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Payments News Update - May 5, 2023

Posted  May 5, 2023

Legal and Regulatory Developments

SPOTLIGHT: Payments Increasingly in Regulatory Crosshairs, Industry Lawyers Say
PaymentsDive – April 27, 2023

The Consumer Financial Protection Bureau’s proposed junk fee rules and recent Federal Trade Commission actions against payments firms were targets for criticism this week at a trade association conference in Atlanta.

Scott Talbott, the ETA’s senior vice president of government affairs, called the vibe on Capitol Hill “vitriolic” as he moderated a Wednesday panel on “Policy Threats to the Payments Industry” at the annual Electronic Transactions Association’s Transact conference in Atlanta. . . .

White House to Build International Standards for DLT
CoinTelegraph – May 5, 2023

In the United States, the White House released the national standards strategy for key and emerging technologies on May 4, identifying eight technology sectors that will have a significant economic impact in the near future.

Among the eight technologies are artificial intelligence, communication and network technologies, biotechnology and semiconductors, with the inclusion of distributed ledger technology (DLT) and digital identity infrastructure grabbing the crypto community’s attention. . . .

Chinese Cities Begin to Pay Public Employees in Digital Yuan
Nikkei Asia – May 5, 2023

More Chinese civil servants have begun to be paid entirely in digital yuan, joining some of the country’s bank employees as a new phase begins to promote the currency.

Changshu, a city in Jiangsu province, will switch to digital yuan direct deposits for public sector employees this month. The move follows a similar action taken by a local regional lender earlier this year. . . .

Open Banking: Will PSD3 Regulations Change Everything?
FinExtra – May 3, 2023

A recent survey by the Thales Group revealed that a staggering 38% of users are willing to switch to another provider offering better rates or services, highlighting the cut-throat competition within the banking and financial services industry.

However, with regulations like the Second Payment Services Directive (PSD2), which aim to safeguard sensitive data from fraudsters, European banks face significant challenges to access customer data to offer popular services like digital wallets, short-term loans, and buy-now-pay-later options. . . .

Match Says It’s ‘Very Possible’ Apple-Epic Ruling Could Result in App Store Fee Relief
TechCrunch – May 3, 2023

Dating app giant Match Group believes it’s “very possible” that the recent Apple-Epic Games antitrust appeals ruling, though largely in favor of Apple, may result in App Store fee relief for developers. Speaking to investors during Match’s Q1 earnings call,

Match Group President and CFO Gary Swidler shared the company’s thinking on the historic ruling, which upheld the lower court’s opinion that Apple was not a monopolist, but directed the iPhone maker to give developers the ability to place links in their apps that point customers to third-party payment options. . . .

PayPal Beats Investor Suit Over Federal Probe for Good
Law360 – April 28, 2023 (subscription required)

A California judge tossed with prejudice a suit accusing PayPal and its executives of misleading investors about federal investigations into some of its credit and debit products, ruling the latest version of the complaint failed to show misrepresentation or violations of a consent order.

U.S. District Judge Charles R. Breyer dismissed the suit on Thursday. Among its several claims, the suit alleged PayPal’s July 2021 disclosure that it was under investigation by the U.S. Securities and Exchange Commission and the Consumer Financial Protection Bureau regarding its compliance led to a stock decline, causing harm to investors. . . .

Industry Developments

SPOTLIGHT: Fiserv Gives the Burgeoning Text to Pay Option a Big Boost
Digital Transactions News – May 2, 2023

Fiserv Inc. has partnered with conversational-commerce platform provider Authvia to enable independent software vendors to offer a text-to-pay solution through Fiserv’s CardPointe gateway.

The offering, which was developed in response to the growing use by businesses of tools to communicate with consumers via text and chat, allows businesses to bill, invoice, and accept payments from consumers via text and chat. When a new communication channel emerges, often a new payments channel emerges as well, . . .

Walmart, Kroger Eye Instant Payments
Payments Dive – May 1, 2023

Mega retailers Kroger and Walmart are interested in harnessing the coming power of the FedNow instant payments system to provide their customers with alternatives to the traditional card rails.

That’s according to industry professionals who heard representatives of the two giant store chains speak on a panel at the Faster Payments Council spring meeting in March in Kansas City. Speaking during that “Business End-Users Mega Use Cases” discussion were Walmart’s Matt Howarter and Kroger’s Kathy Hanna. . . .

Amazon Offers Richer Rewards for Its Cobranded Visa Cards
Digital Transactions News – May 1, 2023

Amazon.com Inc. has beefed up the rewards for its Visa-branded cards issued by Chase, in response to cardholder’s desire for travel-related perks and the ability to earn more rewards for day-to-day expenses, such as commuting. Additionally, Amazon is allowing cardholders to redeem rewards daily and has rebranded its cards.

Prime Visa (formerly the Amazon Prime Rewards Visa Signature Card) and Amazon Visa (formerly the Amazon Rewards Visa Signature Card) cardmembers can now earn 5% back and 3% back, respectively, on purchases made through Chase Travel, Chase’s travel booking platform. . . .

Mastercard Launches Crypto Credential Service for Cross-Border Transfers
CoinDesk – April 28, 2023

The executive in charge of crypto products and blockchain at Mastercard (MA) said the payment processing company is bringing out a service designed to ensure transactions between users’ wallets are verifiable and compliant, beginning with transfers of digital assets between countries.

In this first cross-border use case, the Mastercard Crypto Credential service, announced Friday by Raj Dhamodharan from the stage at Consensus 2023, allows wallets to be identified in transactions that are compliant with requirements such as the Financial Action Task Force’s (FATF) “travel rule.” . . .

‘We’re Well-Positioned’ for FedNow, Says Mastercard’s CEO
Digital Transactions News – April 27, 2023

The impending arrival of a commercial real-time payments service from no less an entity than the Federal Reserve will be a major event, but one Mastercard Inc.’s top brass says the card company will take in stride. “We’ll have to wait and see how it plays out, we’re well-positioned,” Michael Miebach, Mastercard’s chief executive, told equity analysts early Thursday.

Miebach conceded Mastercard has been eyeing developments surrounding FedNow, the Fed’s real-time service scheduled to launch in July. . . .

Digital Wallets Become a Buy Now/Pay Later Battleground
American Banker – April 27, 2023