For media inquiries about these stories and more, contact credit card expert and industry analyst Bill Hardekopf at (205) 985-9725 or [email protected]
More small businesses, and even some larger ones, are charging buyers for credit card purchases or offering discounts when paying with debit cards, cash, or checks. The measures are intended to offset the various fees businesses pay for credit card transactions, charges that have risen in addition to generous cash back and travel rewards.
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Cash discount data is hard to come by and less than 5% of the 8 million small businesses that accept credit cards in the US charge for credit card payments. But that share has steadily increased in recent years. Five years ago, an estimated 2% or less of businesses charged for credit card purchases. The coronavirus accelerated the shift, sending companies looking for revenue to make up for lost revenue in the early months of the pandemic.
• Story by: Anna Maria Andriotis, The Wall Street Journal
Amazon is justifying plans for a surcharge on Visa credit cards in Singapore by pointing to the fees it pays for handling those transactions. It’s a tactic similar to what other retailers have used to pressure the card network over payment fees.
Amazon sent an email to customers in Singapore on Tuesday saying it would charge 0.5% for Visa credit card purchases from September 15. An Amazon spokesperson said the cost of accepting card payments is an obstacle to providing the “best prices” for consumers. Amazon also claims that payment fees, including interchange fees and other fees, should decrease over time given technological advancements.
• Story by: John Adams, American banker
Mastercard will remove the magnetic stripes on its credit and debit cards over the next 10 years, as part of a broader push by the company to use “more capable and secure” alternatives to the old-fashioned swipe. The company said it is the first payment network to phase out magnetic stripes, which debuted in the 1960s and allowed banks to store information on a piece of metal tape stuck to the card.
Card layers don’t disappear yet. Newly issued Mastercards must still have magnetic strips. But in 2024 they will become optional and Mastercard will no longer issue cards with magnetic strips by 2029. By 2033, they will be completely eliminated.
• Story by: Jordan Valinsky, CNN
The US Census Bureau released their July 2021 figures this morning. Unfortunately, the numbers are not favorable for the credit card industry, pointing to low consumer confidence and lower spending. Retail and foodservice spending fell $9 million between May and June.
Retail sales affect credit card revenue from several perspectives. First, when spending goes down, so does exchange. Interchange, the merchant’s cost of using the payment network, generates income without interest. When spending falls, revolving credit stagnates, which affects interest income. And of course credit risk can be an issue. Remember, consumer spending drives 70% of the economy, so bells and sirens go off when that stat drops.
• Story by: Brian Riley, Payments Journal
Capital One just launched two new student credit cards, the Capital One Quicksilver Student Rewards credit card and the Capital One SavorOne Student Rewards credit card. Like the flagship versions of these cards, they offer excellent rewards, but with less stringent entry requirements.
The Capital One Quicksilver Student Rewards credit card offers unlimited 1.5% cash back with every purchase. The Capital One SavorOne Student Rewards credit card offers unlimited 3% cash back on restaurants, entertainment, popular streaming services and in supermarkets, plus 1% cash back on all other purchases. Through January 2023, cardholders will also earn 8% back on purchases from Vivid Seats, an online event ticket seller.
• Story by: Ben Luthi, Investopedia
Before you submit your next order to Amazon, you can save big by using your American Express Membership Rewards points. Through October 31, targeted Amazon customers will receive 20% or 40% off their next order, up to $40.
All you need to do is redeem one Membership Rewards point to earn the deep discount. Here’s what you need to know about this great offer and how to maximize it.
• Story by: Brett Holzhauer, CNBC
Weeks after Wells Fargo sparked a public outcry over his plan to cut off personal lines of credit, the bank is turning off course. The lender has started in recent days informing customers who have used their personal lines of credit that the financing channels will remain available.
People who haven’t used their account since October will also be given the option to keep them open.
• Story by: Hannah Levitt and Jennifer Surane, Bloomberg
A study by JPMorgan Chase reveals how many people use digital features in the financial sector. Nearly 90% of those surveyed by Chase say they deposit their money through their financial institution’s app. Nearly half say they started and/or continued to use these mobile options to avoid physical interactions.
As the impact of Covid-19 in the US begins to level off, the digital banking tools people depended on in 2020 appear to be a regular part of their banking habits.
• Story by: Garret Reich, the financial brand
Facebook is ready to launch the Novi digital wallet linked to Diem’s blockchain-based payment system. David Marcus, head of Facebook’s financial services division, said Novi could play an important role in fixing the global payment system, which he says is, among other things, too slow and too expensive.
Diem, which was first spearheaded by Facebook under the name Libra, is a blockchain-based payment system that has faced a number of roadblocks. Regulatory concerns over Facebook’s data privacy and potential money laundering issues have contributed to delays to the program due to start in early 2021.
Diem was originally intended to be backed by a broad mix of currencies and government debt, but it is now intended to launch as a single currency backed by the US dollar.
• Story by: Carla Mozee, Business Insider
Tens of millions of personal information of current, former or future T-Mobile customers have been leaked to hackers. The breach affects as many as 7.8 million postpaid subscribers, 850,000 prepaid customers and “just over” 40 million past or potential customers who have applied for credit from T-Mobile.
While no customer financial information appears to have been disclosed, the stolen personal information includes names, dates of birth, social security numbers and driver’s license numbers for “a subset of current and former postpay customers and potential T-Mobile customers.”
• Story by: Brian Fung, CNN
A U.S. judge rejected a request from Toronto-Dominion Bank to dismiss a proposed class action filed in December by customers who said it had broken its agreement to give them regular credit cards.
Customers who obtained deposit-protected credit cards between 2016 and 2019 accused TD of its promise to automatically “grade” them to unsecured cards, if they didn’t default for seven months. The plaintiffs are seeking damages of at least $5 million from the Canadian bank, alleging that it refused to give them unsecured credit cards even after going between 15 and 37 months without default.
• Story by: Nichola Saminather and Jonathan Stamp, Reuters
Oh, how the roles are reversed. It used to be that if you were a fintech startup or, for lack of a better term, a digital native financial services company, you might be eyeing a takeover from an incumbent in the industry. But lately, it’s fintech upstarts making the acquisition.
• Story by: Ryan Lawler, TechCrunch