When consumers travel by public conveyance they become
captives. Moreover, long haul travelers become easy prey for diabolical payment
architects blatantly blurring the lines between debit and credit payment
applications.
Consider the ubiquitous embedded screens on the seat backs
of jumbo jets and place them on all modes of transportation where passengers
wait patiently for their journeys to end. Next consider optional ticket prices
to include cash available to gamble, access proprietary content (maybe not
actually used), pay for contingent travel (such as discounted hotels if circumstances
interrupt a trip) or other similar amenities. If the option includes winning
money (not necessarily by gambling, but by contests, refunds, or a host of such
promotional items) then effectively $x charged to a credit card becomes $x - $y
where $y is cash received back by the consumer.
The cash strapped traveler may use their credit limit to
access ready cash at a discount and the conveyance providers may well get the
use of a generous float if weary travelers do not stop at a Kiosk to get their
cash back but let it ride until their next trip. Further the conveyance providers
have a source of data that shows what their custom want to do to wile away the
hours. The losers of course are
financial institutions (FI) that get less money than they would otherwise for a
cash advance on a credit card.
Providing cash to credit cardholders is not just for the
travel industry. It is possible for inspired entrepreneurs to provide a cash
delivery service to credit card customers. The cash strapped consumer gives the credit card
number to the delivery company that initiates a request for the cash, the card
not present (CNP) fee, and a fee for the service. Once again all are happy
except the FI that may complain that it violates card acceptance agreements
somewhere way down in the small print.
There are many such ways to wring cash from credit cards
without the regular FI fees and perhaps now there are certain unscrupulous
merchants that ring up a sale, only to give the majority of the value back to
their custom. There is likely an economic model that gives a price point for
the cheap loan service including covering the risk that the evil merchant takes
if discovery means the inconvenience of changing their merchant number or some
other ruse. These after all are desperate times for a middle class under siege.
Next Blog: Bad Ed
II: new filters for a new era of fraud
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