quickly and securely to consumers domestically and internationally. Now live for users in the United States, MasterCard Send permits sending secure real-time payments to consumers, both banked and unbanked. The recipients get the funds immediately on their MasterCard or other cards, into mobile money and bank accounts or via cash agent outlets. MasterCard Send emulates one of the two main advantages of bitcoin payments–fast transactions that take minutes instead of days. Details on the business model and economics were not disclosed, so it isn’t clear if MasterCard plans to emulate the other mainstream advantage of bitcoin payments–cheap transactions. Story by Giulio Prisco for Bitcoin Magazine.
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 14.55 percent, identical to last week. Six months ago, the average was 14.47 percent. One year ago, the average was 14.54 percent.