Legal and Regulatory Developments

SPOTLIGHT: Swipe Fee Foes Find Legislative Support in Almost a Dozen States
Payments Dive – March 28, 2025

Inspired by an Illinois law, legislators in multiple states are working to ban card swipe fees on sales tax and gratuities, with proposals pushed by retailers and restaurateurs gaining momentum.

In recent years, merchants of all sizes have decried rising fees for customers’ credit and debit card transactions, propelling the efforts to curb interchange application to portions of consumer payments. Illinois enacted a law in 2024 to eliminate swipe fees on taxes and tips beginning July 1, 2025.

This year, 11 states including California, Colorado, Nevada, Texas and Vermont, are considering bills that carry “the highest threat of enactment,” according to the Electronic Transactions Association, which is hustling to block them. The ETA counts card issuers, processors and networks as members, including Bank of America, Fiserv, Mastercard and Visa. . . .

House Slates CFPB Payment, Overdraft Rules for Repeal
Law360 – April 9, 2025 (subscription required)

The House on Wednesday voted to overturn two Biden-era Consumer Financial Protection Bureau rules aimed at increasing oversight of larger digital payment providers and curbing big-bank overdraft fees, setting the pair up for final repeal at the White House.

The Republican-controlled U.S. House of Representatives voted overwhelmingly along party lines to pass GOP-sponsored legislation that would nullify the CFPB rules under the Congressional Review Act. The Senate already approved the legislation last month.

One of the two proposals — to nullify a CFPB rule that established a $5 overdraft fee cap intended to lower the typical $35 fee charged by large banks — passed by a vote of 219-211 on party lines. The other — to nullify a CFPB rule allowing the agency to supervise the firms behind the biggest payment and wallet apps — passed by a vote of 217-211, with one Republican joining Democrats in opposition. It wasn’t immediately clear from House records who the Republican nay vote was. . . .

US Justice Dept Disbands Crypto Enforcement Team, Citing Trump Order
Reuters – April 8, 2025

The U.S. Justice Department is disbanding its National Cryptocurrency Enforcement Team and ordering prosecutors to narrow crypto investigations to focus on drug cartels and terrorist groups, according to a memo seen by Reuters.

The memo from Deputy Attorney General Todd Blanche, sent out to employees late on Monday night, accused former Democratic President Joe Biden’s administration of pursuing a “reckless strategy of regulation by prosecution” of the digital asset sector.

The unit, known as NCET and launched in February 2022 as part of the administration’s bid to combat fraud and illicit finance, investigated and coordinated cases including one against Binance and its founder Changpeng Zhao, who pleaded guilty to violating laws designed to prevent money laundering. . . .

State Regulators Push Back on Proposed Federal Control of Stablecoin Industry
PYMNTS – April 8, 2025

Crypto’s biggest success story, after a litany of industry failures, has been stablecoins. The asset-pegged digital tokens, designed to maintain their stability and facilitate non-volatile financial applications across blockchains, have to-date grown so much that there exist around $234 billion in circulation.

But while the top 10 stablecoins by market share, representing well over 90% of the tokens in issuance, are U.S. dollar-denominated, the U.S. still does not have a regulatory framework in place to govern the sector.

Lawmakers are trying to change that, particularly in light of the current administration’s comparatively warm embrace of the crypto space. Still, as Congress wrestles with establishing a coherent regulatory framework for stablecoins, the recently introduced Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act has sparked sharp opposition from certain areas. . . .

CFPB Examiners Barred From Work Despite Agency’s Assurances
Bloomberg Law – April 7, 2025

The Consumer Financial Protection Bureau’s examination unit isn’t supervising banks and other financial companies despite claims from agency leaders that they ’re complying with all congressional mandates.

In a request to stay a March 28 preliminary injunction that would require the CFPB to bring back employees from administrative leave, agency leaders sought to assure a federal judge in Washington they were carrying out all legally required work, such as consumer response efforts.

But agency examiners haven’t been allowed to get back to reviewing big banks and nonbank companies for compliance with consumer financial protection laws, multiple sources who requested anonymity for fear of retaliation said. Instead, staff members were merely encouraged to organize their files, according to an internal CFPB email obtained by Bloomberg Law. . . .

Durbin Rounds Up CCCA Support
Payments Dive – April 4, 2025

Sen. Dick Durbin met with members of retail and restaurant associations this week, plugging his previously proposed Credit Card Competition Act, but he still hasn’t introduced the bill this congressional session.

When Durbin, a Democrat from Illinois, spoke at the National Restaurant Association’s annual conference in Washington on Wednesday, he recounted how small business owners of gas stations and a convenience store are being hurt by the high cost of swipe fees they pay on credit card transactions. The expense of the fees is eliminating their profits in some cases, he said in a release regarding his appearance at the conference.

Durbin urged restaurateurs to explain their credit card cost plight to their congressional members. “Tell your representative how swipe fees take up a huge portion of your budget, how they prevent you from lowering prices, and how you are not able to hire additional employees,” the release said. . . .

Industry Developments

SPOTLIGHT: Breaking the Visa and Mastercard Duopoly: Europe’s Path to Innovation
The Paypers – April 9, 2025

The European card payments market is one of the most critical components of modern commerce, processing billions of transactions every year. Despite its scale, competition remains limited, with Visa and Mastercard maintaining a dominant position that leaves little room for alternative networks.

While a competitive payments ecosystem is essential to driving innovation, reducing costs, and expanding consumer choice, Europe has struggled to establish viable alternatives. This has led to mounting concerns over rising fees, limited payment options, and an overreliance on US-based financial infrastructure. In 2023 alone, Visa and Mastercard collectively processed over EUR 7 trillion in transactions across Europe, reinforcing their entrenched market position. . . .

Banks Say Debit Card and Check Fraud Attacks Are Gaining Momentum
PYMNTS – April 8, 2025

PYMNTS Intelligence data has detailed the continuing appeal of debit cards as preference for everyday spending, prized for convenience and as a way to spend cash on hand, rather than tapping credit (and adding to monthly debt burdens).

The data show that individuals are 67% more likely to use debit cards than credit for groceries; 39% of consumers used debit to pay for their most recent retail purchases vs. 30% who used credit.

Just as debit is favored by individuals … it’s also a favorite of fraudsters. And as a result, banks are losing money to fraudsters, but they’re hardly standing still and are using advanced technologies to beef up their own defenses. The paper check? Well, those age-old conduits of bank account data and personal information are top choices for criminals too, but the continued shift toward money made mobile across digital channels holds promise in blunting fraud. . . .

The Zelle App’s Role May Be Changing, But It Is Not Going Away, the Network Says
Digital Transactions News – April 4, 2025

Zelle, the peer-to-peer payments service from Early Warning Services LLC, took steps late Thursday to clear up misperceptions concerning its decision to limit the capabilities of the Zelle standalone app.

As of April 1, app users can no longer transact or enroll in Zelle. Instead, the app will become more of an information tool for users, who will be able to check their statements through August and receive information about avoiding scams and fraud going forward. Zelle informed app users of the changes in a blog post last October and through in-app messages.

The move was prompted primarily by low transaction volume through the app. About 2% of total transactions were conducted through the app, which can be downloaded through an app store, the network says. . . .

Sweden’s Klarna Pauses US IPO Plans as Tariffs Roil Markets, Sources Say
Reuters – April 4, 2025

Swedish fintech Klarna has paused its plans for a U.S. initial public offering as President Donald Trump’s sweeping tariffs rattle global markets, according to sources familiar with the situation.

The decision would complicate an uneven recovery for the U.S. IPO market, as the company’s listing was seen as a potential catalyst for encouraging others to follow.

Klarna could reassess its plans if market conditions stabilize, the people said. . . .

Visa Unveils a Trio of New Tools to Make the Payments Process Easier
Fast Company – April 3, 2025

At Visa’s ETA Transact event on April 3, the payments giant introduced three new products designed to simplify and secure payment acceptance. These innovations—Authorize.net 2.0, Unified Checkout, and the ARIC Risk Hub—all aim to enhance efficiency and fraud protection for businesses navigating an increasingly complex commercial landscape.

By integrating the three new tools, Visa seeks to service businesses end to end—from integrating with existing platforms to accepting more payments, reducing checkout friction, and managing risk efficiently.

“Visa is looking to wherever appropriate to invest in next-generation technologies and uplift our products,” says Rob Cameron, global head of Visa Acceptance Solutions. . . .

The Cost of Fraud Continues to Rise for Merchants, LexisNexis Finds
Digital Transactions News – April 3, 2025

Fraud costs merchants in the United States $4.61 for every $1 of fraud incurred, up 32% from $3.16 in 2022, according to LexisNexis Risk Solutions’ annual True Cost of Fraud Study. In Canada, fraud costs merchants $4.52 for every $1 of fraud incurred.

Driving the increase is that criminals are attacking merchants from more entry points than ever before, not just at checkout. Attack points include account takeovers and synthetic identities to open customer accounts.

“Criminals are becoming more creative when it comes to finding and exploiting weakness when it comes to fraud prevention and are attacking merchants across the entire customer journey, not just during payment,” says Maanas Godugunur, senior director, fraud and identity for LexisNexis Risk Solutions. “The more attack vectors used, the harder it becomes to detect fraud.”. . .

Visa Offers Apple Roughly $100 Million to Take Over Credit Card From Mastercard
The Wall Street Journal – April 1, 2025 (subscription may be required)

Visa has offered Apple a roughly $100 million payment to get the tech giant’s credit card, part of a battle between the country’s biggest payment networks for the splashy Apple card.

The Apple card is up for grabs because Goldman Sachs , the bank behind it, is getting out of the consumer lending world. For months, big banks including JPMorgan Chase and Synchrony Financial have been vying to take over as issuer. What hasn’t been known is the equally fierce fight playing out between the networks to win Apple, with Visa and American Express trying to unseat Mastercard, according to people familiar with the matter.

Apple is expected to select a network for the card before it picks the bank to replace Goldman Sachs. Networks provide the plumbing that transmit information between the banks that issue consumers’ cards and the merchants’ banks. . . .

Read Payments News Update – April 11, 2025 at constantinecannon.com