Visa, Mastercard pause crypto push in wake of industry collapse
US payments giants Visa and Mastercard are slashing plans to form new partnerships with crypto firms after a series of high-profile collapses rocked confidence in the sector, people familiar with the matter told Reuters. The crypto industry saw a stunning turnaround in 2022, as the bankruptcies of major companies FTX and BlockFi upset investors and increased regulatory oversight of the industry. Both Visa and Mastercard have decided to delay the launch of certain products and services related to crypto until market conditions and regulations improve. [Reuters]
Recent problems with cryptocurrencies have caused Visa and Mastercard to delay their plans
Discover to enable tracking of gun store purchases starting in April
Discover, a credit card provider, told Reuters it will allow its network to track purchases at gun stores in April, making it the first of its peers to publicly set a date to move forward with the initiative, which is intended to help authorities investigate gun-related crimes. Discover’s announcement came after the International Organization for Standardization, which decides on the classification of merchant categories used by payment cards, approved the launch of a special code for gun dealers in September. [Reuters]
Nearly half of Millennials, Generation X, have more credit card debt than savings
Nearly half of Americans ages 27 to 58 now have credit card debt that exceeds the balance in their savings accounts. About 45% of millennials and Generation X consumers surveyed reported a credit card balance greater than their savings or emergency funds, according to an annual emergency savings report released this week by Bankrate. [The Hill]
DoorDash launches its first co-branded credit card with Chase
DoorDash launches its very first credit card with Chase. The DoorDash Rewards Mastercard cardholders get 4% cashback on DoorDash and Caviar orders from merchants on the DoorDash platform, 3% cashback on meals when purchased directly from a restaurant, online or in store, 2% cashback on supermarkets online or in store and 1% cashback on all other purchases. New cardholders get free DashPass for a year, the platform’s $9.99 per month subscription service that offers free delivery and other benefits. Cardholders can renew their free DashPass membership each anniversary year with a $10,000 spend. Cardholders also get a $100 cash bonus after spending $500 on purchases in the first three months after account opening. [Tech Crunch]
Russian banks say debit cards may no longer work due to Western sanctions
Russian banks are warning debit cardholders that new sanctions from the US and UK could mean their cards stop working abroad. Emails from multiple Russian banks urging their customers to withdraw money from accounts linked to UnionPay cards as soon as possible came a day after the US and UK introduced sweeping new sanctions that prevented the rejection of approved transactions from a list of Russian financial institutions. UnionPay is a Chinese payment system that some Russian banks used before the war, and more used it after MasterCard and Visa withdrew from the country after the invasion a year ago. According to the US Treasury Department, the sanctions will go into full effect on May 25. [New York Post]
Chip shortage leads to delays in credit card deliveries
If you have lost your credit card, if it has been stolen, or if you are waiting for a card linked to a new account, it may take longer for your replacement credit or debit card to reach your mailbox. It usually takes a week for new cards to be shipped, but due to a shortage of chips, that has increased to eight weeks in some cases. More cards contain chips, and industries such as auto and technology are vying for the tight supply. Credit cards are further down the list to get the chips, and smaller credit card issuers are even further down the list. Last summer, a global cards and mobile payments industry group warned of a continued impact into 2023. [News 4 Jax]
Where digital payments, even for a 10 cent chai, are huge
The tiny QR code is ubiquitous in the vastness of India. The scan-and-pay system is one of the pillars of what the country’s prime minister, Narendra Modi, has championed as “digital public infrastructure,” with a foundation laid by the government. It has made everyday life easier, extended banking services such as credit and savings to millions of Indians, and expanded the reach of government programs and tax collection. With this network, India has shown on a previously unseen scale how rapid technological innovation can have a leapfrog effect on developing countries, boosting economic growth even when physical infrastructure lags behind. It is a public-private model that India wants to export as it establishes itself as a breeding ground for ideas that can uplift the poorer nations of the world. [The New York Times]
CFPB publishes new findings on financial profiles of buy now, pay later borrowers
The Consumer Financial Protection Bureau has released a new report analyzing the financial profiles of Buy Now, Pay Later borrowers. While many “Buy Now, Pay Later” borrowers use the product without noticeable indications of financial stress, the report finds that “Buy Now, Pay Later” borrowers are more likely to be active users of other types of credit products, such as credit cards, personal loans and student loans. . loans. They also show financial problems more often than non-users. For example, borrowers who buy now, pay later are more likely to have high debts or revolving balances or delinquent payments on their credit cards compared to consumers who do not use Buy Now, Pay Later products. Buy now, pay later borrowers are also more likely to use high-interest financial services such as payday loans, pawn loans and overdrafts. [CFPB]
Skimming fraud exploded in 2022
According to a recent analysis by FICO, card skimming in the US has grown by almost 500% in 2022 and shows signs of growing even faster this year. The company’s data identified more than 161,000 compromised cards last year, or about five times the number reported in 2021. Nearly 3,000 unique financial institutions were affected by compromise, representing a 79% year-over-year increase in the number of affected institutions. The January 2023 data showed a trend of nearly 1,000% from 2022. Most skimming fraud was concentrated in California, accounting for 47% of all cases FICO tracked during the year. [ABA Banking Journal]
LendingTree launches credit card with staggered payment model
LendingTree, which operates a financial services marketplace for consumer loans, is branching out by offering a branded credit card that pays back at a fixed rate, such as an installment loan. The LendingTree Win Visa card is based on the San Francisco-based Upgrade model that offers users a flat rate on purchases paid off in equal installments over 24, 36 or 60 months, structured as a personal loan. The card is issued by Sutton Bank, with banking services and lines of credit provided by Cross River Bank. LendingTree will offer the credit card separately from the mortgage loans, car loans and other consumer loans displayed on the online loan marketplace. [American Banker]
The history of women and credit cards
In March, the United States recognizes Women’s History Month, a time to commemorate women’s contributions and achievements in various fields and eras in history. In the field of personal finance, pioneers, legislation and certain events have been critical in making strides in leveling the financial playing field for women today. And while credit cards are a modern product, they can represent many of the changes women have experienced in recent decades, from financial access to credit utilization. Here’s a look at the history of women and credit, some key moments in changing the status quo and where we are today. [Yahoo Finance]
US Bancorp signals that CFPB has turned up the heat in prepaid card research
The Consumer Financial Protection Bureau is considering an enforcement action against US Bancorp after launching an investigation into its administration of prepaid cards for unemployment benefits, according to a securities file from the company. The Minneapolis company, which disclosed the CFPB’s investigation late last year, said in a filing Monday that the agency is now “considering a possible enforcement action” and that US Bancorp is cooperating fully with any ongoing investigations. The CFPB probe focuses on unemployment benefits paid out during the pandemic. [American Banker]
