Paying With Your Wearable Device

Mercedes-Benz Partners with Mastercard for In-Car Payments

Car manufacturer Mercedez-Benz has partnered with Mastercard to launch an in-car payments solution – meaning customers can fill up their cars and complete payment from behind the wheel. The embedded in-car payments solution leverages fingerprint sensor technology, and will first be rolled out in Germany at over 3,600 service stations. This partnership marks the first use of fingerprint payment authorization for native in-car payments at a point of sale. It also makes Mercedes the first automaker to integrate Mastercard Secure Card on File for Commerce Platforms technology for in-vehicle online payments. [FinTech]

What’s the Future of Wearable Payment Devices?

The global market for wearable payment technology is expected to be worth $137bn by 2030, whether that’s using smartwatches, bracelets, jewelry, or even having a chip embedded under your skin. Wearable payment devices are not gimmicks: they offer fast, convenient and secure ways to pay. Most are based on near field communications technologies, enabling smart payments, processed automatically via secure links between the device, payment terminal and the consumer’s bank account and/or digital wallet. Smart payments also generate data that a card issuer, bank or brand could use to inform personalized services. Wearable payment devices can also be used for other purposes, including ticketing for transport or events, access control for buildings or vehicles, and digital identity verification. [Information Age]

College Students Struggle as U.S. Credit Card Debt Hits a Record High

U.S. Credit card debt recently hit a record $1 trillion and research shows that 42% of college students are a large part of that number. Research shows more than 4 in 10 college students say they are trying to pay off some type of credit card debt. University of Houston’s Beaur College of Business’ Financial Expert John Lopez says it’s because their balances have largely increased. “Credit card debt is rising for college students as well” Lopez said. “The APRs for people that don’t have a credit history tend to be higher, and college students fit into that.” [Fox News]

People Are Having Trouble Paying Off Their Credit Cards, and These 2 Department Stores Could Be in Trouble

The heavy hand of the Federal Reserve may pound the financials of big department stores Nordstrom and Kohl’s this holiday shopping season. Bank of America slashed its profit estimates and price targets for Nordstrom and Kohl’s on Tuesday, citing rising financial stress on households amid higher interest rates. Those higher rates are driving increased delinquencies and could potentially lead to more charge-offs on department store credit cards soon. [Yahoo Finance]

American Bankers See Weakening Credit Conditions Through End of 2024

Based on the American Bankers Association’s latest Credit Conditions Index released this week, U.S. bank economists expect credit conditions to weaken over the next six months. Among households, consumer spending has been the driving force behind the U.S. economy but is likely to slow later this year and next year as wage growth cools, pandemic-era savings dwindle and student loan repayments restart. Households have increasingly turned to credit cards to support spending, and credit card delinquency rates are now similar to pre-pandemic levels (but well below levels from the 1990s and 2000s). [The World Property Journal]

Buy Now, Pay Later Users: Young and Well-Off But Nearing a Financial Cliff, Poll Shows

A financial crisis may be brewing with buy now, pay later, users, a new survey shows. Not only do shoppers who use short-term financing tend to borrow and spend a lot, but they’re having difficulty keeping up with debt payments. More than 2 out of 5 users carry buy now, pay later debt and one-quarter of them missed a payment last month, the survey showed. Another one-quarter said they paid late fees; 27% saw a decline in their credit score and 22% interacted with a debt collector. [USA Today]

Consumer Group Says Mastercard is Selling Cardholders’ Data Without Their Knowledge

Mastercard keeps detailed records of the spending habits of its credit card holders, which it then sells to third-party companies, often without customers’ knowledge. That’s according to a report published Thursday by the U.S. Public Interest Research Group (PIRG), which says that Mastercard has built a separate division dedicated to the selling of customer transaction data which has become a huge revenue stream for the global payments technology company. In a statement, Mastercard denied selling customers’ data. [CBS News]

Credit Card Companies Are Making It Harder to Get Benefits

During the pandemic, the number of proprietary AmEx cards grew from 54.7 million at the onset of the pandemic to over 79.3 million in Q2 2023. Many of these new cardholders were enticed by attractive sign-up bonuses. At one point, the AmEx Platinum boasted a 150,000 Membership Reward Point offer (worth at least $1,500.) AmEx wasn’t alone in its ambitions to acquire new customers. All of these new cardholders meant more congestion at airport lounges when travel inevitably resumed. And as the economy recovered and interest rates began to rise, the outsized acquisition spend at creditors began to taper, and too much of a good thing became a real problem. Throughout 2022 and 2023, card issuers have made a concerted effort to rein in some of the most valuable benefits of their premium cards. [Nasdaq]

Credit Card Data Shows U.S. Consumer Spent Less in September. A Sign of a Slowdown?

Cracks in the resilient consumer narrative are starting to appear. Or so says Bank of America. New data from BofA showed spending on the bank’s cards decreased 0.3% in the week ending September 23 compared to the same period last year. In fact, spending on BofA cards has been trending lower for several weeks now, and even lower when excluding auto and gas purchases. But many economists have said consumers have started to hold back and, thus, a slowdown is on the horizon. Other data out Thursday showed that might already be happening more than initially thought: Personal consumption growth in the second quarter, for example, was revised down to 0.8% from 1.7%. [Yahoo News]

Wells Fargo Has a New Virtual Assistant in the Works Named Fargo

Wells Fargo is developing a virtual assistant to help it convert more retail banking customers into digital users. The assistant, named Fargo, will be able to execute tasks including paying bills, sending money and offering transaction details and budgeting advice. It’s expected to be out next year after the bank releases a revamped mobile app and website in early 2022. The move by Wells Fargo is part of a broader technology overhaul under CEO Charles Scharf. Updating the bank’s aging systems has been a priority for Scharf since becoming chief executive two years ago, as well as a key part of the turnaround needed after the bank’s 2016 fake accounts scandal. Last month, Wells Fargo announced a decade-long plan to move computing to Google and Microsoft cloud servers. [CNBC]

How Are Walmart, Best Buy, and Others Innovating with Mobile Apps?

Mobile is driving ecommerce sales growth, with 43.2% of the $1.14 trillion in US ecommerce sales we project for this year. As mcommerce sales rise, retailers are innovating to get a piece of the $491.14 billion pie. Mobile commerce will be especially vital this holiday season. Some 79% of US online shoppers did so via mobile during Thanksgiving weekend last year, according to Bizrate Insights data cited in a Forrester report. Here are four examples of retailers innovating with mobile apps to cash in on mcommerce. [Insider Intelligence]