This Week In Credit Card News: Slow Card Readers May Spur Mobile Pay, Who Buys Digital Gift Cards?

Why Your Merchant Clients Should Offer Digital Gift Cards, All Year Long

Consumers are increasingly purchasing digital gift cards for purposes other than holiday gift-giving. “eGift” might be a misnomer, according to new research, which found 58% of consumers purchased an egift in the last year. And 63% of “egifts” were bought to be used by the purchaser. The study found that consumers tend to purchase plastic gift cards to give as gifts and use egifts, more often, for themselves. [Business Solutions]

Slow EMV Readers May Spur Mobile Payment Usage

One of the issues with this new credit card reader is that the transactions are slow and involve several steps. In fact, just a few weeks ago, Walmart executive, John Drechny, predicted a more chaotic holiday shopping season due to the change. He felt the EMV transition would cause confusion and longer lines during the Christmas rush. Since most EMV terminals are NFC capable, consumers may start switching to mobile payments since these transactions are much faster than those made with chip embedded cards. “EMV cards take 15 seconds to process. That’s up from two seconds for a mag stripe swipe. What about ApplePay readers? That is micro-seconds,” the Morgan Stanley analysts said. “Watch for mobile payments to take off as retailers turn on NFC to enable mobile wallet payments and encourage you to use your phone to pay.” []

First U.S. Debit Card Ready for Use in Cuba

Americans visiting Cuba can finally put away their cash and pull out their debit card. MasterCard and Stonegate Bank announced that their cards are now active for use in hotels, restaurants and other stores in Cuba, becoming the first to take advantage of the new opening with the communist island. ATM transactions won’t be available until 2016, but Americans can now use their debit cards to pay for hotels rooms, meals and all kinds of products and services across the island. [USA Today]

Airbnb Working On ‘Experience Card’: Preloaded $1K MasterCard + Rewards Program

While Airbnb dukes it out with local regulators and fights off encroaching rivals, the company continues to look at ways of increasing the margins that it makes around its accommodation service and improving overall loyalty on its platform. In the latest move, Airbnb appears to be working on an “Experience Card”–a prepaid MasterCard credit card for international Airbnb guests to spend up to $1,000 while travelling in the U.S. covering most goods and services. [Tech Crunch]

Why Just Raised $9 Million, a maker of customized prepaid MasterCard debit cards, announced it has raised $9 million from investors. offers prepaid MasterCards which can be customized with a user’s favorite brands and characters, including those from “Family Guy” and “Sesame Street.” The company offers an alternative to traditional banking since customers are only required to use a debit card and their mobile phones or the Internet to access their accounts. The investment will enable the company to expand its customer base. [Los Angeles Business Journal]

Apple Pay, Samsung Pay Push Into More Markets

The availability of mobile payment services continues its slow march forward thanks to new movement from Apple and Samsung. Apple launched Apple Pay in Canada on Tuesday, and plans to launch in Australia on Thursday.American Express is the only payment network supporting Apple Pay out of the gate in both countries. Samsung, too, has plans to move into a handful of new markets. Samsung Pay launched first in South Korea, and later in the US. Samsung is targeting a first quarter launch in China, Spain, and the UK. [Information Week]

Rob Gronkowski Gives Financial Tips for Capital One

Rob Gronkowski, banker? The New England Patriots tight end, better known as “Gronk,” has built a reputation for his on-field ability to break tackles and his off-field antics. While Ben Bernanke and Janet Yellen have nothing to fear, the marketing campaign for Capital One penned #GRONKonomics tries to offer consumers some common-sense advise for managing money. Gronk’s rules include setting short term savings goals, building financial discipline through automatic transfers and nicknaming your savings accounts to keep you motivated. [Boston Globe]

Bank Branches Still in Demand Despite Mobile Banking Growth

The increased use of mobile banking apps isn’t stopping people from visiting their local branches, according to a new survey from OnePoint Global. The study assessed how mobile banking customers from the United States and United Kingdom interact with their banks, and found that 77% of customers who have a banking app had still visited their local branch within the last month. []

LG Joins Apple, Google in Creating its Own Mobile Payment System

Just when you thought there couldn’t be more tech companies tackling the notion of mobile payments, in walks LG. The South Korean electronics conglomerate said it plans to launch LG Pay, a service that will presumably turn its smartphones into digital wallets. LG, which has seen its market share in the smartphone business fade despite successful high-end devices such as the G4, will partner with Korea’s two largest credit card firms, Shinhan Card and Kookmin Card, to roll out LG Pay. [CNet] Weekly Credit Card Rate Report

Based on the 1,000+ cards in the Complete Credit Card Index, the average advertised APR for credit cards is 14.64%, slightly higher than last week’s average of 14.62%. Six months ago, the average was 14.47%. One year ago, the average was 14.49%. []

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This Week In Credit Card News: Most Companies Not Prepared For Cyber Attack; Is Cash Dead?

Apple’s Tim Cook Says Cash Will be Dead for the Next Generation of Kids

Apple CEO Tim Cook is making another bold prediction about money. He’s telling university students that their future children will be totally unfamiliar with the concept of cash. The Apple boss may not be far off base. Cash usage is in decline in the UK and elsewhere as more consumers take up other payment options, like mobile payments and debit, credit, or prepaid cards. In 2014, the number of non-cash payments made in the UK eclipsed, for the first time, those made with physical currency. [Quartz]

79% of Small Business Owners Unprepared for Cyber Attack

Nearly eight in ten (79%) small business owners do not have a cyber attack plan, even though 63% have already been the victims of at least one attack. Respondents were asked why they had no cyber attack response in place, and 46% said they felt their current software was secure. []

The Rise of Reloadable Prepaid Cards Could Affect the Way Millennials Approach Banking

Prepaid cards were originally targeted at consumers with minimal access to financing or bank accounts. However, the appeal of these cards has broadened, attracting traditional banking customers as well. This is because the formula behind prepaid cards resonates with the growing population of debt-averse consumers–namely, millennials and Gen Xers–who recently suffered through the Great Recession. Younger consumers, in particular, are adopting prepaid cards, and many cite the avoidance of overdraft fees and debt as motivating factors. [Business Insider]

What You Can Learn From Marco Rubio’s Credit Card Mistakes

Newly released American Express charge card statements from 2005 and 2006 — when Marco Rubio was serving in the Florida Legislature — combined with statements previously disclosed read like a cautionary tale. Not only did he use a corporate card from the Republican Party of Florida for personal expenses, but he also accrued more than $1,700 in delinquency and late fees over a four-year period, The Washington Post reports. The whole controversy shows that not even the powerful are immune to problems with managing credit cards. It’s also instructive, especially if you’ve made a few slip-ups of your own and want to get back on the right track. [Nerd Wallet]

How College Kids Can Dodge Credit Card Pitfalls

Despite waves of strict legislation, credit card companies still spend millions to attract new, young customers – and many financially inexperienced students are signing up, often to their own detriment. These days, in order to get a credit card, college students must either put down a deposit in exchange for a secured card or get a parent or other adult to be a co-signer, which means the co-signer is also on the hook should they fall into credit debt. [USA Today]

VW Offers $1,000 in Credit Cards to U.S. Owners of Some Cheating Diesels

Volkswagen’s U.S. subsidiary said it will offer $1,000 worth of credit cards, of which half may be spent at VW and Audi dealerships, to owners of certain diesel models the company has admitted do not comply with government emissions standards. The automaker said eligible U.S. owners of nearly 500,000 VW and Audi models equipped with 2.0 liter TDI diesel engines can apply to receive a $500 prepaid Visa card and a $500 dealership card, as well as three years of free roadside assistance services. [Reuters]

Senators Demand Protection for Prisoners over Debit Card Fees

The Consumer Financial Protection Bureau is facing pressure to regulate a debit card program for released prisoners. A group of 18 senators wrote a letter to the CFPB about the high fees on these debit cards that all released prisoners receive. When prisoners are released, many of them have accumulated money from work they did in the prison or funds that friends and family members have sent them while they served time. This money is released in the form of a prepaid debit card rather than cash or check. Government officials are fighting to reduce the fees on the cards to help ex-prisoners secure as much of their money as possible. The problem is that the debit card programs aren’t designed to benefit the prisoners. The fees vary from one issuer to the next, but one report showed an average ATM withdrawal fee of $3 and a transfer fee as high as $30. []

Uber is Trying to Lure New Drivers by Offering Bank Accounts

One of the biggest challenges Uber faces as it aggressively expands and fends off competitors is attracting-and then retaining-drivers. As part of those efforts, the ride-share startup is planning to offer banking services to drivers, according to people who work closely with financial institutions and Uber, as well as documents reviewed by Quartz. The plan, which is in its early stages, would allow drivers to easily register for a bank account or prepaid card when signing up to work for Uber, according to the documents. By doing so, drivers can get paid the same day they work, compared to weekly now. [Quartz]

While Mobile Banking Grows, Branches Drive Business

While mobile and online banking continue to increase, brick-and-mortar branches drive referrals and customer satisfaction. Market Force Information found that 72% of customers whose bank offers a mobile app have downloaded it, up from 7% in 2014. Not so for digital wallets–such as PayPal Mobile or Apple Passbook. More than half surveyed say they don’t know what it is, and only 12% are using them. However, the vast majority of customers still retain retail bank accounts and visit branches. [St. Louis Business Journal] Weekly Credit Card Rate Report

Based on the 1,000+ cards in the Complete Credit Card Index, the average advertised APR for credit cards is 14.62%, slightly higher than last week’s average of 14.58%. Six months ago, the average was 14.50%. One year ago, the average was 14.50%. []

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Americans Aren’t Doing Enough to Protect Their Privacy Online

Nearly every American consumer (98%) believes they are creating safe passwords, but a recent study shows that only 6% are actually doing so.

The study by Avast, a company specializing in PC and mobile security, is surprising since 69% of respondents say having others access their personal information is one of their biggest fears. In fact, the research found 74% of Americans would rather have their nude photos leaked than personal banking information, yet fewer people lock their banking apps than their photo apps.

The survey of 6,800 consumers found the average length of a password is only eight characters and only 4.7% of consumers use special characters in their passwords. 95% of passwords contain only letters or numbers.

Websites are making it much too easy to create these weak passwords. Of the top 20 most-visited websites in the United States, 17 do not require passwords to use a combination of upper and lower case letters, numbers and special characters. Twelve of these websites accept passwords with as few as six characters, and two even allow passwords of less than six characters.

Security experts state that passwords should be no less than sixteen characters, with a mixtures of characters and numbers. Nearly 30% of respondents are not using these more complex passwords, though, as they said that they were “too hard to remember.”

In a separate survey conducted by Avast, 40% of Americans stated they do not use a password or pin to lock their smartphones, and another 50% rarely or never change their passwords for online websites–even after they’ve been notified of a site breach.

“We make it too easy to have our privacy taken–either through our own laziness or because websites don’t demand more of us,” said Vince Steckler, chief executive officer of Avast. “To protect our privacy, we need to modify our behavior, and that includes using better password management techniques.”

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This Week In Credit Card News: Voice Identification To Fight ID Theft, Rubio’s Card Use Under Fire

How Your Voice Can Protect You from Credit Card Fraud

Some banks are using voice biometrics and other technology to help determine who is calling and where a call is coming from. The reason: call-in center fraud is surging. The internet used to be a treasure trove for scammers, but financial institutions caught on and increased security, causing fraudsters to shift gears. New credit card technology has shifted criminals toward call-in centers, as chip-enabled cards are difficult to copy and replicate. Call-in centers remain a point of vulnerability. To help combat the fraud, some banks are using voice biometrics. Just like your fingerprint, your voice has characteristics that make it unique. [CNN Money]

Marco Rubio Confronts New Scrutiny Over Use of Party Credit Card

A decade after he began using a Republican Party credit card for personal purchases like paving stones at his home, Senator Marco Rubio on Wednesday pledged to disclose new spending records from that account. [The New York Times]

Why Millions of Millennials Can’t Get Credit Cards

A huge segment of the country’s largest generation is having trouble qualifying for a credit card, according to a new survey. A third of millennials said they were unable to obtain some kind of credit, largely credit cards, versus a quarter of the national sample. That adds up to 27.7 million Americans born between 1982 and 2000 who, as a result, may have a harder time getting a mortgage or car loan down the road. [The Fiscal Times]

State of Florida Can’t Ban Credit Card Surcharges, Court Rules

Pointing to the First Amendment, a federal appeals court has struck down a Florida law that bars businesses from imposing a surcharge on customers who pay with credit cards. The 11th U.S. Circuit Court of Appeals, in a 2-1 decision Wednesday, sided with four small businesses that faced potential prosecution for telling customers they would face additional costs for using credit cards. [Orlando Sentinel]

Amazon Discontinues Its Mobile Credit Card Reader

After only a year on the market, the mobile card reader known as “Amazon Register” is being pulled from the virtual shelves. Amazon announced it will be discontinuing its mobile payment processor as of February 1, 2016. Amazon Register was introduced in August 2014 to compete with other card readers such as Square and PayPal Here. Business owners received a small credit card reader that allowed them to accept card payments from their phones or tablets. Amazon undercut Square’s transaction fees to lure customers by offering a promotional fee of 1.75%, which then increased to 2.5%. Square’s transaction fee was 2.75%. []

Few People Are Using Apple’s Mobile Payments Service

Relatively few people are using Apple’s new mobile payments service, called Apple Pay, according to a new study from Trustev. Only 20% of people participating in mobile payments in the United States are using Apple Pay. Of those using Apple Pay, 56% have reported that they have used the service once during a typical week. Another 15.3% say they have never used it during their week. While few people may be using Apple Pay, fewer are using other services provided by Google and Samsung. [Mobile Commerce Press]

RushCard to Compensate PrePaid Debit Card Users for Outage

On October 29, RushCard announced it is creating a “multi-million dollar” fund to cover the costs that its prepaid debit card customers incurred after their cards stopped working in mid-October. When RushCard moved to a new payment processor on October 12, technical problems ensued that left hundreds of thousands of RushCard customers unable to access their funds. Some users lost access to their money for as long as two weeks. []

Mobile Malware Makes Mobile Banking Treacherous

A Kaspersky Lab report shows rate of mobile malware occurrence exploding in the third quarter. The number of mobile threats percolating on devices worldwide has risen precipitously this year-over three-fold. [Dark Reading]

Should There Be Affordability Checks for Credit Cards in the UK?

Credit card issuers need to do more to help up to 1.6 million people struggling with their credit card debt and paying only the minimum amount each month, the Financial Conduct Authority (FCA) has said. Following a year-long review, the regulator has concluded that the £60bn credit card market is working reasonably well for those who default on their loans and that there is effective competition in the sector. But it is concerned about those who only manage to keep their heads above water and who on average will take 10 years to pay off their debts. [The Week]

MasterCard Names Craig Vosburg, President, North America Markets

MasterCard announced the appointment of Craig Vosburg to president, North America Markets, effective January 1, 2016. This appointment comes as Chris McWilton announced he will leave MasterCard on December 31. McWilton joined MasterCard in 2003 as corporate controller and was appointed chief financial officer in October of the same year. [MarketWatch] Weekly Credit Card Rate Report

Based on the 1,000+ cards in the Complete Credit Card Index, the average advertised APR for credit cards is 14.58%, identical to last week. Six months ago, the average was 14.48%. One year ago, the average was 14.51%. []

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3 of 4 Consumers Have Changed Online Behavior Due to Cybercrime

Nearly 3 of 4 adults (74%) in the United States say they have changed their online behaviors due to the threat of cybercrime, according to a recent survey. The most common changes are not conducting transactions on a shared computer (46% of respondents) and changing passwords more often, not giving out personal information and not using public Wi-Fi (each at 35%).

Not only have behaviors changed, perception of security is also different due to the increase in data breaches, which were up 23% in 2014. 42% of respondents feel less secure than they did five years ago, and 44% reported having experienced a security breach first-hand.

Despite these feelings, 81% of respondents have not invested in online theft or identity theft protection.

Even though the health care industry accounts for more data breaches (37% in 2014) than any other sector, 68% of Americans trust health care providers with their personal data. Nearly 68% also trust the financial (68%) and education (67%) sectors.

The government and retail were viewed most negatively by respondents. Only 50% of consumers trust the retail industry with their personal data and just 41% say they trust the government with their information.

93% of respondents want the public and private sectors to do more when it comes to fighting cybercrime. Most Americans would like to see more investment in cyber security (72%), or an increase in qualified personnel (46%).

The study highlighted a number of ways consumers can protect their identity:

  • Create passwords that contain upper and lowercase letters, numbers and other characters.
  • If an email comes from an unknown source, don’t open attachments. These often contain viruses that allow criminals to access your computer.
  • Use a firewall and keep it up to date, as it will block viruses.
  • Most companies will not ask for personal information via email. If something seems questionable, contact the organization directly.
  • Look for a lock on your browser to make sure that it is secure.

The survey was from the University of Phoenix and conducted online by the Harris Poll in September among 2,028 U.S. adults.

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