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Payments News Update – October 15, 2021

Posted  October 15, 2021

Legal and Regulatory Developments

SPOTLIGHT: European Banks Debate Rival to US Payment Giants
Politico EU – September 30, 2021

Europe’s biggest banks will decide if it’s in their interests to take on the U.S. payment duopoly of Mastercard and Visa as soon as next month, as political pressure grows to break American dominance in this space. Deutsche Bank, Commerzbank, BNP Paribas, ING, Santander, UniCredit and BBVA are among 22 backers of an effort, dubbed the European Payments Initiative (EPI), that’s seeking to move the EU’s cross-border payments industry beyond the influence of Washington.

As the banks look to dislodge U.S. card companies from the European market, they’re also nervously eyeing American tech giants Google, Amazon, Facebook and Apple — dubbed GAFA — as they wade deeper into European payments. “We are in front of a duopoly of Visa and Mastercard. They are increasing their market power,” said EPI Chief Executive Martina Weimert in an interview. “GAFA solutions are all spreading around the European market and we don’t have anything European.” . . .

Coinbase Says U.S. Should Create a New Cryptocurrency Regulator
CNBC – October 14, 2021

The U.S. should create a new regulator to oversee digital asset markets, Coinbase said in a new policy proposal released Thursday. It warned that failure to regulate appropriately could leave the country even further “behind” other governments. The proposal comes a day after one of its investors, venture capital firm Andreessen Horowitz, released its own vision of how next-generation internet services including blockchain and digital assets should be regulated. Executives from a16z, as the firm is known, planned to meet with leaders across the government this week.

Coinbase’s vision overlaps with Andreessen Horowitz’s but includes some nuanced differences and focuses more closely on digital assets. While a16z advocated for collaboration across regulatory agencies, Coinbase said in its policy report that there should be just one regulator for digital asset markets. . . .

Big Digital Payment Providers to Be Regulated by BoE in 2022
Law360 – October 12, 2021 (subscription required)

Large digital payment companies, such as Apple Pay and Amazon Pay, will be regulated by the Bank of England in the first half of 2022 as Britain looks to bring innovations in the sector under appropriate supervision, the government has said. HM Treasury said in a report published Monday that it will carry out consultation on bringing digital payment companies that it deems to be systemically important within Bank of England regulation at the start of next year.

Innovative payment providers include PayPal, Apple Pay and Google Pay. The technology helps to build a bridge between customers and financial institutions, but the platforms also create risks that some supervisors do not fully understand, potentially impairing the effective monitoring of specific threats. The Payment Systems Regulator has overseen the sector since 2015, while the Financial Conduct Authority is responsible for the day-to-day supervision of payment services and e-money firms. . . .

Apple Decides Its Victory Against Epic Wasn’t Enough — It Wants a Total Win
CNBC – October 11, 2021

Apple wants another go in its legal battle against Epic Games. On Friday night, Apple announced it would ask for a stay on a judge’s September order saying Apple would have to allow apps to direct customers to external websites. That ruling would let app businesses circumvent Apple’s requirement to facilitate payments only inside of apps, where Apple takes up to a 30% cut. Apple is also appealing the ruling.

Because Epic Games is also appealing the nine counts it lost, it could take years before the case is resolved and Apple is forced to make any changes to iOS, the operating system for iPhones, as the two companies wrangle through the appeals process in court. The judge is expected to rule on Apple’s request for a stay next month. . . . .

Crypto Regulation, and Possible Executive Order, Show Top Down Approach
PYMNTS – October 10, 2021

Looming cryptocurrency regulations are getting the top down approach. As in, really top down.  From the desk of the president. Bloomberg reported at the end of the week that a range of possibilities tied to regulating cryptocurrencies is being mulled at the White House – with a focus on combatting ransomware and cybercrime.

The options include, reportedly, an executive order.  Just what that order may look like, and what it will dictate remain to be seen.  But the fact is that a mandate from President Biden, along with continuing multi-agency efforts focused on security, speaks to the urgency of making cryptos safer. “The NSC and NEC are coordinating across the interagency to look at ways we can ensure that cryptocurrency and other digital assets are not used to prop up bad actors, including ransomware criminals,” the White House National Security Council spokeswoman said, as quoted by Bloomberg, with a nod toward the National Security Council and the National Economic Council. . . .

How a U.K. Limit on Contactless Payments Could Drive Consumers to Mobile Wallets
Digital Transactions News – October 7, 2021

An increase in the limit on what contactless cardholders in the United Kingdom can spend before they are required to authenticate themselves is raising questions about whether the new mandate will prompt consumers to shun their cards in favor of mobile wallets, which have no per transaction limit. The theory is the higher ceiling will make cards more appealing to fraudsters, prompting consumers to leave them in a drawer.

Britain’s HM Treasury and the Financial Conduct Authority have decided to raise the maximum value for a transaction made with a contactless card to £100, up from £45, effective Oct. 15. The increase follows a prior jump from £30 to £45 in April 2020. The limit has been gradually raised since contactless cards debuted in the U.K. in 2007, when the limit was initially set at £10. In addition to the dramatically higher per-transaction limit, the HM Treasury and the Financial Conduct Authority are limiting consumers to five contactless transactions totaling a maximum of £300 before they must authenticate themselves using their PIN. . . .

China’s Central Bank Governor Vows to Continue Fintech Crackdown
BNN Bloomberg – October 7, 2021

China will continue taking steps to curb monopolistic behavior among internet platform companies and strengthen the protection of consumer privacy and data security, central bank Governor Yi Gang said. “We will continue to cooperate with anti-monopoly authorities to curb monopolies and actively deal with algorithm discrimination and other new forms of anti-competition behavior,” Yi said Thursday during a keynote speech at the Bank for International Settlements’ conference on Regulating Big Tech.

The People’s Bank of China will continue to strengthen the regulation of the payments sector and ask all financial services companies, including personal information businesses, to be licensed, Yi said. China has been cracking down on its biggest tech companies for the past year after largely giving them free rein to grow. Regulators fired their first salvo in November with new regulations on fintech, which forced Jack Ma’s Ant Group Co. to call off what would have been a record initial public offering days before the firm was due to go public. . . .

Industry Developments

SPOTLIGHT: Wider Acceptance of Crypto, More Specialized BNPL Plans to Lead Merchant Trends
PYMNTS – October 15, 2021

The year still has about a dozen weeks left, but merchants and payments providers are already looking at their 2022 calendars and trying to determine what might be the next big innovation as the digital economy continues to evolve. Lauren Craig, regional manager of the Americas at, said in the next three years, 40% of merchants will be looking to accept crypto as a currency, but the industry has a lot to do to prepare for that to happen at such a scale.

“But as more and more merchants [want the ability to accept crypto], I think the industry will then follow,” Craig told PYMNTS. She also noted that the crypto space is still developing, with innovations from both new players and legacy payment providers. has several clients focused on crypto and currently facilitates pay-ins and payouts for crypto exchanges. In the shorter term, Craig said the focus is on the continuing acceleration of eCommerce and more industries that were “very card-present heavy” moving into digital sales, which may require merchants to seek new expertise and providers to optimize their operations. . . .

Plaid Announces New Tools to Make It Easier for Developers to Scale Faster
Digital Transactions News – October 15, 2021

As part of its strategy to support application developers, open-banking platform provider Plaid Inc. this week introduced at its developer conference several tools to help developers create a broader range of financial technology applications regardless of the programming language developers use.

The new suite of tools include Plaid Pattern apps, which are intended to make it easier for developers to build Plaid integrations and understand how to work with Plaid; an OpenAPI format to make it easier for developers to generate libraries, code snippets, and test tooling; and the Sync API, which enables developers to build in automatic updates to transaction data. Plaid’s technology lets financial-services firms verify users’ bank accounts and funding via an application programming interface to support payments, funds transfer, and other activities. . . .

What Chip Shortage? MagicCube Raises $15m to ‘Replace All Chips,’ Starting With POS Terminals
TechCrunch – October 14, 2021