A forthcoming Visa-branded credit card being issued by a new company boasting investors such as Max Levchin (a PayPal co-founder) and Adam Bain (Twitter's former chief operating officer) has been generating much interest this week. Key features of the ' X1 Card ' include eye-catching rewards points arrangements: holders spending over $15,000 per annum will see their two points for every dollar spent all become three points. Crucially, in a year when credit reporting has become problematic, eligibility and credit limits are to be determined by income rather than credit score. Many users should also appreciate the ability to avail of virtual card numbers that automatically expire: perfect for taking on trial subscriptions while avoiding ongoing expenses that sometimes prove troublesome to undo. As the world moves inexorably online, lifestyles have shifted too, leaving opportunities for providers that are nimble enough to address transformed needs and wishes: the Apple Card was one such move, X1 may well shape up to be another. Already more than 23,000 people are reportedly on the waiting list.
The US Federal Reserve's latest report on household finances as perceived by Americans themselves provides fresh insights in a week when the pandemic continues to dramatically harm the country. Surveyed in July, 70 percent of adults said that they felt able to handle an unexpected expense of $400 either by using cash in hand, drawing on savings or putting the expense on a credit card for paying on the next statement. A further finding from the same survey says that 22 percent of newly unemployed adults felt that their old job would not be coming back, more than three times the number who reported feeling that way in April. Only a quarter of "laid-off people with family incomes below $40,000 went back to the jobs they once had," reports Reuters, citing the Fed's analysis, "compared with 39 percent of laid-off workers with family incomes over $100,000."
Such has been the reluctance worldwide to handle cash during the coronavirus crisis, British authorities have now stored enough £2 coins (each worth $2.55) that they need not manufacture any more until the 2030s. As the country's national auditor points out in a report this week, the enthusiastic adoption of cashless payment methods in the United Kingdom, which has accelerated sharply this year, means that strategic thinking must be brought to bear to ensure that cash continues to be adequately supported to serve the needs of disadvantaged consumers in particular. "The declining use of cash is placing increasing pressure on the sustainability of the infrastructure for producing and distributing cash, " the report's authors conclude.
Given the high profile of Deutsche Bank's investment banking activities in recent years, it can easily be forgotten that the firm possesses a meaningful retail network in its home market of Germany. Now, taking advantage of the consumer shift to digital channels in order to further whittle down its cost base, the bank has announced that it will be closing some twenty percent of its domestic branches. The hope is that the cut in expenditure will help to stave off the competitive pressure coming from Sparkassen, savings banks that are controlled by local municipalities in a uniquely German arrangement. As noted in Verisk Financial Research's latest market report for Germany, Deutsche's consumer finance operations are also being centralised in Bonn. Margins could not be thinner in Europe these days as revenues fall and interest rates maintain historic lows.
To end, links to some other stories of interest this week...
The Weekly News Digest from Argus Advisory Research highlights significant developments 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 often missing from the rolling news cycle.
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