As sales disappoint, after-Christmas discounting starts early
Store sales have fallen for the past three consecutive weeks as retailers had a problem even getting Americans into stores, let alone getting them to spend. The number of shoppers fell 21.2 percent during the week that ended on Sunday, according to ShopperTrak.
I'm not disappointed, angry. That means there was no late rush.
"Data theft at Target reveals plastic’s liabilities; US retailers slow to adopt newer security technologies designed to reduce fraud" by Michael B. Farrell | Globe Staff, December 25, 2013
Even though Target Corp. has not revealed how criminal hackers stole about 40 million credit card numbers at its stores, the breach has made it clear that plastic cards and the systems designed to process them are more vulnerable than ever. A big part of the problem rests in that decades-old magnetic strip technology.
Related: Off Target
That black bar on the backside of US credit and debit cards contains and transmits financial data when they are swiped at stores, restaurants, or gas pumps. It’s definitely convenient. But thieves have figured out how to take stolen financial details and easily make counterfeit magnetic strip replicas.
There is a deterrent to such deception, and many other parts of the world implemented it long ago.
In the mid-1980s, Europe began testing a credit card technology that transmits financial details using a tiny computer chip embedded in the card that generates a secret code to make a transaction. The code is typically paired with a four-digit personal identification number the card holder uses to complete a purchase or withdraw money from an ATM.
Since this standard — known as EMV — has become commonplace in Europe, the rate of credit card fraud has plummeted there, according to many specialists.
A key reason that European countries moved quickly to adopt the chip system was the way credit card companies monitored for fraudulent transactions. Unlike in the United States, it was not common for overseas banks to perform nearly real-time checks on credit card purchases to check for fraud, so they wanted a way to improve security at the point of sale.
Many thought that as Europe adopted new EMV standards, the United States would soon follow.
“We’ve been here waiting a long time for this transition to happen,” said Martin Ferenczi, president of the North America region of Oberthur Technologies, a French company that makes cards imbedded with chips and opened US operations in 1996.
But only about 14 percent of the cards it makes in the United States contain chips. The vast majority still have magnetic strips.
And even though many US retailers and banks realize the benefit of moving away from the magnetic strip system, they’ve resisted the chip-and-pin technology due to the massive investment required to accept those cards. It would cost billions of dollars to upgrade every point-of-sale device and ATM machine, and to issue new credit and debit cards.
“It really is tough to get all the retailers on board,” said Henry Helgeson, chief executive of Merchant Warehouse, a Boston payment processing company.
That could change because of the Target breach, he said. “I believe the retailers are slowly but surely realizing that we have to do this.”
Actually, the switch to EMV is already slowly underway. Major credit card companies have set October 2015 as the deadline for merchants to begin accepting cards with embedded microchips. If they don’t make the switch, stores could be held liable for transactions made with counterfeit magnetic strip cards.
Still, many doubt US merchants will be able to meet the deadline or even make the necessary changes to enable a wholesale move to EMV cards.
“It ain’t happening in the US. The question is closed,” said Anton Chuvakin, an analyst at the research firm Gartner Inc.
Chuvakin said that since the United States has resisted chip technology for the past two decades, retailers and banks might be better off bolstering other types of security technology to protect magnetic strip cards. One way to do that is to begin encrypting financial data from the moment a card is swiped at the point-of-sale device until it is processed at a bank.
“If it’s encrypted, there’s nothing to steal,” Chuvakin said. “You ensure the entire chain and you’re done.”
Except the NSA would have access.
Even that type of security is not common at American retailers. It has been only recently that merchants began working on new ways of protecting the consumers’ financial details at the point of sale.
Another complicating factor is the changing nature of how people shop. EMV was designed to protect transactions made in person, not via e-commerce, to the point where some security specialists say its safer to buy online than inside stores.
Well, maybe not: Group says it easily hacked iPhone fingerprint ID
Overall, the US payments industry is in flux as buying habits evolve, but until the credit card system is made more secure, consumers should expect more instances of massive fraud, according to security specialists. “We’re going to be in for a lot of pain before we get this right,” said Helgeson of Merchant Warehouse.
In the meantime, he said, common sense security practices could prevent many credit card thefts. One is for cashiers to use existing security checks such as the signatures on the back a card, he said. “We’ve actually been shopping all weekend and no one asked to see the signature on my card,” he said.
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Maybe you can use your new OneUnited card:
"Comeback plan at bank includes new credit card; OneUnited’s product targets customers with financial problems" by Deirdre Fernandes | Globe Staff, December 25, 2013
OneUnited Bank, the controversial Boston-based lender, is trying to make a comeback from its financial problems with a new credit card aimed at consumers who are trying to repair bad credit.
The card could help OneUnited, one of the largest black-owned banks in the country, overcome criticism from federal regulators that it does not lend enough money to low- and moderate-income borrowers, despite having branches in underserved neighborhoods....
It's the $y$tem that is the problem, not the ethnicity of the people running it.
It is he first major product launched by OneUnited since the 2008 financial crisis, when the bank lost $50 million because of investments in Fannie Mae and Freddie Mac, the giant mortgage financing companies taken over by the federal government. Since then, OneUnited has faced other losses, including some $5 million in real estate loans to historic Charles Street African Methodist Episcopal Church in Roxbury.
Related: Charles St. pastor says $825,000 was misspent
When institutions of God are corrupt..... anyone notice the the only ones not filled with it are Muslims? The Sharia law against usury must have them thinking they are stealing from God.
The church case is in Bankruptcy Court after One United threatened to foreclose, raising the ire of community groups.
Meanwhile, One United remains one of the few banks yet to repay US taxpayers for bailout funds received under the Troubled Asset Relief Program, or TARP.
Williams declined to comment on the bank’s plan for paying back its $12 million bailout, saying only that OneUnited is in discussions with the Department of the Treasury....
That's chump change when you consider how much Wall Street banks got.
The interest rates and fees are also are also steeper than with standard cards, but initially, the bank plans to spend $500,000 on advertising aimed at African-American and Hispanic consumers, Teri Williams, the bank’s president, said....
Like all banks, OneUnited is trying to find new sources of revenue, and the new credit card is one option, said Thomas O’Connor, with G.T. Reilly & Co., a Milton financial advisory firm that works with 35 community banks and credit unions in Massachusetts.
See: Battling Big Banks a Moot Point in Massachusetts
Banks can make money from credit cards by charging fees and higher interest rates than for many other loans, O’Connor said. But they are also risky, especially for small banks with smaller capital cushions, since customers may not pay their bills.
And they service minorities and low-income people?
In addition, small banks must contend with the big financial services firms that dominate the industry....
Williams and her husband, Kevin Cohee, the bank’s chief executive, have experience in the credit card industry, including operating a company that marketed credit cards to military personnel. Williams said that expertise gives OneUnited an edge over other small banks.
The secured card also offers the bank an opportunity to recover from the “needs to improve” rating that regulators gave the bank for the 2007 to 2010 lending periodunder the Community Reinvestment Act, which encourages banks to lend to poorer customers in the communities they serve.
But it all depends on how OneUnited markets the card and whether it fulfills its promise to help consumers rebuild their credit, said Kenneth Thomas, a Community Reinvestment Act consultant in Miami who is a frequent critic of the bank.
“This looks good on paper, this looks good on the website,” Thomas said. “The question is how will they implement it?”
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Related: MSM Xmas Gifts: To OneUnited Bank
Also see: Visa, MasterCard in $6B settlement over card fees
Interest rates can’t entice, so banks offer bonuses
While out shopping let's hit the food court:
"Sales of Diet Coke starting to fizzle; Increasingly, consumers wary about sweeteners" by Candice Choi | Associated Press, October 16, 2013
NEW YORK — During a conference call with analysts Tuesday, a Coca-Cola executive noted that Diet Coke was “under a bit of pressure” because of people’s concerns over its ingredients, alluding to the growing wariness of artificial sweeteners in recent years....
This summer, the company launched its first ad addressing the safety of aspartame to ease concerns people might have. It has also distributed fact sheets on the topic to its bottlers and retailers who sell Coke products.
The Food and Drug Administration says aspartame can be safely used in foods as a sweetener, and the American Cancer Society has said that most studies using people have found that aspartame is not linked to an increased risk of cancer.
Still, the broader trend in the United States has been toward foods and drinks people feel are natural or organic....
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Refill: Coke offers empty calories — and slogans
My wallet is now empty.
