Legal and Regulatory Developments

SPOTLIGHT: Europe Wants UK to Reconsider Proposal to Cap Credit Card Fees
Bloomberg – December 12, 2024 (subscription may be required)

A top UK regulator is facing pushback from European lawmakers as it continues to weigh new rules to restrict how much British merchants must pay in credit-card fees on online purchases by consumers from the continent.

Members of the European Parliament from Ireland, Spain, France, and Germany have written to the UK’s Payment Systems Regulator and asked the watchdog to review its plans to restore a cap on interchange fees that was lifted after Brexit, according to people familiar with the matter.

The parliamentarians asked the UK to conduct a full economic study prior to introducing any cap, the people familiar with the matter said, asking not to be named discussing non-public information. Their admonitions come as the PSR is planning to publish its latest report on the matter in the coming days, the people said. . . .

CFPB-Google Battle Likely to Stretch Into Next Administration
Payments Dive – December 10, 2024 

At the heart of the Consumer Financial Protection Bureau’s supervisory action against Google’s payment app, which included a peer-to-peer payment option and a means of storing funds, lies a rule requiring financial institutions to let customers dispute unauthorized transactions.

The federal agency’s order begins the process of putting Google’s payment services, including a digital wallet, under federal supervision, the agency announced late Friday. In issuing the order, the CFPB relied on Regulation E, a federal rule implementing the 1978 Electronic Funds Transfer Act, and it alleges Google failed to reimburse consumers whose accounts were taken over, and then refused to explain its decisions.

Mountainview, California-based Google, in turn, sued the CFPB on Friday evening, accusing the bureau of overstepping its bounds. . . .

World’s First Apple Pay Alternative for iPhone Launches in Norway
MacRumors – December 9, 2024

Norwegian payment service Vipps has become the world’s first company to launch a competing tap-to-pay solution to Apple Pay on iPhone, following Apple’s agreement with European regulators to open up its NFC technology to third parties.

Starting December 9, Vipps users in Norway can make contactless payments in stores using their iPhones. The service initially supports customers of SpareBank 1, DNB, and over 40 other Norwegian banks, representing approximately 70% of Norwegian bank customers. . . .

The launch follows the European Commission’s July 2024 acceptance of legally binding commitments from Apple to open its mobile payments system to competitors. . . .

Tariffs May Be an Inflation Worry but So Are Credit Card Processing Fees, Some Say
USA Today – December 9, 2024

While many Americans worry about tariffs potentially boosting inflation, merchants continue to warn of a cost increase that’s already certain: credit card swipe fees.

Banks, card processors and processing networks like Visa and Mastercard each charge a fee to process credit card transactions. The sum of those fees is called the “swipe fee,” which usually amounts to between 1% and 3% of the sale. Visa and Mastercard, which control about 80% of credit card processing, skipped fee increases in 2020 because of the pandemic and in 2021 under pressure from Congress. In 2022, they resumed hiking fees. In January, Visa plans to boost some of the fees it charges merchants and banks, according to a notice from the processor Global Payments.

Swipe fees are often merchants’ second largest expense after labor and eventually get passed down to consumers, experts said. . . .

Industry Developments

SPOTLIGHT: How Venmo Is Angling for a Greater Piece of Checkout
Modern Retail – December 9, 2024

PayPal’s path to monetizing Venmo is increasingly focused on major e-commerce companies like eBay, Poshmark and TikTok Shop.

Venmo, owned by PayPal, offered Cyber Monday shoppers 25% off TikTok Shop purchases if they paid out of their Venmo account, making a maximum of $1 million in discounts available. It’s just one example of how PayPal has made Venmo more visible in recent months. The service has been partnering with bigger platforms to add Venmo at checkout as well as e-commerce companies on special promotions. . . .

As PayPal looks to shift its position from a processing company to a commerce company, Venmo is a critical part of the growth strategy. This year, PayPal has started bundling Pay with Venmo with PayPal Checkout, meaning merchants that use PayPal to process all their checkout transactions can deploy it as a payment option. . . .

Payments Are Going Digital, but Many Seniors Still Rely on Cash
The New York Times – December 7, 2024 (subscription may be required)

Some things you can no longer do with cash: Buy a well-loaded hot dog at any of the five Devil Dawgs eateries in and around Chicago. Order a Vermont Pale Lager from Hill Farmstead Brewery’s taproom in Greensboro Bend, Vt.

Attend the annual BeachLife Festival in Redondo Beach, Calif., or buy food, drinks or merchandise there. Purchase admission to the Home of Franklin D. Roosevelt National Historic Site in Hyde Park, N.Y., or to many other sites maintained by the National Park Service.

The park service’s expanding no-cash policy exasperated several would-be visitors enough for them to sue in federal court earlier this year. . . .

Bank of America Completes Paze Enablement
Digital Transactions News – December 6, 2024

Consumers holding Bank of America Corp. credit and debit cards now have access to the Paze online checkout following BofA’s declaration that all of its eligible cards are now enabled for the e-commerce service.

Paze is an online-checkout service developed by Early Warning Services LLC. It is designed to provide consumers with a secure and reduced-friction checkout experience, one that should help merchants increased their conversion rates. It can do this because there’s no password to remember, no manual entry of card numbers, and no third-party applications to use, BofA says. . . .

Other Paze issuers include Capital One, Chase, Elan, PNC, Truist, U.S. Bank and Wells Fargo. . . .

Update: Real-Time Payments Reach New Milestones Across the US and Beyond
PYMNTS – December 6, 2024

Real-time payments took center stage in 2024, with groundbreaking milestones reshaping how money moves worldwide. From the United States expanding its payment networks to new systems debuting in other regions, the year has been a turning point for faster, more accessible transactions. What follows are some key highlights from the year.

In January, Mastercard and The Clearing House announced an extended multiyear partnership to enhance real-time payments adoption through the RTP® network. Mastercard remains the exclusive instant payments software provider for the RTP network, enabling the integration of new instant payment use cases across diverse payment flows. . . .

Meanwhile, the other U.S. real-time payment option, FedNow® Service, has seen significant growth since its launch in July 2023. . . .

Read Payments News Update – December 13, 2024 at constantinecannon.com