Hurricane Helene Aftermath Prompts Card, Cash Troubles
After Hurricane Helene devastated much of the southeastern U.S., survivors of the wreckage wrought by the storm are grappling with another issue: How to pay for goods and services. Across much of the region, particularly in the hardest hit areas, credit card networks have been disabled in tandem with power and internet outages. Merchants who managed to open their doors were sometimes demanding that customers use cash only because of an inability to process credit or debit card transactions. [Payments Dive]
The Buying Power of Your Credit Card Points Is Tanking
Inflation is eroding the value of credit card points that are converted to dollars, losing about 20% of their purchasing power since 2018. Airlines and hotels are changing the points needed to redeem flights and rooms to reflect cash prices that have risen with inflation. Experts recommend redeeming points soon after earning them to avoid “pointsflation” and suggest using cards with easily transferable points to get the best deals. [The Wall Street Journal]
U.S. Senator Warren Asks Regulator to Impose Growth Curbs on Citi
A prominent Democratic U.S. senator called on a top regulator on Wednesday to impose growth restrictions on Citigroup as the Wall Street bank struggles to fix ongoing regulatory problems. In a letter to Acting Comptroller of the Currency Michael Hsu, Senator Elizabeth Warren said that Citi’s years-long struggle to fix data, controls and other management problems show it has become “too big to manage” and should be curtailed. A prominent bank critic who has previously taken aim at Wells Fargo, JPMorgan and others, Warren cannot force Hsu to take action but her letter can still put pressure on him to be tough on Citi, and draws more attention to the bank’s problems. [Reuters]
Mastercard to Buy Swedish Startup That Makes It Easier to Manage and Cancel Subscription Plans
Mastercard said it’s agreed to acquire Minna Technologies, a software firm that makes it easier for consumers to manage their subscriptions. The move comes as Mastercard and its primary payment network rival Visa are rapidly attempting to expand beyond their core credit and debit card businesses into technology services, such as cybersecurity, fraud prevention, and pay-by-bank payments. The payments giant said that the deal, along with other initiatives it’s committed to around subscriptions, will allow it to give consumers a way to access all their subscriptions in a single view, whether inside your banking app or a central “hub.” [CNBC]
UK Banks to Put Four-Day Hold on Suspicious Payments
UK Banks will have the power to pause payments for up to four days to give them more time to investigate fraud, the government has said. Currently, transfers must be processed or declined by the end of the next business day, but the new law will allow an extension of three more days. For years, banks have needed to have reasonable grounds to suspect fraud before being able to investigate but have also faced pressure from customers who want payments to be made instantly. The long-proposed new regulations will come into force at the end of October, later than originally planned. [BBC]
E-payments Are Essential in China, But Still Tricky for Foreign Visitors
China’s digital economy has been evolving at a faster pace since the pandemic. Daily tasks like calling a cab or ordering and paying at a restaurant are all done mostly through Alipay and WeChat. According to the Chinese central bank, in 2023 there were 340 trillion yuan ($48 trillion) worth of third-party online payments. Alipay and WeChat make up over 90% of mobile payments. However, it has not been easy for foreigners to sign up for the payment apps. To attract more foreign visitors, cities like Shanghai, aided by the country’s central bank, have pushed to make mobile payments more visitor-friendly. Foreigners residing in China must provide passport details and a scan of their passport information page. [Marketplace]
Average Cost of Credit Card Processing Fees
You can give your customers more payment options by accepting credit cards, but you will pay a credit card processing fee to do this. The average credit card processing fee, which will be taken out of a merchant’s sales revenue, is in the range of about 1.5% to 3.5%. Merchants can negotiate their card processing fees, and they are not set in stone. [Bankrate]
Baby Boomers Still Have the Highest Credit Limits
A recent Experian survey found that baby boomers have an average credit limit of $41,906, up nearly 4% from the year before and more than three-times the average for Generation Z ($12,899). While it’s tempting to be jealous of other people’s financial positions, there are some good reasons why baby boomers outpace everyone else with their credit limits. For one, boomers have decades-long credit histories. Lenders love long credit histories, and those who’ve paid their bills on time have likely earned higher limits. Second, baby boomers generally have a higher credit score than most generations, with an average score of 743. [The Motley Fool]
43% of Americans Have at Least One Unused Gift Card
More than 2 in 5 Americans have at least one gift card, gift voucher or store credit they haven’t used. The average amount in unused gift cards, gift vouchers or store credit is $244 per person. More than 1 in 3 Americans have lost money with a gift card misstep. The data shows that 55 percent of households with annual incomes of $100,000+ have at least one unused gift card, more than any other income bracket. The average amount of unused gift cards for this income bracket is $348. This contrasts sharply with households making under $50,000 annually. Just 35 percent of them have unused gift cards with an average value of $180. [Bankrate]
Visa Launches Spend Management Partnership with Denmark’s Cardlay
Danish FinTech Cardlay is working with Visa to improve spend management for commercial card issuers. The partnership combines Cardlay’s spend management platform with Visa’s market position, payment network and data capabilities to offer clients “fully embedded” commercial cards and expense management solutions. Research by PYMNTS Intelligence has projected that the global value of virtual card transactions will grow from about $2 trillion to $6.8 trillion by 2026, a sign of the growing recognition of their simplicity and security when compared to outdated methods such as paper checks. The research also showed that 55% of companies were using virtual cards more frequently. [PYMNTS]