Payments News Update – September 1, 2023

Legal and Regulatory Developments

SPOTLIGHT: US Debit Has Become More Competitive for CNP Merchants
The Paypers – August 31, 2023

Since 2011, most card-not-present (CNP) merchants have had limited access to alternative debit networks due to issuers not enabling transaction routing. Now, nearly two months since the Federal Reserve codified that issuers must enable two networks for ‘all types of transactions’, US merchants are seeing their share of routable transactions grow – along with the opportunity to achieve over USD 3 billion in annual cost savings. In addition, US card-present (CP) merchants have new but varied access to alternative transaction rails that may concurrently facilitate cost-savings and customer through-put. . . .

Apple Says the Banks Are Just Whingeing About the Cost of Apple Pay
Australian Financial Review – August 29, 2023

Apple says the fees it charges Australian banks for using Apple Pay are not a money making exercise, and should be regarded as good value given the tech giant’s digital wallet reduces fraud rates and improves payment experiences for people who transact on iPhones.

At a parliamentary hearing, Daniel Mulino, who is chairing the House economics committee, raised regulatory concerns about a lack of transparency around the fees – worth more than $110 million a year – and potential changes to them. . . .

No, Congress Is Not Considering a Law That Would Ban Credit Card Rewards
VERIFY – August 28, 2023

Credit card rewards, such as loyalty points, discounts and travel miles, are popular, and play into many people’s choice of preferred card.

Several VERIFY readers recently asked if a bill in Congress is targeting their favorite cards’ perks, wanting to know if pending legislation would remove or take away credit card rewards, or even make them illegal. One reader said they heard about this through television ads referring to the legislation as the “Big Box” law. . . .

Federal Reserve Sets Guidelines for Banks’ Use of Stablecoins
PYMNTS – August 28, 2023

A new Federal Reserve supervisory letter on the process for state member banks using dollar tokens, such as stablecoins, to facilitate payments has drawn the ire Monday (Aug. 28) of members of Congress.

Earlier this month, the Fed released guidelines for state member banks to first get a written supervisory nonobjection from the Federal Reserve before issuing, holding, or transacting in dollar tokens, according to an agency press release. . . .

Processor Trade Group Weighs in on FedNow, Surcharges
Payments Dive – August 28, 2023

The Atlanta-based American Transaction Processors Coalition positioned itself to be located near a pack of processors in “transaction alley” when it was founded in 2014. A decade later, the trade group represents a broad spectrum of companies in the payments ecosystem and 50,000 workers in the industry.

It follows legislative and regulatory issues at the federal and state levels on behalf of those members, including processor behemoths FIS and Fiserv as well as card giants Visa and Mastercard and technology providers Ingenico and ACI Worldwide. . . .

Mastercard, Visa Ask DC Circ. To Rethink Antitrust Classes
Law360 – August 25, 2023 (subscription required)

Mastercard and Visa have urged the D.C. Circuit to rehear en banc its decision to affirm the certification of three classes of consumers and ATM operators who accused the credit card giants of imposing ATM fees that violate antitrust laws, saying the panel’s decision is based on legal standards that are outdated and nonbinding.

In a petition filed on Thursday, Mastercard and Visa said the appeals court’s July decision to affirm class certification conflicts with both D.C. Circuit and Supreme Court precedent and will have “far-reaching implications” for future class certifications. . . .

New SEC Rule Ups the Ante on Data Breach Disclosures
Digital Transactions News – August 25, 2023

With the Securities and Exchange Commission mandating public companies victimized by a cyberbreach publicly disclose the breach, businesses need to be more diligent in keeping out cybercriminals, as disclosure of such information can subject them to greater scrutiny and potential liability.

The rule, which the SEC passed in July, requires public companies to publicly disclose details of a cyberattack within four days of identifying a material impact on their finances. . . .

Industry Developments

SPOTLIGHT: Visa, Mastercard Prepare to Raise Credit-Card Fees
The Wall Street Journal – August 30, 2023 (subscription required)

Visa and Mastercard are planning to increase fees that many merchants pay when they accept customers’ credit cards. The fee increases are scheduled to start in October and April, according to people familiar with the matter and documents viewed by The Wall Street Journal. Many of the increases are for online purchases.

The changes could result in merchants paying an additional $502 million annually in fees, according to CMSPI, a consulting company that works with merchants. . . .

Jump in Contactless Payments Opens Door for Digital Wallets
PYMNTS – August 30, 2023

John (JP) Park, senior product manager of go to market strategy at Bank of America Merchant Services, told PYMNTS in an interview that the rise of contactless payments has been years in the making.

Midway through the last decade, with the launch of mobile wallets, “that started shifting the paradigm and the acceptance of contactless payments,” said Park. At least on the part of consumers.

However, there was a lack of readiness tied to “acceptance infrastructure,” Park said. . . .

Incoming Payments CEOs Usher Industry Into New Era
Payments Dive – August 28, 2023

A string of new CEOs marched into payments companies this month, extending C-suite turnover this year that’s likely to keep fueling change in the industry. On Aug. 14, digital payments pioneer PayPal named the long-awaited successor to Dan Schulman, selecting Alex Chriss for the role.

The same day card issuer Discover Financial Services surprised the market with an announcement that its CEO, Roger Hochschild, had resigned. Just four days earlier, Zelle parent Early Warning Services also hired a new CEO, Cameron Fowler. . . .

How JPMorgan Chase’s Use of Tap to Pay Pressures Merchant Acquirers
American Banker – August 28, 2023 (subscription required)

JPMorgan has added technology that allows merchants to accept payments with minimal upgrades to their own devices, a move that will accelerate plans for most U.S. payment processors.

The bank last week launched Apple’s Tap to Pay, with Sephora being the first retailer to deploy the payment method across all of its stores. The feature supports Apple Pay, contactless cards and other digital wallets that enable NFC payments. . . .

SoftPOS Offers Many Advantages, but a Few Drawbacks, Too
Digital Transactions News – August 25, 2023

The recently developed ability to accept card payments on an ordinary smart phone, with no additional hardware, has electrified the payments industry. But the technology, known as SoftPOS, comes with complications that could slow progress, a panel of experts warned Thursday.

SoftPOS, which as the name implies relies on specialized software to enable contactless card transactions, offers a seemingly endless list of possible applications for sellers of all sizes. . . .