Payments News Update – February 18, 2022

Legal and Regulatory Developments

SPOTLIGHT: Visa Had a Monopoly on Payments at the Olympics for 36 Years. China Put an End to That
Fortune – February 11, 2022

Since 1986, Visa has served as the exclusive payment service provider for the Olympic Games, complimenting cash as one of the only two ways to pay for anything at official Olympic venues. If you’re at the Olympics and need to pay with a credit card, or if you’re online and want to buy tickets for an upcoming Games, Visa is the only way to go.

That was until Beijing 2022. Inside the “Olympic bubble”—a dynamic quarantine zone China operates throughout the Olympic Village in Beijing—athletes, media, staff, and all other guests have three payment options available, rather than the usual two. Visa, cash, or China’s digital currency, the e-CNY. . . .

Amazon Accepts Visa Credit Cards in Global Truce Over Fees
Reuters – February 17, 2022

Amazon.com Inc has reached agreement with Visa Inc (V.N) to accept its credit cards across its network, ending a standoff between the two that threatened to disrupt e-commerce payments and deal a blow to the U.S.-based payments processor.

Details of the deal were not disclosed but Visa and other payments cards have faced increased pressure about their fees as more shoppers have turned online during the pandemic. The spat had highlighted the growing clout of retailers in the fee battle.
Amazon had said in November it was considering dropping Visa as partner on its U.S. co-branded credit card, after earlier confirming it would stop accepting Visa credit cards in the UK because of high transaction fees. . . .

US Draft Bill on Stablecoins Offers Safe Harbor for Issuers
PYMNTS – February 16, 2022

Congressman Josh Gottheimer released on Tuesday, Feb. 15 a draft of the Stablecoin Innovation and Protection Act of 2022, a piece of legislation that aims to define stablecoins and to offer a legal framework where stablecoin issuers could operate.

“The expansion of cryptocurrency offers tremendous potential value for our economy. But for cryptocurrency to grow and thrive here in the United States, instead of overseas, we must provide more direction and certainty to the marketplace to help boost innovation and protect consumers,” said Gottheimer. . . .

Colorado Plans to Accept Crypto for Tax Payments by End of Summer
PYMNTS – February 16, 2022

Colorado will begin taking cryptocurrency for tax and other payments by the end of the summer, Gov. Jared Polis told CoinDesk. “For consumer convenience, we want to accept payment in a wide variety of cryptocurrencies, just as we do in credit cards,” Polis said Wednesday (Feb. 16).

He added that Colorado is seeking companies that will handle the crypto transactions. Polis said the state doesn’t want to take the “speculative risk” of holding digital assets, so there will be a transactional layer. Polis has long been a proponent of cryptocurrency. As a congressman in 2014, he was one of the first U.S. politicians to accept campaign donations in bitcoin. . . .

CFPB Acts to Guard Gov’t Benefits From Card Companies
PYMNTS – February 15, 2022

The Consumer Financial Protection Bureau (CFPB) says it is taking action to keep prepaid card providers from illegally taking money from people receiving benefits from the government.

The CFPB issued a compliance bulletin Tuesday (Feb. 15) that outlines prohibitions that prevent prepaid cards being the sole method for distributing government benefits and underscores the rules designed to promote market competition and to protect people’s right to choose how they receive their money under the Electronic Fund Transfer Act (EFTA). . . .

Apple Racks up More Fines in Dutch Fight Over Dating-App Payments
Bloomberg – February 14, 2022

Apple Inc. was fined an extra 5 million euros ($5.6 million) by Dutch antitrust regulators over an order to open up app payments for dating services. Apple’s new terms for payments for dating apps are “unreasonable and create an additional barrier,” the Authority for Consumers & Markets said on Monday. The iphone maker “still does not meet the requirements” of the antitrust authority, the ACM said.

This is the fourth penalty payment Apple has received from Dutch regulators following a December order for it to open up payment options for dating app providers in the Netherlands. The latest penalty brings the running total for fines to 20 million euros out of a potential maximum amount of 50 million euros. . . .

U.K. Regulator Orders Buy Now/Pay Later Firms to Clarify Terms
American Banker – February 14, 2022

Three buy now/pay later lenders that operate in the U.K. have refunded late-fee charges to consumers following a review by the country’s Financial Conduct Authority, which is seeking to expand its jurisdiction over the fast-growing and unregulated domestic BNPL industry.

The moves came after the U.K.’s financial regulator ordered Klarna, Openpay, Clearpay and Laybuy to clarify terms in their contracts to protect consumers, the FCA said Monday. Openpay, Clearpay and Laybuy subsequently agreed to refund late-fee charges for buy now/pay later customers who canceled their entire purchases, the FCA said. . . .

‘Buy Now Pay Later’ Boom Fuels Consumer Debt Concerns as Transactions Soar
Financial Times – February 12, 2022

In an age of mobile payments, the decision by Swedish “buy now pay later” group Klarna to launch its first physical card in the UK last month felt somewhat dated. The pastel pink and black cards enable customers to make their purchases — but delay paying for 30 days.

It is the latest development in the buy-now-pay-later (BNPL) phenomenon that has swept the UK, marketing itself as a healthier alternative to other unsecured types of lending but fuelling debt concerns as living costs soar. Klarna, which has 90mn customers across 17 countries and was valued at $46bn in an investment round backed by Japan’s SoftBank last year, has led the UK boom in the past few years. . . .

European Commission Promises to Legislate Instant Payments by Mid-Year
PYMNTS – February 11, 2022

The European Commission has pledged to accelerate instant payments across the European Union (EU). In a tweet and in an address to the 2022 Fintech and Regulation Conference, European Commissioner for Financial Stability, Financial Services and the Capital Markets Union Mairead McGuinness confirmed the panel will submit a legislative proposal on instant payments in the second half of 2022.

“We need this to accelerate the roll-out of instant payments in the EU,” she tweeted on Wednesday (Feb. 9). No details were provided. Last year, McGuinness pledged the EU payment strategy for the coming years, including open banking and instant payments, in a speech to the European Payment Institutions Federation. . . .

Industry Developments

SPOTLIGHT: Discover to Offer Shoppers Pay-by-Bank
PaymentsJournal – February 16, 2022

IDiscover Financial Services is expected to announce a deal this week with fintech company Buy It Mobility Networks that will enable Discover cardholders to pay merchants directly from their bank accounts with no debit or credit card needed. This type of payment process has long been popular in the Asian region, being driven by big commerce players WeChatPay and AliPay, but has been slow to catch on in the U.S. where shoppers prefer to use branded credit and debit cards for purchases.

Banks that issue cards to consumers benefit from significant interchange fee income when their cards are used to make purchases, and so have been slow to make alternative payment methods available to their customers. . . .

Discover Backs Card-Free Payments
Payments Dive – February 16, 2022

A fintech that facilitates ACH payments is leveraging Discover Financial Services’ network to get more consumers on board with paying merchants directly from their checking accounts.

Teaming up with Discover, Atlanta-based digital payments infrastructure platform Buy It Mobility (BIM) Networks is launching BuyPass, which will enable consumers to make direct payments from their checking accounts through merchant apps. Shoppers’ payments run through Automated Clearing House rails to merchants within Discover’s network. The companies announced the launch in a news release Wednesday. . . .

Decline of Cash Spotlights Swipe Fees
Payments Dive – February 16, 2022

The shift away from cash is welcome news for card networks and banks. But it’s bad news for merchants and their customers, writes National Retail Federation Vice President Leon Buck.

Visa recently released a study that found 16% of consumers surveyed have stopped using cash and that 53% say they will do so within a decade. Only a few years ago, retailers largely dismissed card industry reports of a “cashless trend” as propaganda intended to promote the erroneous idea that cash was old fashioned and that cards were the modern way to pay. By encouraging more people to pay with costly plastic, big banks and card giants could take a percentage of even more purchases through the tens of billions of dollars in “swipe” fees they charge merchants to process card transactions each year. . . .

As Users Seek More Choices, PayNearMe Adds PayPal and Venmo to Its Bill Pay Platform
Digital Transactions News – February 16, 2022

Responding to demand from consumers and billers for digital bill-payment options, electronic billing and payment platform provider PayNearMe Inc. on Tuesday announced the addition of PayPal and Venmo to its payment options.

A recent study by PayNearMe revealed that 43% of respondents rated the convenience of using PayPal to pay bills as important or very important. In addition, more than 27% of consumers cited Venmo as a preferred way to pay their bills, and 35% of Gen Zers and Millennials wanted the option of using Venmo to pay their bills. . . .

Marqeta and Plaid to Pair ACH With Card Issuing
Finextra – February 15, 2022

Marqeta (NASDAQ: MQ), the global modern card issuing platform, today announced a partnership with Plaid, a data network that powers the tools millions of people rely on to live healthier financial lives, to simplify ACH transfers, enabling customers to seamlessly and securely authenticate their bank accounts and fund their accounts to power more immediate spending.

This technology will enable Marqeta customer’s cardholders to more easily initiate ACH transactions to send money between customer accounts and external accounts. They will also be able to verify and link external accounts more quickly, making it easier to fund their accounts and start spending sooner. . . .

MoviePass, Movie Ticket App That Closed in 2019, Plans to Relaunch This Summer
NBC News – February 10, 2022

The subscription-based movie ticket service plans to relaunch this summer, nearly three years after shutting down amid financial woes. MoviePass founding chief executive Stacy Spikes announced the plans during an event at Lincoln Center in New York City on Thursday afternoon.

Spikes laid out an ambitious goal, telling the audience he wants the company to be responsible for 30 percent of all movie ticket sales across the United States by 2030. The original incarnation of MoviePass gained a cult following in 2018 with a simple sales pitch. The service allowed subscribers to see a movie in theaters as often as once a day for $10 a month. . . .

You Can Now Split the Bill With Friends on Facebook Messenger
Engaget – February 9, 2022

Splitting a restaurant bill or dividing the costs of a group trip can be tedious. Meta is attempting to make this easier by rolling out its Split Payments feature to all Facebook Messenger users. The feature, which was previously in testing, will likely be perfect for occasions when you are dividing the cost of something with two or more people.

For example, dividing the purchase of a new microwave with your three roommates, the cost of a new birthday gift for grandma with your siblings, or even this weekend’s Super Bowl party. If you or your friends are new to using Facebook Payments in Messenger, the feature will ask for payment details (either a debit or credit card or Paypal). . . .