Payments News Update – February 13, 2026
Legal and Regulatory Developments
SPOTLIGHT: Illinois Merchants Score a Big Win in Their Battle for Interchange Relief
Digital Transactions News – February 11, 2026
Illinois merchants scored a big victory late Tuesday in their battle for interchange relief as United States District Court Judge Virginia Kendall upheld the Illinois Interchange Fee Prohibition Act.
The decision, which comes after more than a year of legal wrangling, means the IFPA will go into effect July 1, a year later than originally intended. Since the measure’s passage in 2024, banking organizations have sought a permanent injunction against it. Prior to her final ruling, Kendall had issued a preliminary injunction against the IFPA in December 2024.
The law exempts Illinois merchants from paying interchange on sales tax and gratuities linked to credit and debit card transactions. . . .
Cruz, Britt Seek to Raise Debit Card Fee Cap for Smaller Banks
Bloomberg – February 11, 2026 (subscription may be required)
Two key Republican senators have proposed a measure that would overturn a rule that exposes banks with more than $10 Billion in assets to limits on debit card swipe fees.
The legislation, sponsored by Senators Ted Cruz of Texas and Katie Britt of Alabama, would tie asset restrictions, enacted after the financial crisis, to the rate of inflation.
Cruz, who chairs the powerful Senate Commerce Committee, and Britt, who leads the Banking Subcommittee on Housing, Transportation and Community Development, say the revision would free smaller banks from fee limits, as Cruz put it, “intended for much larger institutions.” . . .
Merchants Seek Hearing on Card Pact
Payments Dive – February 11, 2026
Several large merchants, including Walmart, are asking a federal judge to schedule oral arguments before he rules on a proposed settlement to resolve decades of litigation with Visa and Mastercard over card interchange costs.
The National Retail Federation and the Retail Industry Leaders Association wrote to U.S. District Judge Brian Cogan on Tuesday, requesting oral arguments on the merits of the pact, which was announced in November.
Walmart made a similar request on Friday, followed by Circle K and the National Association of Convenience Stores on Monday. . . .
UK Brings Buy Now, Pay Later Under Full FCA Oversight
Retail Insight Network – February 11, 2026
The UK is set to bring Buy Now, Pay Later (BNPL) products under full regulatory oversight, with the Financial Conduct Authority (FCA) confirming that the sector will be regulated from 15 July 2026.
The change will see BNPL formally classified as Deferred Payment Credit (DPC), ending a long-standing exemption that allowed most providers to operate outside the UK’s consumer credit regime.
The new framework marks a significant shift for the retail and payments sectors, where BNPL has become a common checkout option both online and in store. . . .
European Alternatives to Visa and Mastercard ‘Urgently’ Needed, Says Banking Chief
Financial Times – February 9, 2026 (subscription may be required)
Europe “urgently” needs to reduce its reliance on US groups such as Visa and Mastercard, the head of a banking alliance has said, as officials warn that their market dominance could be weaponised if transatlantic relations were to deteriorate.
“We are highly dependent on international [payment] solutions,” said Martina Weimert, chief executive of the European Payments Initiative (EPI), a consortium of 16 European banks and financial services companies.
“Yes, we have nice national assets like domestic [payment] card schemes . . . but we don’t have anything cross-border. . . .
Industry Developments
SPOTLIGHT: Visa, Amex Vie for Small Businesses
Payments Dive – February 5, 2026
Credit card giants Visa and American Express both pitched new programs this week in making new plays for small businesses.
Visa announced the launch of a service on Thursday intended to provide small businesses with more loans and services, while Amex said it will introduce a pay-over-time option for small business owners in the UK.
In separate news releases on Thursday, both companies boasted that they are committed to the success of mom-and-pop stores. “We’re connecting Visa’s products and in-house knowledge with the expertise of our clients and partners to provide small businesses with flexible financing,” Kim Lawrence, Visa’s regional president of North America, said in the company’s press release. . . .
How AI Is Rewriting Acquiring
Digital Transactions News – February 9, 2026
Artificial intelligence has long been a part of payments, known early on as machine learning, but now it’s shifting from a predictive function to agentic AI, where systems act, not just advise, said Joseph Arthur, managing partner at RPY Innovations, a payments consultancy.
Speaking on a panel at the Northeast Acquirers Association conference last week in Boston, Arthur said the era of AI watching and waiting for instructions, its advance heralds a shift. “Predictive AI suggests, agentic AI acts,” he said. “Imagine a system that doesn’t just flag a suspicious transaction, but autonomously initiates the dispute and adjusts accordingly.”
He says this changes the math of margins, head count, and risk. Agentic AI employs machine-learning models that can mimic human decision making in real time, in IBM’s definition. . . .