American Express Fee Accusations Get U.S. High Court Hearing
The U.S. Supreme Court accepted a case that could roil the credit-card business, agreeing Monday to consider reviving government allegations that American Express thwarts competition by prohibiting merchants from steering customers to cards with lower fees. A federal appeals court had thrown out the lawsuit, saying the U.S. government and 11 states failed to prove that the American Express rules harmed cardholders as well as merchants. The Supreme Court’s decision to take the case offers new hope to retailers trying to reduce the $50 billion in fees they pay to credit-card companies each year. It’s a boost for Discover, which says the rules undercut its ability to compete with American Express. Story by Greg Stohr for Bloomberg
5 Ways To Get Smart And Avoid Drowning In Dumb Debt
Is debt dragging you down? You are not alone. Despite the so-called “deleveraging” of the American consumer after the financial crisis, debt remains a major burden for large numbers of Americans, based on a recent survey by Northwestern Mutual. A heavy debt load can lead to a sense of helplessness for borrowers. Many are ashamed of their situation and would rather ignore the problem than face it. Interviews with more than 2,700 adults over the age of 18 revealed that nearly three-quarters of them said they were struggling with debt, and it was a “high” or “moderate” source of anxiety for 40 percent of them. Almost half of those interviewed were carrying at least $25,000 in debt, and the average debt load was $37,000, excluding mortgages. More than 1 in 10 owed more than $100,000, and 45 percent of those carrying debt were spending half their monthly income on debt repayments. And yet still we spend. The individuals surveyed spent on average 40 percent of their income on non-essential items, such as travel, entertainment, eating out and hobbies, despite saying they felt anxious about their financial futures. Story by Andrew Osterland for CNBC
Sign Your Receipt? Mastercard Customers Can Skip It
Mastercard customers won’t need to search for a pen anymore when they make purchases with the credit card. The credit card giant Mastercard is making it official, eliminating the need to sign for purchases made on the card at retail, as of April. Whether to sign or not will now be an optional decision for merchants in the US and Canada. Already, many merchants don’t currently require signatures for purchases. The signature was originally designed as a security precaution, to prove that you indeed made the purchase, but Mastercard notes that chips, biometrics and tokens use newer and more secure methods to prove identify. Story by Jefferson Graham for USA Today
A Boom in Credit Cards: Great News for Banks, Less So Consumers
The nation’s biggest banks are earning millions of dollars a month on their credit card customers. The four top American banks—Bank of America, JPMorgan Chase, Citigroup and Wells Fargo—together made more than $4 billion in pretax income from their credit card businesses from July through September. The amount of debt owed by American consumers, which receded in the wake of the financial crisis, is again on the rise. Outstanding credit card debt—the total balances that customers roll from month to month—hit a record $1 trillion this year, according to the Federal Reserve. The number of Americans with at least one credit card has reached 171 million, the highest level in more than a decade, according to TransUnion, a credit-reporting company. Story by Jessica Silver-Greenberg and Stacy Cowley for The New York Times
Coming Soon: A Selfie With Your Credit Card Application
The selfie is everywhere and soon your bank could be asking for one in order to approve your purchase or credit card application. Payment processing giant Visa is launching a platform to allow banks to integrate various types of biometrics—your fingerprint, face, voice, etc.—into approving credit card applications and payments. If a person were to apply for a credit card application on their smartphone, the bank app could ask the applicant to take a selfie and then take a picture of a driver’s license or passport. The technology will then compare the photos for facial similarities as well as check the validity of the driver’s license, all happening within seconds. The selfie could also play a role in an online purchase. Instead of a bank call center autodialing a customer when they have a concern about a transaction, this new technology could allow the customer to use Apple’s Touch ID or other fingerprint recognition technology, or take a selfie or record their voice, to verify they made the transaction. Story by Ken Sweet for the Associated Press
Capital One’s New Cash-Back Credit Card For Foodies
Capital One’s new credit card aims to pay people back for what many are already spending big on: dining out. The card, called Savor, offers unlimited cash back in standard categories like 2% back on groceries and 1% on all other purchases. But it’s the 3% cash back on dining that sets it apart from other cash-back rewards cards. Over the past three years restaurant spending has grown 20% and grocery spending has grown 5%. The no-annual-fee card offers a one-time $150 bonus after spending $500 on purchases within the first 3 months after opening the account. It has no rotating categories, no foreign transaction fees and earnings don’t expire for the life of the account. Story by Anna Bahney for CNN Money
Google, Overstock Among Biggest Blockchain Investors
Plenty of industries and companies are eyeing blockchain—the technology that enables cryptocurrencies, such as bitcoin—but when it comes to corporate investors, SBI, Google, Overstock.com, Citi and Goldman Sachs are standing out from the pack. That’s according to a news report from CB Insights, which found that the number of corporate investors in blockchain hit a record 91 this year—just four shy of the number of venture capitalist firms that are investing in the technology. Corporations have invested $327 million in blockchain deals this year, which is only a little lower than the $390 million invested in blockchain in all of 2016. Story in PYMNTS
Here Are The Only 3 Times You Should Use A Debit Card
At the register, 66 percent of Americans believe choosing debit over credit is the safer bet, according to a recent survey. This belief holds especially true for millennials: 69 percent say debit cards are as safe or safer than credit cards, while only 49 percent of Boomers and those in older generations say the same. But while debit cards can help keep you from overspending, they don’t offer other key protections. Because debit cards essentially function as electronic cash, if fraudulent charges are made, you could be liable for a lot: from $50 to everything in your account, potentially. There are generally only a few scenarios where using an ATM card is the best choice. Below are the three times when you should opt for debit over credit. Story by Emmie Martin for CNBC
How QR Codes Are Changing E-Commerce
Walmart introduced its Walmart Pay application using a QR code to initiate a payment. Consumers scan the QR code displayed on the checkout lane screen with their phones to pay for their goods with the payment method they have stored on their Walmart app. It’s a completely opposite approach to the typical payment process, in which we present our payment method to the merchant. The QR code conveys the purchase transaction information to the application on the mobile device where the payment is initiated. One obvious advantage is that the payment information is not carried through a merchant’s store network. It is stored within the merchant’s system, potentially tokenized, thereby decreasing potential exposure during transit or storage. Also, consumers don’t need to have a payment card with them at the store. For QR codes to be used more broadly in payment transactions, we need standards that both merchants and payment providers can adopt. Story by Jose Diaz for Mobile Payments Today
Gates Foundation Taps Ripple to Develop Mobile Payments Services
The Bill & Melinda Gates Foundation has tapped Ripple’s Interledger Protocol (ILP) to help level the economic playing field for the 2 billion people who are trapped in poverty, many of whom solely because they do not have access to a bank account or other basic financial services. On Monday, the Gates Foundation released Mojaloop, software intended to provide the world’s unbanked population with access to digital financial services. The software is open-source, so banks will be able to adapt and implement it into their digital platforms with reduced effort and cost. Mojaloop uses Ripple’s ILP technology to create an interoperability layer that connects bank accounts, mobile wallets, and merchants in a single loop. Story by Josiah Wilmoth for Crypto Coins News
Barclays U.S. Launches a New Banking Tool for Consumers
Barclays announced it is launching a new product for its U.S. customers called My Personal Bank. My Personal Bank is a personal banking tool that is designed to make banking and money management easier for customers. The service is embedded in the credit card mobile app, and it puts all of the customer’s services and accounts into one place. Customers can manage their finances in real time, and Barclays can help consumers more easily and efficiently. My Personal Bank brings together not only a customer’s Barclays credit cards and loans but also their accounts at other banking institutions. With all of these accounts in one location, customers will have an easier time managing their money. And Barclays is able to offer each customer personalized insights and recommend other services that might be beneficial to them. Story by Dave Rathmanner for Lend EDU
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 15.40 percent, slightly higher than the 15.39 percent average of last week. Six months ago, the average was 15.25 percent. One year ago, the average was 14.61 percent.