Synchrony Hikes Interest Rates on Credit Cards to Offset Late Fee Rule
The credit card company Synchrony Financial is hiking interest rates it charges to its customers, part of a series of steps to mitigate the financial impact of a Consumer Financial Protection Bureau rule that would shrink its late fee revenue. [American Banker]
Walmart Backed Startup Fintech Launches Buy Now, Pay Later Option
The Walmart-backed financial technology company, One, is helping customers to buy now and pay later. According to One’s website, the pay over time feature applies to purchases between $100 and $3,000. It also comes with an annual percentage rate between 9.99% and 35.99%, which depends on your creditworthiness. One’s system rivals that of Affirm, which Walmart already uses to help customers purchase products across its stores and online. [Fox Business]
U.S. Consumers on Lower Incomes Face Loan Stress While Banks Pull Back
U.S. borrowers on lower incomes are increasingly struggling to keep up with their loan payments, according to recent data and bank executives, prompting banks to become more cautious about dishing out credit cards and car loans. A growing number of Americans have seen their savings dwindle as rising prices squeeze budgets while interest rates stay high, bankers and economists said. The deterioration in household finances for those earning less than $45,000 contrasts with financial resilience among those on higher incomes. First-time and low-income borrowers are experiencing higher default rates on their loans than people with larger incomes. [Reuters]
This Cash-Advance App Is Buying Petal Credit Card
Empower Finance is buying Petal, the credit card issuer that originally made a splash with the promise of helping customers build their credit inexpensively but ended up downgrading some of those same customers to cards charging numerous fees. When it launched in 2016, Petal credit card company touted itself as an affordable way to access credit for anyone with a less-than-stellar credit history. Its approval process used alternative data like banking information instead of just credit scores and credit history. And unlike some credit-builder cards, Petal doesn’t charge a security deposit. Plus, you could earn 1% to 10% in cash back — depending on the card you were approved for — a rarity for a credit-builder card with no annual fee. But the company stumbled amid financial woes with users reporting issues that included some customers being downgraded to a version of the card that charged an annual fee. [CNet]
Mastercard Harnesses AI to Take on Scammers
Mastercard is tackling the growing threat of scams through the launch of an AI-based product suite and several cross-industry partnerships. According to the FBI, across the United States people lost $12.5 billion to internet scams in 2023. In the UK, fraudsters were responsible for nearly 1.4 million thefts during the first half of 2023. To combat the threat, Mastercard has launched Scam Protect, a suite of specialized tools powered by AI, biometrics and open banking, which help identify and prevent scams whether they are card-based, account-to-account, or fraudulent account openings. The payments firm is also working with Verizon, combing its identity insights with the US telco’s network technologies to more accurately block spam and scammers. [Finextra]
Cash Still Critical for Businesses But Processes Need Updating
According to a new report from PayComplete, nearly six-in-10 businesses globally (57%) say they expect to never be entirely cashless despite the widespread adoption of electronic, card and mobile payments. More than four-in-10 (41%) companies still use manual cash-handling processes, leading to many businesses spending over $500,000 a year on excessive security costs. More than one-in-three (35%) organizations encourage buyers to use electronic payment methods to increase overall efficiencies, despite cash remaining a strong customer preference for payment. Over a third (34%) of organizations say their biggest challenge is discrepancies when handling and processing cash due to low levels of automation. More than three-in-10 (31%) organizations say they are tightening processes and increasing staff training to offset their lack of automation. [Chain Store Age]
Square Brings Offline Payments to All Devices
Offline payments, Square’s no-connection-required solution to deliver continuous commerce connectivity, is now available to Square sellers using every hardware device, and in every country. Square has offered offline payments for 10 years, first bringing “Offline Mode” technology to the original Square Reader for magstripe in 2014. In 2022, offline functionality expanded to Square Register and Square Terminal, Square’s proprietary end-to-end integrated devices, which provided offline coverage to about half of Square’s seller population. Now, offline payments are available across the entire Square hardware lineup, expanding to Square Stand and Square Reader for contactless and chip, enabling nearly 90% of hardware sellers to take offline payments. [Global Data]
Get a Limited-Edition Delta Card Design Made 33% from an Iconic Retired Boeing 747
Want a credit card that’s made from a piece of storied aviation history? If so, you may want to strongly consider getting a Delta SkyMiles Reserve American Express Card or Delta SkyMiles Reserve Business American Express Card with the limited-edition Boeing 747 design made from two retired Delta Air Lines Boeing 747 aircraft. Delta and American Express have partnered to release a limited-edition card design made with 33% metal from two retired 747 Queen of the Skies aircraft. This sleek card is available to both new and existing Delta Amex cardmembers. [The Points Guy]
Jack Dorsey’s Payments Company, Block, Is Building Its Own Bitcoin Mining System
Jack Dorsey says that his payments company, Block (formerly Square), is expanding its bitcoin mining ambitions from designing chips to developing a full bitcoin mining system. In a post on Tuesday, the global tech firm announced that it had finished the development of its own standalone three-nanometer bitcoin mining chip and was now in the process of working through the design with a “leading global semiconductor foundry.” Block also unveiled plans to broaden out the scope of its mining project to include system design. [CNBC]
Read the full article here
