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Payments News Update - April 3, 2019

Posted  April 3, 2019

US-China Trade War Deal Could Be Too Late for the Likes of Mastercard, American Express and Visa
South China Morning Post – April 2, 2019

A trade deal between President Xi Jinping and United States counterpart Donald Trump could finally fulfil a long-delayed promise to open up China’s 208.1 trillion yuan (US$31 trillion) market for credit cards and other third-party payment processors to American companies like Mastercard, American Express and Visa. But any agreement reached might be too little too late.

Beijing promised to allow foreign firms into its domestic electronic payments market by 2006. Instead, foreign firms have faced continued obstacles, despite a seemingly successful a World Trade Organisation case brought by the US to pry open the market. Only now has China finally established a two-step application process for foreign companies to receive a licence to provide electronic payment services. . . .

The Prepaid Business Adopts a Sanguine Approach as the CFPB’s Big Rule Finally Takes Effect
Digital Transactions News – April 1, 2019

A day long dreaded by the U.S. payments industry came and went on Monday with little fanfare and not much more gnashing of teeth. The Consumer Financial Protection Bureau’s voluminous prepaid card rule finally took effect with sweeping provisions governing matters ranging from fee disclosures to error-resolution rights to consumers’ access to their accounts. But issuers of prepaid cards and digital wallets have had time to adjust to the CFPB’s rule, which a hostile Congress once tried to quash under the Congressional Review Act, and are now more or less sanguine about its many provisions. . . .

The 10 Places Where the U.S. Wants to Mandate Cash
PaymentsSource – March 29, 2019

U.S. lawmakers are not enthusiastic about the cashless trend being driven by the likes of Amazon Go, sweetgreen, and numerous other merchants of all sizes.

Several cities and states have proposed or enacted legislation banning cashless stores, in an effort to preserve choices for consumers that prefer to operate with cash. Here’s the status of states and cities that currently enforce or are considering a ban on cashless stores. . . .

Payments Firms Need to Keep Their Eyes on Regulators and the States, ETA Lobbyist Says
Digital Transactions News – March 28, 2019

Regulators and the states currently are more active than Congress on issues affecting the payments industry, according to the Electronic Transactions Association’s point person on governmental affairs.

The divided Congress probably won’t pass any major payments-related legislation before the 2020 elections, says Scott Talbott, a senior vice president at the Washington D.C.-based payments-industry trade group. Talbott reviewed public-policy issues Tuesday at the Southeast Acquirers Association annual conference in Atlanta. . . .

UK’s Payments System Regulator Presents 2019/20 Annual Plan
PayTech – March 27, 2019

The Payments System Regulator (PSR) has held an event today (27 March) in London, laying out its annual plan for 2019/20, which focuses on the open banking and collaborative initiatives, anti-fraud measures and the New Payment Architecture (NPA) by Pay.UK.

The UK payments regulator has highlighted its commitment to focusing on initiatives to help consumers. In the opening remarks, PSR chair Charles Randall commented on the need to change regulations to keep up with the rapid pace of technological change. . . .

NY Fed Creates Fintech Advisory Group
PYMNTS – March 26, 2019

The Federal Reserve Bank of New York has announced the creation of the Fintech Advisory Group to bridge the communication gap between the FinTech industry and consumer organizations, the organization said in a release.

The organization will “provide bank leaders with a high-level platform to establish clear points of contact with senior representatives and thought leaders from the financial technology industry and consumer organizations,” the statement said. . . .

Industry Developments

Coinbase Announces Launch of Cross-Border Payments via XRP and USDCoin
AMBCrypto – April 2, 2019

The American cryptocurrency exchange, Coinbase, announced the launch of cross-border payments via USDC and XRP.

Coinbase announced that XRP, the second largest altcoin in the market and the exchange’s stablecoin USDCoin [USDC] can now be used for cross-border payments with no applicable fee on the transfer. The exchange added that these coins were “optimized for cross-border transmission.”. . .

Discover Seeks to Reclaim Lost Turf in Small-Biz Payments
PaymentsSource  – April 2, 2019 (subscription required)

Discover is no stranger to small business, as it had been courting business owners in the mid-2000s as the market began to really take off. However, after the recession of 2008-2010 the company quietly backed away from the market.

Now with the September 2018 launch of the Discover Business It Card, the company is clearly seeking to capitalize on this market opportunity with a new Discover card for small businesses. . . .

American Express and Delta Renew Industry-Leading Partnership, Lay Foundation to Continue Innovating Customer Benefits
BusinessWire (Press Release) – April 2, 2019

American Express (NYSE:AXP) and Delta Air Lines (NYSE:DAL) have signed an 11-year renewal extending their exclusive Delta SkyMiles Credit Cards from American Express portfolio through the end of 2029. . . .

Sluggish Banks Are Losing Ground in the POS Lending Game
PaymentsSource PayThink – April 1, 2019

Banks have been in the lending business forever, but they’ve been slow to adjust to the fact that customers are no longer only relying on them to secure a loan.

With a rise in both well-planned and impulse purchases, people expect to be able to seamlessly access a loan when and where they want, at the point of sale. While banks are often simply too big to react to this consumer change quickly, more agile fintechs have been much faster to prioritize mobile-first POS financing. And now the banks are falling behind. . . .

QR Code Payment Specs in Japan Could Be Unified by Summer
The Japan News – April 1, 2019

Standardized specifications for QR codes used in cashless payments could be put into practice as early as this summer.

The Payments Japan Association, a council on promoting cashless payments that includes representatives from the Economy, Trade and Industry Ministry and the finance and information technology sectors, has announced standardized specifications. The specifications are being called “JPQR.” . . .

Clearing House Bids to Win Over Smaller Institutions to Real-Time Payments Network
Finextra – April 1, 2019

The Clearing House is bidding to win over community banks and credit unions to its real-time payments network, opening up four new seats for smaller depository institutions on the RTP Business Committee.

The move comes in response to reluctance from smaller banks to engage with The Clearing House’s objectives, suspicious of the power exerted by TCH’s top tier banking membership. . . .

Chinese Payment Giant Alipay Downplays U.S. Ambitions
American Banker – March 28, 2019 (subscription required)

Chinese tourists can now use Alipay at 200,000 U.S. locations, but the popular app’s maker said Thursday that the firm does not have its eyes on the American consumer.

“Right now that’s not what we’re looking at,” said Carol Grunberg, the head of growth, global and strategic partnerships at Ant Financial. “It’s got to make sense.” Alipay is a China-based mobile payment platform that boasts more than 500 million users. Its users are currently required to have Chinese bank accounts. . . .

Cash Discounts and Surcharging Remain the Hot Topic for ISOs
Digital Transactions News – March 27, 2019

They’ve been the subject of intense debate for several years now, but evidence from the Southeast Acquirers Association annual conference Tuesday shows interest among independent sales organizations in discounts for cash and credit card surcharges is as high as ever.

About 800 people attended the Atlanta confab that concluded Wednesday, and most of them crowded into a panel session Tuesday to learn more about services that offer merchants a way to reduce payment card acceptance costs while increasing ISO profitability. While both pricing plans have their share of critics, discounts for cash have been especially controversial since Visa Inc. issued a bulletin last October that in essence told the merchant-acquiring community that many such programs are really improperly disclosed surcharges imposed on card-using customers. . . .

Amazon Could Be Next to Follow the Apple and Goldman Sachs Credit Card Link-Up
Compelo – March 27, 2019

After Apple revealed an upcoming credit card launch with Goldman Sachs, digital banking expert Jo Howes believes Amazon could be the next tech giant to follow suit and make a move into the financial services industry

Amazon could be the next big tech firm to enter the banking industry, says a fintech expert after Apple and Goldman Sachs launched a new credit card. . . .