Delinquencies and balances on the rise; Mastercard’s Priceless campaign turns 25

Card delinquency rates and balances are increasing

Underscoring consumers’ reliance on credit cards, consumers who are more than 90 days past due on their cards continued to increase their credit lines between the third quarter of 2019 and the fourth quarter of 2021, according to a study by TransUnion covering nearly six million consumers. During this period, consumers who were 90 days past due on their credit card decreased the amount paid beyond the minimum payment, but consumers who were up-to-date on their bank cards increased the amount paid beyond the minimum payment. The decline in consumer liquidity began 12 months before the severe default and increased at all credit levels. Most consumers reached 30 days past due three months before a serious default, indicating that it is useful to segment customers by their changes in liquidity nine months to a year in advance. [Payments Dive]

Credit card balances and delinquencies are on the rise


Create a 25-year marketing and sponsorship relationship for Mastercard and MLB? Invaluable.

A quarter of a century ago, Mastercard wanted to ditch its utilitarian brand persona with a new ad agency and campaign that would inject emotion into a category obsessed with APRs and annual fees. As the former American head of Mastercard, Peter Dimsey (now deceased), told us: “Competition on price is never a good strategy; anyone can copy it. McCann Erickson (now McCann) won a six-agency shootout with the “Priceless” series, now considered one of the best advertising campaigns of all time, one that reinvigorated a brand that was then called a “mess” by its own leaders. The Priceless campaign debuted in Game 1 of the World Series on October 18, 1997. This very first spot showed a father and son bonding in the stands during an MLB game with what has now become a familiar formula. [Sports Business Journal]

Americans continue to pay for inflation with credit cards

Credit card debt continues to soar as consumers struggle with rising prices and dwindling savings. In August, revolving credit rose 18.1% as total consumer debt hit a record $4.68 trillion, according to the latest consumer credit data from the Federal Reserve. Total consumer debt rose by $32.2 billion in August, an increase of 8.3% on an annual basis. This was well above the $24 billion projection. [Schiff Gold]

The ‘unexpected’ thing Americans are now blaming their credit card debt on

Americans’ level of credit card debt reached $887 billion in the second quarter of 2022, according to the Federal Reserve Bank of New York. And the #1 reason they cite for this debt? Emergency or unexpected expenses, with 46% of debtors citing an emergency or unexpected expense – including a medical bill, home repair, car repair or other emergency/unforeseen expense – as the reason they carried over a balance month-to-month, according to a new report. The solution to this is a tried-and-tested rule adopted by nearly every personal finance bigwig: build an emergency fund. And there’s good news on that front: Savings accounts like these are now earning significantly more than they did last year. [MarketWatch]

Buy now, pay later is always a blind spot in your credit score

Last year, American consumers signed up for billions of dollars in “buy now, pay later” plans. Almost none are reflected in their credit ratings. Equifax, Experian and TransUnion began allowing companies to buy now, pay later to declare their short-term payment plans earlier this year. But some of the biggest players in the industry, including Affirm, Klarna, and Afterpay, aren’t yet. [The Wall Street Journal]

EMVCo rolls out a new payment standard

A new contactless and mobile payment software standard was approved by international standards body EMVCo on Wednesday in a bid to unite the card industry around an approach. The software, which EMVCo calls a “kernel,” enables payment acceptance at point-of-sale terminals and ATMs for processing card transactions, even in cases where the card is embedded in a phone. There are currently around 20 different contactless payment “cores” used by merchants around the world. The new specification therefore aims to reduce complexity and costs. [Payments Dive]

Google selects Coinbase to accept cloud payments with cryptocurrencies

Google said it would leverage Coinbase to start allowing select customers to pay for cloud services with cryptocurrencies in early 2023, while Coinbase said it would leverage Coinbase’s cloud infrastructure. Google. The deal, announced at Google’s Cloud Next conference, could be successful in attracting cutting-edge companies to Google in a fierce and rapidly growing market, where Google’s main competitors currently do not allow customers to pay with digital currencies. The cloud business is helping to diversify Alphabet, Google’s parent company, away from advertising, and it now accounts for 9% of revenue, up from less than 6% three years ago, as it grows faster than Alphabet in his outfit. [CNBC]

Nearly half of Gen Z and Millennials rely on Buy Now and Pay Later while on vacation

As shoppers stretch their holiday budget, a survey of 1,000 consumers from customer service technology company Bluedot found that four in 10 respondents said they plan to pay for their holiday shopping with buy now services. , pay later. The survey found that nearly half (48%) of Gen Z respondents said they planned to use BNPL’s services during the holiday season, followed by Gen Y (47%), Generation X (40%) and Baby Boomers (14%). Nineteen percent said they use BNPL’s services because they lack money. Eighty percent of respondents said they plan to buy through retailers’ mobile apps the same amount or more during the 2022 holiday season than last year. More than half (55%) of respondents said they plan to use retailers’ mobile apps because they are easy to use, while 38% say they are looking for discounts. [Retail Dive]

Credit card swipe fee change from Defense Spending Bill

A last-minute bipartisan effort to fit a credit card swipe fee amendment into a larger spending bill ultimately failed. Sen. Dick Durbin (D-Ill.) and Sen. Roger Marshall (R-Kan.) pushed to slip the Credit Card Competition Act of 2022 into the National Defense Authorization Act, triggering alarms from banks, credit unions and other financial service providers who argued that the move would upend credit card loyalty programs. The Credit Card Competition Act aims to dilute the market power of Visa and Mastercard card issuers and would require several changes, including requiring merchants to have at least one network for non-credit card transactions. linked to Visa or Mastercard. [PYMNTS]

JP Morgan and Visa Link Their Private Blockchain Networks to Streamline Global Payments

JP Morgan and Visa are partnering to streamline cross-border payments using their private blockchain networks, Liink and B2B Connect. Payment failures cost the global economy $118 billion a year; 66% of them are caused by incorrect account information, according to JP Morgan. Confirm predicts that it will soon validate account data from 3,500 banks, covering more than 2 billion accounts. In addition to limiting failed payments, Confirm promises to mitigate fraud by confirming that the intended recipient is the owner of the bank account the funds are being transferred to. [Forbes]

Juniper predicts 121 billion virtual card transactions by 2027

The integration of virtual cards into digital wallet services like Apple Pay and Google Pay will lead to a 340% increase in virtual card transactions, from 28 billion in 2022 to 121 billion by 2027, predicts Juniper Research. Virtual card transactions via mobile payment methods will account for 53 billion of the 121 billion transactions projected for 2027, up from 5 billion in 2022. Virtual cards, randomly generated card numbers linked to a payment account, will be a key driver market for consumer adoption. contactless payments in rapidly developing economies like India. [NFCW]

Dark Web Marketplace ‘BidenCash’ Distributes 1.2 Million Stolen Credit Cards as Promotion

Now even hackers are taking a page out of the big ads playbook to promote their ill-gotten personal financial information. Over the weekend, the stolen credit card marketplace called BidenCash announced it was giving away 1,221,551 credit cards for free, promoting the leak on several other sites. Credit cards can come from several sources, including malware forced into online stores, malware attacks from individual users, or breaches from companies that store credit card information. [Gizmodo]

About Shirley L. Kreger

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