This Week In Credit Card News: Delinquencies And Balances Rising; Mastercard’s Priceless Campaign Turns 25

This Week In Credit Card News: Delinquencies And Balances Rising; Mastercard’s Priceless Campaign Turns 25

Card Delinquency Rates, Balances Rise

Highlighting consumers’ reliance on credit cards, consumers who were more than 90 days past due on their cards continued to add to their credit lines between Q3 2019 and Q4 2021, according to a TransUnion study of nearly six million consumers. During that period, consumers who were 90 days late on their credit cards decreased the amount paid beyond the minimum payment, but consumers who were current on their bank cards increased the amount paid beyond the minimum payment. Consumers’ decline in liquidity started 12 months before severe delinquency and increased across all credit tiers. Most consumers reached 30 days past due three months prior to serious delinquency, a sign that segmenting customers based on their liquidity changes nine months to a year beforehand is useful. [Payments Dive]

Creating a 25-Year Marketing and Sponsorship Relationship for Mastercard and MLB? Priceless.

A quarter century ago, Mastercard wanted to discard its utilitarian brand persona with a new ad agency and a campaign that would inject emotion into a category fixated on APRs and annual fees. As former Mastercard U.S. chief Peter Dimsey (now deceased) told us then, “Competing on price is never a good strategy; anyone can copy that.” McCann Erickson (now McCann) won a six-agency shootout with the “Priceless” series, now considered one of the best ad campaigns ever, one that reinvigorated a brand that was then labeled “a mess” by its own executives. The Priceless campaign debuted in World Series Game 1, Oct. 18, 1997. That very first spot showed a father and son bonding in the stands at an MLB game with what by now has become a familiar formula. [Sports Business Journal]

Americans Continue to Pay for Inflation with Credit Cards

Credit card debt continues to spiral higher as consumers struggle with rising prices and depleted savings. In August, revolving credit increased by a staggering 18.1% as total consumer debt surged to a record $4.68 trillion, according to the latest consumer credit data from the Federal Reserve. Total consumer debt increased by $32.2 billion in August, an 8.3% increase on an annual basis. That was well above the $24 billion projection. [Schiff Gold]

The ‘Unexpected’ Thing Americans Now Blame Their Credit Card Debt On

Americans credit card debt levels rose to $887 billion dollars in the second quarter of 2022, according to the Federal Reserve Bank of New York. And the No. 1 reason they cite for this debt? Emergency or unexpected expenses, with 46% of debtors citing an emergency or unexpected expense—including a medical bill, home repair, car repair, or some other emergency/unexpected expense—as the reason they carried a balance month to month, according to a new CreditCards.com report. The solution to this is a tried-and-true rule espoused by nearly all the personal finance bigwigs: build up an emergency fund. And there’s good news on that front: savings accounts like these are now paying far more than they did last year. [MarketWatch]

Buy Now, Pay Later Is Still a Credit Score Blind Spot

U.S. consumers signed up for billions of dollars of “buy now, pay later” plans last year. Almost none are reflected in their credit scores. Equifax, Experian and TransUnion began allowing buy now, pay later companies to report their short-term payment plans earlier this year. But some of the biggest players in the business, including Affirm, Klarna and Afterpay aren’t yet doing so. [The Wall Street Journal]

EMVCo Rolls Out New Payment Standard

A new contactless and mobile payments software standard was approved Wednesday by the international standard-setting body EMVCo in an effort to coalesce the card industry around one approach. The software, which EMVCo refers to as a “kernel,” allows for payment acceptance at point-of-sale terminals and ATMs for the processing of card transactions, even in instances when the card is embedded in a phone. There are currently some 20 different contactless payment “kernels” in use by merchants around the world so the new specification is aimed at reducing complexity and costs. [Payments Dive]

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Google Selects Coinbase to Take Cloud Payments with Cryptocurrencies

Google said it will rely on Coinbase to start letting some customers pay for cloud services with cryptocurrencies early in 2023, while Coinbase said it would draw on Google’s cloud infrastructure. The deal, announced at Google’s Cloud Next conference, might succeed in luring cutting-edge companies to Google in a fierce, fast-growing market, where Google’s top competitors do not currently permit clients to pay with digital currencies. The cloud business helps diversify Google parent Alphabet away from advertising, and it now accounts for 9% of revenue, up from less than 6% three years ago, as it is expanding more quickly than Alphabet as a whole. [CNBC]

Nearly Half of Gen Z, Millennials to Rely on Buy Now, Pay Later This Holiday

As shoppers stretch their holiday budget, a survey of 1,000 consumers from the customer service technology firm Bluedot found that four in 10 respondents said they plan to pay for their holiday purchases with buy now, pay later services. The survey found that almost half (48%) of Gen Z respondents said they planned to use BNPL services this holiday season, followed by millennials (47%), Gen X (40%) and baby boomers (14%). Nineteen percent said they are using BNPL services because they’re low on cash. Eighty percent of respondents said they plan to shop via retailer mobile apps the same amount or more during the 2022 holiday season than last year. More than half (55%) of respondents said they plan to use retailers’ mobile apps because they are easy to use, while 38% say they are looking for discounts. [Retail Dive]

Credit Card Swipe Fee Amendment Pulled from Defense Spending Bill

A last-minute bipartisan effort to package a credit card swipe fee amendment into a larger spending bill was ultimately unsuccessful. Sen. Dick Durbin (D-Ill.) and Sen. Roger Marshall (R-Kan.) pushed to slip the Credit Card Competition Act of 2022 into the National Defense Authorization Act, prompting alarms from banks, credit unions and other financial service providers who argued that the move would upend credit card loyalty programs. The Credit Card Competition Act is aimed at diluting the market power of card issuers Visa and Mastercard and would require several changes, including the requirement that merchants have at least one network for credit card transactions unrelated to Visa or Mastercard. [PYMNTS]

J.P. Morgan and Visa Bridge Their Private Blockchain Networks to Streamline Global Payments

J.P. Morgan and Visa are teaming up to streamline cross-border payments using their private blockchain networks, Liink and B2B Connect. Failed payments cost the global economy $118 billion a year; 66% of them are caused by incorrect account information, according to J.P. Morgan. Confirm is projecting it will soon validate account data from 3,500 banks, covering more than 2 billion accounts. In addition to curbing failed payments, Confirm promises to mitigate fraud by confirming that an intended recipient is the owner of the bank account to which funds are being transferred. [Forbes]

Juniper Forecasts 121 Billion Virtual Card Transactions by 2027

The integration of virtual cards into digital wallet services like Apple Pay and Google Pay will drive a 340% increase in virtual card transactions, from 28 billion in 2022 to 121 billion by 2027, Juniper Research predicts. Virtual card transactions through mobile payment methods will account for 53 billion of the 121 billion transactions forecast for 2027, up from 5 billion in 2022. Virtual cards, randomly generated card numbers linked to a payment account, will be a key market driver of consumer adoption of contactless payments in rapidly developing economies, such as India. [NFCW]

Dark Web Marketplace ‘BidenCash’ Hands Out 1.2 Million Stolen Credit Cards as a Promotion

Now, even hackers are taking a page out of big advertising’s playbook to promote their ill-gotten personal financial details. Over the weekend, the stolen credit card marketplace called BidenCash announced they were offering a free giveaway of 1,221,551 credit cards, promoting the leak on multiple other sites. The credit cards could come from multiple sources, including from malware forced into online shops, individual user malware attacks, or from breaches of companies who store credit card info. [Gizmodo]

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