JPMorgan Chase has upped the ante in its contest with competitors for the affluent segment with an eye-catching revamp of rewards and perks on its Sapphire line: according to CNN, the bonus points on offer with the Chase Sapphire Preferred card could be worth some $1,250 in travel. As Verisk Financial Research's new market report for the United States points out, this cards market is highly competitive: ten issuers share three-quarters of the total number of cards in issue, with Chase estimated to be slightly behind market leader Capital One in their mutually held share of a 30 percent slice. Many issuers have been pushing rewards and cashback to drive cardholder spending in a recovering economy. "Last year, banks were in risk management mode anticipating a wave of defaults that failed to materialise. However, the focus has since moved towards profitability, with the second quarter seeing competition for spend intensify", commented Gary Brennan of Verisk Financial Research. "Around 80 percent of credit card purchase volume here is conducted via rewards cards, and other issuers such as Citigroup and Wells Fargo have unveiled new cashback card offerings, while the Venmo credit card is offering double cashback rewards until the end of 2021."
Joining the prevailing trend in the burgeoning Buy now, pay later (BNPL) sector, PayPal has announced the forthcoming abolition of late fees on its BNPL solutions in America, Britain and France. (The fintech's similar offerings in Germany and Australia already lack the penalty.) The development, which comes into force in October, comes amidst a volley of PayPal news, all involving partnerships of one sort or another. In the first of these, Giant Eagle has added PayPal and Venmo acceptance at its points of sale across almost 500 supermarkets and shops, making it, according to the retailer, the first chain grocer to do so. Another partnership, this time with Fiserv, will allow gig workers to deposit their wage cheques directly into Venmo accounts. Although exact numbers are difficult to determine, the US government estimated in 2017 that over 21 million workers depended on "contingent" or "alternative" jobs. Finally, ACI Worldwide and PayPal are combining to provide bill-settling customers with PayPal and Venmo as additional payment methods in ACI's Speedpay app.
Apple Pay's success in the United States mobile proximity payments market might lead one to forget that it is also making inroads in that role at the point of sale globally. This week, with the support of local issuer QNB, Qatar became the 59th country to take the service live. The move makes it the third Apple Pay market in the Middle East and North Africa region, following the regional debut in the United Arab Emirates in 2017 and Saudi Arabia two years later. The next market to go live is rumoured to be Chile, in conjunction with Itaú Bank, which will be the second country for Apple Pay in the Latin America region after Brazil. Apple rival Facebook meanwhile has wasted a lot of time in the payments space chasing a global money-reinvention dream that quickly came to grief when regulatory authorities worldwide were given an opportunity to see its blueprint. Now, a dramatically scaled-down digital wallet, Novi, is close to launch in the US. According to project head David Marcus, licences or other necessary approvals have been secured at the state level across most of the country. In a blog post, Mr Marcus makes a point of observing that volume for Facebook Payments, available in 55 currencies and in over two thirds of the world's countries, aggregated $100 billion over the most recent four quarters.
Other stories of interest this week...
Global: Mastercard to end magnetic stripe on cards
Nigeria: Explosion in electronic payments powers start-up boom
UK: Banks extend pilot scheme for sharing branches
US: Wells Fargo reverses plan to end personal credit lines after customer backlash
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The Weekly News Digest from Verisk Financial Research highlights significant developments that have recently occurred in payment cards, digital payments, acquiring, processing, retail banking and consumer credit. Our writers and researchers frame these items in contexts such as historical, sectoral and regional trends, adding a layer of value that is often missing from the rolling news cycle.
About Verisk Financial Research The market-leading online, interactive database and data dashboards covering the global cards and payments industry in detail, plus a range of data-packed country and regional reports. Leveraging financial cards data going back to 2010 – and forecasts up to 2022 – our unique datasets cover 72 countries around the world and feature more than 250 metrics per market.