This Week In Credit Card News: Deadline Arrives For Chip Credit Cards, Hack Occurs At Trump Hotels

Ready or Not, it’s Credit Card Chip and Dip Time

Thursday marks a milestone in the effort to shift the U.S. to the use of microchip-embedded credit cards, a more secure alternative to traditional cards that require the swipe of a magnetic stripe. The October deadline is more a call to action for retailers than a cutoff, electronic payment experts say. Chip or EMV cards are more secure than those with just a magnetic stripe because they produce a unique code for each transaction, making them harder to counterfeit and preventing the card from being used for future fraudulent purchases. [USA Today]

Trump Hotels Hacked, Credit Card Data at Risk

Hackers snuck a computer virus into Trump hotels across the United States and Canada, potentially stealing data from customer credit cards for an entire year. The hotel chain warned that anyone who visited a Trump hotel between May 19, 2014 and June 2, 2015 “may have been affected.” The list of hotels includes two locations in New York and one in each of the following cities: Chicago, Honolulu, Las Vegas, Toronto and Miami. [CNN Money]

CFPB Fines Fifth Third Bank for Illegal Credit Card Practices

Fifth Third Bank became the 11th credit card issuer to be slapped with major fines by the Consumer Financial Protection Bureau for illegal practices in the marketing or administration of credit card add-on products and services. Fifth Third Bank will have to pay back an estimated $3 million to nearly 24,500 consumers who purchased a “Debt Protection” credit card add-on product. From 2007 to 2013, the CFPB discovered the bank’s telemarketers deceptively marketed credit card add-on product during calls. []

The Rise of Corporate Prepaids–No Flash in the Pan

Prepaid solutions are growing in Europe, as the view of prepaid in general is shifting away from a “subprime” mindset that may carry negative connotations, and toward a technologically advanced platform that can help a range of enterprises manage time and money more efficiently. That includes governments–and of course corporate clients–being able to monitor employee spend in real-time fashion. [PYMNTS]

Samsung Pay Officially Launches in United States

After being tested in its home market of South Korea, the Samsung Pay mobile payment service has now gone live in the United States with some major new features. Currently, Samsung Pay works only with the Galaxy S6 Edge Plus, Galaxy Note 5, Galaxy S6 and Galaxy S6 Edge. Samsung Pay uses tokenization for making transactions and does not store any account numbers or credit card numbers on the device. Using Near Field Communication technology, Samsung Pay processes payments at tap-to-pay terminals and works with every point of sale system, including NFC, magnetic stripe and EMV (Europay, MasterCard and Visa) terminals for chip-based cards, according to the company. However, Samsung Pay does not work with readers where users are required to physically insert their card into a slot, like the ones at gas stations or on an ATM. [MNR Daily]

Face-to-Face Interactions Keep Bank Branches Open

Most Americans still want to visit a physical branch to do their banking business, according to a new survey. In fact, 61% of American consumers visit their bank once a month, and 73% believe they’ll still need a bank branch 10 years from now. Respondents said they enjoy the face-to-face contact when they visit a branch (28%) but many others indicted they are worried about the safety of online transactions. []

U.S. Court Hears Challenge to $5.7 Billion Visa, MasterCard Settlement

A U.S. appeals court on Monday weighed whether to uphold the approval of an estimated $5.7 billion antitrust settlement by MasterCard and Visa with merchants over credit card fees despite the objection of several major retailers. A lawyer for retailers including Target and urged the 2nd U.S. Circuit Court of Appeals in New York to reject the deal, saying it forces merchants to give up their rights to sue over various policies and practices. The settlement, the largest in a U.S. antitrust class action, resolved lawsuits by merchants pending since 2005. The lawsuits accused Visa and MasterCard of fixing the fees they were charged each time customers used credit or debit cards. [Reuters]

Mobile Payments Data Breaches Will Increase, Say Cybersecurity Experts

A majority (87%) of cybersecurity experts expect to see an increase in mobile payment data breaches over the next 12 months, yet 42% of them have used this payment method in 2015. A survey of 900 cybersecurity experts, conducted by ISACA, suggests that people who use mobile payments are unlikely to be deterred by security concerns. Almost 89% see cash as the most secure payment method, but only 9% prefer to use it. [First Post]

MasterCard Introduces Fast Bitcoin-like Global Payments to Consumers

MasterCard has launched MasterCard Send, a personal payments service that enables funds to be sent quickly and securely to consumers domestically and internationally. Now live for users in the United States, MasterCard Send permits sending secure real-time payments to consumers, both banked and unbanked. The recipients get the funds immediately on their MasterCard or other cards, into mobile money and bank accounts or via cash agent outlets. MasterCard Send emulates one of the two main advantages of bitcoin payments–fast transactions that take minutes instead of days. [Bitcoin Magazine] 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 14.55%, identical to last week. Six months ago, the average was 14.47%. One year ago, the average was 14.54%. []

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This Week In Credit Card News: Thieves Test Cards On Charity Sites; Why Your Chip Card Is Safer

What’s the Chip in Your New Credit Card Do?

The microchip on your debit or credit card helps make it more difficult for fraudsters in two important ways. It makes it harder to physically counterfeit the card and it creates a unique transaction code that’s passed to the merchant every time you make a purchase with the card. Stealing a unique transaction code and using it for fraudulent purchases is like having an expired password: it won’t do anyone any good. [CNBC]

Criminals Use Charity Websites to Test Credit Card Numbers

If your credit card bill contains an unauthorized donation to a charity, you are not alone. New information reveals that criminals are using unsecured charity websites to test stolen credit card numbers on a global scale. Many charity websites have simplified their donation platform to encourage more people to give to their organizations. This added convenience comes at a price though, costing some organizations thousands of dollars due to false donations made to their websites. Cyber criminals are beginning to take advantage of the limited security measures on charity websites to verify the validity of stolen credit card numbers so they can be used for future fraudulent purchases. []

Federal Reserve Board Announces Enhancements to ACH Service

The Federal Reserve Board on Wednesday announced the approval of enhancements to the Federal Reserve Bank’s same-day automated clearing house service. [Mobile Payments Today]

Why Apple Pay and Other Mobile Wallet Services Could be Regulated Like Banks

Mobile payment services are slowly starting to catch on in the United States. But while the payment services seem simple–just plug in a debit or credit card number, enter your email and scan your phone using a bar code or QR code at one of a growing number of stores, from Kohl’s to the hamburger chain White Castle–one larger question looms over the services: are they replacing traditional banks, and should they be subject to the same types of regulation? [The Christian Science Monitor]

Debit Cards Lag Credit Cards in EMV Migration, Putting Banks at Risk

Three times as many credit cards will be chip-enabled by the end of the year as debit cards, making the slower banks bigger targets for cybercriminals. An estimated 25% of debit cards are expected to be EMV ready,compared to about 75% of credit cards. [CSO Online]

Samsung Pay a Hit in South Korea in Run-Up to U.S. Launch

Samsung said Thursday that its mobile payment platform reached $30 million in transaction volume a month after it was launched in South Korea. The news comes as Samsung Pay is scheduled to launch in the U.S. Monday to compete with the likes of Apple Pay and Google’s Wallet and Android Pay. [The Los Angeles Times]

Another Airline Gets a New Credit Card Deal

In recent years, credit card companies have realized that in the perennial competition to acquire and retain customers, they need desirable rewards partners. While many card issuers have their own rewards points or cash-back programs, many consumers want to earn currency from a particular brand. Airlines are usually near the top of the list in terms of desirability. They serve huge numbers of customers. Moreover, airline tickets are expensive enough that plenty of people want to earn points for free flights. Carriers have used their resulting leverage to get significantly better deals upon renewing their agreements on co-branded airline credit cards in the past couple of years. [The Motley Fool]

MasterCard Launches Aid Network

Humanitarian organizations are increasingly asked to provide aid in a climate of political and economic unrest. To address this challenge, MasterCard launched the MasterCard Aid Network, an end-to-end, non-financial service designed to streamline aid distribution even in the absence of telecommunications infrastructure. [Finextra] 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 14.55%, slightly lower than last week’s average of 14.59%. Six months ago, the average was 14.48%. One year ago, the average was 14.51%. []

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This Week In Credit Card News: Google Launches Android Pay, Consumers Borrowing More

Consumer Credit in U.S. Increased More Than Forecast in July

Consumer credit in the U.S. rose more than projected in July, boosted by bigger credit card balances and loans for automobiles. The $19.1 billion increase followed a $27 billion gain in the prior month that was larger than previously estimated, Federal Reserve figures showed Tuesday. Americans are becoming more willing to borrow for large-ticket purchases such as cars as the job market strengthens, home values rise and household finances improve. Revolving debt, which includes credit cards, rose by $4.3 billion following a $7.5 billion increase. [Bloomberg]

Google’s Android Pay Rolls Out in U.S.

Google’s Android Pay rolled out Thursday to US customers, becoming the latest system to allow consumers to tap their phones to pay for purchases at retailers. Similar to the Apple Pay system unveiled last year, Android Pay will allow consumers to store their credit card information on their handsets along with loyalty cards and other data. For extra security, Android Pay will generate a one-time “token” or virtual account number so the actual credit card data is not revealed in a transaction. [Yahoo Tech]

Countdown is on for Discover Credit Cardholders to use Apple Pay

Discover said that it would integrate with Apple’s mobile payments technology, Apple Pay, starting Sept. 16. For background, Apple Pay lets users upload credit and debit card information to a “mobile wallet.” They can then use their iPhone or Apple Watch to pay for goods at retail stores in the U.S. and U.K. that have point-of-sale registers equipped with near field communication technology, known as NFC. By turning on the spigot with Discover, Apple is now compatible with all major credit cards. [Fortune]

Only 22% of Small Businesses Are Ready for EMV Deadline

Yet another study has emerged showing that small businesses are unprepared for the October 2015 transition to EMV credit cards. Only 22% of small retailers are ready for the deadline, and 23% feel chip and PIN card readers are completely unnecessary. Surprisingly, about one in 10 business owners still said they did not know about the approaching deadline. []

JPMorgan Uses its Might to Cut Costs in Credit Card Market

JPMorgan Chase is cutting prices for a group of its Chase credit card customers and getting Visa to shoulder at least some of the burden of the lost revenue, underscoring how the largest U.S. bank’s size can help it hang onto business in fiercely competitive markets. Chase, which generated roughly $3.6 billion of revenue last year from those fees, is increasingly occupied with fending off banking rivals like Citigroup, as well as Paypal and Square. Chase’s revenue from those fees is showing signs of eroding. In the first half of 2015, fee income in the bank’s credit and debit card business fell 2% from the same period a year earlier, even as the bank processed a higher volume of transactions. [Reuters]

MasterCard to Lift Limit on Mobile Payments in Europe by 2017

MasterCard said new standards it is introducing in Europe will make NFC-based payments easier on mobile devices, including lifting the fixed limit on how much consumers can pay in several European countries. On-device authentication means the limit on smartphone payments can be lifted. In several countries, users can only tap and pay to a fixed limit (€25 in France and £30 in the UK). [Mobile World Live]

Nearly Half of Mobile Device Owners Use Mobile Banking

According to a new survey from the American Bankers Association, 39% of Americans and 45% of mobile device owners use mobile banking at least once a month. []

3 Trends In Mobile Payments You Need to Know About

The mobile payments space has been touted as the next big thing for some time now. For almost as long as the mobile device revolution, industry watchers have predicted that the ubiquitous nature of mobile devices signaled the end of the traditional wallet–that, soon, cash and credit cards would give way to a new technology embedded into our mobile phones. So far, it hasn’t happened. Most people continue to pay for things using traditional credit cards and cash. Here are three recent trends that are set to help accelerate the pace of innovation in this space. [Forbes]

Sam’s Club to Accept American Express Credit Cards

Sam’s Club, Wal-Mart Stores Inc.’s warehouse division, will accept American Express credit cards starting Oct. 1, in addition to the other cards it already accepts in its stores. American Express lost a crucial relationship with Sam’s Club competitor Costco earlier this year. Costco stopped accepting Amex cards exclusively, and switched to Visa instead. Citigroup will issue Costco Visa credit cards. [Reuters] 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 14.59%, slightly below last week’s average of 14.60%. Six months ago, the average was 14.46%. One year ago, the average was 14.46%. []

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This Week In Credit Card News: Stealing Cards At Gas Stations, Online Shopping Without A Card

Credit Card Fraudsters Pump Gas Stations for Profit

As motorists head out on the last big driving weekend of the summer, the credit card industry and gas station owners are deploying everything from sophisticated software to heavy-duty padlocks to combat an epidemic of fuel-related theft and fraud. While many big merchants will have equipment in place by Oct. 1 to accept the new chip-based cards, tougher guidelines set by Visa and MasterCard don’t apply to gas stations until 2017. [The Wall Street Journal]

No Credit Card at Checkout? Online Shopping Just Got Even Easier

As it currently stands, online checkouts are far from seamless. I learned to dread the process from an early age. My mother, near the end of any and every online purchase, would inevitably yell, “Can somebody please bring me my wallet?!” But a Swedish checkout service that officially debuted in the U.S. on Tuesday is in the market to fix that. The service is named Klarna, and the way it works is this: when it comes time for checkout, you type in your email address, shipping address, and sometimes your phone number. The service then quickly decides-based on whatever data about you it can gather-whether it will extend you credit. Assuming you are worthy, your purchase is complete. No credit card necessary–yet. Customers have 14 days to pay. After that, a warning is issued. Eventually, anyone who doesn’t make good on a bill will see late payment fees and possibly have to deal with a debt collection agency. [Fortune]

Affinity Credit Card Companies Need To Expand Customer Base

Roughly 43% of U.S. adult consumers own at least one co-branded or affinity credit card. By year-end 2014, co-branded credit cards generated 31% of general purpose credit card purchase volume, or $809 billion out of $2.63 trillion, among Visa, MasterCard, Discover and American Express branded credit and charge cards. Behind the scenes, the Visa, MasterCard and American Express networks are also jockeying for position. Another trend is rewards that tie back to the partner in a unique way. [MediaPost]

Subprime Borrowers Should Apply for That Credit Card Now

If you’re a subprime borrower–meaning you’re a higher credit risk to credit card companies, mortgage lenders and other creditors, and that you have a credit score below 601–now is the time to apply for that new piece of plastic. Why? Because credit card companies are more lenient these days about approving card applications from consumers with weaker credit. What’s more, even with new approvals to consumers with lower credit scores, credit card delinquency rates “remain low,” at 1.19% for the quarter. [The Street]

Credit Card Delinquencies Remain Low Despite More Subprime Lending

Even though subprime consumers are once again being courted and approved by credit card issuers, credit card delinquency rates have remained steady for the past year. These are the findings of the latest TransUnion Industry Insights Report. The average new account line is now $923, the lowest it has been since 2012. Consumers with subprime credit scores made up 18% of all new account originations, up from 14.7% a year ago. Overall, new accounts increased 11.2% to 13.1 million. The average credit line per borrower dropped slightly to $5,199 in the second quarter of 2015, down from $5,234 the same time last year. []

MCX Mobile Payments Rolling Out to Walmart and Other Locations in Ohio

Mobile payments have been making their way to a bunch of retailers around the world, but some of the biggest companies in the United States have yet to adopt mobile payments. Three years ago a group of retailers in the US working under the Merchant Customer Exchange umbrella decided to enter the mobile payments market. That Merchant Customer Exchange (MCX) partnership includes Walmart and Target. Three years after vowing to enter the mobile payments market, companies in the partnership are finally set to start rolling out the tech needed to enable mobile payments. The first locations to get the mobile payment upgrade will be several retailers and restaurants in the Columbus, Ohio area. [SlashGear]

Mobile Payments will be Mainstream Soon, Says 1 in 3 UK Consumers

Though mobile payments have been slow to take off, they are rapidly becoming more popular and now a new study based on a survey from Lloyds Bank has shown that many consumers feel that they will be regularly using this tech within five years. Moreover, recent statistics from Barclaycard have revealed that contactless spending in the United Kingdom is three times greater than it had been a year ago. 43% of consumers agreed that technology is the way that payments are going in the future. [Mobile Commerce Press]

eBay Sellers Can No Longer Process Payments Through PayPal Rivals

PayPal and eBay may have split ways, but that doesn’t mean they will no longer be affiliated with one another. As part of their breakoff agreement, eBay promised to process at least 80% of its payments through PayPal. eBay told its community that it is parting ways due to the low usage and high maintenance from offering ProPay and Skrill. []

5 Things to Know About the EMV Deadline

By the end of 2015, losses due to credit card fraud in the U.S. are expected to exceed $10 billion. This makes the transition from mag-stripe to EMV chip-and-PIN cards even more important as the industry moves toward the first major deadline in the EMV shift process. Here are five significant points for businesses and financial institutions to keep in mind. [Credit Union Times] 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 14.60%, identical to last week. Six months ago, the average was 14.45%. One year ago, the average was 14.49%. []

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