This Week In Credit Card News: Shopping At Amazon’s Cashierless Stores; The Surge In Digital Banking – Forbes

Amazon Go: Inside the New Cashierless Store Moving in to the Suburbs

Amazon Go, the tech giant’s cashierless store concept, is ready for its move to the suburbs. The company opened a new Go store in Mill Creek, Washington, which it says will target customers living in suburban areas. Like its other Go stores, customers won’t need to visit a cash register when they’re ready to check out. They grab what they need and leave. Consumers will access the store by scanning their Amazon app, scan their palm with Amazon One tech, or submit a credit card. Customers can then choose between a variety of grab-and-go food items and drinks. The store is equipped with technology similar to self-driving cars which track what users add to their cart, then charges them once they leave the store. [USA Today]

More Than Three-Quarters of Consumers Prefer Digital Banking

The pandemic accelerated the world’s digital transformation, leaving a lasting impact on consumer preferences. Take banking, for example. The Digital-First Banking Tracker found that 78% of American consumers said they now prefer to do their banking digitally. Breaking that down, 41% said they prefer to use mobile apps, while 37% said they like using their financial institution’s website. These apps include functions such as check deposit, funds transfers and the ability to view statements and account balances. When physical branches were shuttered, FIs were forced to prioritize digital banking functionality and seek new ways to offer traditional in-person services. [PYMNTS]

Your Credit Card Debt Is About to Get a Lot More Expensive

After consumers paid off a record $83 billion in credit card debt during the pandemic, credit card balances are creeping back up amid higher prices for gas, groceries and housing. Overall, credit card balances rose by $52 billion in the fourth quarter of 2021, notching the largest quarterly increase in the 22-year history of the data. Now, total card debt is on track to surpass pre-pandemic levels and hit an all-time record as soon as this summer. At the same time, the Federal Reserve has committed to raising interest rates to tame inflation, which is now running at its fastest pace in more than 40 years. Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. As the federal funds rate rises, the prime rate does, as well, and credit card rates follow suit. Cardholders see the impact within a billing cycle or two. [CNBC]

With Kard, Banks and Fintechs Can Build Custom Credit Card Rewards Programs

Credit card rewards often play a significant role in attracting users to a particular card over its peers. But for young fintech companies newer to card issuance, setting up an attractive rewards program from scratch can be onerous, requiring the issuer to negotiate with individual retail partners and manage the complexities of integration case-by-case. Kard‘s rewards-as-a-service API streamlines the process for card issuers, allowing them to create a customized rewards program tailored to their particular customer base by choosing from Kard’s set of merchant partnerships. Kard manages the relationships with each business looking to offer rewards to promote their brand, making it easy for a new issuer to mix-and-match from Kard’s offerings and integrate those rewards into the issuer’s own user interface. [Tech Crunch]

MORE FOR YOU

Credit Card Companies Adjust Merchant Fees. Consumers May Pay the Price

Processing fees, or “swipe” fees, on credit cards are likely rising for millions of businesses. Visa and Mastercard, the top two payments networks in the U.S. with more than 70% of the market, recently changed its fee structures for merchants who accept their credit cards for payments. The companies said some of the changes, delayed from last year due to the pandemic, include both increases and decreases and are meant to continue supporting small businesses and safe and convenient shopping for consumers. However, retail trade groups and a bipartisan group of lawmakers say the moves on the whole will force business to pass on added costs to consumers. Although some companies will see fee increases, Mastercard notes it’s lowering costs for all merchants with transactions below $5 and Visa says it’s cutting its rates by 10% for more than 90% of small businesses, which could mean those with $250,000 or less in credit card volume. Both say these types of changes are going to help make small businesses more competitive against big-box retailers and benefit local shoppers. [USA Today]

New Apple Cash Accounts Now Branded as Visa Cards

The Apple Cash virtual debit card appears to be switching networks from Discover to Visa, as revealed in some updated images on Apple’s website. Since its launch, Apple Cash, originally known as Apple Pay Cash, has been operated through a partnership with Green Dot Bank on the Discover network. Discover is one of the smaller card networks and is accepted in far fewer places than heavyweights Visa and Mastercard. Over the past few days, several Apple Cash virtual card images on Apple’s website have been swapped out for new ones displaying a Visa debit logo, and the transition to the more widely accepted network appears to be underway. [MacRumors]

Venmo and PayPal Fees Are on the Rise Yet Again

PayPal has announced plans to change the fees related to its Instant Transfer offerings for U.S. consumers and merchants on PayPal and Venmo. Personal accounts on PayPal and consumer and business profiles on Venmo will pay 1.75% of the transfer amount with a minimum fee of 25 cents and a maximum fee of $25. PayPal merchant accounts will retain the existing rate of 1.5% of the transfer amount, change the minimum fee to 50 cents and remove the existing $15 cap for a no-maximum-fee cap structure. The announced changes will take effect for Venmo customers May 23 and for PayPal customers June 17. [Money]

Russian Law Firm Plans to Sue Apple Over Removal of Apple Pay

A law firm based in Russia says that it will file a class action suit on behalf of Russians, arguing that the shutting down of Apple Pay in the region caused “intentional moral damage.” Users of Russian banks subjected to sanctions by the U.S. and other countries, have been unable to use Apple Pay since February 2022. Apple then later shut down a loophole that had allowed its continued use via gift cards. [Apple Insider]

CFPB Plans to Revisit the CARD Act, Older Regulations

CFPB Director Rohit Chopra told lawmakers Wednesday that the bureau plans to revisit and update older regulations such as the Credit Card Accountability Responsibility and Disclosure Act, known as the CARD Act, to lower credit card fees. Chopra announced the move at a hearing of the House Financial Services Committee, where he fielded tough questions about the bureau’s plans to collect data on small business loans, crack down on so-called junk fees and address fraud in payment networks. [American Banker]

80% of US Shoppers Use Buy Now, Pay Later to Avoid Credit Card Debt

The Experian Global Insights Report found that 62% of respondents said they use mobile wallets, and 63% use traditional forms of payment. More than half of survey respondents (53%) said they have spent more online in the past three months, and half said they are likely to increase their spend online in the next three months. Also, 57% of respondents said using buy now, pay later services could replace their credit card. But only 18% of respondents said they used buy now, pay later services in the past six months. And 80% of U.S. consumers said they use digital installment payment services to avoid credit card debt. [Retail Dive]

Cuba Approves Cryptocurrency Services, Requires Central Bank License

The Cuban central bank issued regulations on Tuesday for virtual asset service providers, after giving a nod last year to the personal use of cryptocurrencies, a move some experts said could help the Communist-run Caribbean island skirt stiff U.S. sanctions. Cryptocurrencies, which allow financial operations to be carried out anonymously in a decentralized manner, have been used in the past to get around capital controls, as well as to make payments and transfers more efficient. [Reuters]

Innovation and Inflation: Two Trends Changing Credit Card Marketing

The early days of the pandemic prompted a quick throttling down of marketing, followed by a shift to new and different rewards. Overlaying all that has been a growing role for bank-fintech partnerships and the rise of buy now, pay later services. And now credit card issuers face an environment of rising rates plus inflation the likes of which many consumers and bankers have not seen before. Low-rate offers were reined in during the pandemic and offered much more cautiously, but now the acquisition battle is back on—not back to pre-pandemic levels, but in that direction. [The Financial Brand]

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