Payments News Update - March 31, 2023
Legal and Regulatory Developments
SPOTLIGHT: Ottawa Moves to Lower Credit Card Swipe Fees for Small Businesses in 2023 Budget
The Globe and Mail – March 28, 2023
The federal government said it has worked out a deal with Visa and Mastercard to lower the transaction fees that small businesses pay every time a customer uses their credit card.
The 2023 federal budget, released Tuesday, said the government expects other credit card companies to make similar pledges. Ottawa aims to have small businesses – which it says make up 90 per cent of card-accepting businesses – see their credit card fees reduced by up to 27 per cent from their current average rates, which could total $1-billion in savings over the next five years. . . .
Singapore and Malaysia Enhance Cross-Border Payments With QR Codes and Phone Numbers
Finance Feeds – March 31, 2023
The Monetary Authority of Singapore (MAS) and Bank Negara Malaysia (BNM) have launched a cross-border QR code payment linkage between Singapore and Malaysia.
Financial institutions will be able to make retail payments by scanning NETS QR and DuitNow QR codes, which will support in-person payments through the scanning of physical QR codes displayed by merchants, and online cross-border e-commerce transactions. . . .
Citi Says Mass Adoption of Crypto Will Be Driven by CBDCs, Tokenization
Decrypt – March 30, 2023
Citi says the industry is finally “approaching an inflection point” and that blockchain technology will soon see “billions of users and trillions of dollars in value.”
In its latest report “Money, Tokens, and Games: Blockchain’s Next Billion Users and Trillions in Value,” Citi analysts suggest that the next influx of crypto adoption will be powered primarily by the rise of central bank digital currencies (CBDCs) and the tokenization of real-world assets. . . .
Senators Urge BNPL Crackdown
Payments Dive – March 28, 2023
Senators Jack Reed (D-R.I.), Tammy Duckworth (D-Ill.) and Sherrod Brown (D-Ohio) are calling on the Consumer Financial Protection Bureau to bring the largest buy now, pay later providers under more federal supervision.
In a letter to CFPB Director Rohit Chopra dated March 22, the three urge the bureau to bring big BNPL lenders under its watch to “better protect consumers from unfair, deceptive and abusive acts and practices.” . . .
Hate How Hard It Is to Cancel Subscriptions? The FTC Feels You
Wired – March 25, 2023
It’s easy to get overloaded by subscription services with recurring renewal fees. But it’s typically way harder to get rid of them. Some companies or publications (we’re not naming names here) don’t offer a simple way to cancel a subscription. In some cases, customers are required to call and speak with a representative, who will often try to talk them out of cancellation or try to upsell them something else.
If the US Federal Trade Commission has its way, it might soon get much easier to cancel subscriptions. . . .
Conflicting Appeals Court Decisions Add Nuance to a CFPB Supreme Court Case
Digital Transactions News – March 24, 2023
With a federal appeals court ruling on Thursday upholding the Consumer Financial Protection Bureau’s constitutionality, the CFPB, along with its severest critics, find themselves at a crossroads at a time when the agency has become significantly more energetic in overseeing the payments industry.
The latest ruling, from the Federal Court of Appeals for the Second Circuit, contradicts a decision handed down in October last year by the Fifth Circuit, which held the CFPB’s funding mechanism is unconstitutional because its money flows from the Federal Reserve rather than by Congressional appropriations. . . .
Industry Developments
SPOTLIGHT: Apple Launches Its Pay Later Service
CNBC – March 28, 2023
Apple on Tuesday introduced Apple Pay Later, which will allow users to split their purchases into four payments spread over the course of six weeks.
Apple Pay Later users will be able to manage, track and repay their loans in their Apple Wallet, the company said in a release Tuesday.
Individuals will be able to apply for Apple Pay Later loans between $50 and $1,000 and use them for in-app and online purchases made through merchants that accept Apple Pay. . . .
Mastercard, Visa Reportedly Among Bidders for Pismo USD 1 Bln Acquisition
The Paypers – March 30, 2023
Two of the largest payment companies in the world, Mastercard and Visa, have reportedly planned to acquire Pismo, a Sao Paulo-based fintech company, according to Bloomberg.
Pismo is a provider of provides cloud-based payment and banking platforms. The potential acquisition is being valued at around USD 1 billion, according to sources familiar with the matter who requested anonymity due to the private nature of the negotiations. . . .
Synchrony Mulls Creating a Digital Wallet
Payments Dive – March 29, 2023
The private label card company behind many retailers’ credit options may develop its own digital wallet, but for now it’s deferring to others’ wallets. Synchrony Financial, which manages credit card options for major retailers, is doubling down on developing digital wallet services for those clients, and may even launch its own digital wallet.
“We still provide the physical plastic (card) in the more traditional way, the same way we’ve been doing it for 20 years,” said Mike Bopp, Synchrony’s chief growth officer. . . .
U.S. Real-Time Payments Will Climb Fast but Will Still Account for a Small Fraction of Activity
Digital Transactions News – March 29, 2023
The Federal Reserve’s planned launch in July of its FedNow service is widely expected to spur big growth in real-time payments in the U.S. market. That’s likely to happen, but the overall share of transaction volume for instant payments is expected to remain under 5% for at least the next five years.
That’s according to research released late Tuesday by the payments-technology company ACI Worldwide Inc. . . .
Why Apple Pay Later Is Different From Other Buy Now Pay Later Loans
American Banker – March 29, 2023
Though Apple took its time moving into the booming BNPL sector with a more conservative approach than many incumbents, Apple Pay Later is rolling out in a way uniquely geared to expand Apple Pay’s transaction volume.
One of several features that sets Apple Pay Later apart from rivals is the fact that the Cupertino, California, tech giant will be self-financing its interest-free loans through a new entity, Apple Financing LLC, and loans initially won’t exceed $1,000. . . .
Retail Groups Say Swipe Fees Will Push Easter Holiday Costs Higher
Convenience Store News – March 28, 2023