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Payments News Update – January 5, 2024

Posted  January 5, 2024

Legal and Regulatory Developments

SPOTLIGHT: NY Governor Pursues BNPL Regulation
Payments Dive – January 3, 2024

New York Gov. Kathy Hochul announced Tuesday she’s pursuing buy now, pay later-related legislation that would require BNPL providers to obtain a license to operate in the state. The bill would also permit the state’s financial services department to propose and issue regulations for the industry, according to a slate of proposals from the Democratic governor’s office. In New York, a governor can introduce legislation by way of the executive budget.

The legislation and potential regulations aim to “establish strong industry protections around disclosure requirements, dispute resolution and credit reporting standards, late fee limits, consumer data privacy, and guidelines to curtail dark patterns and debt accumulation and overextension,” the governor’s office said in Tuesday’s news release. . . .

The CFPB’s Chopra Cites a Need for Competition to Cap Card Acceptance Costs
Digital Transactions News – December 22, 2023

Having taken aim at credit card late fees and interest rates, and having targeted non-bank digital wallet providers, Consumer Financial Protection Bureau Director Rohit Chopra has now indicated his regulatory agency is turning its attention to credit card acceptance costs.

Chopra’s comments Thursday came as the Credit Card Competition Act, which is aimed at reducing merchant card-acceptance fees by requiring network choice, has been re-introduced in Congress. During an interview on CNBC’s “Squawk Box,” Chopra said the agency has heard from merchants that credit card acceptance fees have reached a point where they “don’t know how much they’re going to pay when a card is swiped depending on if it’s a credit card or debit card or something else.”

While Chopra addressed credit card acceptance costs, his primary focus was on ensuring competition. “It’s not about price setting, it’s about competition,” said Chopra, who did not specifically mention the CCCA or take a position on it. . . .

5 Things to Watch in Courts and on Capitol Hill That Will Impact Payments in 2024
PYMNTS – December 20, 2023

Congress is quiet, on recess until the beginning of next year. The Supreme Court’s not hearing arguments at the moment. The regulators are wrapping up as vacations loom. And so, 2023 draws to a close as key themes of competition, data access, artificial intelligence (AI) and the reach of regulators are all likely be to be revisited in various marbled hallways in the nation’s capital in 2024. And that’s just the tip of the iceberg.

Credit Card Competition Act – The CCCA, which was reintroduced by Sens. Roger Marshall and Dick Durbin in June, has the potential to impact the “swipe fees” that are levied on merchants when consumers use their cards to pay. The legislation would also require card-issuing banks with at least $100 billion in assets to offer at least two payments networks to merchants. . . .

Industry Developments

SPOTLIGHT: How State-Issued IDs Are Driving Google Wallet’s Strategy
American Banker – January 3, 2024 (subscription required)

Driver’s licenses typically have little to do with payments. But the DMV-issued credential is a major part of Google Wallet’s strategy, acting as an onramp to dozens of financial and non-financial services. “Digital ID will be a cornerstone for us in the next year,” said Dong Min Kim, director of product management for Google Wallet. The technology company hopes to expand the number of jurisdictions that embed driver’s licenses into Google Wallet as a form of authentication. That could make it easier for users to access a growing menu of other products via Google, including those using the technology giant’s generative artificial intelligence.

The stakes are high for Google Wallet, which faces competition from other mobile wallets from Apple and Samsung, as well as emerging rivals such as the bank-led Paze wallet and new decentralized wallets that use blockchains to connect enrolled users to different services. The more these firms add financial products, the greater the pressure on the entire digital wallet market. . . .

These Trends Will Shape Consumer Payments in 2024
Forbes – December 19, 2023 

Technology and evolving consumer preferences are rapidly changing the payments space. Consumer demand for convenience, efficiency, choice and security are several of the factors that continue to significantly impact the way people pay for things. As a result, some of the trends I expect to shape the consumer payments space in 2024 include:

Continuing Surge In Digital Payments – In 2024, the growth of digital payments that make transactions frictionless will likely continue. In the U.S., consumer use of tap-to-pay options has increased in recent years, approaching an estimated $300 billion across Apple Pay, Samsung Pay and Google Pay. Juniper Research forecasts that by 2024, unique contactless mobile payment users will hit 1 billion worldwide and digital wallet spending will surpass $10 trillion in 2025, an increase of $4.5 trillion in five years. . . .