LowCards.com Weekly Credit Card Update–October 6, 2017

October 6, 2017, Written By Lynn Oldshue

Equifax Breach Caused by Lone Employee’s Error, Former CEO Says
The Equifax data breach, which exposed the sensitive personal information of nearly 146 million Americans, happened because of a mistake by a single employee, the credit reporting company’s former chief executive told members of Congress on Tuesday. Richard F. Smith, who stepped down last week, sought to play down the severity of the problems that had led to the breach, defended the company’s response to the crisis and deflected questions about how far Equifax would go to compensate consumers who were financially harmed. Story by Tara Siegel Bernard and Stacy Cowley for The New York Times

Yahoo Says All 3 Billion User Accounts Were Impacted by 2013 Security Breach
Yahoo today announced that the huge data breach in August 2013 affected every user on its service. That’s all three billion user accounts and up from the initial one billion figure Yahoo initially reported. Since disclosing the hack, Yahoo continued to add more numbers of accounts compromised, but today’s announcement makes it clear that if you had a Yahoo email account, you were part of the breach. The hack exposed user account information, which includes name, email address, hashed passwords, birthdays, phone numbers, and, in some cases, “encrypted or unencrypted security questions and answers,” the company said back in 2016. Yahoo did confirm that passwords were not stolen in clear text, and hackers did not obtain bank or credit card information tied to the Yahoo accounts. Story by Natt Garun for The Verge

Square Launches Support For Debit Card Payments in Canada
Nearly five years after payments company Square launched in Canada, it is introducing support for Interac debit cards for businesses using its point-of-sale system and has developed a contactless chip reader to facilitate those transactions. The chip reader will cost $59. A recent report found that 24.8 per cent of payments in 2016 were done through debit card, up from 20.4 per cent in 2011. In comparison, credit card use was lower at 21.8 per cent in 2015. Square’s pitch is that it will act as the middleman between small businesses and financial institutions. So far it seems to be working, as the company continues to grow substantially each year. The company processed more than US $50 billion in transactions last year, up 39 per cent from 2015. In its most recent earnings, Square saw a 26 per cent jump in quarterly revenue and payment volume up 33 per cent to US $16.4 billion. Story by Josh McConnell for Financial Post

Mobile Payments to Overtake Credit Cards by 2019, Says UN Report
In the near future, we’ll be paying for goods and services with our phones rather than our credit cards, says a report from the United Nations Conference on Trade and Development (UNCTAD). In 2014, 51 percent of payments in developed countries were made with credit cards. However, that number is expected to dip to 46 percent in 2019 as advances in technology will make it easier for people to pay for things with their phones.  This won’t apply to developing nations, where cash is still the preferred choice. In the future, blockchain technology will be used for cross-border payments, which may help ease expensive transaction fees from banks to boot, as these services are peer-to-peer, secure and less expensive. That said, it’s not the preferred choice yet, but the report notes that improvements to security and the size of the minimum transaction will cause adoption to increase. Story by Aloysius Low for CNet

Will Apple Pay Cash Steal PayPal’s Crown Jewel?
The fastest growing segment of PayPal’s business has been its peer-to-peer (P2P) payments app Venmo, which has been a hit with millennials, processing more than $8 billion in total payment volume, an increase of 103% over the prior year quarter. Unfortunately for PayPal, Apple is out to steal the crown jewels. Apple plans to launch its own person-to-person payment feature later this fall. The ability to quickly and easily send payments to friends without incurring fees has shown strong appeal among younger consumers. The feature will allow Apple Pay users to transfer money to friends and family via iMessage or Siri, using the credit and debits cards in their Apple Wallet. “When users get paid, they receive the money in their new Apple Pay Cash card in Apple Wallet and can use the money instantly,” according to Apple. Story by Danny Vena for Madison.com

Balance Forgiveness Programs More Effective at Reducing Credit Card Debt Than Lowering Monthly Minimum
According to the Federal Reserve, the amount of outstanding debt that Americans hold—often in the form of credit card debt—hit a new high at $1.021 trillion in June 2017, topping the previous record set in April 2008 just before the financial crisis. Conventional wisdom among policymakers and borrowers is that a lack of liquidity—how much cash one can currently access—is the most important driver of financial distress. A common strategy for helping borrowers manage their credit card debt has been for banks to decrease minimum monthly payments so that borrowers have more cash on hand each month after payments are made. New research from Princeton University, however, counters this widespread view and suggests that relief targeting longer-term debt, such as the partial forgiveness of account balances, has a greater effect on a borrower’s overall financial health than strategies concentrating on short-term liquidity issues. Story by Princeton University

Mastercard’s Early Detection System Pinpoints Accounts at Risk of Fraud
Mastercard launched a new program to help card issuers identify accounts at-risk of fraud. The Early Detection System sends alerts when cards or accounts are exposed to data breaches or security incidents, allowing the issuer to monitor transactions more closely and catch fraud in the earliest stages. Mastercard’s Early Detection System rates the risk level of each account so issuers can respond accordingly. For instance, a card with a low risk rating may be monitored closely and flagged when uncharacteristic transactions occur. A card with a high risk rating may be turned off completely and replaced with a new card.Story by Natalie Rutledge for LowCards.com

Capital One Restructures Its Card Division, Leading to Job Cuts
Capital One has cut positions at locations across the country as part of a restructuring. The McLean-based credit card and financial services company is not saying how many positions were affected by the reorganization. However, some employees will take on new work and responsibility, while other positions will be eliminated. The number of job cuts were not high enough to warrant public notice. However, the Richmond area is the hub of operations for the company, employing as many as 11,000 people. Companywide, Capital One employs 49,000. Story by Carol Hazard for Richmond Times Dispatch

Dear Millennials, Can We Be Friends? Sincerely, Your Credit Card
In a recent survey of 500 millennial credit card owners, the results were concerning. To summarize: 47% don’t pay off their balance in full each month; 36% have maxed out their credit card before; 30% reported being dependent on credit cards for basic living expenses; 17% thought their credit score would remain unchanged after a missed payment while 5% believed their score would go up with missing payments; and 41% of millennials find the thought of using a credit card scary. Story by Shelcy V. Joseph for Forbes

Analyst on Visa and Mastercard: ‘Simply the Best Businesses We’ve Ever Seen’
Buckingham Research analyst Chris Brendler thinks there’s plenty that investors still underestimate about the two card companies, which he calls “simply the best businesses we’ve ever seen.” Visa and Mastercard have significant pricing power and are proving to be consistently resilient against up-and-comers in the payments landscape. And they’re poised to keep growing volume and earnings as they further eat into cash and check usage. For the most part, Visa and Mastercard have made it so that every relative newcomer in payments has to go through them. The companies struck deals with PayPal, for instance, so that the service would stop dissuading users from funding transactions with their credit cards. And while Apple Pay and other similar mobile-wallet services haven’t really taken off, Visa and Mastercard are well-positioned in case they do, since these tools rely on credit and debit cards, too. Story by Emily Bary for Barron’s

Zwipe Powers ‘First Commercial’ Contactless Biometric Payment Card
Norwegian biometric firm Zwipe has announced that it has made the first shipment of its biometric tech for use in commercial contactless biometric payment card pilots by leading card manufacturers and banks. Zwipe says its card manufacturing partners represent over 40% of the global smart card market, per volume shipped per the Nilson Report. Zwipe has entered into seven new agreements with both card manufacturers and payments ecosystem partners with a focus on meeting escalating commercial demand for biometric smartcard solutions. Zwipe’s biometric contactless payment card is the only smartcard solution commercially available, and the only solution capable of operating without the need for a battery or fixed power supply. Story in Planet Biometrics

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 15.39 percent, slightly lower than last week’s average of 15.41 percent. Six months ago, the average was 15.21 percent. One year ago, the average was 14.61 percent.

 



The information contained within this article was accurate as of October 6, 2017. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Lynn Oldshue

Lynn Oldshue has written personal finance stories for LowCards.com for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue