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Payments News Update – September 22, 2023

Posted  September 22, 2023

Legal and Regulatory Developments

SPOTLIGHT: California Legislature Passes Plastic Gift Card Ban
Payments Dive – September 21, 2023

California’s legislature has passed a bill that would outlaw plastic gift cards, with legislators in the Senate and Assembly overcoming some opposition this month in votes approving the legislation, according to the state’s legislative website.

About 70% of retail gift cards in California are made from PVC plastic and would be affected by the ban, according to a spokesperson for State Sen. Monique Limón, a Democrat who authored the legislation. The bill, SB 728, “would prohibit, beginning January 1, 2027, a retailer from selling, offering for sale, or distributing plastic gift cards, except those that are both usable with multiple unaffiliated sellers of goods and that have the expiration date, if any, printed on the card,” according to the California legislature’s website. . . .

With Congress Back in Session, CCCA Proponents Put on a Full Court Press to Garner Support
Digital Transactions News – September 21, 2023

Supporters and U.S. Senate sponsors of the Credit Card Competition Act stepped up pressure to pass the bill Wednesday with a Washington press conference featuring Senators Dick Durbin (D-Ill.), Roger Marshall (R-Kan.), and Peter Welch (D-Vt.). The legislators attacked merchants’ card-transaction costs as price gouging and said the levies make it more difficult for small businesses to compete, especially as consumers are feeling the financial pinch of inflation.

Introduced earlier this year, the CCCA would require financial institutions with $100 billion or more in assets to enable at least one network other than Visa or Mastercard for credit card transaction processing. This requirement, they argue, would step up routing competition and help control what they view as excessive costs for credit card acceptance. . . .

Digital Dollar Bill Resurfaces in Congress
Payments Dive – September 18, 2023

Rep. Stephen Lynch, the top Democrat on the House Financial Services’ Subcommittee on Digital Assets, last week reintroduced legislation that calls for a Treasury Department pilot program to create a digital dollar, which would be an electronic version of the currency.

The proposed Electronic Currency and Secure Hardware (ECASH) Act, H.R. 5410, would seek to preserve anonymity for cash transactions while attempting to retain the dollar as a form of currency for the underbanked and unbanked, according to a Sept. 14 press release from Lynch regarding the bill. This legislation, introduced in the House on Sept. 12, “would promote greater financial inclusion, maximize consumer protection and data privacy, and advance U.S. efforts to develop and regulate digital assets,” the press release said. . . .

An Interchange Class-Action Settlement Inches Forward With a Recent Court Action
Digital Transactions News – September 15, 2023

The federal court overseeing a $5.54-billion settlement between millions of card-accepting merchants, on one hand, and Visa Inc. and Mastercard Inc., on the other, over interchange costs recently took several steps that ultimately could get payments out to merchants. But checks still won’t be in the mail for some time.

“I don’t think folks should expect anything in 2024, maybe 2025 to receive proceeds from the settlement,” Sam Wares, director of client success at Omaha, Neb.-based merchant-acquiring consulting firm TSG tells Digital Transactions News. . . .

Payment Data Security Requirements Are Set to Change and Organizations Aren’t Ready
Tearsheet – September 15, 2023

98% of organizations have reported at least one data breach in the past two years and 94% of organizations have very significant concerns about payment data security, according to a new research.

Shielding the payments ecosystem from being exposed to vulnerabilities generated by advancements in technologies and lax data governance are Payment Card Industry Data Security Standards (PCI DSS). PCI DSS provides important guidelines and requirements that delineate how payment partners should manage and govern their payment data and lessen the attack surface that bad actors can exploit. . . .

Industry Developments

SPOTLIGHT: Rival Banks Unite to Take on Big Tech
Financial Times – September 18, 2023

America’s largest banks are preparing to fire the latest salvo in their efforts to defend their turf from Big Tech groups.

JPMorgan Chase, Bank of America, Wells Fargo, and others, next year plan to launch Paze: a mobile wallet that will connect directly to the credit and debit card accounts of 150mn customers. The app will be operated by Early Warning Services, a bank consortium group that already runs payments app Zelle. . . .

EMVCo Floats Click-To-Pay Guidelines
Payments Dive – September 20, 2023

Major card network companies, including Visa and Mastercard, offer click-to-pay options to consumers who are making purchases online. A click-to-pay icon lets them know the option for faster checkout is available. Card holders need to register for the click-to-pay option before they can use it.

The rollout of the new guidelines builds on an earlier release by EMV of specifications for merchant orchestration of payments at checkout, which allows sellers and payment companies to tailor their payment experience and interactions, the release this week said. . . .

Paze Digital Wallet Launch Delayed to Early 2024 – Here’s the New Plan
The Financial Brand – September 20, 2023 

Things got very quiet after the initial buzz about Paze, the ecommerce-only digital wallet from the bank-owned consortium that runs Zelle. But James Anderson, head of Paze, says a flurry of deals is in the offing as the fledgling venture tests its system out ahead of a delayed national launch. Our exclusive interview details what’s been done so far and what’s ahead, along with some lessons learned.

Paze is going to take longer than expected to launch. The ecommerce-only digital wallet — backed by the same big bank consortium responsible for Zelle — was expected to be widely available this fall, in time for the 2023 holiday shopping season. . . .

Zebra Joins the Race for Mobile POS Market Share
Digital Transactions News – September 19, 2023

Zebra Technologies Corp. has entered the highly competitive mobile-payments market with the introduction of Zebra Pay, a software-based, PIN entry, consumer off-the-shelf mobile payment solution for merchants.

With solutions like Zebra Pay, the cardholder’s PIN is entered on an acquirer’s app running on the mobile device, while the card is inserted into a secure card reader on the device. Merchant segments being targeted by Zebra include the retail, hospitality, entertainment, field mobility, and logistics industries. . . .

How Tech Is Changing the Checkout Process
PaymentsJournal – September 15, 2023

The final stage of any grocery shopping trip, the checkout process, has long been a significant pain point for many consumers. Extended wait times, inefficiencies, and the occasional system malfunction often transform a simple shopping trip into an unexpectedly frustrating ordeal that negatively impacts the customer experience.

However, technology has made the overall experience more streamlined. As the space continues to evolve, tech will continue to play a crucial role at checkout. Let’s explore the innovative solutions that are revolutionizing the grocery sector. . . .