Payments News Update – September 20, 2024
Legal and Regulatory Developments
SPOTLIGHT: The Electronic Payments Coalition Weighs in on a Lawsuit Challenging Illinois’s Interchange Law
Digital Transactions News – September 19, 2024
The Electronic Payments Coalition late Wednesday filed an Amicus brief on behalf of the plaintiffs in a lawsuit challenging the Illinois Interchange Fee Prohibition Act.
The lawsuit, brought by Illinois Bankers Association, Illinois Credit Union League, American Bankers Association, and America’s Credit Unions and filed last month in the United States District Court of Northern Illinois, seeks to overturn the law, which was passed as part of Illinois’s budget for the coming fiscal year.
In the document, the EPC contends the law is “a first of its kind piece of legislation” that “unilaterally restructured interchange fees” and is “an example of troubling self-dealing by a state government.” . . .
Fed Payments Proposal Pits Big Banks Against Small Rivals
Payments Dive – September 18, 2024
Big banks have offered support for the Federal Reserve’s proposal to extend the operating hours of the Fedwire Funds Service and the National Settlement Service in comments submitted this month, but smaller rivals bemoaned its potentially negative impact.
The proposal, made by the Fed in May, would increase the operating hours of its two big-value payments services, namely the Fedwire Funds Service and the National Settlement Service. While the proposal would extend the hours to just short of all-day for now, the Fed’s staff has contemplated around-the-clock services too. “While this proposal is focused on an expansion to 22x7x365, an expansion to full 24x7x365 operating hours for the Fedwire Funds Service and NSS remains a consideration for the future,” the April 15 Fed memo said.
The proposal is seen by the biggest U.S. banks, and some large derivatives exchanges, as a smart way to increase the efficiency of the U.S. payments systems, according to some of the roughly 140 comments filed by the Sept. 6 deadline. . . .
Top UK Banks Push Payments Infrastructure Reform Plan
Law360 – September 17, 2024 (subscription required)
The trade body for financial institutions urged U.K. regulators and companies on Tuesday to engage with a new infrastructure for digital payments that is backed by major banks and card providers.
UK Finance and 11 of its members have successfully completed the experimentation phase for the regulated liability network, which could enable fast settlement of digital currencies through shared ledger technology, updated simultaneously by sides to a trade.
Financial institutions involved in the early-stage project include Barclays, Citi UK and HSBC UK. Lloyds Banking Group, Mastercard, NatWest, Nationwide and Santander UK, as well as Standard Chartered, Virgin Money and Visa made up the other financial companies. . . .
Industry Developments
SPOTLIGHT: Apple Turns on Support for Tap to Cash NFC Peer-to-Peer Mobile Payments
NFCW – September 17, 2024
Apple Watch and iPhone users in the US can now use Apple’s Tap to Cash peer-to-peer money transfer service to transfer money to each other via NFC.
The ability to use NFC to add a payment card to Apple Wallet is also being rolled out via a new Tap to Provision service. . . .
The Digital Wallet Wars: Big Tech Vs Little Tech
Forbes – September 16, 2024 (subscription may be required)
Conventional Silicon Valley wisdom says that most technological breakthroughs or mega-trends are overestimated in the near term and greatly underappreciated in the fullness of time. Recency bias would point you to the dozens and dozens of podcasts over the past few months using the current AI wave as a perfect example (and prediction) of this.
However, perhaps digital wallets are a more apropos reinforcement with greater evidence of the full hype lifecycle and tangible penetration 15+ years into the mobile revolution.
The Global Payments Report for 2024 published by Worldpay just declared digital wallets to be the most preferred payment method by consumers around the world, and the numbers are BIG. . . .
Mastercard Bolsters Threat Intelligence Capabilities With $2.65 Billion Deal for Recorded Future
Digital Transactions News – September 12, 2024
Mastercard has agreed to buy threat intelligence company Recorded Future from private equity firm Insight Partners for $2.65 billion, the payments company said on Thursday.
The acquisition will bring expanded threat intelligence capabilities to the New York-based payments firm, which recorded $9 trillion in gross dollar volumes last year, a metric that represents the total dollar value of all transactions processed.
The rapid adoption of new technologies has upped the risk of cyber threats, with companies increasingly facing hacking or ransomware attacks. . . .