Payments News Update -- April 24, 2019
Legal and Regulatory Developments
SPOTLIGHT: The Government’s Set a Steep Learning Curve for Crypto Compliance
PaymentSource PayThink – April 22, 2019
The market and regulatory forces that fueled a substantial uptick in merger and acquisition activity in the blockchain industry in the U.S. in 2018 are expected to continue through 2019.
Cryptocurrency prices remain significantly below their high-water marks, while regulators in the U.S. sustain, or even increase, their scrutiny of ICOs and other market actors. Those are only two of the factors likely to impact both the pace of M&A activity and that well-counseled cryptocurrency entrepreneurs, investors and potential acquirers should consider. . . .
Mastercard to Take Card-Fee Mass Lawsuit Fight to UK’s Top Court
MLex – April 23, 2019 (subscription required)
Mastercard plans to take its fight against a proposed mass lawsuit over its card fees to the UK’s highest court. The payments-card operator has told MLex that it will ask the Supreme Court for permission to challenge a Court of Appeal ruling last week that reopened it to the risk of a collective action for consumer redress on behalf of 46 million consumers. . . .
Brazil’s Antitrust Watchdog Probing Banks Over Competition Hurdles to Fintech
Reuters – April 22 2019
SAO PAULO, April 22 (Reuters) – Brazil’s antitrust watchdog Cade is investigating four banks in the country for allegedly creating competition hurdles to digital banking newcomer Nubank, the watchdog said in a statement on Monday.
Cade said Banco do Brasil SA, Caixa Economica Federal, Banco Santander Brasil SA and Banco Bradesco SA were denying requests to schedule automatic payments from Nubank clients that also were account holders at those banks.
The Consumers’ Champion Chasing Mastercard for £14bn
The Guardian – April 20, 2019
China’s top economic planning body has proposed new rules that would see the closure of all local cryptocurrency mining facilities if enacted – a move that would potentially end the country’s dominance in the energy-hungry, yet lucrative industry. The National Development and Reform Commission (NDRC) on Monday unveiled amendments to its guidance for adjustments to the nation’s industrial structure, including categories that are encouraged, restricted and eliminated. Cryptocurrency mining was included among sectors to be eliminated immediately. The new list is under public consultation until May 7. . . .
Big Banks Say They Have ‘No Part to Play’ in Swipe Fee Suit
Law360– April 19, 2019 (subscription required)
Bank of America, Barclays and other big banks under fire for allegedly saddling millions of merchants with excessive swipe fees argued that the rules governing those charges are set down by Visa and Mastercard, leaving the banks with “no part to play” in retailers’ litigation to escape the fees.
“Even assuming that plaintiffs could demonstrate that they are entitled to some relief from the Visa and Mastercard rules, plaintiffs do not plausibly allege that any of the bank defendants, individually or collectively, has any authority to change the networks’ rules,” the banks told a New York federal court in a filing made public Thursday. “The bank defendants thus have no part to play in this injunctive relief case.” . . .
A Blockchain Bill, Backed by Industry, May Tie SEC’s Hands
Roll Call – April 17, 2019
Even as the nation’s infant blockchain industry lines up in support of a new bipartisan bill to exempt digital tokens from Securities and Exchange Commission oversight, others warn about the dangers of Congress making the situation worse.
The bill from Reps. Warren Davidson, an Ohio Republican, and Darren Soto, a Florida Democrat, would provide a safe harbor from federal securities regulations for digital currencies and other blockchain-based products. But outside of the young sector’s backers, some worry that the bill goes too far in its current form. . . .
Industry Developments
Will Consumers Bank with Their Telcos?
PYMNTS – April 23, 2019
Last week, wireless carrier T-Mobile announced it would throw its hat into the mobile banking arena with the national rollout of T-Mobile MONEY. The mobile app offers low or no-fee checking-like services, out-of-network ATM usage fees and the ability to earn 4 percent APY on balances of up to $3,000. The checking account requires no minimum balance, and allows overdrafts of up to $50 with no penalty fees — as long as the balance is made positive within 30 days.
“Traditional banks aren’t mobile-first, and they’re definitely not customer-first. As more and more people use their smartphones to manage money, we saw an opportunity to address another customer pain point,” said John Legere, CEO of T-Mobile, according to a press release. . . .
Visa Tests APIs to Outflank Asian E-Commerce Giants, Fintechs
PaymentsSource– April 22, 2019 (subscription required)
As threats from nimble fintechs and global e-commerce companies abound, Visa’s turning to open development tools to place itself in the middle of the innovation, rather than making a solitary counterplay itself.
The card brand is positioning Visa Next as an open toolkit that enables a wide range of digital commerce and mobile payment options through developer tools, documentation and beta APIs. Developers can use these tools to create new digital card accounts on demand, share digital companion card and control access in real-time, activate and tokenize digital accounts for e-commerce and mobile wallets, and set rules and limitations around the use of cards. . . .
You Can Now Shop With Bitcoin on Amazon Using Lightning
Coindesk– April 22, 2019
Bitcoin spenders can now use the lightning network to shop at e-commerce sites like Amazon.
Crypto payment processing startup Moon announced today that any lightning-enabled wallet can now also be used through Moon’s browser extension. Before this lightning feature, roughly 250 beta users already used Moon to spend crypto on e-commerce sites by connecting the browser extension to exchange accounts like Coinbase. . . .
Apple Pay Abruptly Dropped by JCPenney, Is No Longer Accepted in Store
Apple Insider – April 22, 2019
Struggling retail chain JCPenney has intentionally dropped support for Apple Pay in its retail department stores and through its iOS app, for reasons unknown. As of this weekend, the department store chain JCPenney no longer accepts payment by Apple Pay either in-store or via its iOS app. The company did not announce that it was ceasing to support the service, but it has confirmed to customers over Twitter that this is an intentional decision rather than the fault of any technical issue. . . .
JPMorgan Expanding Blockchain Project With 220 Banks to Include Payments
Coindesk– April 22, 2019
Investment banking giant JPMorgan Chase is planning to expand an existing blockchain project to include settlement features as it seeks to fend off competition from payments upstarts such as TransferWise and Ripple.
The blockchain-based Interbank Information Network (IIN), set up in partnership with Australia’s ANZ bank and the Royal Bank of Canada back in 2017, currently allows its over 220 banking members to quickly address payments that contain errors or get held up for compliance reasons – problems that can takes weeks to solve with multiple banks being involved across the payments chain. . . .
How an Old Standard Could Trip up a New Generation of Contactless Payments
Digital Transactions News – April 22, 2019
The surprising revelation by The J.C. Penney Co. Inc. over the weekend that it had ceased acceptance of contactless payments unmasked the little-noticed ability of contactless mobile wallets to work with point-of-sale technology that far predates them but which Visa Inc. wants banished.
The blend of old and new has worked just fine until now, but problems with it are likely to become apparent as contactless-enabled EMV chip cards begin to proliferate in the U.S., observers say. The new plastic cards won’t work when tapped on terminals relying on the old contactless standard known as magnetic-stripe data, or MSD, even if the terminal can read the card’s EMV chip when the card is inserted, or dipped, into the device. That potentially means longer lines at stores or even lost sales from frustrated cardholders. . . .
Venmo’s Latest Effort to Turn a Profit: Credit Cards
Wall Street Journal – April 19, 2019 (subscription required)
Venmo’s latest gambit to profit off its massive but still-not-lucrative user base involves a decidedly old-school idea: credit cards.
Executives at the digital payments company have been meeting with banks since late last year to discuss issuing a Venmo-branded credit card, people familiar with the matter said. The company, owned by PayPal Holdings Inc., is close to selecting Synchrony Financial as its credit-card issuer and is hoping to announce the card this year, one of the people said. . . .
T-Mobile Takes on US Banks With Checking Account
Finextra– April 18, 2019
Telecoms giant T-Mobile is taking on the American banks, teaming up with BankMobile to launch an app-based checking account.
Following a soft launch late last year, the no-fee, interest-earning, mobile-first T-Mobile Money account is now available nationwide. The account has Fdic-insured protection thanks to a partnership with BankMobile, the digital-only arm of Customers Bank. . . .
Why Mastercard Bought Vyze
PYMNTS – April 17, 2019
Second thoughts — sure, wise elders recommend them, but they represent defeat for retailers. Hesitation and deeper consideration can lead to fewer products in baskets, abandoned carts and lost sales in the world of payments and commerce.
The trick is to get that consumer past the finish line (or through the door, or over the fence, depending on the preferred cliché), and to not only make the sale, but win that shopper’s loyalty — and maybe even get them to throw a few more things into those baskets along the way. . . .
How Alipay, WeChat Pay’s Rise in the West Helps Other Mobile Wallets
PaymentsSource – April 17, 2019 (subscription required)
SnapPay has grown rapidly in its role as an acquirer and payments gateway for Chinese mobile payment acceptance in North America, and it is ready to show merchants the next step.
In bringing Alipay and WeChat Pay to merchants in Canada and the U.S., the Toronto-based company is illustrating how important — and technically straightforward — it is for merchants to accept all payment types and begin embracing mobile for its ability to do so. . . .