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Archive for August, 2012

The New Credit-Card Rewards Programs – WSJ.com

Credit-card issuers are making it easier to use your rewards points to make purchases on the spot.

This summer, Citigroup began allowing cardholders to use rewards points to buy concert tickets directly through ticket-seller LiveNation.com. American Express  customers can use points for purchases made via Ticketmaster and Telecharge. Discover Financial Services, and American Express cardholders can use their rewards to shop on Amazon.com.

The deals add to the growing array of options available to rewards cardholders—and offer a chance to skirt the clumsy redemption process.

But the shopping power of the points varies significantly—from one cent per point to half that amount—and they don’t always provide the best rewards value. That makes it important to figure out how much your points are worth and how that compares to the value of other options before you start shopping.

Some deals carry restrictions. The Amazon offers don’t carry minimum point requirements, but consumers can’t use their rewards for certain items, such as Kindle downloads. American Express requires cardholders to redeem at least 2,000 points for a Ticketmaster or Telecharge purchase.

Card issuers such as J.P. Morgan and Discover say they are seeking additional retail partners. Consumers “see this as a real convenient way to redeem their cash-back bonus,” says Dana Traci, vice president of rewards at Discover, which introduced its Amazon offering last October. In July, it began allowing cardholders to use their rewards to make online purchases from Apple’s iTunes, Walt Disney’s Club Penguin and Facebook.

The deals are yet another sign of the stiff competition in the credit-card industry at a time when consumers are more cautious about spending, says John Grund, a partner at First Annapolis Consulting, an advisory firm focusing on the electronic-payments industry.

via The New Credit-Card Rewards Programs – WSJ.com.

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Big U.S. Retailers Join Forces to Develop Mobile Wallet – WSJ.com

More than a dozen big merchants announced Wednesday their plans to jointly develop a mobile-payments network that will battle similar services from Google Inc. and other companies.

Wal-Mart Stores Inc.,  Target Corp., 7-Eleven Inc. and Sunoco Inc. SUNare among the companies hoping to elbow their way into the burgeoning market that turns smartphones into devices for making purchases.

The push by merchants, called Merchant Customer Exchange, or MCX, is at an early stage, and the companies haven’t set a launch date or hired a chief executive. A CEO search is under way. It isn’t clear how much money each participating merchant is contributing to the network’s development.

Financial institutions and technology firms are pouring billions of dollars into the development of mobile-payment systems that operate as so-called digital wallets.

While few shoppers use their phones as mobile-payment devices, industry executives are convinced that consumers eventually will be just as comfortable buying with their phones as they now are when using credit cards and debit cards.

The technology relies on applications that a customer can download onto a smartphone and then make purchases in a store by tapping the phone against a reader placed by the cash register.

Mobile-payment transactions are expected to surge to an estimated $600 billion world-wide by 2016, up from $172 billion this year, according to market-research firm Gartner Inc. A Federal Reserve report in March said 87% of Americans have a mobile phone. Nearly half of those are smartphones, cellphones with computer applications and Internet access.

Among people with a mobile phone and bank account, 11% used mobile payments in the previous year, the survey found.

The new mobile-payments efforts already is running behind rivals such as the Google effort, called Google Wallet, which began operating last year on the technology company’s Android devices.

Isis, a collaboration of mobile carriers AT&T Inc.,  Deutsche Telekom  T-Mobile USA Inc. unit and the Verizon Wireless joint venture between Verizon Communications  and the U.K.’s Vodafone Group VOD, will start trials later this summer in Salt Lake City and Austin, Texas.

And in another sign of the growing interest in mobile payments, start-up Square Inc. said last week Starbucks Corp.  will invest $25 million in the company and use its technology to eventually process all credit and debit transactions at about 7,000 Starbucks outlets in the U.S.

via Big U.S. Retailers Join Forces to Develop Mobile Wallet – WSJ.com.

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