Credit card company Synchrony Financial is increasing interest rates for its customers as a response to a Consumer Financial Protection Bureau rule that would decrease its late fee revenue. This move is part of a series of steps taken by the company to mitigate the financial impact of the new rule. Additionally, Walmart-backed financial technology company One has introduced a buy now, pay later option for customers to pay for purchases between $100 and $3,000 over time. The annual percentage rate ranges from 9.99% to 35.99%, depending on the customer’s creditworthiness. This new feature competes with Affirm, which Walmart already uses to assist customers with purchasing products.
Borrowers in the United States with lower incomes are facing challenges in keeping up with loan payments, leading banks to become more cautious about issuing credit cards and car loans. Rising prices are squeezing budgets for many Americans, causing a decline in household finances for those earning less than $45,000. This contrasts with the financial stability seen among higher-income individuals. In particular, first-time and low-income borrowers are experiencing higher default rates on loans compared to those with larger incomes. In addition, Empower Finance is acquiring Petal, a credit card issuer that initially launched as an affordable way for customers to build their credit but encountered issues with fees and customer downgrades.
To address the growing threat of scams, Mastercard has launched Scam Protect, an AI-based product suite designed to identify and prevent fraudulent activities like card-based scams, account-to-account scams, and fraudulent account openings. The company is also partnering with Verizon to enhance scam prevention efforts. Despite the widespread adoption of electronic and mobile payments, many businesses globally still use manual cash-handling processes, leading to excessive security costs. PayComplete’s report indicates that cash remains a strong customer payment preference, with over a third of organizations facing challenges due to discrepancies in cash handling processes.
Square is expanding its offline payments feature to all hardware devices and in every country, allowing nearly 90% of hardware sellers to accept offline payments. Additionally, Delta and American Express have released limited-edition credit card designs made from retired Boeing 747 aircraft, offering a unique piece of aviation history to new and existing cardholders. Lastly, Jack Dorsey’s payments company, Block, formerly known as Square, is venturing into bitcoin mining by developing its own mining system and chip design. This expansion into bitcoin mining marks a new direction for the global tech firm.
