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Payments News Update – February 16, 2024

Posted  February 16, 2024

Legal and Regulatory Developments

SPOTLIGHT: Senator Calls Card CEOs on Congressional Carpet
Payments Dive – February 14, 2024

Sen. Dick Durbin, who has long railed about antitrust issues in the card network industry, told the CEOs of Visa and Mastercard they should show up for an April congressional hearing, and not send subordinates. In Monday letters to Visa CEO Ryan McInerney and Mastercard CEO Michael Miebach, Durbin issued a “formal invitation” to an April 9 Senate Judiciary Committee meeting that is scheduled to focus on “competition in the credit card market.”

The Democrat from Illinois, who chairs that committee, said he felt compelled to write them personally because he understood that they had previously rejected invitations and alternatively offered to send lower-ranking company officials. Visa had offered to send a senior adviser to McInerney, Bill Sheedy, to Washington for the hearing while Mastercard had said it would send Linda Kirkpatrick, president of Mastercard North America, according to the letters. . . .

Is a US Stablecoin Bill Just Around the Corner? Law Decoded
Cointelegraph – February 12, 2024 

United States Treasury Secretary Janet Yellen told lawmakers that Congress should address gaps in digital asset regulation, some of which could present risks to investors or the financial system.

In a Feb. 6 hearing on the Financial Stability Oversight Council annual report, House Financial Services Committee Chair, Representative Patrick McHenry, questioned Yellen about her views on pending legislation to address stablecoins and regulatory clarity of the crypto space.

The Treasury secretary called the regulation “critical” for certain areas, including protecting wallet holders and overseeing stablecoin issuers. . . .

Amazon and Mastercard Join US Artificial Intelligence Safety Initiative
PYMNTS – February 8, 2024 

Amazon and Mastercard are among dozens of members of a new government artificial intelligence (AI) safety initiative. The tech giant and the payments company announced Thursday (Feb. 8) that they are part of the newly formed U.S. Artificial Intelligence Safety Institute Consortium (AISIC). The consortium, created by the National Institute of Standards and Technology (NIST), is designed to fuel collaboration between industry and government to promote safe AI use.

“To unlock AI’s full potential, we need to ensure there is trust in the technology,” Mastercard CEO Michael Miebach said in a news release. “That starts with a common set of meaningful standards that protects users and sparks inclusive innovation. The public-private partnership enabled by AISIC will be critical in helping to achieve this goal and reinforce responsible AI.” . . .

Industry Developments

SPOTLIGHT: Who Wins and Loses With Visa’s New Dispute-Management Tool?
American Banker – February 8, 2024 (subscription required)

Even if a bank wins a dispute, it often loses time and money — while merchants wrestle with their own rising tide of chargebacks. Visa and ServiceNow have responded by rolling out a tool this month that uses generative AI to ease the pain.

Banks have been coping with increasing volumes of card transaction disputes that require labor-intensive processes to resolve within bank industry regulations and card network rules. And one of the ongoing fallouts from the pandemic-accelerated shift to digital payments was a surge in all kinds of transaction disputes . . . .

The new new AI-powered tool is designed to smoothly orchestrate transaction disputes across fragmented bank, merchant and card-processing systems . . . .

At a Double-Digit Growth Rate, BNPL Isn’t Cooling Off
Digital Transactions News – February 12, 2024 

The buy now, pay later trend emerged in the U.S. market in a big way in 2020 in the wake of the pandemic as a means to let strapped consumers make point-of-sale and online transactions with partial payments, while financing the balance over a short term. Since then, the U.S. market has ballooned to $116.3 billion in payments volume for 2023 and will grow 14% to $132.7 billion this year, projects a research report that emerged Friday.

What’s more, the energy behind that market will propel volume to nearly $206 billion by 2029, according to the study, “United States Buy Now Pay Later Business and Investment Opportunities Databook,” from Research and Markets, a Dublin-based firm. . . .

How J.P. Morgan’s Ambitious Commerce Platform Enables Cross-Channel Payment Acceptance
Digital Transactions News – February 9, 2024 

J.P. Morgan Payments sees the future of electronic commerce as one pipeline accessed by consumers across channels. Its role in that scenario is outlined by the debut earlier this year of what it calls a full-stack omnichannel service, one that offers in-store, online, and mobile checkout capabilities.

“We realized merchants more and more want to provide their customers an experience,” Jean-Marc Thienpont, managing director of omnichannel & biometric solutions at J.P. Morgan Payments, tells Digital Transactions News. The goal is not one that simply is an e-commerce or in-store experience, “not a siloed experience,” he says. . . .

China’s Central Bank Encourages Local Businesses to Accept Foreign Payment Cards
CNBC – February 7, 2024

China is encouraging banks and local businesses to accept foreign bank cards and is considering other steps to make mobile pay for international visitors even easier, said Zhang Qingsong, deputy governor of the People’s Bank of China. “Banks and vendors (such as hotels, restaurants, department stores and even coffee shops) are encouraged to accept foreign bankcards,” Zhang said. His written comments, exclusive to CNBC, come as Beijing has stepped up efforts to encourage visits from foreign tourists and business people. . . .

Mobile pay took off in China in the last several years. But while it’s been convenient for locals to scan a QR code with a smartphone to pay, financial system restrictions have also meant foreigners often found it difficult to make payments. . . .