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Hard-Up Americans Are Now Taking Out Loans to Pay for Groceries Using Buy Now, Pay Later Apps
A growing number of Americans are using ‘buy now, pay later’ services to purchase basic goods such as groceries, raising concerns about consumers taking on more debt. Food accounted for about 6% of the purchases last year, but seems to be an important part of the sector’s explosive growth, as the soaring cost of groceries in the US raises the appeal of deferred payments. Klarna, for instance, reported that grocery or household items accounted for more than half of the top 100 items purchased through the app. Zip says it has seen 95% growth in US grocery purchases, and 64% in restaurant transactions. [Daily Mail]
Runaway inflation is causing stressed consumers to look for new ways to pay for the basics
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Rising Numbers of Stressed Consumers Seek Alternatives to Credit Cards
Credit card companies continue to have solid satisfaction in an uncertain economic environment, but big concerns are on the horizon. Many consumers are experiencing financial stress, and higher interest rates are leading them to look at other options, like buy now, pay later. Other short-term lending options, such as installment plans, personal loans, and buy now pay later programs, have “exploded” over the past 24 months. These choices are particularly attractive to consumers who are financially stressed and have tighter budgets. That is a swath of the cardholder population that is growing rapidly. J.D. Power data indicated a significant spike in consumers who cannot pay their bills and lack long-term financial plans. [The Financial Brand]
NYC Officials Want Credit Card Companies to Help Track Gun and Ammo Sales
New York City officials Tuesday said they want major credit card companies to create a code to track purchases of guns and ammunition to help law enforcement try to keep better tabs on criminals. They are requesting that credit card companies such as American Express, Mastercard and Visa add a new four-digit “merchant code” that would classify gun and ammunition stores on individual statements when purchases are made. The new code would help companies track when suspicious purchases are made and could help law enforcement even stop shootings before they happen, proponents said. [The New York Post]
Americans’ Credit Scores Hold Up Despite Recession Fears
Sky-high inflation and an economy that contracted for the first half of the year might be causing more recession jitters these days, but new data shows Americans are still paying on their debts. Analytics firm Fair Isaac Corporation said Tuesday that the national average FICO score is currently 716, the same as it was a year ago. FICO said that 2022 marks the first time the average score did not rise in recent years, noting that there was a significant boost in scores during the first year of the Covid-19 pandemic. [Fox Business]
How Gift Cards Can Help Restaurants Cope with Inflation
Gift cards are easily accessible, offering restaurants free advertising. In fact, they are frequently called “pocket billboards” because they boast a brand’s logo and stay within close confinement, a physical or mobile wallet, where consumers are constantly reminded of the “free money” they can use to dine out. Gift cards almost always guarantee money will be spent at that specific business, with the potential to attract new customers. Moreover, 60% of gift card recipients spend more than the initial amount on their card, providing unexpected revenue for restaurants. Gift cards are also excellent for running promotions. For example, offering a promotion such as “buy a $100 gift card to give, get a $10 gift card to keep,” encourages both gifting for new customers and inviting regular customers to return to their favorite restaurant. [Modern Restaurant Management]
Mastercard Reports on Growth in Consumer Adoption of Emerging Payments Technologies
Nearly nine in ten consumers worldwide have made digital payments using digital wallets, contactless, QR codes, buy now pay later, money transfer apps, cryptocurrencies, biometrics and other digital payment technologies (85%) and more than six in ten say they have increased their usage of at least one digital payment method (61%) in the last 12 months, according to a Mastercard survey. Globally 35% of respondents to the survey said that they used less cash in the last year. When asked specifically about biometric payments, more than two-thirds of respondents say they think authenticating payments using biometric technology is more secure than using a PIN or password while just under two-thirds agree that it is easier to pay with biometrics than using a payments card (61%). [NFC World]
Klarna Losses More Than Triple Following Valuation Crunch
Buy now, pay later giant Klarna has seen its losses more than triple in the first half of the year, amid a challenging period for the company that also saw its valuation plummet by 85%. The company reported operating losses before tax that swelled to $580 million in the six months to July, more than tripling from $168million in the same period a year earlier. It comes after the company laid off 10% of its global workforce, around 700 people, in May. Confirmation of Klarna’s worsening burn rate comes a month after the startup suffered a massive valuation drop from $46 billion to $6.7 billion, as it tapped investors for $800 million in fresh funding. [Sifted]
Three Hilton Credit Cards Are Offering Welcome Bonuses Up to 130,000 Points
For a limited time, American Express and Hilton have raised the welcome bonus offers on three of their Hilton Honors cards: the Hilton Honors American Express Surpass Card, the Hilton Honors American Express Card and the Hilton Honors American Express Business Card. Now through Oct. 26, you can earn up to 130,000 Hilton Honors points when you sign up for one of these three Hilton credit cards and meet the minimum spend requirements. [CNBC]
Citi Expands Transgender-Friendly True Name Program to Debit Cards
Nearly two years after enabling transgender people and other customers to use their preferred name on credit cards, Citigroup is expanding the option to debit cards for the first time. Citi is the largest bank to broadly expand its chosen-name feature to debit cards after Mastercard first announced the True Name program in 2019. Beginning Monday, Citi’s debit customers can call Citi or visit a Citi branch to use their preferred name on their debit card instead of their legal name. [American Banker]
What Is Cryptocurrency, and How Does It Work?
In order to get in on crypto investing, you first have to understand how cryptocurrency works. Half of our visitors are familiar with cryptocurrency, but most (95%) have never used it, and 99% have never paid for anything with it. Whether you’re completely clueless about crypto, have a basic understanding or are interested in dipping your toes into digital currency waters, it pays to understand the tech before using it. Keep reading for easy-to-understand answers to questions you’ve probably been wondering since bitcoin entered the scene: How does cryptocurrency work, what can you do with it and what does the future of digital currency hold? [Reader’s Digest]
US Department of Agriculture to Trial NFC and QR Mobile Payments for Contactless State Benefits
The US Department of Agriculture is to run a series of pilot schemes to test the use of mobile payments technology to enable citizens entitled to financial support under its Supplemental Nutrition Assistance Program (SNAP) to receive benefits and make NFC or QR code payments for eligible purchases on their mobile device. USDA plans up to five pilots in partnership with state agencies that would allow SNAP recipients to pay for bread, fruit, vegetables and other essential foodstuffs at authorized merchants with their smartphone, tablet or smart watch rather than using their existing physical SNAP payment card. [NFC World]
Latin American Crypto Firm Ripio Launches Prepaid Crypto Card in Brazil
Latin American crypto company Ripio has started rolling out a prepaid debit card in Brazil that allows payments to be made in cryptocurrency and earns cash back rewards in bitcoin. The company hopes to release 250,000 cards, which were developed in partnership with Visa, by the end of the year, offering the product to the one million users it has in the South American country. The card will allow payments using Brazilian reals and the 28 cryptocurrencies Ripio has listed on its platform. The company also plans to launch the card in Argentina later this year, and is not ruling out rolling it out in other countries where the firm operates, such as Uruguay, Colombia, Mexico and Spain. [Coin Desk]
