Payments News Update – February 24, 2023

Legal and Regulatory Developments

SPOTLIGHT: Mastercard and Visa to Face Another Card Interchange Class Action Suit
Finextra – February 22, 2023

Commercial litigation law firm Harcus Parker is set to bring the claim at the Competition Appeal Tribunal (CAT) on behalf of UK businesses in a case that could seek at least £7.5 billion in compensation, says Sky.

The law firm will argue that the interchange fees are set by Visa and Mastercard, not market forces. Thomas Ross from Harcus Parker tells Sky: “These fees are unlawful and should be abolished.” . . .

Crypto Makes Its Peace With New EU Law, but What Does It Do?
The Defiant – February 23, 2023

The European Council is set to approve and implement the highly-anticipated Markets in Crypto-Assets (MiCA) law. Expected to come into force in early 2024, this is one of the first acts to bring crypto assets, issuers, and crypto-asset service providers (CASPs) under one regulatory framework.

But the companies operating with digital assets need to start adapting their activity to the new requirements now, in March 2023. . . .

FedNow Aims to Avoid Zelle-Type Fraud
Payments Dive – February 23, 2023

As the Federal Reserve prepares for the launch of FedNow as early as May, it’s focusing on building fraud prevention features into the new real-time payments system.

“Fraud management features are a high priority for (financial institutions) and are being tested along with transaction flows in the countdown to launch,” the Federal Reserve said in a website post, citing FedNow Senior Vice President Nick Stanescu. . . .

Banks Intend to ‘Close the Gap’ if CFPB Slashes Credit Card Late Fee Income
S&P Global – February 21, 2023

The drastic cuts to credit card late fees proposed by the Consumer Financial Protection Bureau could force credit-card heavy banks to change the way they do business, analysts and attorneys told S&P Global Market Intelligence.

The proposal would reduce the immunity provision for late fees to $8 for a missed payment and end the automatic annual inflation adjustment. It also seeks to ban late fee amounts above 25% of the consumer’s required payments. . . .

Japan to Launch Pilot Programme for Issuing Digital Yen
Reuters – February 17, 2023

Japan will start a pilot programme in April to test the use of a digital yen, its central bank said on Friday, joining a growing number of countries seeking to catch up with front-runner China in launching a central bank digital currency (CBDC).

The widely expected move follows two years of experiments that the Bank of Japan (BOJ) has been conducting to decide whether to issue a CBDC, and moves Japan closer to issuing a digital yen in several more years. . . .

Observers Split on Banking Groups’ Effort to Get the Fed to Extend Time for Debit Compliance
Digital Transactions News – February 16, 2023

Industry opinions are mixed regarding a move by banking trade groups to plead for more time to act on a ruling issued in October by the Federal Reserve.

The ruling orders all banks to comply by July 1 with an 11-year-old requirement that merchants have a choice of at least two networks for all debit transactions, online as well as in-store. One of the networks can’t be Mastercard if the other is Visa, and vice versa. . . .

Industry Developments

SPOTLIGHT: Access to Real-Time Payments Expands Worldwide
PaymentsJournal – February 22, 2023

Consumers want faster, convenient, and reliable payments and real-time payments (RTP) have delivered on all fronts. Today, it is no longer limited to a select few. According to Bankless Times , 72% of the world’s population now has access to RTP.

“Global adoption of RTP is expected to experience an annual growth rate of 23.6% from 2020 to 2025,” said Sophia Gonzalez, Debit and Payments Analyst at Javelin Strategy & Research. . . .

33% Of Us Retailers Plan to Add Real-Time Payments
PYMNTS – February 22, 2023

After three tumultuous years leading to a very uncertain 2023, retailers are innovating in key areas to improve customer journeys with advanced data approaches and real-time payments.

These are among the findings from the study “Retail Payments Innovation Year in Review: How Real-Time Payments Drive the In-Store Customer Journey,” a PYMNTS and ACI Worldwide collaboration, taken from a survey of 300 retailers in the U.S. or the U.K. with at least 50 store locations and annual revenues over $1 billion for U.S.-based companies, or 100 million pounds ($127 million USD) for those in the U.K. . . .

Square Chases Bigger Merchants
Payments Dive – February 22, 2023

As it seeks to expand beyond its roots in the small business market, Square is targeting bigger business customers to fuel its growth this year.

Being labeled a digital payments provider to small businesses is a “natural consequence” of Square having started out distributing its white plastic square card reader to owners of small operations, such as vendors at farmers markets, Square General Manager Saumil Mehta said in a Thursday interview. . . .

ACH Network Sees Same Day Payments up 15.5% And B2B Rise 11.8% In ‘22
PYMNTS – February 22, 2023

Same Day ACH and B2B payments on the ACH Network saw double-digit growth in 2022.

These gains came during a year in which, overall, the number of payments processed by the ACH Network grew 3% to 30 billion and the value of those payments rose 5.6% to $76.7 trillion, ACH Network governor Nacha said in a Wednesday (Feb. 22) press release. . . .