Innovative ScoreCard Rewards Promotion Delivers Results

CSCU member Evansville Teachers Federal Credit Union has increased its average monthly credit card applications by 89% after extending to members its “3-2-1” ScoreCard Rewards program. Since July 2015, the program has offered credit union members triple points on a quarterly rotating category, double points year round on gas and groceries, and one point per dollar spent on all other purchases.

Thoughts on the Good News and Bad News for Credit Unions

When a debit card number is counterfeited, like what happens in a breach of data from a merchant, any counterfeit card number usage results in withdrawals directly from the cardholder’s bank account. Even though the cardholder’s liability for fraudulent transaction is limited - under the FCBA, liability for unauthorized use of the card tops out at $50 and many issuers have a $0 liability for fraud - there also can be additional costs and fees as a result. Checks that bounce result in NSF charges or scheduled bill pays that fail and incur late fees are just some of the aggravations that debit cardholders whose cards were caught in one of the many highly publicized data breaches had to deal with.

Not true! Chip cards are solving the problem they were intended to solve.

A number of leading news organizations recently reported that a security flaw in chip cards has been discovered, questioning the security benefits offered by EMV technology. One article suggests there are ways to completely undo the security the chip-enabled cards provide. The articles pointed to research presented by two people from NCR, a payments technology leader. Their research was presented at Black Hat, a widely attended hackers convention where research, security flaws, and hacks are presented to the public and to fellow security experts with the goal of closing security gaps before they can be exploited.

Contactless debit, credit and prepaid cards - payment cards that can be used by tapping a point of sale (POS) terminal or waving the card near the terminal - have been issued by major banks around the world since 2007.  Also referred to as “tap and pay” or “tap and go,” these cards feature an embedded NFC antenna and chip (different than the EMV chip) which allows the card to exchange payment credentials to an NFC enabled terminal with just a wave or a tap. They are touted for both speed and convenience mostly because no signature or PIN is needed.  In addition, the transaction amounts using this capability are typically limited to $25 or $50, consistent with the waiving of the need for signature for mag stripe transactions for those amounts.