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Buy Now, Pay Later Companies Get Caught Up in CFPB Probe
Washington, D.C. is ratcheting up the pressure around the payments craze that is buy now, pay later. The CFPB has opened up an inquiry into the model more commonly known as BNPL and is now asking five of the biggest providers in the space—Affirm, Afterpay, Klarna, PayPal, and Zip—for information about the risks and benefits of their offerings. The CFPB named several concerns about BNPL offerings, including whether the ease of them is allowing consumers to pile on more debt than they can handle, if BNPL lenders are appropriately considering consumer protection laws in creating and operating their products, and how they are handling, managing, and using consumer data. [Fortune]
Buy now, pay later plans are now being scrutinized by the CFPB
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Several Travel Credit Cards Have Quietly Added Application Fee Credits for NEXUS, a Better Deal Than Global Entry or TSA PreCheck
When Chase launched the Aeroplan Credit Card earlier this month, it had the distinction of being the only US credit card to offer a NEXUS application fee credit. NEXUS is a Trusted Traveler program offered in partnership between US Customs and Border Protection and the Canada Border Services Agency, and members get faster customs processing when they enter Canada or the US from abroad. But it appears the Aeroplan Credit Card is no longer unique in this regard. Several Chase travel credit cards are now showing NEXUS reimbursement as a benefit, bundled with their existing Global Entry/TSA PreCheck application fee credits. [Business Insider]
New and Useful Features to Look For If You Want a Better Credit Card
The credit card market is highly competitive and constantly evolving. Lately, that means new cards that give consumers more choice. As this trend continues into 2022, credit card shoppers will need to know what to look for. What does a good credit card look like these days? Recently some issuers have begun offering niche cards with rewards specially tailored to people who are into cryptocurrency, wine or video games. Others are letting cardholders choose which categories pay the richest rewards. Here are four newer, broader or more useful features to keep an eye on when shopping for a credit card in 2022. [NerdWallet]
Equifax to Add More Buy Now, Pay Later Plans to Credit Reports
A popular kind of “buy now, pay later” plan is coming to credit reports. Early next year, Equifax will begin recording installment plans that allow shoppers to make four biweekly payments instead of covering the full cost at checkout. The move is meant to give lenders a fuller picture of people’s financial commitments, including how much they owe on these plans. These “pay-in-4” plans have exploded in popularity in recent years. They are often used for small-ticket items such as clothing and makeup and are typically billed directly to a shopper’s debit or credit card. [The Wall Street Journal]
Medical Debt Has Forced 23% of Consumers to Carry a Credit Card Balance
Medical debt is something many consumers are forced to deal with. A good 53% of U.S. consumers say the pandemic caused them to take on new medical debt, according to a new survey from Discover Personal Loans. What’s even more disturbing is that among those with medical debt, 23% say they’ve been forced to only make their minimum credit card payments rather than pay off those balances in full. Carrying a credit card balance can be costly when interest starts to accrue over time. It could also result in credit score damage. Owing too much money in healthcare bills could mean falling behind on other expenses and missing out on major goals. Plus, medical debt can be a notable source of stress. [The Motley Fool]
Credit Scores for Car Insurance Become a Target for Regulators
The ubiquitous three-number credit score is a powerful force in U.S. finance—and everyday life. Banks use scores to determine who gets a loan, landlords rely on them to choose who rents an apartment, and auto insurers in some states depend on them to decide who’s riskier. Now, the insurance industry and Washington state regulators are at odds over whether the scores are a fair measure to figure out who’s a good driver. [Bloomberg Law]
Remittances Through Digital Payments Are Preferred in the United States
Visa has released a new study, showing that consumers are increasingly turning to digital payments to send money around the world. Almost a quarter (23%) of surveyed US adults have sent money from the US to another country and nearly two-thirds (65%) of those remittance users plan to send money to another country to celebrate the holiday season. Digital remittances are the preferred method, with digital-only transactions already being the most popular and a majority (59%) of the remittance users surveyed saying they have sent or plan to send money using digital-only platforms. Globally, it is estimated that 800 million people receive money from family or friends to pay for food, utilities and education. [The Paypers]
McDonald’s Is Selling Digital Tech Startup Dynamic Yield to Mastercard
McDonald’s said it’s selling a tech company it acquired roughly three years ago to Mastercard for an undisclosed amount. The fast-food chain had bought Dynamic Yield, which specializes in personalization and decision logic technology, in 2019, in a bid to personalize its drive-thru experience. To date, Dynamic Yield’s technology has been deployed to McDonald’s drive-thrus and ordering kiosks in several markets globally. The deal with Mastercard will allow Dynamic Yield to scale its technology to other third-party businesses. [CNBC]
LendUp Shuttering Operations After Reaching Settlement with CFPB
The digital payday lender LendUp is shutting down operations after settling a lawsuit with the Consumer Financial Protection Bureau. It’s a major downfall for the Silicon Valley-backed lender, which had billed itself as an alternative to traditional payday lenders by offering to bring down borrowers’ interest rates on future loans as they paid back their prior ones. But LendUp repeatedly came under scrutiny from the CFPB, which said the company failed to live up to that promise to tens of thousands of customers, even after the agency penalized it in 2016. [American Banker]
Visa Completes Acquisition of Cross Border Payments Platform Currencycloud
Visa has completed its purchase of Currencycloud, which works with banks and FinTechs to provide foreign exchange solutions for cross-border payments. The acquisition will allow Visa and Currencycloud clients and partners to access more transparency, flexibility and control. Currencycloud’s cloud-based platform supports more than 500 banking and tech clients in more than 180 countries. Currencycloud uses APIs to help financial services providers offer currency exchange services, providing real-time notifications on transactions, multicurrency wallets and virtual account management. In July, Visa signed a deal worth about $925 million to acquire Currencycloud in an effort to advance money movement around the world. [PYMNTS]
Software Company Expands to Provide Crypto ATMs and Debit Cards Worldwide
Cryptocurrency ATMs offer people the convenience of either physically cashing out their crypto, or in some cases, buying some right off the street. Their spread represents the growing interest in and acceptance of cryptocurrencies. However, despite their growth, most of these ATMs operate in a way that goes against some of the core principles of the underlying blockchain technology. Existing crypto ATMs are not only rather centralized physically, with nearly 75% located in North America and roughly the other quarter in Europe, but have also been monopolized and are anti-privacy by design. [Coin Telegraph]
