Legal and Regulatory Developments

SPOTLIGHT: More States Press Interchange Regulation as Illinois Legislators Contemplate Delaying the IFPA
Digital Transactions News – May 23, 2025

More states are introducing legislation exempting merchants from paying interchange on sales tax and tips. Bills are currently pending in Alaska, Massachusetts, and New York.

In Alaska, the proposed bill, which was attached at the 11th hour to a bill authorizing businesses to pay employees using reloadable cards, has been put on hold until January, when the legislature reconvenes to finish its two-year session. Attaching one piece of legislation to another prior to adjournment is a common political tactic intended to improve the odds of passage, payments experts say.

The bill, sponsored by representative Bill Elam, is positioned as an “effort to reduce unnecessary costs for Alaska’s small businesses” by addressing interchange fees. . . .

Congress Pushes Back Swipe Fee Reform Vote
CSP Daily News – May 28, 2025

Voting is delayed on the Genius Act, a bill that could move forward the Credit Card Competition Act, which aims to help combat swipe fees for retailers like convenience stores.

It was possible that a Senate vote to add the amendment could have come as early as May 22, NACS said. However, Congress is now on a brief recess and the overall bill will not be considered until next week, according to the U.S. Senate Legislative Schedule. The Senate is in a State Work Period from May 26-30.

On May 20, Sen. Roger Marshall (R-Kansas) on behalf of himself and Sen. Dick Durbin (D-Illinois) filed the amendment to add the Credit Card Competition Act to the Genius Act. . . .

Fintech Groups Oppose State BNPL Rules
Payments Dive – May 28, 2025

Fintech trade groups are pressuring New York officials to change buy now, pay later regulations which were implemented earlier this month, arguing that the rules are not appropriate for the buy now, pay later providers.

As of earlier this month, the state requires buy now, pay later companies to disclose interest rates and fees upfront and develop a framework for returns and disputes. The New York Department of Financial Services has been directed to implement a licensing and supervision regime for BNPL loans. The provisions were included in the state budget Gov. Kathy Hochul signed into law May 9.

While consumer advocates generally favor the regulations, organizations like the Financial Technology Association contend New York’s rules must change. . . .

CFPB’s Move to Rescind Rule 1033 Creates Uncertainty in Open Banking
PYMNTS – May 25, 2025

Apparently, the days of Rule 1033 are numbered. In fact, as of Sunday (May 25) they might be down to four, as the Consumer Financial Protection Bureau’s (CFPB) general counsel indicated late Friday that it will petition a U.S. District Court in Kentucky on May 30 to have the rule rescinded.

The action took place as part of a status report from the bureau in its defense regarding a lawsuit filed against it and acting Chairman Russell Vought by several banks and the Bank Policy Institute (BPI). BPI and co-plaintiffs argued that the CFPB lacks the authority to mandate free, comprehensive data-sharing and that the rule risks undermining safer, emerging private-sector open banking efforts. They also raised concerns about the rule’s potential to increase fraud and scams, fail to hold third parties accountable, and allow third parties to profit from systems built by banks. . . .

Visa, Mastercard Fees Hit by New Round of EU Antitrust Scrutiny
Bloomberg – May 23, 2025 (subscription may be required)

Visa Inc. and Mastercard Inc. fees are under fresh scrutiny from European Union antitrust enforcers, less than a decade after a series of probes ended with hefty fines and an agreement to cut some of their controversial levies.

European Commission regulators last week circulated a new series of questions to market participants on “scheme fees” they impose on the financial institutions that provide card-payment services to retailers using Visa and Mastercard networks, according to people familiar with the matter.

The questionnaires homed in on whether retailers have a choice of whether to accept Visa and Mastercard payments, whether merchants are getting value for money from the fees eventually passed on to them, and how transparent the charges are, said the people, who spoke on condition of anonymity. . . .

Industry Developments

SPOTLIGHT: Apple Rolls Out Tap to Pay on iPhone to Eight European Countries
ThePaypers – May 27, 2025

Apple has announced that it has launched Tap to Pay on iPhone in Belgium, Croatia, Cyprus, Denmark, Greece, Iceland, Luxembourg, and Malta.

Through this move, Apple aims to enable merchants across these regions to leverage their iPhone to securely accept in-person contactless payments.

In partnership with payment platforms, app developers, and payment networks, Tap to Pay on iPhone allows businesses, regardless of their size, to accept payments from contactless credit and debit cards, Apple Pay, and other digital wallets utilising their mobile device and a partner-enabled iOS app, with no additional hardware or payment terminal required. . . .

How Worldpay, OwlTing, and PSQ Are Moving on Stablecoins
Digital Transactions News – May 27, 2025

The big processor Worldpay said early Tuesday it will work with BVNK, a stablecoin-technology company, to provide to Worldpay clients what the companies say will be “nearly instant global payouts” in stablecoins. The service will be available to clients in the United States and Europe starting in the second half of this year.

Meanwhile, the fintech OwlTing Group announced it has added features based on artificial intelligence to its OwlPay Harbor platform, which offers application programming interfaces for payments based on stablecoins and other digital currencies. And, at the same time, the online marketplace PSQ Holdings Inc. said it is embarking on what it calls a digital-asset strategy that could include allocations into stablecoins, Bitcoin, and other digital currencies.

The moves come as stablecoins in particular take on mainstream applications and have attracted the attention of lawmakers looking to create a federal legal framework for the digital assets, whose value is tied to national currencies such as the dollar. . . .

Big Banks Explore Venturing Into Crypto World Together With Joint Stablecoin
The Wall Street Journal – May 22, 2025 (subscription may be required)

The nation’s biggest banks are exploring whether to team up to issue a joint stablecoin, a step intended to fend off escalating competition from the cryptocurrency industry.

The conversations have so far involved companies co-owned by JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and other large commercial banks, according to people familiar with the matter. Those include Early Warning Services, the operator of the peer-to-peer payment system Zelle, and the Clearing House, the real-time payment network.

The bank consortium discussions are in early, conceptual stages and could change. Any final decision would depend on the fate of legislative actions around stablecoins and other factors, such as whether the banks find there would be enough demand for them. . . .

Cash Use Declines as Cards Rise: Atlanta Fed
Payments Dive – May 22, 2025

The percent of consumers who said last October that they’d recently made payments with cash declined to 83%, from 87% in 2023, according to the results of a survey of payment methods by the Federal Reserve Bank of Atlanta. Similarly, the proportion of survey respondents who had used checks fell to 35% in 2024, from 40% in 2023.

The most popular form of payment for all types of transactions, including purchases and bill payment, were credit cards, according to the report. Of all the transactions tracked in the survey, 35% were made with credit cards, followed by debit cards (30%), cash (14%) and bank account methods (13%), the results showed. Checks captured just 3% and prepaid cards 2%.

“Payment cards retained their dominance in the consumer sphere, representing two-thirds of payments by number and just over one-third by value,” said an abstract of the report by Fed researchers Kevin Foster, Claire Greene and Joanna Stavins. . . .

Read Payments News Update – May 30, 2025 at constantinecannon.com