The next time you look at the chip on your debit or credit card, consider this: We will soon mark the three-year anniversary of the EMV liability shift for point-of-sale transactions in the U.S. The U.S. was the last major market to switch to EMV, a technology that has transformed the payment process for retail organizations; financial Read More
EMV has been a much-discussed payments topic in recent years. And when the EMV liability shift occurred in 2015, millions of mag-stripe debit and credit cards were traded in for chip-enabled cards. The goal: to prevent consumer data theft and tighten security at point-of-sale terminals. Despite some slow rollouts of EMV-capable retail terminals, the shift to more Read More
It’s been a little more than a year since payment-card fraud liability shifted from card issuers to retailers—and in that time, the majority of EMV news has focused on the growing pains of transition. That includes the slow certification processes, low retailer adoption, the absence of PIN verification and exaggerated consumer complaints about point-of-sale inconvenience. But issuers Read More
In 2010, the federal government passed the Durbin amendment (named for U.S. Senator Dick Durbin, D-Ill.), which essentially caps debit interchange fees. It not only limits the profitability of debit card programs but also causes many issuers to cut back or eliminate rewards programs in their debit portfolios. Fast forward to 2016, and credit card portfolios now face Read More
Card fraud is one of the fastest growing crimes impacting financial institutions. A 2016 LexisNexis report found that issuers directly lose $10.9 billion per year in card fraud, with an average loss of $5.90 per compromised card.With the threat mounting, a bank’s first impulse is often to build additional barriers to mitigate the risks of card fraud. Read More
Influencing a customer’s decision to choose a specific credit card for any given transaction from her wallet can be challenging for card issuers. In the typical lifecycle of managing a bankcard customer, driving activation and usage is one of the most critical aspects of engagement.This is indeed a challenge for issuers, because consumers have many options available Read More
Last year, as the Federal Reserve was preparing for its long-anticipated first monetary tightening in nearly a decade, the conversation began to focus on the generation of bankers whose concept of “normal” consisted of short-term interest rates near zero percent and holding steady. So, now that the suspense is over and we have “lift-off” in the Fed Read More
The October 1 deadline came and went for merchants to accept new chips cards – also known as EMV cards – and the payments world remains much the same. Of the eight million U.S. merchants that accept debit and credit cards, only about 300,000, or less than 4%, are equipped to take chip cards today. Most small Read More
In the wake of recent well-publicized data breaches, the financial services industry is looking at tokenization as a means of improving the security around payments. In a previous article for BAI Banking Strategies, we looked at tokenization from the standpoint of managing token directories. Now it’s time to tackle the issue of sorting through the different approaches Read More
This October represents a key deadline for financial institutions across the country. It marks the transition to EMV, or chip-based technology for payment cards, also known as the “fraud liability shift” set by Visa, MasterCard, American Express and Discover. Essentially, any party that hasn’t implemented EMV may be liable for the fraud that results from a magnetic-stripe Read More
As the economic downturn that began in 2008 deepened, credit tightened, consumers switched to other payment methods and credit losses reached historically high levels. That landscape has changed dramatically. Today, a recovering economy and new payments-related regulatory reforms are converging to bring credit back in favor among both U.S. banks and consumers. Banks are increasingly well positioned Read More
No doubt “big data” is one of the most popular terms in banking discussions and has even seeped into consumers’ frame of reference. Who hasn’t noticed when the ads on a website eerily mimic your recent Internet search history? While it’s talked about ad-nauseam, many banks still struggle with how to leverage the vast amounts of information Read More
“Overdraft fees should not be ‘gotchas’ when people use their debit cards,” said Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), after the regulatory agency published its most recent report, “Data Point: Checking Account Overdraft.” The study states that most overdraft fees result from debit card purchases for amounts under $24 and are repaid within Read More
Half the world’s adults, over 2.5 billion people, do not have a formal bank account, according to the World Bank. In the United States, the segment of financially underserved consumers is substantial, whether they fall into the unbanked or underbanked categories. According to the FDIC, this seemingly high-risk group makes up over 10 million households across America. Read More
“We saw a decrease in fraud of about 75%,” says Vivienne Nicol, senior manager, fraud operations, at ATB Financial in Calgary, Canada. She attributes this achievement to the bank’s embrace of EMV, the chip-based encryption technology that has dramatically reduced fraud in Europe. With EMV cards adopted in Europe, and now Canada, organized fraud rings have moved Read More
While the $6.6 billion lawsuit between the credit card industry and a trade association of merchants has been settled, the battle is far from over. A recent Wall Street Journal article highlights a part of the settlement with far-ranging future consequences: the right for retailers to charge more for customers who use a credit card. Banks need Read More
Consider a customer who approaches a bank or credit union seeking a small-dollar credit product. The customer is run through the traditional credit checks and found to be ineligible. The issue may be a thin credit file or no credit file, damaged credit from past mistakes, over-indebtedness, or a number of other reasons. What happens next? Is Read More
Can “crowdsourcing” work in credit cards? UK-based Barclays Bank is trying to find out with its new Barclaycard Ring card. The idea is that cardholders can vote on features for the card, which was rolled out to the U.S. market on March 1 carrying an 8% interest rate. As explained in the following interview with Paul Wilmore, Read More
At a time when retail banks are particularly hungry for growth, one of the brightest opportunities is the cross-sale of credit to depositors, including consumers and small businesses. But fresh approaches will be needed to build real momentum. Retail banks long have been dominant players in customer payments and related accounts, typically handling more than 80% of Read More
The introduction of the $5 debit card fee and its subsequent withdrawal can teach us two lessons: one, consumers are very sensitive to any additional banking fees, and two, there are more productive ways to improve the bottom line through a reduction in interest expense. Banks can generate nearly double the potential $875 million in monthly debit Read More
