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CardRates.com Weekly Credit Card Update — October 8, 2021

Weekly Credit Card Update 2021 10 08

credit card news

Bill Hardekopf
By: Bill Hardekopf
Posted: October 8, 2021

Our experts and industry insiders blog the latest news, studies and current events from inside the credit card industry. Our articles follow strict editorial guidelines.

For media inquiries on these stories and more, contact credit card expert and industry analyst Bill Hardekopf at (205) 985-9725 or billh@cardrates.com.

1. Apple Pay Fees Vex Credit Card Issuers

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Banks rushed to work with the Apple Pay mobile wallet when it debuted in 2014. They have some regrets. When Apple Pay launched, the tech giant got big banks including JPMorgan, Capital One and Bank of America to agree to pay fees that would allow their cardholders to pay by iPhone.

But some banks have grown unhappy with the costs, especially after Apple introduced its own new credit card in 2019. Some banks are pushing back, nudging card network Visa to change the way it processes certain Apple Pay transactions. The change would trim the fees that banks pay to Apple. Visa plans to implement the change next year. Apple executives have told Visa executives they oppose the change.

• Story By: AnnaMaria Andriotis, The Wall Street Journal

2. The Postal Service’s Tiny Check-Cashing Test Sparks a Big Reaction

American Banker

It’s a far cry from the postal banking system that progressives favor and bankers dislike, but the U.S. Postal Service’s entry into the check-cashing space is still making a big splash. Loud responses Monday from both boosters and critics reflected a widespread perception that the pilot program could be a first step toward a wider implementation of postal banking.

The modest scope of the program contrasted with the size of the reaction it generated. The recently launched program is only operating in four offices—in Washington, D.C., Baltimore, Falls Church, Virginia and the Bronx, New York—out of the Postal Service’s more than 30,000 locations nationwide. The USPS is only accepting business and payroll checks of $500 or less, shutting out larger checks and any personal checks. The post office will not provide cash in exchange for the checks, and will instead let customers purchase a single-use gift card of up to $500.


• Story By: Polo Rocha and Hannah Lang, American Banker

3. Mark Cuban-Backed Otto Raises $4.5 Million to Turn Car Equity into Credit

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Otto, a fintech startup which aims to allow people to tap into their vehicle’s equity for access to credit, has raised $4.5 million in a seed round of funding. The Dallas-based company is building a mobile platform that will essentially let people borrow against their vehicles at the same interest rate as standard credit cards.

But unlike other cards, Otto will not charge fees or overdraft charges, and will not require applicants to supply their FICO credit scores. Users will be able remotely verify and collateralize their cars through Otto’s mobile platform, which is set to launch in early 2022.

• Story By: Mary Ann Azevedo, TechCrunch

4. CFPB Report Indicates Sound Credit Card Industry despite Covid

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The CFPB is required to publish an update on the credit card industry every two years in a report to Congress. The most recent report was published in late September.

Five key points from the report should not surprise followers of the U.S. market; they indicate a drop in consumer credit card volume during Covid, a modest decrease in the cost of credit, tighter credit issuance during the pandemic, continued innovation, and significant relief during the global healthcare crisis.

• Story By: Brian Riley, Payments Journal

5. Is Affirm the Next PayPal?

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Affirm which trades on one of retailing’s oldest concepts—buy now, pay later—recently held a presentation where it unveiled products that will expand its reach in the consumer-finance market. The bigger message, though, is that Affirm may have the ambition and potential to become more than just a purveyor of BNPL services.

Affirm’s business is financial technology at heart, which might remind investors of a larger, more established fintech company, PayPal. Here are three reasons Affirm could eventually grow to become a giant fintech stock.

• Story By: Justin Pope, The Motley Fool

6. Google Abandons Plex Banking Play

Google reportedly shelved plans to offer and pitch bank accounts to users, pulling back from its Plex project almost a year after first announcing the move. Google unveiled Plex in November 2020, partnering up with Citibank and other financial institutions, outlining plans to offer a mobile-first approach to open bank accounts.

Through Plex, Google would provide its technology and app design, allowing users to open accounts with banks and credit providers. While allowing Google a route into financial services, it would also help traditional financial providers a way to tap into mobile banking, particularly if they hadn’t developed their own apps.

• Story By: Kavit Majithia, Mobile World Live

7. Mobile Contactless Transactions to Exceed 49 Billion Globally in 2023

Global transaction volumes for mobile payments will grow from 26 billion in 2021 to 49 billion in 2023, representing a growth of 92%, according to a new report from Juniper Research. The report also reveals that growth in mobile contactless transaction volumes will significantly exceed contactless card volumes by 2023, as mobile contactless transactions grow twice as fast as contactless card transactions.

The Juniper Research report identified the enhanced security and increasing cross-channel payment capabilities of mobile contactless payments as key drivers of growth. The report recommends that mobile contactless payment wallets fully leverage opportunities for value-added services, such as loyalty schemes and personal financial management, to differentiate their digital wallet services in this competitive market.

• Story In: IT Wire

8. Affirm Shares Surge 20% after Online Lender Partners with Target Ahead of Holiday Shopping Season

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Affirm shares jumped closed up 20% on Wednesday after retail chain Target began offering its customers the online lender’s installment loan service for purchases of over $100. Target said it’s partnering with Affirm and smaller rival Sezzle as consumers gear up for the holiday shopping season.

Buy now, pay later, or BNPL, services, which are installment loans that often come with no interest fees, have surged in popularity as retailers respond to consumer demands for easy ways to pay without incurring debt. BNPL providers typically add a checkout button to a retailer’s website and then take a cut from the merchant on each transaction.

• Story By: Ari Levy, CNBC

9. The Challenges of Regulating Cryptocurrency

The SEC has so far failed to keep up as thousands of tokens and digital currencies have been introduced, and new companies and platforms have emerged to help store and trade them.

The lack of regulations over this burgeoning area has created an opening for widespread fraud; in May the FTC reported that consumers lost more than $80 million on cryptocurrency-investment scams between October, 2020, and March, 2021, more than ten times the amount lost during the same period in the prior year. ($2 million of it was lost to scammers impersonating Elon Musk.) Gary Gensler now faces the challenge of clarifying how the nascent market will be regulated in the future. The stakes are also high for the crypto industry: until it becomes a part of the regulated economy, it will be associated with a notion of criminality.

• Story By: Sheelah Kolhatkar, The New Yorker

10. Capital One Credit Card Miles Just Became Even More Valuable

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Starting Oct. 7, all but two of Capital One’s airline and hotel partners will transfer at a 1-to-1 ratio. This means that if you transfer 1,000 Capital One miles to 14 of the program’s 16 current partners, you’ll get 1,000 points or miles in the corresponding airline or hotel loyalty program.

Six airline frequent flyer programs are moving up to Capital One’s 1-to-1 transfer ratio tier: Air Canada Aeroplan, Air France/KLM Flying Blue, British Airways Avios, Emirates Airline Skywards, Singapore Airlines KrisFlyer and Turkish Airlines Miles&Smiles. Most of these programs formerly transferred from Capital One at a 2-to-1.5 ratio, while both Emirates and Singapore transferred at a 2-to-1 ratio. The improvements mean that Capital One cardholders will get 33% more points or miles than before when they transfer to these programs, and 50% more when transferring to Emirates or Singapore.

• Story By: Julian Kheel, CNN

11. American Express is Upgrading Its Consumer Platinum Card Again for the Holidays

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For the second time this year, American Express is sprucing up the perks attached to its consumer platinum card. American Express is introducing two new retail and wellness benefits. Beginning on Oct. 7, U.S. Consumer Platinum Cardmembers can now get statement credits on particular purchases with Walmart and SoulCycle.

With these new benefits, American Express says the latest version of Platinum Card for consumers (as there is a different Platinum Card for business) now offers more than $1,500 in potential annual value. The new benefits continue the company’s shift toward incorporating amenities that are more lifestyle-focused in light of the pandemic and more people staying closer to home, versus Amex’s legacy for travel-minded perks. 

• Story By: Rachel King, Fortune