Survey Finds Payment Schemes Worldwide Optimistic, Looking to Cooperate
Developing new services, adopting the latest technologies and collaboration are the top priorities among payment schemes worldwide, according to a new study.
Features
Study: Big Box Stores, Plastic Cards Dominate in Loyalty, Corporate Rewards
In a sign that many consumers use gift cards to purchase everyday household items, big box retailers continue to lead loyalty points and rewards redemptions in the U.S., according to a new study from the National Gift Card Corp. (NGC).
Cybersecurity: computers or humans – where does the threat lie?
Digitalisation plays a key role in the fight against payment fraud. Yet Commerzbank’s cybercrime specialists in cash services show that even in this technologically advanced environment, security threats persist. Companies must take steps to ensure that human beings – as well as computers – are protected against crime.
Innovators’ Spotlight: Raise
The Chicago-based startup enables consumers to easily purchase and redeem e-gift cards right from their smartphones, essentially turning unwanted e-gifts into a convenient and useful form of digital currency.
Mobile payments in the age of the customer
The mobile payment market is getting more congested every day. For banks, it’s the most frequent touchpoint – one that can help (re) establish everyday relevance and drive engagement. How can banks develop their strategy and prioritise the capabilities that will help them remain valuable to their customers?
N.Y. Grants Global Cash Card Petition against Labor Dept. Paycard Regs
Payroll card providers that operate in New York can breathe a huge sigh of relief. Global Cash Card tells Paybefore that its petition against the New York Department of Labor payroll card regulations due to go into effect on March 7, 2017, has been granted. The industry had been raising red flags about the regulations, which many feared would result in providers exiting the market, since first proposed in 2015.
CFPB Seeks Help in Tackling Thin-, No-File Challenge
In a Feb. 16 field hearing, the CFPB said it wants industry input on using alternative data to help thin- or no-file consumers build credit scores. It’s a challenge that many in the prepaid industry have been trying to solve for years to better serve cardholders who often are among the approximately 26 million U.S. consumers who don’t have a credit history and another 19 million consumers whose credit histories are insufficient to produce a credit score, according to CFPB estimates.
8th Circuit Tells Lower Court to Take another Look at Target Data Breach Settlement
The case creates new issues surrounding standing and how to resolve and settle class action claims in the context of privacy and data protection suits, where some members of a group have not suffered concrete harm and thus may not be able to meet the concrete and particularized injury prong of the test for standing.
White House: CFPB Exempt from ‘1 In, 2 Out’ Rule
The CFPB is not required to comply with President Trump’s executive order limiting new regulations, according to a memorandum from The White House. Trump’s order—which requires covered agencies to repeal two regulations for every one new regulation adopted—does not apply to the CFPB, which is considered an independent agency.
Global ATM Hacker Sentenced to 8 Years in Prison
The ringleader of three highly organized, global cyberattacks on ATMs resulting in $55 million in losses was sentenced Feb. 10 to eight years in prison and ordered to pay more than $55 million in restitution.
Trade finance and blockchain: the right time
Financial institutions and technology companies have tinkered with trade finance for years, but progress has been slow. Despite automation advances in many areas of financial services, trade finance remains a largely paper-based, manual process. But it could be one area where blockchain technology will be successfully applied.
Prepaid Gains More Love from Canadians, but Bank Execs Might Have Worries
Reloadable prepaid cards are a hit with Canadian consumers, with 95 percent of them saying they are satisfied with the products in 2016. That represents an increase of 22 percentage points from 2015, and stands as the highest satisfaction rate for all payment tools, according to the second annual survey from the Canadian Prepaid Providers Organization.
Consumer Groups Cry Foul as House Joins Senate Push for Prepaid Rule Repeal
The CFPB’s final prepaid rule is turning out to be unpopular with the current U.S. Congress: A U.S. representative has followed the lead of a Senate colleague and filed a joint resolution to repeal the rule, which has attracted criticism from industry groups since the agency released it last year. But consumer groups, who lobbied for the rules, are attacking the effort, arguing that it would put consumers at risk.
Appeals Court Denies Efforts to Defend CFPB in PHH Case
Efforts by three different parties to defend the CFPB were thwarted Feb. 2 when a federal appeals court denied the motions to submit briefs on behalf of the CFPB in PHH Corp., et al.v. Consumer Financial Protection Bureau.
Insurtech in 2017: making insurance great again
There are many reasons to be excited about insurtech in 2017!
Can Sen. Perdue Undo CFPB Prepaid Accounts Rule?
For those disappointed that President Trump’s regulatory relief executive orders wouldn’t extend to prepaid providers—and others covered under the CFPB’s final prepaid accounts rule—Sen. David Perdue (R-Ga.) may be coming to the rescue. On Feb. 1, Sen. Perdue, along with six co-sponsors, introduced joint resolution 19 that provides “congressional disapproval” for the rule, and which says that “such rule shall have no force or effect.”
CFPB Orders UniRush, Mastercard to Pay $13 Million over RushCard Outage
The CFPB is “putting the prepaid industry on notice that companies will face the consequences if consumers are denied access to their money or to the services they pay for and on which they have the right to depend.” In its first enforcement action against prepaid providers, the bureau on Feb. 1 announced that UniRush and Mastercard will pay a combined $13 million for a 2015 service disruption that left cardholders without access to their funds.
People on the Move: Kathy Moe, FDIC San Francisco
The FDIC has appointed 30-year veteran Kathy Moe regional director for the San Francisco region.
Mastercard Victorious in U.K. Interchange Lawsuit
Mastercard can put a notch in the win column after a High Court judge ruled in the payment card network’s favor regarding a lawsuit brought on by retailers disputing cross-border interchange fees on debit and credit cards.
U.K. Slaps Deutsche Bank with $200 Million Penalty over Money Laundering Case
The U.K.’s Financial Conduct Authority has fined Deutsche Bank £163 million (US$204.7 million) for failing to maintain adequate anti-money laundering controls between Jan. 1, 2012, and Dec. 31, 2015, according to Paybefore sister publication Banking Technology.
Trend Watch 2017: Payments Year in Review
Paybefore’s first-ever payments year-in-review report, sponsored by The Bancorp, is available now. Offering an in-depth look at key trends and the Top 10 payments stories from 2016 that will continue to shape the industry in 2017 and beyond, this must-have resource examines everything influencing the industry from the CFPB and Uber to Brexit and Trump and much more.
Fed Highlights Progress toward Faster, Safer Payments
A 2-year-old Federal Reserve plan to improve the speed, efficiency and security of the U.S. payments system has made significant strides toward those goals, but there’s more work to do, according to the Fed’s latest progress report on the initiative. First announced in a January 2015 document titled Strategies for Improving the U.S. Payment System, the plan includes several strategies to enhance the U.S. payment system to “meet the changing demands of American consumers and businesses.”
Five mistakes to avoid when starting a fintech company
Francisco Lorca, MD of Startupbootcamp FinTech London, a UK-based accelerator, highlights the pitfalls of starting a fintech firm, drawing on his extensive 17-year experience in finance and entrepreneurship.
TSYS Talks FTC Negotiations, NetSpend’s New Products
TSYS-owned NetSpend is negotiating with the Federal Trade Commission over the agency’s allegations that the prepaid provider deceived cardholders and denied or delayed their access to funds, TSYS Chairman and CEO Troy Woods told analysts this week in a fourth-quarter earnings call. TSYS also announced that NetSpend is working on diversification, including the launch of a demand deposit account later this year.
White House Reg Freeze Raises Questions for CFPB, Prepaid Industry
Prepaid providers—along with P2P and mobile wallet providers that fall under the CFPB’s final prepaid accounts rule—might have cheered to learn that President Donald J. Trump issued a freeze on forthcoming regulations on Jan. 20. Further examination of the White House memo detailing the freeze, however, suggests that it may not delay the Oct. 1 effective date for the final rule on prepaid accounts. But, it’s implications for the CFPB and some of its other regulations are unclear.
Innovators’ Spotlight: ClassWallet
As companies fight for wallet share, ClassWallet’s focus on bringing efficiency to K-12 education expense management has helped the startup launch a successful digital wallet, prepaid card and online marketplace that could be a springboard to other niche markets.
Western Union Settles with DOJ, FTC on Fraud and Money Laundering Violations
Western Union will pay $586 million in customer refunds and beef up its money laundering and fraud protections. after admitting to criminally violating the U.S. Bank Secrecy Act and federal anti-fraud regulations, according to the U.S. Department of Justice. The settlement also involves the Federal Trade Commission and covers conduct that took place between 2004 and 2012.
Money rolls
Our new series of thrillers – produced and directed by CustomerXPs and Banking Technology – narrate the tales of the fight between the forces of good (the Clari5 analytics and anti-fraud software) and the forces of evil. Based on real events and guaranteed to keep you on the edge of your seat!
Texas Republican Meets with Trump for CFPB’s Top Job
A Texas Republican under consideration to lead the CFPB met with President-elect Donald Trump last week, Trump Spokesman Sean Spicer confirmed on a Jan. 12 call with reporters, according to The Huffington Post. Former U.S. Rep. Randy Neugebauer, a long-time critic of the bureau and a proponent of repealing the Durbin Amendment and other aspects of Dodd-Frank, could please financial services providers, while putting retailers on edge.
Want Consumers to Spend More? Make Sure They Have Gift Cards.
Gift cards are very good for business, and getting better: 75 percent of U.S. consumers using the payment devices in 2016 spent more during their shopping trips than the value stored on those cards, according to a First Data study. That compares with 69 percent in 2015. The average extra spending stands at $27.74 more than the value of the card, the report said.
Trade Group Report Offers Post-Brexit Licensing Guidance
With last year’s Brexit decision casting uncertainty on U.K.-based e-money passporting, the Emerging Payments Association (EPA) has released a new report recommending the best options for U.K.-licensed fintech and financial services companies in danger of losing their European Union passporting rights following the U.K.’s exit from the EU.
White House Unveils Fintech Framework for U.S.
Following the OCC’s plans for a special fintech bank charter, which has state regulators and a few Democratic senators up in arms, the National Economic Council (NEC) of the U.S., part of the Office of White House Policy, has published a whitepaper, “A Framework for Fintech,” reports Paybefore’s sister publication Banking Tech.
U.S. Supreme Court Hears Credit Card Surcharge Case
Credit card surcharges came before the U.S. Supreme Court on Jan. 10, in a case that concerns how much freedom retailers have in telling consumers they are being charged extra for the payment method. Comments from justices suggested that the Supreme Court might send the case back to New York for further review, though it was unclear when a decision would be announced, according to news reports.
House Financial Services Committee Names New Members, Leadership
The newly seated 115th U.S. Congress includes several new faces on one of the most important committees for financial services regulation. House Financial Services Committee Chairman Jeb Hensarling (R-Texas) announced 10 new Republican members who will serve on the committee for the new Congress.
Democratic Senators Oppose OCC Fintech Proposal
A skirmish over the future of U.S. fintech is underway in the new U.S. Senate, with two Democratic senators this week saying a new federal charter governing the industry “could weaken consumer protections, limit competition and threaten financial stability.”
CFPB Fills Leadership Roles amid Uncertain Future
Ahead of what could be some big changes for the CFPB during the incoming Trump administration, the agency has announced new appointments to several leadership positions.
CFPB Keeps Focus on Disclosures, Deceptive Marketing with Latest Enforcement
The CFPB’s emphasis on fee disclosures and marketing practices was highlighted in a major way this week, as the bureau levied a $23.1 million enforcement action against credit reporting agencies Equifax and TransUnion over allegedly misstating the cost and usefulness of their products and “luring” customers into recurring payments. Although targeted at credit bureaus, the enforcement action offers key takeaways for payments providers shaping their own compliance efforts to stay out of the CFPB’s cross hairs, according to industry observers.
U.K. Competition Authority Raises a Concern about Mastercard/VocaLink Deal
The U.K. Competition and Markets Authority (CMA) is worried that Mastercard’s billion-dollar deal to acquire VocaLink could hinder competition, and the CMA is giving the two companies until Jan. 11 to address a concern or face an “in-depth investigation,” according to the authority.
Prepaid Complaints Drop 59 Percent, CFPB Reports
Complaints about prepaid products dropped 59 percent from September through November in 2016 compared with the same period the previous year, according to the latest CFPB Monthly Complaint Report. That drop, to 183 complaints on average per month, represents the largest percentage decrease in complaints among all the products tracked by the federal agency, and comes as the CFPB in its new report focuses on debt collection.
Plan Would Require Declaration of Prepaid Cards Shipped into EU
A proposed plan by the European Commission (EC) to combat terrorism financing would require customs declarations for prepaid cards sent in postal parcels or freight shipments into or out of the EU. Currently, cards sent or shipped across EU borders are not covered by the standard customs declaration requirement. Coming in the wake of a truck attack in Berlin that left 12 people dead and dozens wounded, the proposal is part of the EC’s action plan against terrorist financing, an initiative unveiled in February 2016, designed to help EU nations cut off the supply of funding for terrorist activity.
