Payments News Update – July 12, 2024
Legal and Regulatory Developments
SPOTLIGHT: 2 Cases in Visa, Mastercard MDL Ready for Trial, Judge Says
Law360 – July 9, 2024 (subscription required)
The New York federal judge handling multidistrict litigation over Visa and Mastercard merchant fees suggested on Monday separating from the MDL the lawsuits involving the Target and 7-Eleven plaintiffs, saying the cases are ready for trial and should be transferred to the Southern District of New York.
The suggestion of remand to the Judicial Panel on Multidistrict Litigation from U.S. District Judge Margo Brodie is for cases involving named plaintiffs Target and 7-Eleven, although many other companies such as Macy’s, Marshalls and Homegoods are also plaintiffs, and 7-Eleven is no longer a plaintiff because it reached its own settlement in January. . . .
Congress Members Egg on US Payments System Expansion
Payments Dive – July 8, 2024
A bipartisan group of Congress members are prodding the Federal Reserve to expedite the expansion of interbank settlement hours, underscoring the potential for accelerating faster and safer payments for consumers, workers and businesses.
In a letter to Federal Reserve Board Chairman Jerome Powell on Monday, the congressional group asked why the central bank isn’t planning to extend the U.S. payments system’s days of operation sooner than a plan for 2027. They also asked about other target dates considered, and what factors might allow for speeding up the plan.
House Financial Services Committee Vice Chair French Hill was one of the six lawmakers who signed the letter. “Our goal is that the Fed take the progress that they’ve made on faster payments and improving the payment infrastructure, and advance the ability to go 24 hours a day, seven days a week, sooner than a date in 2027,” Hill said in an exclusive interview with Payments Dive on Monday. . . .
Visa, Mastercard to Extend Non-EU Card Fee Caps to 2029, EU Says
Reuters – July 5, 2024
Visa and Mastercard will extend caps on tourist card fees agreed five years ago with EU antitrust regulators by another five years to 2029, the European Commission said on Friday.
Visa, the world’s largest payments network operator, and its closest rival Mastercard, in 2019 agreed to a 0.2% fee cap on non-EU debit card payments carried out in shops and a 0.3% fee limit on credit card payments to settle an EU antitrust investigation and avoid hefty fines.
The fee caps are due to end in November this year. The move followed a long-running investigation by the EU competition enforcer triggered by a 1997 complaint by business lobby EuroCommerce . . .
Industry Developments
SPOTLIGHT: The Credit-Card Feature That Saves Time, but Can Muck up Your Bills
The Wall Street Journal – July 8, 2024 (subscription may be required)
An under-the-radar feature that aims to save customers time when their credit card is lost or stolen is backfiring.
When you request a new card, the issuer sends you a card with a new number. In the past, this meant that come payment time, you would have to add the new number to any utility or retailer website that kept your card information on file.
But today, largely invisible to cardholders, credit-card companies often automatically update your card information—no need to enter in new information. It is a convenience that has become a headache for some customers when fraud occurs. . . .
Discover: Tokenization Removes Friction for Card-Not-Present Transactions
PYMNTS – July 10, 2024
Maybe there’s one bit of stolen digital information fraudsters can’t make use of: tokens.
Calling them “the magic behind payments,” Valeri Vanourek, vice president of digital products at Discover® Global Network, told PYMNTS in an interview that tokenization is emerging as a double-duty asset for digital payments. It enhances payment security for merchants, issuers and consumers as they interact across digital channels without introducing any friction into the process.
“The token protects the data in the case of a breach … because it’s meaningless to a fraudster,” she said. . . .
Issuer-Provided Installment Plans Are Catching up to Traditional BNPL Plans
Digital Transactions News – July 8, 2024
Issuer-provided installment plans, such as American Express Plan It, My Chase Plan, and Mastercard Installments, are on par in popularity with in-store installment offers, finds Auriemma Group’s The Payments Report.
American Express Co. was among the first issuers offering its own buy now, pay later plan, having launched it in 2017. AmEx recently signed Delta Air Lines as a Plan It client. Klarna AB was among the first to offer in-store BNPL services in the United States.
Auriemma says availability of issuer-provided installment plans increased 18 percentage points since the fourth quarter of 2019 with 40% of credit card holders offering this option, while in-store installment plans remained “stagnant” at 36% over the period. . . .
FedNow at Year One
Digital Transactions Magazine – July 1, 2024
As the Federal Reserve’s real-time payments network celebrates its first birthday, the payments industry takes stock of its impact on instant transfers.
Launched with great fanfare in July 2023, the widely and long-anticipated FedNow has largely enjoyed a successful first year.
One area where the network has excelled is in establishing connections with financial institutions. FedNow has links to more than 700 FIs, more than the rival Real Time Payments network, which was launched in 2017 by The Clearing House Payments Co. As of June, the RTP network had connections to about 630 financial institutions, more than double the number a year ago. . . .