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People Who Use Mobile Payments Are More Likely to Overspend
Whether it’s Apple Pay or Google Pay, many of us now use our mobile phones for contactless payments while we’re out and about. But a new study may make you reconsider using mobile payments. Researchers from the University of Puget Sound in Washington have revealed that people who use these payment methods are more likely to overspend. Participants who used mobile payments had 34% higher odds of spending more than their yearly income than those who used other payment methods. They were also 31% more likely to have difficulties in paying bills and expenses. [Daily Mail]
Mobile payment users are 31% more likely to have difficulties in paying bills and expenses
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iPhone-to-iPhone Tap to Pay Launches at Apple Stores
Apple will begin rolling out its new Tap to Pay feature for the public. The feature was unveiled in February and lets iPhones that were compatible take payments through Apple Pay, contactless credit and debit, or other digital wallets. The feature will let small businesses and merchants take contactless payments via supported iOS apps. The merchant at checkout will prompt the customer to hold their device, either an iPhone, Apple Watch or contactless credit or debit card, near the merchant’s iPhone, and the payment will be completed. The feature began testing at the Apple Park Visitor Center earlier in May. [PYMNTS]
Why Mastercard and Visa Rarely Shut Down Scammers Who Are Ripping Off Consumers
A yearlong BuzzFeed News investigation reveals that both Mastercard and Visa, which together process three-quarters of all US credit card payments, move money for businesses with extensive records of fraud, making it possible for them to keep swindling customers, sometimes for years. The credit card giants collect a percentage of every sale, legitimate or not. BuzzFeed News’ review, based on tens of thousands of pages of court records, confidential investigative reports, secret recordings, internal company records, and more than 120 interviews, shows how Mastercard and Visa continue to accommodate thousands of businesses that have been flagged for issues including lying to customers, lying to banks, and breaking the law. [BuzzFeed]
CFPB Alleges TransUnion Lured Consumers with Dark Patterns
The CFPB filed a case against TransUnion, and John Danaher, a former TransUnion executive, alleging the credit reporting bureau manipulated consumers into signing up for subscription services. According to the consumer protection agency, when consumers applied for an annual free copy of their credit reports, TransUnion would ask for their credit card information for what appeared to be identity verification purposes. An online button appeared that seemed to offer a free credit score in addition to the credit report. What actually happened is that consumers who pressed the button were signed up for credit-monitoring services with recurring monthly charges using the card information they provided. Disclosures about this charge were made in fine print that was difficult to locate. Consumers who tried to cancel these recurring charges found there was no simple way to do so. [Bankrate]
PayPal Looks to Embrace All Possible Crypto and Blockchain Services
Global payment giant PayPal is doing its best to bring all possible blockchain and cryptocurrency integrations to its services. PayPal is working hard to support all possible digital services, including digital currencies and central bank digital currencies. After rolling out its buy, hold and sell service for Bitcoin across the United States in 2020, PayPal continues to expand its digital currency-related offering. [Coin Telegraph]
CFPB Targets Credit Card Suppressed Data Practices
The CFPB announced it has sent letters to the nation’s biggest credit card companies to question them about why they are not regularly providing data to credit bureaus on the actual monthly payments their borrowers are making. According to the CFPB’s research, only about half of the largest credit card companies contribute data to credit reporting companies about the exact monthly payment amounts made by borrowers. The same research also showed that over a short period of time, several of the largest credit card companies began to suppress actual payment amount information that they had previously provided or furnished about consumers. This practice of suppressing payment data has potential for harm as it may impact consumers’ ability to access credit at the most competitive rates. [PYMNTS]
Mastercard Focuses on Southeast Asia, Latin America After India Ban, Russia Exit
Southeast Asia and Latin America are strong growth regions for Mastercard after its withdrawal from Russia in March and India’s 2021 ban on it from issuing new cards. India’s central bank banned Mastercard after declaring it “non-compliant” with the country’s 2018 rules that required foreign card networks to store Indian payments data locally for “unfettered supervisory access”. Mastercard suspended operations in Russia, a market that accounted for roughly 4% its net revenue in 2021, in March over its invasion of Ukraine. [Reuters]
Bank of America CEO Says Nothing Will Slow U.S Consumer from Spending Money
U.S. consumers are “in good shape” and will keep spending at an elevated clip, at least in the near term, according to Bank of America CEO Brian Moynihan. “Consumers are in good shape, not overleveraged,” said Moynihan. The bank’s customers have checking and savings accounts that are still larger than before the pandemic and are spending 10% more so far in May than the year-earlier period. “What’s going to slow them down? Nothing right now,” Moynihan said. [CNBC]
Africa Accounts for 70% of the World’s $1 Trillion Mobile Money Market
Africa now accounts for 70% of the world’s $1 trillion mobile money value. The value of Africa’s mobile money transactions edged up 39% to $701.4 billion in 2021 from $495 billion in 2020, highlighting the future of African banking is mobile. GSMA’s figures show the volume of mobile money transactions jumped 23% to 36.7 billion in 2021 from 27.5 billion in 2020. In the review period, registered mobile wallets in Africa topped 621 million, a 17% increase from 562 million captured in 2020. There are now over 184 million active mobile money wallets on the continent compared to 161 million accounts just over a year before. [Quartz Africa]
Klarna Used a Prerecorded Video Message to Lay Off 10% of Employees
Klarna, the Swedish buy now, pay later service, announced that it is laying off 10% of its global workforce in a prerecorded video message. The company currently has about 7,000 employees, and a 10 percent cutback puts the number of affected workers somewhere around 700. BNPL businesses soared at the height of the pandemic when many people were strapped for cash and had nothing else better to do than shop online. Last week, The Wall Street Journal reported that Klarna is looking to raise a new round of funding that would value the company at $30 billion, about one-third less than the $46 billion it was valued at nearly one year ago. Rival BNPL service Affirm has also seen a similar dip, with its share price sinking 75% this year. [The Verge]
Chase Announces Limited-Time Offers on Southwest Credit Cards
Chase announced a limited-time offer for its consumer Southwest co-branded credit cards. The card issuer is offering an increased sign-up bonus for new cardholders, offering 75,000 bonus points. The limited-time offer gives new cardholders 75,000 bonus points after they spend $5,000 in the first three months. The bonus is now available on the Southwest Rapid Rewards Plus, Premier and Priority cards. All of the points you earn with a Southwest Airlines credit card count toward your eligibility for the coveted Southwest Companion Pass, which requires that you earn at least 125,000 points in a calendar year. [Investopedia]
