Payments News Update – February 27, 2026
Legal and Regulatory Developments
SPOTLIGHT: Debit Card Fraud Losses Rise
Payments Dive – February 26, 2026
Fraud loss rates have climbed for debit cardholders, according to a Kansas City Federal Reserve Bank analysis issued Wednesday that is based on Federal Reserve Board data released in December. The actual loss rates detailed in the report differed depending on whether the transactions moved over a dual-message network, like that offered by card giant Visa, or a single-message network, such as Star or NYCE.
That 2023 data set for non-prepaid debit fraud showed the loss rate for cardholders rose over 2021 when debit cards were used to pay for goods or services online or in stores. Meanwhile, it wasn’t always the case that the loss rates rose for merchants and card issuers, according to the Kansas City report comparing 2021 and 2023 data.
Overall, the incidence of debit card fraud climbed for e-commerce purchases between 2021 and 2023, but in some cases in-person fraud rates on debit card transactions declined during that period, the analysis said. . . .
Illinois Attorney General Cross-Appeals in Ongoing IFPA Battle Over Transaction Data
CU Today – February 24, 2026
The Illinois Attorney General filed a cross-appeal seeking to overturn the injunction on the data use provisions in the Illinois Interchange Fee Prohibition Act (IFPA), America’s Credit Unions reported.
The IFPA bans interchange fees on the tax and gratuity portion of credit card transactions and prohibits the use or transfer of transaction data. The law affects all credit card transactions made within the state of Illinois; it is not dependent on where the financial institution is located.
A judge earlier this month upheld the interchange portions of the law, but granted relief to financial institutions from the data usage provisions. . . .
New York Releases Draft BNPL Rules
Payments Dive – February 24, 2026
The state of New York has released a proposal for its new buy now, pay later rules, calling it a “new nation-leading” template for ensuring consumer protections.
The proposed regulations would codify a bill passed last year by the state’s legislature and signed by Gov. Kathy Hochul. The governor touted the proposal in a press release Monday and the New York Department of Financial Services posted the rules for BNPL lenders online Monday.
The industry objects to the rules, considering them overly burdensome, while consumer advocates see New York’s BNPL regulations as a possible inspiration for regulatory changes in other states. . . .
Industry Developments
SPOTLIGHT: Inside Visa’s Quest to Go Beyond Card Swipes
American Banker – February 25, 2026 (subscription may be required)
A particularly nasty form of payment fraud has provided the latest chance for Visa to showcase services that aren’t directly related to card payments.
The card network said it recently spotted a “romance scam” that uses fraudulent dating sites to mimic affection through bots with automated personalities that trick victims into sending money to thieves.
“It’s a horrible thing to see, but there is definitely a way to embed AI in a case like this,” Andrew Torre, Visa’s president of Value-Added Services, told American Banker. . . .
Card Surcharges Turn Checkout Into a Loyalty Test as Shoppers Push Back
PYMNTS – February 20, 2026
Merchant surcharges are in the news as retailers, large and small, look for extra revenue and consumers rail against their existence.
“Over the past few months, it feels like almost every place I eat at is adding a [3% to] 4% fee just for paying with a credit card,” read a November Reddit post. “I get that costs are going up for businesses, but this used to be rare, and now it feels like it’s everywhere. Are you seeing the same thing? Do you just pay it or are you switching to cash?”
Yes, they were. The responses to that post indicated a weary acceptance of surcharges. . . .