The Legality Of Card Surcharges; Buy Now Pay Later Surging During Holidays


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Shoppers Go Deep on BNPL and eCommerce as Holiday Shopping Ramps Up

Driven by an inflation-fueled demand for deals, the official kick-off weekend of the 2022 shopping season outperformed events of the past two years albeit with a new bias for more point-of-sale credit and financing and increased reliance on digital channels than ever before. PYMNTS’ just published survey found that 33% of shoppers who wanted to make purchases over the weekend opted out over cash and credit concerns. Another report found that another 31% of respondents who bowed out said stores were too crowded during Black Friday weekend, reflecting an odd imbalances high prices are creating this season. [PYMNTS]

What Are Credit Card Surcharges and Where Are They Legal?

According to November data from the Nilson Report, consumer and commercial credit, debit, and prepaid general-purpose cards generated $9.7 trillion in transactions in 2021: a 22.5% increase over the previous year. Along with all of the increased credit card usage, there’s been an uptick in surcharges, which are fees that payment processors and credit card companies charge merchants and retailers. For a long time these fees were not felt by consumers, but between the increased number of customers paying with a credit card and the rise in the cost of doing business in recent years, surcharges are becoming far more commonplace as a way to help merchants cover their own expenses. [Fortune]

Deluge of Fraud Claims Adds to Concerns About Credit Scores

The consumer credit-scoring system has long been opaque and confusing. One change intended to help people navigate the system has created a whole new set of problems. In recent years, a government website has made it easier for people to file claims of identity theft so they can remove fraudulent accounts from their credit reports. Those reports are the basis of credit scores sold by Equifax, Experian and TransUnion to banks as they make lending decisions. [The Wall Street Journal]

Banks Plan to Start Reimbursing Some Victims of Zelle Scams

The seven banks that own the payments network Zelle are preparing a major rule change early next year that will require the network’s member banks to compensate customers who fall victim to certain kinds of scams, according to two people familiar with the plans. The shift would reverse the network’s current policy, which typically sticks customers with the losses on any Zelle transactions that the customers physically initiated themselves, even if they were tricked into sending their cash to a thief. A growing number of scams using Zelle has angered lawmakers and regulators, who have pressured banks to better protect, or indemnify, their customers. [The New York Times]

Collaboration Aims to Push Virtual Credit Card Use in Hotels

Sabre Corporation and Conferma Pay have partnered with Mastercard to accelerate the use of virtual cards for business-to-business travel payments. This builds on Sabre’s August acquisition of Conferma Pay. Digitization of travel payments with virtual cards helps address the challenges associated with B2B leisure and corporate travel payments. The single-use card numbers provide a link between booking and associated payments to third-party suppliers, and travel buyers and suppliers can track and reconcile payments. [Hotel Management]

Please Look at My Metal Credit Card

Metal credit cards have become not only a reality, but a mundanity. Once limited to products like the Centurion that require proof of high net worth and a history of lavish spending, the cards are now available to pretty much anyone with passable credit. Even Venmo, the cash-swapping app, is enticing people to use their balance like a bank account with a metal debit card in pink or black. As a marketing play, the cards are brilliant. But they’re also an object lesson in the life cycle of the consumer status symbol. When everyone’s special, no one is. Metal credit cards may have begun as markers of extreme wealth, but they were spawned by something far more pedestrian: consumer-loyalty programs. [The Atlantic]

Score Free, Fast Shipping with This Amex Card Benefit

If you have an American Express credit card, you may be missing out on a valuable perk that could make your next online order cheaper. You can get free shipping with a complimentary ShopRunner membership. ShopRunner usually costs $79 annually, so this is a valuable perk. ShopRunner partners with more than 100 stores. Brands like Allbirds, Under Armour, American Eagle Outfitters, NARS Cosmetics, Proflowers, bareMinerals, and NFLShop participate. Once you enroll in this service, you can enjoy free delivery in as little as two days when making qualifying purchases. You can also take advantage of free shipping on returns. [The Motley Fool]

Max Levchin’s War on Credit Cards

In 2012, Max Levchin founded Affirm, which ushered in a new kind of consumer lending. Sure, PayPal led the charge in convincing the masses to buy stuff online, but so many people still pay for online purchases with a pre-internet product: old-fashioned credit cards. There are 191 million Americans with credit card accounts. Today, those people collectively owe $925 billion, a figure that took its largest leap in 20 years in the third quarter of this year. Affirm offers a different model called buy now, pay later: An online shopper is offered a zero-percent, short-term installment plan or loan for their purchase right at the virtual checkout. The way these newish financing companies make money: They get paid a processing fee by merchants, who partner with the lenders to encourage sales. They also collect interest or late fees from customers who miss payments, or interest on longer-term loans. [Wired]

Mastercard Loses Bid to Exclude 3 Million Dead Claimants in UK Lawsuit

Mastercard lost a bid to narrow the size of the UK’s largest ever class action claim over its payment fees after appeal judges rejected its attempt to exclude some 3 million people who died since the claim was first filed. The credit card provider is facing a claim that’s at least $12 billion from Walter Merricks, the former head of the UK’s Financial Ombudsman Service representing more than 46 million consumers. The UK courts gave the green light to the suit last year in the first judicial certification of its kind. Mastercard, which was trying to reduce the size of any potential damages, had argued that the 3 million people who have died since the claim was first issued should be excluded. [Bloomberg]

Crypto Exchange Kraken Lays Off 1,100 Employees

Kraken, one of the world’s largest crypto exchanges, is laying off about 30% of its headcount, or 1,100 people, “in order to adapt to current market conditions,” co-founder and CEO Jesse Powell said. Powell wrote that slowing growth, prompted by “macroeconomic and geopolitical factors,” had muted customer demand, lowered trading volumes and cut sign-ups. [CNBC]

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