Shopping at Amazon’s cashierless stores; The rise of digital banking

Amazon Go: Inside the new cashierless store coming to the suburbs

Amazon Go, the tech giant’s cashierless concept store, is ready for its move to the suburbs. The company has opened a new Go store in Mill Creek, Wash., which it says will target customers living in suburban areas. Like its other Go stores, customers won’t need to walk to a cash register when they’re ready to pay. They take what they need and leave. Consumers will access the store by scanning their Amazon app, scanning their palm with Amazon One technology, or submitting a credit card. Customers can then choose from a variety of food and drink items to take away. The store is equipped with technology similar to self-driving cars that track what users add to their cart and then top it up once they leave the store. [USA Today]

More than three-quarters of consumers prefer digital banking services

The pandemic has accelerated global digital transformation, leaving a lasting impact on consumer preferences. Take banking, for example. The Digital-First Banking Tracker found that 78% of US consumers said they now prefer to do their banking digitally. Breaking this down, 41% said they preferred using mobile apps, while 37% said they liked using their financial institution’s website. These apps include features such as check deposit, fund transfers, and the ability to view account statements and balances. When physical branches were closed, 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 whole lot more expensive

After consumers paid a record $83 billion in credit card debt during the pandemic, credit card balances rise due to rising gas, grocery and housing prices. Overall, credit card balances increased by $52 billion in the fourth quarter of 2021, recording the largest quarterly increase in the data’s 22-year history. Now, total card debt is on track to surpass pre-pandemic levels and hit an all-time high as early as this summer. At the same time, the Federal Reserve has pledged to raise interest rates to bring inflation under control, which is now at its fastest pace in more than 40 years. Since most credit cards have a variable rate, there is a direct link to the Fed’s benchmark index. As the federal funds rate rises, the prime rate also rises, and credit card rates follow. Cardholders see the impact within a billing cycle or two. [CNBC]

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

Credit card rewards often play an important role in attracting users to a particular card over its peers. But for fintech startups 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 on a case-by-case basis. Kard’s Rewards API as a Service streamlines the process for card issuers, allowing them to create a personalized rewards program tailored to their particular customer base by choosing from Kard’s set of merchant partnerships. Kard manages relationships with each company looking to offer rewards to promote their brand, allowing a new issuer to easily combine Kard’s offerings and integrate those rewards into the issuer’s own user interface. [Tech Crunch]

Credit card companies adjust merchant fees. Consumers can pay the price

Processing fees, or “swipe” fees, on credit cards are likely to increase for millions of businesses. Visa and Mastercard, the two major payment networks in the United States with more than 70% of the market, recently changed their 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 aimed at continuing to support small businesses and making shopping safe and convenient for consumers. However, retail groups and a bipartisan group of lawmakers say the measures taken overall will force businesses to pass on additional costs to consumers. While some businesses will see fee increases, Mastercard notes it’s cutting costs for all merchants with transactions under $5 and Visa says it’s slashing rates by 10% for more than 90% of small businesses, which could mean those with $250,000 or less in credit cards. volume. Both say these kinds of changes will help make small businesses more competitive with big-box retailers and benefit local shoppers. [USA Today]

New Apple Cash accounts are now Visa branded

The Apple Cash virtual debit card appears to be changing 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 the Visa and Mastercard heavyweights. Over the past few days, several images of virtual Apple Cash cards on Apple’s website have been replaced with new images displaying a Visa debit logo, and the transition to the more widely accepted network appears to be underway. [MacRumors]

Venmo and PayPal fees are rising again

PayPal has announced plans to change fees for its instant transfer offerings for US 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 current rate of 1.5% of the transfer amount, change the minimum fee to 50 cents, and remove the existing $15 cap for a maximum fee-free cap structure. The announced changes will go into effect for Venmo customers on May 23 and for PayPal customers on June 17. [Money]

Russian law firm plans to sue Apple over Apple Pay removal

A Russia-based law firm said it would file a class action lawsuit on behalf of Russians, arguing that the region’s Apple Pay shutdown caused “intentional moral harm”. Users of Russian banks, subject to sanctions by the United States and other countries, have not been able to use Apple Pay since February 2022. Apple then closed a loophole that had allowed continued use through gift cards. [Apple Insider]

CFPB plans to review CARD Act, old regulations

CFPB Director Rohit Chopra told lawmakers on Wednesday that the bureau plans to review and update old regulations such as the Credit Card Accountability and Disclosure Act, known as the CARD Act, to reduce credit card charges. Chopra announced the move during a House Financial Services Committee hearing, where he answered tough questions about the bureau’s plans to collect data on small business loans, crack down on so-called fees undesirable items and to combat fraud in the 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 payment methods. More than half of respondents (53%) said they have spent more online in the past three months, and half said they are likely to increase their online spending in the next three months. Additionally, 57% of respondents said that using buy-it-now and pay-later services could replace their credit card. But only 18% of respondents said they had used “buy now, pay later” services in the past six months. And 80% of US consumers said they use digital installment payment services to avoid credit card debt. [Retail Dive]

Cuba Approves Cryptocurrency Services and Requires Central Bank License

Cuba’s central bank released regulations for virtual asset service providers on Tuesday, after giving a nod to the personal use of cryptocurrencies last year, a move some experts say could help the economy. communist-ruled Caribbean island to circumvent tough US sanctions. Cryptocurrencies, which allow financial transactions to be carried out anonymously and in a decentralized way, have been used in the past to circumvent 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 caused a rapid limitation in marketing, followed by a shift to new and different rewards. On top of all this, there has been a growing role for bank-fintech partnerships and the rise of buy-now-pay-later services. And now credit card issuers are facing an environment of rising rates and inflation that many consumers and bankers have never seen before. Low-rate deals were limited 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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