The Perils of Apple’s Pay Later; Senate bill could regulate crypto


The ugly economics behind Apple’s new “Pay Later” system

Apple is getting into the buy-now pay later business with its new pay later service, which is integrated with Apple Pay and Apple Wallet. While Apple bills the service as “designed with users’ financial health in mind,” BNPL is a practice that has come under scrutiny from government regulators as something that could potentially hurt customers. Apple’s Pay Later service, in the works for at least last year, allows users to make a purchase with Apple Pay and then pay it back in four equal installments over six weeks. There is no interest on these installments, but it remains unclear whether Apple will charge a late fee and, if so, how much it will cost. [The Verge]

US senators unveil cryptocurrency regulation bill

A bipartisan pair of U.S. senators on Tuesday introduced a bill that would set new rules for cryptocurrency and turn most of its oversight over to the Commodity Futures Trading Commission (CFTC). The bill represents one of the legislature’s most ambitious efforts to set clear guard rails around fast-growing and contentious cryptocurrency markets. The measure would see the CFTC, not the Securities and Exchange Commission, play the primary role in regulating crypto products, most of which the senators said function more like commodities than securities. The smaller CFTC is generally seen as a friendlier cryptocurrency regulator, as the SEC has typically found that crypto products must meet a variety of securities requirements. [Reuters]

1 in 3 Americans making $250,000 or more say they live paycheck to paycheck

According to a survey by PYMNTS and LendingClub, more than one in three Americans earning at least $250,000 say they live paycheck to paycheck. In fact, 36% of Americans who take home a quarter of a million dollars or more say they won’t have any more money by payday. More than 40% of those making at least $100,000 say the same. The big picture is bleaker. The report found that 61% of Americans as a whole were living paycheck to paycheck as of April 2022. In other words, nearly two-thirds of the US population, or about 157 million people, have little to nothing left at the end of the month. a nine percentage point increase from April 2021. And most people making less than $50,000 (just under 80% of them) live paycheck to paycheck. [MarketWatch]

Satisfaction with credit card apps decreases as usage increases

Most customers are dissatisfied with their mobile credit card apps and online options, according to recent research from JD Power. Overall satisfaction with most digital channels has declined as usage has increased. Many customers are financially stressed and want their bank and credit card issuer to help them manage their finances through online tools. However, when it comes to delivering personalization through high-touch digital channels, most banks and card issuers fall short. [ABA Banking Journal]

Americans are increasing the use of credit cards as high rates continue

Americans continue to rely on credit cards and loans as consumer credit surged $38 billion in April amid the highest inflation in 40 years. The latest Federal Reserve data on outstanding consumer credit comes after March’s record rise of $52.4 billion. That figure has since been revised down to $47.3 billion. Revolving credit, which includes mostly credit card balances, grew at an annualized rate of 19.6% to total $1.103 trillion in April, just breaking a pre-pandemic record of $1.1 trillion. [CNN]

“Buy now, pay later” financing can create the “dangerous illusion” that purchases are cheaper than they actually are

Buy-now-pay-later, or BNPL, financing options are becoming increasingly popular among consumers, particularly those under 45, according to JD Power’s latest Banking and Payments Intelligence Report. And that could spell trouble for her financial well-being. Many young people report that they don’t understand how these payment methods work, and that’s where the problems start. It is fairly easy to sign up for BNPL loans and if consumers are not careful about their spending, they can end up incurring more debt than they can afford to pay back. In fact, according to the report, almost a third of younger consumers say they spend more than their BNPL budget allows. [Fortune]

The Apple Passkey feature will be our first taste of a truly passwordless future

Apple and other tech giants want to eliminate passwords for online accounts and apps. At its WWDC 2022 keynote on Monday, the iPhone maker announced a new feature called Passkeys. It’s essentially a new breed of security that aims to replace passwords for account login purposes. It will be coming to iOS 16, macOS Ventura and Apple’s other 2022 updates in the fall. Apple Passkeys are essentially a type of biometric sign-in standard. Instead of entering a password to log into an app or online account, you would use a passkey stored on your device. You can think of a master key as a digital version of a hardware security key. Once you set up a passkey for an account, you can use it to log in by authenticating with either Face ID or Touch ID. [Apple Insider]

Mastercard introduces “Pay by Link” open banking function

Mastercard debuted its pay-by-link payment feature at Money 20/20 Europe, leveraging Europe’s open banking platform Aiia to allow businesses to send their customers a link so they can pay from anywhere can pay from immediately. The new payment feature “fits directly into Mastercard’s open banking vision to usher in a new era of choice, simplicity and personalization in a secure manner,” according to the company’s press release. Based on open banking payments, Mastercard’s Pay by Link feature caters to users dealing with accounting, insurance and telecom companies, as well as social commerce, payment service providers and utilities. [PYMNTS]

Discover offers Free and easy way to unsubscribe from popular people search websites

Discover recently introduced a new benefit for its credit card and bank customers. The company says its Online Privacy Protection program makes it easy to remove personal information from 10 popular data collection websites, including Spokeo, Intelius and ZabaSearch. The free service is accessed through the Discover mobile app. For those who need to protect their personal data, such as B. survivors of domestic violence, it is crucial to opt out of this data sharing. Removing your information from people search sites can reduce your risk of identity theft, but it won’t eliminate the threat, something Discover makes clear to customers who sign up for its program. [Consumers’ Checkbook]

Ivella is the latest fintech focused on couples banking, with a twist

Ivella, a new fintech startup, was born out of the expectation that couples would only use Venmo if they weren’t married. The best solution so far has been joint accounts: this means that two people set up an account where they merge their accounts and draw from the same pool. Instead, Ivella would like to set up a shared account: couples keep individual accounts and balances, but receive an Ivella debit card linked to both accounts. [Tech Crunch]

Yes, a restaurant may charge different rates for credit cards and cash

In every state, it’s legal for restaurants to charge customers more for purchases made with credit cards than for purchases made with cash. In most states, they can do this with an additional fee for credit card purchases. In some states, restaurants can only do this by offering a discount for purchases made with cash or other payment methods. Although cash discounts serve the same purpose as surcharges, cash discounts are also permitted in the 10 states that prohibit surcharges. [Verify]

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