Legal and Regulatory Developments

SPOTLIGHT: Swipe Fees Get Renewed Washington Focus in Aftermath of Election
American Banker – November 12, 2024 (subscription required)

Sens. Dick Durbin, D-Ill., and Roger Marshall, R-Kan., will hold a long-awaited hearing on pending swipe fee legislation.

Executives from Visa and Mastercard, the two card networks most impacted by the bill, however, are not listed to attend as of Tuesday afternoon. The hearing, which will be held Nov. 19, will be held by the Senate Judiciary Committee, where Durbin is the chairman and Marshall is the ranking member.

The Credit Card Competition Act has lingered in Congress for years, picking up bipartisan cosponors including — at one point at least — Vice President elect Sen. JD Vance, R-Ohio. It hasn’t made any gains for months, however, despite multiple opportunities to attach it to must-pass legislation in the last year, including defense spending and government funding packages. . . .

Visa to Fight Market Definition in DOJ Antitrust Case
Law360 – November 12, 2024 (subscription required)

Attorneys for Visa told a New York federal judge on Tuesday that the company plans to argue the U.S. Department of Justice’s debit card monopolization case should be tossed because it ignores a key payment method and attacks legitimate contracts.

Visa sketched out its expected dismissal bid for U.S. District Judge John G. Koeltl during a pre-motion conference on Tuesday, with Kieran Gostin of Wilkinson Stekloff LLP telling the judge that Visa plans to attack the definition of the market the DOJ alleges was monopolized.

The complaint contends Visa controls 60% of the market for debit network services, but Gostin said this ignores that many consumers use the automated clearing house, or ACH, network to make payments using their routing and bank account numbers instead of debit cards. . . .

Trump Team Set to Roll Back Chopra’s Credit Card, Banking Rules
Bloomberg Law – November 7, 2024

The Consumer Financial Protection Bureau is likely to reverse Biden-era rules and significantly scale back its regulatory agenda after President-elect Donald Trump puts new leadership atop the agency.

Trump didn’t make financial regulation a central part of his successful campaign to retake the presidency, but Project 2025—the Heritage Foundation blueprint for a Republican return to the White House—called for eliminating the agency entirely.

That seems unlikely. Instead, Trump is expected to fire the CFPB’s Biden-appointed director, Rohit Chopra, soon after taking office in January. . . .

Industry Developments

SPOTLIGHT: Visa’s Flexible Credential Goes Live in US With Affirm and Cross-Border With UAE’s Liv
PYMNTS – November 12, 2024 

Six months after launching its Visa Flexible Credential (VFC) in Japan with Olive, Visa’s taking the all-in-one payment credential into two new use cases, both announced Tuesday (Nov. 12).

According to the payments network, the VFC is being rolled out in the U.S. with the Affirm Card (already in the market), the buy now, pay later (BNPL) provider’s debit card that allows consumers to opt to pay over time for transactions made through the Affirm app. And elsewhere, United Arab Emirates (UAE) neobank Liv is debuting VFC to enable users to switch between multiple currency accounts from one card.

The appeal of having a single payment credential able to link and toggle between several funding source, from credit to debit to checking and back again — without having to access different apps or shuffle through plastic cards — is already showing up in the numbers. . . .

Mastercard Plans to Tokenize All Online Transactions by 2030
Digital Transactions News – November 14, 2024

Mastercard Inc. unveiled plans late Wednesday to tokenize card numbers for all online transactions globally by 2030. The move will make the need for physical card numbers, passwords, and one-time codes for online purchases obsolete, the network says.

Tokenization masks in-the-clear card numbers with digits that would be indecipherable to any entity that might intercept a transaction.

Mastercard plans to combine tokenization with biometric authentication and Click to Pay to phase out manual card entry and static passwords. Currently, more than 30% of Mastercard transactions worldwide are tokenized through the Mastercard Digital Enablement Service. Some markets, such as India, are nearing 100% tokenization for e-commerce, the network adds. . . .

Visa Pinpoints Rising Fraud Threats
Payments Dive – November 10, 2024 

Cyber criminals have been taking advantage of payments vulnerabilities and using artificial intelligence to accelerate the pace of their wrong-doing, according to a biannual threats report from Visa.

In the report published last month that covers the first half of the year, Visa identified multiple payment fraud techniques that posed risks to companies and consumers: fraudulent purchase return transactions; ransomware and data breach attacks; digital skimming attacks; and impersonation scams.

The card network giant also said fraudsters are increasingly discussing the use of artificial intelligence for payment fraud in underground forums. . . .

Read Payments News Update – November 15, 2024 at constantinecannon.com