Payments Insights

Does the Token Taxonomy Act Offer “Security” for Blockchain?

Blockchain and cryptocurrency, which some call the most innovative technology since the internet, should be dominating America’s tech industry. But it isn’t. A lack of regulatory certainty combined with inconsistent guidance from the SEC and the courts has crypto-startups flourishing overseas instead of right here at home. As a result, the Token Taxonomy Act (“TTA”) has been reintroduced in the House of...

TCH Just Made the Case for a Federal Reserve Real-Time Payments Alternative

For many years, The Clearing House (“TCH”) has occupied an unusual space in the payments industry.  Owned by 26 of the largest banks in the United States, TCH is uniquely capable of deploying a set of payment rails that could be transformative.  Few can match what TCH brings to the table.  TCH operates a wire transfer platform (CHIPS), an ACH network (EPN), a check imaging system and, most consequentially, a...

PSD2 and the Future of Payment Services in Europe

Open Banking is a major topic of discussion in the United States as a potential solution to the lack of competition in the marketplace.  The European payments services directive (“PSD2”) is the most comprehensive Open Banking initiative we are aware of, and its progress is a good barometer of whether such regulations can successfully introduce new competition in payments.  Our London office prepared the...

Visa’s Proposed Acquisition of Earthport – A Good Test for Antitrust in the 21st Century

As the 2020 Presidential election begins to heat up, something unusual is happening – antitrust policy is being bandied about as an election issue.  The reason for this is simple.  We live in an era of increasing concentrations of wealth and industrial power.  While the impulse to look at antitrust as part of the solution makes perfect sense, many of the proposals on the table, including the suggestion by one...

Adyen Offers PSD2 Payments to European Merchants, and U.S. Merchants Should Take Notice

Adyen (Surinamese for "start over again") is a growing Netherlands-based payment platform. Adyen is among the leading providers whose business model is designed to capitalize on the European Union’s Payment Service Directive (“PSD2”), which requires banks to offer application programming interfaces (“APIs”) for third parties to initiate direct bank-to-merchant payments.  The company recently announced a...

Does the Apple Card Signal Apple’s Plan to Ultimately Disrupt the Payments Industry?

Apple made big news last week when it announced its entry into subscription services, ranging from news to video streaming services.  Antitrust commentators, justifiably, expressed concerns that Apple might exploit the market power it enjoys via its dominant platform to undermine competition in those industries.  Obscured by the mainstream press attention regarding Apple’s foray into subscription services was...

The Arrival of the China Pays

The payments news last week was dominated by Apple, whose CEO Tim Cook promised that its newly introduced Apple Card and its Apple Pay platform will “transform another fundamental method of payment.” But many payments professionals are equally intrigued by the steady unveiling of potentially more impactful disruptors. These disruptors come not from the innovation labs at Cupertino, but from China. Two companies,...

Why the Fed Needs to Offer a Real-Time Payments Alternative

The U.S. continues to be an embarrassing laggard in payments.  While the rest of the developed world spent the last 25 years implementing Chip & PIN to reduce fraud, the United States continued to rely on signatures and magnetic stripes.  That was the equivalent of the world migrating to personal computers, while Americans remained loyal to the typewriter.  Remarkably, while we have begun to use Chip based cards we...

Facebook's Foray into Payments: Revolutionary or More of the Same?

To merchants, the evolution of digital payments was supposed to be a “get out of jail” card that released them from the shackles of the current payment system.  That dream could be reduced to the following proposition - the technology industry could conquer any industry. If anyone could disintermediate Visa and Mastercard and shake up payments, it would be Apple. Facebook, Google, Samsung, or some other tech...

Can Blockchain Introduce Competition in Payments?

U.S. merchants' unhappy experience in payments is well known by now.  Take it or leave it interchange rates that are orders of magnitude higher than rates that prevail in other parts of the world.  An increasingly long list of opaquely described network fees, which are also take it or leave it propositions.  Indefensible extensions of the Honor All Cards rules to force merchants that implement contactless...