LowCards.com Weekly Credit Card Update–October 31, 2014
Some U.S. Retailers Shun Apple Pay, Eye Rival Payments System
Some large U.S. retailers are refusing to use Apple Pay, Apple’s new electronic payments service, as they commit to developing a rival payments system that would bolster their profits by eliminating credit card transaction fees. Wal-Mart is among the roughly 50 big retailers that have chosen not to accept Apple Pay, along with Rite Aid and CVS. They say they are working instead on developing their own payment system, called Current C, through the Merchants Customer Exchange (MCX) consortium. Story by Nandita Bose and Nathan Layne for Reuters.
Why Credit Card Companies Couldn’t Stop Hacks at Target and Home Depot
While public outrage over recent data breaches has focused mostly on the retailers that were hacked, several security experts say the credit card industry shares some of the blame. More than a decade ago, as concerns over cyberattacks were growing, the major credit card companies–including Visa, MasterCard, American Express and Discover–unveiled a strategy to fight hackers. Those security tests have failed to stop the growing number of cyberattacks against retailers this past year. Two of the biggest retailers to get hacked–Home Depot and Target–say they passed the security tests before hackers stole the debit and credit card data of a combined 96 million consumers from their computer systems. Story by Gerry Smith for Huffington Post.
B2B Credit Card Payments Jump
The share of U.S. companies that pay their suppliers by credit card has doubled in the past two years. Though paper checks are still the dominant form of payment, an estimated 10% of this year’s business-to-business purchases will be made with credit cards. Why the sharp increase? As companies struggled out of the credit crisis, many sought the extra 30-day float and perks that credit cards offer, and wrote fewer checks. Plus, using a credit card also can increase fraud protection and lower processing costs, especially on small purchases. Story by Noelle Knox for The Wall Street Journal.
Coming Next Fall: More Chip and Pin Cards in the U.S.
Americans traveling in other parts of the world are sometimes bewildered to discover that their debit or credit cards don’t work at automated kiosks that use new chip and PIN technology rather than magnetic stripes. EMV cards have been the standard in Canada, Europe and other parts of the world for several years now, but they’re not as widely used in the U.S. That’s likely to change next October, when liability for fraud shifts from U.S. card issuers to merchants if merchants don’t upgrade their payment terminals to properly accept chip-based cards. Some smaller merchants may be slow to adopt the new technology if they feel it’s less expensive to assume the fraud risk than update their payment terminals. President Barack Obama also recently signed an executive order to embed this technology in all government-issued credit and debit cards. Story by Susan Johnston for U.S. News & World Report.
China Eases Monopoly on Credit Cards
China says it will ease restrictions on credit cards in a move that might give Visa, MasterCard and other foreign competitors greater access to the Chinese market. Foreign companies will be allowed for the first time to apply to set up credit card clearing operations in China, said a Cabinet announcement late Wednesday. It gave no details of what qualifications would be required for a foreign competitor to be approved or when licenses might be issued. Beijing’s restrictions have given a monopoly on credit card processing to a state-owned entity, UnionPay. All banks are required to participate in UnionPay and all transactions must be processed through it. Story by Joe McDonald for the Associated Press.
Data Breaches Affected 18.5 Million Californians in 2013
Nearly half of California’s residents were affected by data breaches and cyber intrusions in 2013, a staggering seven-fold increase from the previous year. According to a new report issued by Kamala Harris, the state’s Attorney General, the personal information of approximately 18.5 million Californians was hacked last year. There were 2.5 million accounts which were hacked in 2012. Harris estimated that as many as one-third of those people will become victims of fraud. Story by Bill Hardekopf for LowCards.com.
Ex-Googler Sees Opportunity as Credit Cards Lose Magnetic Stripe
In the coming year, Americans will ditch their old magnetic-stripe credit and debit cards for new plastic embedded with chip-and-pin technology. To Osama Bedier, former head of Google’s Wallet mobile payment business, the shift is a once-in-a-lifetime opening. “This is the biggest opportunity in the payment business for decades,” he says. Bedier launched a startup called Poynt Co. and unveiled the company’s first product, a merchant terminal that reads chip-and-pin cards. The unit can handle other payment technologies that have flooded the market in recent years, including Near Field Communication, QR codes, beacons and Apple Pay. Story by Alistair Barr for The Wall Street Journal.
Too Big To Tax: Settlements are Tax Write-Offs for Banks
At the Justice Department, senior officials like to congratulate themselves on the headline-making, big bucks settlements they have imposed upon banks and lenders for their part in causing the 2008 mortgage meltdown that sparked the biggest American financial crisis since the Great Depression. But wait a moment. Those settlement figures are not quite what they seem. Buried deep in the announcements of the astronomical sums that Wall Street banks are being forced to pay is a dirty secret: A big chunk of the hundreds of billions of dollars banks have paid in settlements to various federal agencies and regulators since 2010 is deductible from the taxes banks and lenders pay. When is a fine not a fine? When it can be put against your tax bill. By Lynnley Browning for Newsweek.
6 Ways for New Grads to Tackle Their Student Loans
The six-month grace period for many student loans is about to expire for new college graduates. If the past is any guide, many people will miss their first payment and some will end up defaulting on their loans–even though there’s usually no good reason for that to happen. Story by Liz Weston for Reuters.
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 14.51 percent, slightly below last week’s average of 14.52 percent. Six months ago, the average was 14.49 percent. One year ago, the average was 14.44 percent.