Payments Insights

U.S. Adoption of a Central Bank Digital Currency Could Revitalize Payments Markets With Competition

The ailing U.S. payments markets could get a shot of much-needed competition if the U.S. government follows through on proposals to adopt a Central Bank Digital Currency (“CBDC”)—which would be issued by the Federal Reserve. The competitive failings of U.S. payments markets were highlighted a few weeks ago at a Senate Judiciary Committee hearing on interchange or “swipe fees,” the fees that merchants pay...

Pass-on Defences and Indirect Claims: Will UK Courts Apply the Same Antitrust Sauce to the Goose as to the Gander?

How the UK is sorting out the rights of direct and indirect purchasers to claim damages for anti-competitive conduct. By Richard Pike It is well-established in economic literature that anti-competitive conduct may increase prices not only for direct purchasers but also for indirect purchasers. As UK courts are now demonstrating, however, determining who should be allowed to recover, and what each party must...

Mastercard’s Digital Fee Hike Means Double Trouble for Merchants

By Owen Glist As part of the annual spring ritual of interchange increases and new network fees, Mastercard has announced that it is more than doubling its “Digital Enablement Fee.”  This hefty price hike raises both the cost of digital transactions and antitrust concerns. Mastercard’s Digital Enablement Fee is essentially a tax the network imposes for “enabling” online transactions, also known as...

UK Regulator Raps Schemes for Raising Fees and Concludes that Card-Acquiring Services Market “Does Not Work Well”

By Richard Pike, Simon Yeung and Andreas Killi[1] A comprehensive government review has concluded that the card-acquiring services that enable merchants in the UK to accept card payments is not working well for a significant number of merchants. The UK’s Payment Systems Regulator (PSR; the economic regulator of the payment systems industry in the UK) published its final report on its market review into...

Disrupting the Equilibrium? Why stablecoins may struggle to challenge existing payment schemes

Mastercard and Visa have dominated global markets for consumer payments for decades. A key reason for their success is the barriers to entry into the global general purpose payment card network market. It is hard to replicate Visa’s and Mastercard’s global acceptance, and those networks do everything in their power to maintain and increase those barriers. Certain cryptocurrencies, known as stablecoins, have the...

App Store Competition Bill Contains A Loophole

Although Congress has already had a busy 2021 pushing antitrust legislation that targets large digital technology platforms, even more legislative battles are looming on the horizon. Earlier this year, bipartisan members of the House introduced six antitrust bills designed to curb the perceived power of tech platforms, some of which were also introduced in the Senate.[1] Those bills have made it through the...

Developments in Merchant Surcharging: Hold the Champagne

Those following the payments industry press on surcharging may have noticed headlines touting recent events in state legislatures and in the courts, which deceptively suggest that the state laws prohibiting merchant surcharging are falling away.  But, as is often the case, the devil is in the details and the positive headlines mask a more sobering reality.   Colorado Governor Jared Polis, for example, recently

The First Blockchain Antitrust Case. Or Is It?

Legal professionals paying close attention to the still nascent world of blockchains and cyptocurrencies are following what is considered to be the first antitrust case involving cryptocurrencies. For enthusiasts, United American Corp. v. Bitmain, Inc. involves the self-described inventor of bitcoin on one side, the operator of bitcoin.com on the other side, the world’s largest mining pools, and the Bitcoin Cash...

Apple v. Pepper: Supreme Court Rejects Attempt to Block Consumer Claims Under Indirect-Purchaser Rule

The Supreme Court issued a much-anticipated decision in the Apple v. Pepper case, where iPhone owners are accusing Apple of monopolizing the retail market for iOS applications, or apps. The Court ruled in favor of the plaintiffs, holding that iPhone owners have standing to pursue a claim for damages against Apple under the federal antitrust laws.  The decision has significant implications in terms of both the...

Brexit's Potential Impact on the UK Payments Industry

Like many around the world we have followed the trials and tribulations of Brexit with great interest.  It is beyond the scope of this blog to enter into the fraught territory of predicting the United Kingdom’s future relationship with Europe.  However, we have been following Brexit’s potential impact on payments regulations in the United Kingdom given the potential impact to UK merchants and Fintechs.  Below...