Tag: US Finance

U.S. Credit Card Issuers Embrace Microchip Security

In the aftermath of several data hacks during the holiday season, credit card issuers throughout the United States are rushing to follow in the footsteps of most European countries. In the U.S., credit cards use a magnetic strip which is swiped by a machine; a process which poses a security threat to card owners. However, in the U.K. and Kenya, the microchip, or EMV, cards are equipped with smart chip security and are encrypted.

National Retail Federation general counsel Mallory Duncan explained: “Fraud is rising too quickly not to make progress. Banks are going to do the right thing. The risk has gone up.”

This is already proving true, with Virginia Credit Union announcing that it will be sending out MasterCard credit cards with microchips for increased security.

“Our plans have been underway since last summer to reissue cards,” said Deb Wreden, senior vice president of product and delivery strategy, adding that the decision was not the result of security compromises at retailers.”

Similarly, Bank of America began offering cards as early as 2012 and has recently updated its cards for customers who travel abroad. JP Morgan recently announced that it will be following suit this year.

Ally’s Auto-Finance Business Expects Gains in 2013

According to Ally Financial Inc.’s CEO, the company will repay the government by 2014 thanks to its auto-finance business.

CEO Michael Carpenter explained that Ally will be able to make a large payment this year. As the second-largest remaining investment by the U.S. Treasury’s bailout fund, Ally still has $14.6 billion outstanding from the Treasury’s Troubled Asset Relief Program.

“We are 100 percent confident that we can repay the American taxpayer completely,” Carpenter said. “Whether that’s this year or next year, I don’t know. But it’s in that time frame.”

In an effort to increase company focus on autos and its online retail bank, Ally has been selling assets outside of the United States as well. Its auto unit has also expanded, providing used, leasing and subprime financing offerings early this year, before agreements with General Motors and Chrysler expire.

US Stocks Rise as Central Banks Consider Joint Efforts

The thought of American and European central banks joining China to boost the economy has triggered the best weekly gain for the Standard & Poor’s 500 Index since last year.

In fact, all ten of the index’s stock groups rose this week, adding almost 5%. Though Facebook continued its three-week slide, Chesapeake Energy Corp. and Home Depot were two companies who reported significant gains.

Altogether, the S&P 500 climbed 3.7% to 1,325.66, a large improvement to last week’s 3% slump. The Dow Jones Industrial Average also rose to 12,554.20.

“The optimism comes from the belief that there is going to be some kind of coordinated activity from central banks,” said Mariner Wealth Advisors’ Bill Greiner.

“The question in my mind is how close to the edge do the world of investors have to move before the central banks start to move in the direction that they need to,” he added.