Payments News Update -- June 12, 2019
Legal and Regulatory Developments
Banks Warn EU Rules Will Scupper a Quarter of Online Payments
Financial Times – June 12, 2019
Europe’s big banks have warned that more than a quarter of online payments will be impossible to complete from September because of a lack of preparedness for new EU anti-fraud rules and have “urgently” requested more time to adapt.
In a letter seen by the Financial Times, trade bodies for the European banking sector wrote to the European Commission and Europe’s top banking regulator on Tuesday asking for an EU-wide effort to manage risks created by the new rules. . . .
RBI Constitutes Six-Member Panel to Review ATM Interchange Fee Structure
Mint – June 11, 2019
The Reserve Bank of India on Tuesday constituted a six-member committee to review the ATM interchange fee structure with a “view to give a fillip to the ATM deployment in the unbanked areas”.
The committee will be led by V G Kannan, Chief Executive, Indian Banks’ Association. . . .
Swipe Fee Counsel Seek $604M In Fees, Final Settlement OK
Law360 – June 10, 2019 (subscription required)
A class of merchants that sued Visa, Mastercard and a group of banks over card swipe fees has asked a Brooklyn federal judge to put her stamp of approval on a “historic” multibillion-dollar settlement and to approve a $604 million fee award.
In a motion Friday seeking a final OK of a deal tentatively approved early this year, class counsel said the antitrust class action agreement in the swipe fee dispute is likely the largest in history. The $6.3 billion settlement was also reached despite intervening changes in the law and market that threatened to upend the case at various points in its long history, class counsel said. . . .
As crypto litigation hits the headlines, many in the blockchain space are focused on the U.S. Securities and Exchange Commission’s (the “SEC”) recently filed complaint against Kik Interactive Inc. (“Kik”). However, at least some crypto lawyers believe that, in the near term, the New York Attorney General’s (the “NY AG”) ongoing proceeding against Bitfinex, Tether and others may have greater consequences for the industry. . . .
BofA Customers Strike $5M Deal In Overdraft Fee Battle
Law360 – June 10, 2019 (subscription required)
A group of Bank of America account holders asked a Florida federal judge to sign off on their nearly $5 million deal to resolve claims the bank wrongly charged overdraft fees for everyday transactions with “gig economy” merchants, like Lyft and Grubhub.
In their motion for preliminary approval of the settlement filed Friday, the account holders said Bank of America has agreed to pay $4.9 million to form an all-cash, nonreversionary settlement fund for the benefit of the proposed class of more than 73,000 account holders who were charged at least one overdraft fee as a result of a nonrecurring debit card transaction originating from merchants including Lyft Inc., Grubhub Inc. and Doordash Inc. . . .
UK Regulator Considers Shake-Up of ATM Interchange Model
PaymentsCompliance – June 7, 2019 (subscription required)
The UK’s Payment System Regulator (PSR) has opened a call for views on potential reforms to the way in which ATMs in the country are funded, as pressure grows for a more determined response to declining access to cash.
Cash machines in the UK are currently funded by interchange fees, a sum paid by the bank to the ATM operator for each withdrawal or transaction. . . .
Del. Chancery Finding Could Lead to Reinstatement of $17M Judgment in Contract Dispute Over Metal Card Sale
Delaware Business Court Insider – June 5, 2019 (subscription required)
The ruling, outlined in a 12-page report from Vice Chancellor J. Travis Laster, could put CompoSecure back on the hook for a nearly $17 million judgment that the state Supreme Court “reluctantly” vacated in the long-running contract dispute.
A Delaware Chancery Court judge on Wednesday said that a metal credit card manufacturer CompoSecure could not rely on a contractual provision to avoid paying a hefty commission to a company it had retained to market its products to high-end customers. . . .
SPOTLIGHT: With the New Common Buy Button, Don’t Look for a Payoff Any Time Soon, a New Report Warns
Digital Transactions News – June 10, 2019
The news that the major payment card networks will implement a standardized buy button later this year may have stirred hopes among issuers, merchants, and acquirers that the longstanding problems of rising e-commerce fraud and inconsistent checkout flows will finally be addressed. But already cautionary notes are emerging to indicate the bulk of the hoped-for benefits could be years away.
Version 1.0 of the Secure Remote Commerce specification from EMVCo, the major card networks’ standards body, emerged Friday, and almost immediately American Express Co., Discover Financial, Mastercard Inc., and Visa Inc. said they plan to incorporate the SRC process within a matter of months. . . .
Visa Sends Blockchain-Based B2B Payments Network Live
ZDNet – June 12, 2019
Visa has announced the commercial launch of its cross-border payments network, Visa B2B Connect.
According to the company, the network allows financial institutions to quickly and securely process high-value corporate cross-border payments globally. . . .
The Point of Sale Should Be a Shopping Experience All Its Own
PaymentsSource PayThink – June 11, 2019
As payment options and point-of-sale technology continues evolving, consumer demand for financial flexibility will continue to increase as well. Diversifying payment options will soon be essential for retailers to maintain their customer base and build brand loyalty, and retailers that don’t offer alternatives risk getting left behind.
By 2021, over half of all online transactions are predicted to be made using alternative payment methods—a number we anticipate will keep rising. . . .
A New Survey Shows the U.S. Leads in Mobile Payments But Trails in Contactless
Digital Transactions News – June 11, 2019
A survey of more than 3,000 consumers in the United States, United Kingdom, and Australia, sponsored by Transaction Network Services, shows the heaviest adoption of mobile-payment apps in the U.S., at 59% of respondents, but the highest adoption of contactless payments in the U.K., at 79%.
Perhaps not surprisingly, younger consumers were more likely to use a mobile-payment app on a smart phone. Of those 16 to 24 years old, 71% said they would, as did 73% of those 25 to 34 years old. The likelihood begins to fall with 59% for 35-to-44 year old consumers, and drops to 42% for the 45-to-54 group and 28% for the 55-to-64 segment. . . .
A Chinese-Style Payment Network to Challenge Visa and Mastercard Is Taking Shape in Europe
Yahoo Finance – June 10, 2019
Mobile money is getting a boost in Europe: A new initiative plans to make six of the region’s smartphone wallets interoperable with each other, creating a total network of 5 million users in 10 European countries, from Finland to Portugal. The burgeoning system could potentially pose a challenge to the Visa and Mastercard card-payment duopoly.
Notably, the mobile wallets—Bluecode, ePassi, Momo Pocket, Pagaqui, Pivo, and Vipps—are working with Chinese fintech giant Alipay to develop a unified QR code, according to a statement released today. Around 190,000 merchants in Europe accept payments from the wallet providers, and Chinese tourists using Alipay (membership) would also be able to tap into the system. They plan to use a QR code format provided by Chinese firm, and to expand the collaboration elsewhere in Europe over time. . . .
Return Fraud Is a Source of Increasing Worry for Retailers
Digital Transactions News – June 10, 2019
Retail loss-prevention executives say fraud is increasing the most inside stores, but nearly a third say fraud is rising the most in online-only sales and more than 20% say it’s going up the most in multi-channel sales.
The findings come from the Washington, D.C.-based National Retail Federation’s newly released National Retail Security Survey. Some 42.9% of respondents said in-store only sales are seeing the most increases in fraud, while 30.2% cited online-only sales. Multi-channel sales, including buy online/pick up in store purchases, were cited by 22.2% of respondents as the source of the biggest increase in fraud. . . .
How Dunkin and Starbucks Apps Set the Stage for Retail’s Future
PaymentsSource – June 7, 2019
Coffee and doughnut shops such as Starbucks, Dunkin’ Donuts and Krispy Kreme have been at the forefront of mobile payments, and this technology could soon develop into a completely cashierless experience.
Order-ahead capabilities don’t quite emulate the smoothness and spontaneity of something like Amazon Go, but they train a large number of customers to buy coffee and doughnuts with minimal human interaction. . . .
Facebook Plans June 18th Cryptocurrency Debut. Here’s What We Know
TechCrunch – June 6, 2019
Facebook is finally ready to reveal details about its cryptocurrency codenamed Libra. It’s currently scheduled for a June 18th release of a white paper explaining its cryptocurrency’s basics, according to a source who says multiple investors briefed on the project by Facebook were told that date.
Meanwhile, the company’s Head of Financial Services & Payment Partnerships for Northern Europe Laura McCracken told German magazine WirtschaftsWoche‘s Sebastian Kirsch that the white paper would debut June 18th, and that the cryptocurrency would indeed be pegged to a basket of currencies rather than a single one like the US dollar to prevent price fluctuations. . . .
Global Growth Leads to Nearly 41 Million Terminals Accepting Contactless, Researcher Says
Digital Transactions News – June 6, 2019
With last week’s introduction of contactless card acceptance on New York City subway and bus systems, hopes are riding high on mass transit to at last stimulate contactless acceptance and usage in the United States. Now recent research indicates acceptance is picking up rapidly pretty much everywhere.
The number of point-of-sale terminals worldwide accepting contactless cards shot up 41% in 2017, the most recent year for which data was available, to reach 40.9 million, according to RBR Research, a London-based firm. That represents 42% of all payment terminals, the firm says. . . .
Alipay Has Tripled Its Merchants in Europe Amid ‘Booming’ Chinese Tourism Market
CNBC – June 4, 2019
Alipay is making big inroads in Europe as Chinese tourists flock to the region, according to the leader of the Chinese firm’s European division.
Roland Palmer, head of Europe for Alipay, told CNBC on Tuesday the company has tripled the number of European merchants accepting its online and mobile payment platform to “tens of thousands” in the past year. . . .