Payments News Update – June 11, 2021
Legal and Regulatory Developments
SPOTLIGHT: A Surcharging Bill Advances to the Colorado Governor’s Desk
Digital Transactions News – June 9, 2021
Soon, there might be just two states that prohibit credit card surcharging with the passage Tuesday of a bill in Colorado that would permit the pricing strategy. The bill, SB21-091, passed both the Colorado House and Senate and now moves to Governor Jared Polis’s desk. He has 30 days to sign it. If signed into law, only Connecticut and Massachusetts would still prohibit credit card surcharging.
Earlier this year, a surcharging ban in Kansas was struck down after CardX LLC, a surcharging-services provider, filed suit against it. CardX also lobbied in support of the Colorado measure. Chicago-based CardX calls the Colorado bill “the most pro-consumer surcharging regime in the country. This bill requires Colorado-specific consumer disclosure language, permits surcharge amounts only up to the level the merchant pays their provider for processing (ensuring surcharges are not profit centers to merchants), and prohibits surcharging on debit cards,” . . .
American Banking Lobby Hits Out at CBDC Hype
Finextra – June 10, 2021
The American Bankers Association has adopted a defensive stance over the possible future issuance of a central bank backed digital currency (CBDC), warning lawmakers about real-world trade-offs that could significantly reshape the banking system. While recognizing that CBDC proposals are often driven by laudable goals, the American Bankers Association has cautioned that the introduction of a CBDC could “fundamentally change the role of the central bank in the United States and reshape the banking system.”
In a statement for the record of a Senate Banking subcommittee hearing, ABA notes that choosing between the various CBDC designs requires “serious and complex policy tradeoffs” and that too often CBDC proponents take a “highlight reel” approach to describing CBDC, “cherry picking all the perceived benefits, while downplaying the serious risks to consumers and our financial system.” . . .
US Financial Regulator Warns Against Strict Cryptocurrency Rules
Financial Times – June 9, 2021
A senior US financial regulator has spoken out against attempts by her colleagues to regulate cryptocurrencies more strictly, warning that doing so runs the risk of discouraging investors. Hester Peirce, one of two Republicans among the five commissioners at the Securities and Exchange Commission, told the Financial Times she was worried about the push by several US regulators to play a more active role in the $1.5tn cryptocurrency market.
Her comments expose a split at the top of the SEC just as Gary Gensler, its chair, spearheads an effort to bring the fast-growing cryptocurrency market more in line with other types of financial assets. “I am concerned that the initial reaction of a regulator is always to say ‘I want to grab hold of this and make it like the markets I already regulate’,” Peirce said in an interview. “I am not sure that’s going to be great for innovation.” . . .
BoE Says ‘Stablecoin’ Payments Need Same Rules as Banks
Reuters – June 7, 2021
The Bank of England said on Monday that payments with ‘stablecoins’ – a form of cryptocurrency usually pegged to a traditional currency – should be regulated in the same way as payments handled by banks if they start to become widely used. The central bank also said it had made no decision yet about whether to issue its own central bank digital currency, or CBDC, a prospect dubbed ‘Britcoin’ by finance minister Rishi Sunak when he asked the BoE to look into this in April.
“The prospect of stablecoins as a means of payment and the emerging propositions of CBDC have generated a host of issues,” BoE Governor Andrew Bailey said. “It is essential that we ask the difficult and pertinent questions when it comes to the future of these new forms of digital money.” . . .
Apple Denies Australia’s Payment Rules Make It Choke Competition
Verdict – June 7, 2021
Apple has denied choking Australia’s payments market and encourages the government to keep the financial services rules just the way they are. The Cupertino-headquartered tech titan has recommended that no changes should be made to the existing financial services regulatory regime in a written submission to the Parliamentary Joint Committee on Corporations and Financial Services.
“Apple believes that Australia’s existing regulatory framework is encouraging and fostering innovative developments that offer competition to incumbent banks, while minimising the risks that arise from developments in technology and broader structural changes to the economy driving new forms of payments,” the iMac maker said. . . .
Industry Developments
SPOTLIGHT: Facebook Adds QR Codes, Payments Link to Messenger
PYMNTS – June 10, 2021
Facebook announced a host of new chat and messenger features Thursday (June 10). And while we have nothing against Olivia Rodrigo or the Fast and Furious movies — both of which you can now choose as themes for your chat messages — one new feature was particularly interesting from our perspective: the addition of QR codes and payment links to Messenger.
Facebook says this feature lets users leverage QR codes and payment links to send or request money with Facebook Pay, even if they aren’t connected to the other person on the platform. There’s no need to add new contacts or download a separate payment app. To access your QR code and payment link, go to Messenger settings and choose Facebook Pay. From there you can simply share the payment link or let friends scan your QR code to send or receive money. . . .
Stripe Debuts an App to Ease the Burden of Sales Tax Collection for Merchants
Digital Transactions News – June 10, 2021
Heeding years-long requests from merchants for a solution to simplify sales-tax compliance, Stripe Inc. on Thursday introduced Stripe Tax, an application that allows merchants to automatically calculate and collect sales tax, value-added tax (VAT), and goods-and-services tax (GST) in the United States and more than 30 other countries.
Spurring the need for the application is that calculating and collecting sales taxes has become increasing complex, governed by a maze of tax laws that is difficult for merchants to navigate, Stripe says. Digital and physical goods are taxed in more than 130 countries. The U.S. alone features more than 11,000 different tax jurisdictions. A further complication is that not only are tax rules in each jurisdiction frequently amended, there can be subtle variances between them. . . .
Shopify and Affirm Open Buy Now, Pay Later to U.S. Sellers via Shopify Installments
Digital Transactions News – June 10, 2021