Payments News Update - August 25, 2023
Legal and Regulatory Developments
SPOTLIGHT: Digital Transactions News 鈥� August 22, 2023
New Jersey has implemented a law that prohibits merchants in the state from profiting from credit card surcharging and requires merchants to clearly disclose any surcharges to consumers.
The law, which was passed by the New Jersey legislature in June and went into effect immediately upon New Jersey Governor Phil Murphy鈥檚 signature on Friday, allows merchants to levy a credit card surcharge but prohibits them from charging more than what they pay to process credit card transactions. . . .
Los Angeles Times 鈥� August 22, 2023
A growing number of restaurants and businesses in Los Angeles have decided cash is no longer king. If you can鈥檛 pay via credit card or a digital payment app, you can鈥檛 pay at all.
That鈥檚 a problem, according to City Councilmember Heather Hutt of L.A.鈥檚 10th District. Hutt introduced a motion last week to ban cashless retail businesses in Los Angeles. 鈥淣ot accepting cash payment in the marketplace systematically excludes segments of the population that are largely low-income people of color,鈥� the motion said. . . .
Reuters 鈥� August 21, 2023
PayPal’s聽(PYPL.O)聽stablecoin is likely to succeed where Facebook’s failed, thanks to the payment giant’s standing in Washington and policymakers’ greater understanding of the issues in the last three years.
PayPal this month said it was launching PayPal USD, a crypto token pegged to the U.S. dollar, making it the second major global company to launch a stablecoin after Facebook, now Meta Platforms META.O, unveiled Libra in June 2019. . . .
Payments Dive 鈥� August 21, 2023
BNPL鈥檚 ubiquity and growing use for everyday purchases should grab regulators鈥� attention, said Consumer Reports鈥檚 senior policy counsel. In her recent research on buy now, pay later, Consumer Reports Senior Policy Counsel Jennifer Chien was surprised by the wide variety of installment plan lengths and fees in the rapidly evolving market.
鈥淚 came out of the research thinking the market is more complex and muddier than when I went into it,鈥� said Chien, a lawyer by training who is focused on financial fairness for Consumer Reports.聽. . .
Bloomberg 鈥� August 16, 2023
Visa Inc. is facing fresh scrutiny from the聽US Justice Department聽over how it charges merchants for technology it uses to protect cardholder information.
As part of a long-running DOJ investigation, enforcement officials have begun probing the payment giant鈥檚 policies for charging retailers more if they don鈥檛 use Visa鈥檚 proprietary 鈥渢okenization鈥� technology, according to people familiar with the matter. . . .
Australian Financial Review 鈥� August 14, 2023
Apple says the federal government鈥檚 plan to regulate its payment services is a dangerous overreach and is being driven by the self-interested misrepresentations by major banks about how the iPhones work.
Pushing back against a proposal being considered by the government to extend Reserve Bank powers to digital payment platforms, Apple said the move could backfire by weakening the privacy and security of iPhones. . . .
Industry Developments
SPOTLIGHT: Digital Transactions News 鈥� August 18, 2023
Consumer affinity for in-person transactions that reduce points of contact are taking hold as contactless payments made with debit cards swelled to 16% of the U.S. card-present share last year from 8% in 2021.
It鈥檚 a similar story with debit cards used with mobile wallets. Their use increased from 5% of the transaction mix to 10% in 2022, according to the 2023 Debit Issuer Study from Pulse, the debit network owned by聽Discover Financial Services. . . .
PYMNTS 鈥� August 22, 2023
J.P. Morgan Payments has debuted a contactless payment solution for its merchant clients. The new聽Tap to Pay聽offering lets merchants accept payments using their iPhones, without the need for a physical terminal, according to a Tuesday (Aug. 22) press release.
鈥淓nhancing the ability for consumers to pay with their preferred method of payment is part of our broader, customer-centric approach to simplify omnichannel payment acceptance for our merchant clients,鈥� said J.P. Morgan Global Head of Payments聽Takis Georgakopoulos聽in the release. . . .
Payments Dive 鈥� August 22, 2023
The Fed鈥檚 latest check use report points to the persistence of checks in U.S. payments relative to other countries. Though the proportion of checks used in India鈥檚 cashless transactions surpassed the U.S. at 44.4% in 2012, the figure in that Asian country dropped to 1.1% in 2021, the Fed said.
In 2021, the U.S. took the top spot in the number of checks used for cashless payments at 5.1%, followed by Canada (4.1%), France (4.1%) and Mexico (1.6%). . . .
NFCW 鈥� August 15, 2023
Just over 93% of card present transactions worldwide were made using EMV chip-enabled payment cards during 2022, up from 90.44% in 2021 and 88.55% in 2020, according to standards body聽EMVCo.
The total number of EMV payment cards in circulation also rose by 7% over the course of 2022, from just under 12bn at the end of 2021 to 12.8bn at the end of 2022, accounting for 69.25% of all cards issued worldwide, up from an average global adoption rate of just over 68% as of December 2021. . . .
The New York Times 鈥� August 14, 2023 (subscription required)
Last year, when food prices rose along with so many other costs, Jos茅 Theoktisto began to think about how to lower operating expenses at the Venezuelan restaurant he runs in upstate New York. He worked with different suppliers, and he raised menu prices. Then he took a closer look at his statements and found that he was paying $2,000 a month in credit card fees.
鈥淭hey pile fees on top of fees, on top of fees,鈥� Mr. Theoktisto said about credit card processing companies. . . .
American Banker 鈥� August 14, 2023 (subscription required)