Credit Cards Won’t Save Airlines From the Next Downturn
There is a dirty secret behind the record profitability of U.S. airlines in recent years: Credit card fees. Credit cards bearing airline insignia are a lucrative business. Delta Air Lines’ partnership with American Express should generate $3.7 billion in revenue for the airline next year, it said Thursday-an 85% increase in five years. That is particularly remarkable because Delta has been cutting discounts and upgrades given to credit-card users when they spend. Merchants pay credit-card issuers and banks when consumers use their cards, and some of these so-called interchange fees are passed onto airlines. This arrangement gives airlines margins as high as 60%, analysts at brokerage firm Raymond James estimate. This would mean they contribute almost a third of the operating profit reported by major U.S. carriers. People might not choose their airline based on which credit card offers the best rewards, but they do choose their card based on which carrier they use most. Because such customers are often big spenders, financial firms are willing to pay a lot to attract them. Story by Jon Sindreu for The Wall Street Journal
What is Magecart? Credit Card-Stealing Malware Proves Hard to Stop
Magecart refers to cyberattacks in which hackers implant malicious computer code into websites and third-party suppliers of digital systems to steal credit card info as people enter it at a checkout page. While the digital theft of credit card info, known as skimming, is not new, attacks on payment pages and smaller companies represent a persistent threat that has proven so successful that it has spawned its own small cottage industry. Magecart’s success is partly due to that fact that it is nearly impossible for the consumer to detect. Story by Jasmin Boyce for NBC News
Payments Company Square to Re-Apply for a Bank License
Square Inc, the payments company led by Twitter chief executive Jack Dorsey, is refiling its application with U.S. state and federal regulators for a bank license. Square is applying with the FDIC for a special industrial loan company license, that allows nontraditional financial firms to collect government-insured deposits. The bank would be Utah-chartered. Square, which is best known for its small credit card reader, had first applied for banking charter in September 2017, but had withdrawn its application earlier this year. If granted a license, the new unit, called Square Financial Services, mainly will be offering deposit accounts and loans to small businesses. Story by Anna Irrera for Reuters
The Surprising Place Rewards Cardholders are Getting the Most Cash Back
Buying groceries is bagging a lot of rewards. Rewards cardholders are earning the most points and cash back on their grocery purchases, according to a CreditCards.com report. More than one in three (35%) respondents credited supermarket sweeps for earning the most cash back, followed by travel (27%) gas (23%) and dining (14%). The surveyed respondents on average said they spent $6,477 a year at the supermarket, earning back $185 in rewards cash on average using a card offering 3% cash back on everyday purchases. Story by Nicole Lyn Pesce for MarketWatch
Here’s How that Fed Rate Hike Will Impact You
With the Federal Reserve’s latest quarter-point interest rate increase (and still more likely to come), few consumers are left unscathed. The decision affects rates on all kinds of borrowing, from home mortgages to credit cards. The Fed made its ninth hike in three years and pushed the federal funds rate target to a new range of 2.25 to 2.5 percent (its highest level in a decade). Rate hikes are generally considered an indication that the economy is doing well and pave the way for pay raises and a better return on your savings. But most credit cards have a variable rate, which means there’s a direct connection to the Fed’s benchmark rate. As the federal funds rate rises, the prime rate does as well, and credit card rates follow suit. Cardholders will see the impact within a billing cycle or two. Story by Jessica Dickler for CNBC
Capital One Savor Cardholders Can Get a Free Postmates Unlimited Subscription
When Capital One relaunched its Savor card this summer, it offered an excellent value proposition to cardholders: 4% cash back on dining and entertainment, 2% back at grocery stores, and 1% back on everything else. Now, Capital One has added a new perk to the card: a monthly statement credit for the delivery service Postmates Unlimited, from now through December 2019. That’s worth up to $120 if you take advantage of it starting this month. Postmates is a crowdsourced service that offers delivery from thousands of restaurants and stores. With a Postmates Unlimited membership, you’ll get free delivery on orders over $15. Postmates Unlimited normally costs $9.99 each month. Story by David Slotnick for Business Insider
New Experian Tool Allows You to Instantly Boost Your Credit Score
Boosting your credit score often requires months of responsible financial behavior. But a new tool from Experian – one of the three major credit bureaus – enables you to instantly add utility and cellphone payments to your credit report, potentially increasing your credit score and helping you pay less to borrow. The platform, called Experian Boost, becomes available in January for those on the credit bureau’s early access list and will roll out to everyone in the following months. Story by Janna Herron for USA Today
GDPR: EU Sees More Data Breach Reports, Privacy Complaints
Privacy watchdogs in Europe say they are continuing to see an increase in data breach reports as well as privacy complaints. That should be no surprise, because the EU on May 25 began enforcing its General Data Protection Regulation. Among its provisions, GDPR requires organizations that suffer a breach that may have exposed Europeans’ personal information to notify relevant authorities. GDPR also gives Europeans the ability to file class-action lawsuits against breached organizations, and some law firms have already been exploring these types of actions. Numerous national data protection authorities say they have seen an increase in both complaints as well as breach reports. Story by Mathew J. Schwartz for Bank Info Security
13 Data Breach Predictions for 2019
Data breaches are inevitable at any organization. But what form will those breaches take? How will the attackers gain access? What will they steal or damage? What motivates them to attempt the attacks? CSO has gathered predictions from industry experts about where, how and why cyber criminals will attempt to break into networks and steal data during the coming year. Story by Michael Nadeau for CSO
Wells Fargo, Bank Of America Top U.S. Mobile Bank App Ranking
Banks in the U.S. are consistently pushing the envelope in terms of mobile innovation to catch up with customer demands for increasing novel features in their digital banking channels, according to S&P Global Market Intelligence’s 2018 U.S. Mobile Banking Market Report. Wells Fargo and Bank of America boast the most comprehensive mobile app, each offering 23 of the features surveyed. BBVA Compass followed in third place with 22; while Capital One, Citi and PNC tied for fourth with 21; and BB&T and Chase with 20. Customers have come to expect a feature-rich mobile experience with comprehensive self-service functionality, with features such as card controls and fingerprint login topping the most in-demand features mobile banking users would like to see added to their apps. In addition to app features, banks are also focused on providing technology-driven customer engagement to improve overall user interface and app performance. Story in the ABL Advisor
Mobile Payments Now Account for 6% of all UK Card Transactions
The percentage of payments made with a mobile phone in UK stores has jumped from 1.3% in Q3 2016 to 5.6% in Q3 2018. Compared to this time last year, the volume of contactless mobile payments has increased by 60%. Cardlytics found the biggest beneficiaries of growing mobile payments are quick-service merchants who have introduced contactless payment methods. This includes quick-service-restaurants (11.3%), coffee shops (11%), public transport (11%) and bars and pubs (9.25%). “This reflects that mobile payments are used more readily at merchants that people visit on a daily basis and wish to pay more expediently, while less popular amongst bigger-ticket, one off purchases,” said the Cardlytics report. Story by Sarah Clark for NFC World
Bank Account Fraud: How to Stop Scammers Using Caller ID Spoofing
If you ever get a call from someone claiming to be a customer service agent at your bank, pump the brakes before answering any questions, even if they have the right caller ID. Using “caller ID spoofing,” scammers can make it look like they’re calling from your bank’s phone number. Here’s the tipoff that it might be a scam: Banks typically don’t call you asking for personal information. One of the easiest ways to spot a scammer is that they reach out to you versus you contacting them. Story by Chanelle Bessette for USA Today