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Payments News Update - July 28, 2023

Posted  July 28, 2023

Legal and Regulatory Developments

SPOTLIGHT: DOJ Continues to Probe Visa Over Debit Cards, Other Payment Methods
PYMNTS – July 26, 2023

Visa is reportedly under continued scrutiny by the U.S. Department of Justice. A new civil investigative demand, similar to a subpoena, was filed May 2, bringing to light a deepening inquiry into the payment processor’s practices, Bloomberg reported Wednesday (July 26).

Visa said in a regulatory filing made Wednesday with the Securities and Exchange Commission (SEC) that the DOJ sought more information about debit cards and other payment methods, according to the report. . . .

Italian Retailers, Financial Firms Clinch Deal to Soften Card Payment Fees
Reuters – July 28, 2023

Italian payment firms, banks and retailers’ associations have clinched a deal to reduce the cost of electronic transactions worth up to 30 euros ($32.9), parties said late on Thursday.

While the accord does not alter significantly the current situation, it allows the government to drop the threat of a windfall tax on commissions from small electronic transactions Rome had pledged to impose in the absence of a deal. . . .

DC Circ. Backs Visa, Mastercard ATM Fee Antitrust Classes
Law360 – July 26, 2023 (subscription required)

The D.C. Circuit has affirmed the district court’s decision to certify three different classes of consumers and ATM operators accusing Visa and Mastercard of dodging antitrust laws with ATM fee rules.

In a per curiam judgment issued Tuesday, a three-judge panel of the D.C. Circuit said U.S. District Judge Richard J. Leon correctly granted the class certifications back in August 2021. . . .

Durbin-Marshall Swipe Fee Bill Could Get a Vote This Congress
American Banker – July 26, 2023 (subscription required)

With proposals aimed at controlling merchants’ costs for accepting credit cards having re-emerged in Congress, research has been emerging on both sides of the issue this summer as advocates for sellers and card issuers compete to influence any eventual legislation.

The latest thrust appeared Monday with a research report arguing Congress should scrap the proposed Credit Card Competition Act and “significantly” raise the asset cap set out in the 12-year-old Durbin Amendment to the Dodd-Frank Act, which regulates debit card pricing. . . .

The CCCA Won’t Harm Card Issuers’ Ability to Fund Rewards Cards, MPC Says
Digital Transactions News – July 25, 2023

The latest battle in the war over the proposed Credit Card Competition Act has focused on the question whether the legislation would cut rewards and other benefits for cardholders.

Citing research from the consulting firm CMSPI, the Merchants Payments Coalition, a lobbying group for sellers, argues that passage of the CCCA will have minimal effect of card issuers’ ability to continue funding credit card rewards. . . .

It’s Official: FedNow Launches With 35 Banks and Credit Unions Signed Up for Instant Pay
Digital Transactions News – July 20, 2023

The Federal Reserve’s instant-payment service, FedNow, is officially live with 35 banks and credit unions participating, the nation’s banking regulator announced early Thursday.

The launch, which culminates four years of work since the Fed first announced its intention to build a real-time payments rail, comes as the payments industry moves toward closing the traditional gap between the initiation of a payment and its settlement into business and consumer accounts. . . .

Industry Developments

SPOTLIGHT: Goldman Seeks Way Out of Apple Card Partnership – Report
Finextra – July 28, 2023

Goldman has been Apple’s partner on the credit card since its launch in 2019 and has since become a banking partner for the tech giant’s high-yield savings account feature and BNPL service.

However, Goldman has been retreating from the consumer market, hiving off digital bank Marcus and putting the Apple business into a new Platform Solutions unit alongside the firm’s transaction banking operations and BNPL outfit Greensky. . . .

Country Survey Canada: Credit Cards Retain Market Dominance
PYMNTS – July 27, 2023

The payment card market in Canada is mature, with each individual holding nearly three cards in 2021. Canadian consumers are avid users of card payments, which accounted for 65.8% of total payment transaction volume in 2021.

This has been driven by strong awareness of electronic payments and a consistently developing payment acceptance infrastructure. Card payment frequency increased over 2017–21, rising from 102.5 times per card per year in 2017 to 112.5 in 2021. This figure is set to reach 127.0 by 2025. . . .

Mastercard Moves to Ban Cannabis Purchases on Its Debit Cards
Reuters – July 26, 2023

Mastercard (MA.N) has told financial institutions to stop allowing marijuana transactions on its debit cards, dealing a blow to an industry already on the fringes of the financial system in the United States.

Most banks in the country do not service cannabis companies as marijuana remains illegal at the federal level despite several states legalizing its medicinal and recreational use. . . .

Apple Pay Later Makes Gains: Survey
PaymentsDive – July 25, 2023

Since Cupertino, California-based Apple launched its buy now, pay later product in March, it has been attracting users at a competitive rate, according to a report last week from market research firm J.D. Power.

In a consumer survey, 19% of consumers who use a BNPL tool said they have tried Apple’s short-term financing option, according to the July 20 report by JD Power Managing Director Miles Tullo. Nonetheless, PayPal still leads a pack of rivals, attracting 39% of BNPL customers and Afterpay with 33%, according to the report. . . .

As Instant Payments Make Headlines, Same-Day Payments Continue to Lift the ACH
Digital Transactions News – July 25, 2023

Growth in same-day automated clearing house volumes slowed in the second quarter, but same-day ACH is still posting impressive gains from 2022, according to the latest data from ACH governing body Nacha.

Herndon, Va.-based Nacha says the second quarter saw 199.4 million same-day ACH payments, up 7.7% from 185.1 million transactions a year earlier. . . .

Visa and Mastercard Can Now Be Used on China’s Biggest Payment Apps
CNN – July 21, 2023