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AmEx Pitched Business Customers a Tax Break That Doesn’t Add Up

Nov 23, 2021

The pitch went out to eye doctors, McDonald’s Corp. franchisees and payroll companies: “Reduce your taxable income burden to Uncle Sam.” In phone calls, emails and in-person meetings with thousands of business owners, American Express Co. salespeople laid out the strategy. Use AmEx to pay your employees and suppliers, they said. You’ll have to pay a fee, but you’ll come out ahead. That’s because you can earn rewards on the transaction that can be converted into untaxed cash, while also deducting the transaction fees for tax purposes.

Plaid leads effort to raise the bar on fintechs’ data security

Nov 22, 2021

The data aggregator Plaid is leading the charge for a new data security standard for fintechs. The San Francisco company, which delivers bank account data to 4,500 fintech clients, has recruited other companies to this effort, including the data aggregators Flinks and MX; the employment verification provider Truework; and the security compliance companies Drata, Laika, Secureframe and Vanta.

Amazon's U.K. Visa ban could foreshadow larger fight in U.S.

Nov 22, 2021

Amazon's plan to block Visa credit card payments in the U.K. is limited in scope but could be the start of a much larger battle between the e-commerce giant and the major card brands. "This could be a tactical move that is about more than just the U.K. market," said Jordan McKee, principal analyst for digital payments at S&P Global Market Intelligence. Citing the high costs of payments, Amazon on Thursday said it plans to halt acceptance of Visa credit cards in the U.K. starting Jan. 19. The move follows a Visa payment fee increase in the U.K. and comes ahead of Visa and Mastercard hikes planned for April 2022 in the U.S., a much larger market for Amazon.

Fed's Waller warns against bank-only stablecoins

Nov 19, 2021

Federal Reserve Gov. Christopher Waller challenged some of the policy recommendations put forth in a report this month from the President's Working Group (PWG), which called on Congress to scale up regulations on stablecoin issuers.

Amazon to stop accepting Visa's UK-issued credit cards over high fees

Nov 17, 2021

Nov 17 (Reuters) - Amazon.com Inc (AMZN.O) said on Wednesday it would stop accepting Visa Inc (V.N) credit cards issued in the United Kingdom from next year due to the high fees charged by the payment processor for transactions. "As a result of Visa's continued high cost of payments, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of 19 January, 2022," an Amazon spokesperson said in an emailed statement.

'Reverse Robin Hood' is real

Nov 9, 2021

In a time when social justice issues are daily headlines, the injustice created and perpetuated by the U.S. payment system has been largely ignored. Aaron Klein, former Treasury deputy assistant secretary for economic policy, has asserted that lower-income consumers subsidize wealthy consumers by helping fund credit card rewards programs that disproportionately benefit the wealthy. This transfer of wealth from the poor to the rich is a real-life “reverse Robin Hood” effect — the opposite of robbing the rich and giving to the poor.

PayPal and Amazon to Enable Customers to Pay with Venmo at Checkout

Nov 9, 2021

Amazon customers in the U.S. will be able to pay with Venmo for purchases on Amazon.com and the Amazon mobile shopping app next year PayPal today announced that we will team-up with Amazon to allow Venmo’s more than 80 million users in the U.S. to pay with Venmo at checkout using funding methods that include their linked bank account and Venmo balance. Starting next year, customers will be able to make purchases on Amazon.com and the Amazon mobile shopping app in the U.S. using their Venmo accounts.

Jay Powell's life in limbo is almost over

Nov 9, 2021

Federal Reserve Chairman JEROME POWELL’s nine month-long job audition is finally nearing its end. And there are plenty of indications that President JOE BIDEN is going to give him another go-around in the high-stakes job atop the country’s central banking system. The markets widely expect Powell to get the nod, and see Biden tapping Fed Governor LAEL BRAINARD — a top Treasury official during the first Obama administration — to be the Fed’s vice chair for supervision and regulation, overseeing big Wall Street firms.

Congress debates pros and cons of BNPL

Nov 7, 2021

The head of the Financial Technology Association (FTA) defended buy now-pay later (BNPL) financing deals at a congressional hearing Tuesday against claims by critics that they encourage consumers to spend more than they can afford, damaging their credit score in the process. In testimony presented to the House Financial Services Committee’s Task Force on Financial Technology, Financial Technology Association CEO Penny Lee argued that BNPL services offer consumers a better deal than credit cards that charge high interest rates that can take years to pay off. She said that technological advances like BNPL also lower borrowers’ costs and increase choice for both consumers and businesses.

Etsy's Payments Chief Says Local Payments Essential For Cross-Border Success

Nov 4, 2021

Growing consumer interest in digital payment options at in-store and online retailers was rising even before the pandemic boosted acceptance. Recent research forecast that global digital payment services, particularly cashless payments, will grow by more than 80% from 2020 to 2025 and will nearly triple by 2030. In the October/November edition of Cross-Border Retail Payments Tracker®, PYMNTS explores how the emergence of digital payment services is changing the payments landscape, helping eCommerce retailers to provide a more seamless and secure customer experience.

Open Banking Is Due for Explosive Growth, Posing a Threat to Cards, a New Report Says

Nov 3, 2021

The rising prominence of open banking, particularly in Europe and the United States, poses a “growing threat to the dominance of cards within e-commerce,” says a report released early Monday by the United Kingdom-based firm Juniper Research. The report comes against a backdrop in which e-commerce transactions are growing fast in response to the pandemic and as fintechs and banks seek out alternatives to credit and debit cards for account-to-account payment networking. Demand for open banking is such that these networks will handle more than $116 billion annually in global transactions by 2026, up from less than $4 billion this year, Juniper projects in its report, “Open Banking: Key Opportunities, Vendor Strategies & Market Forecasts 2021-2026.” Much of the growth will stem from rising awareness of the option among financial-industry players, along with accelerated growth in Europe owing to new application programming interfaces developed in response to the requirements of the Second Payment Services Directive (PSD2), Juniper says.

President’s Working Group on Financial Markets Releases Report and Recommendations on Stablecoins

Nov 3, 2021

Report Outlines Regulatory Framework for Stablecoins and Pathways to Address Risks WASHINGTON — Today, the President’s Working Group on Financial Markets (PWG), joined by the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), released a report on stablecoins. Stablecoins are a type of digital asset generally designed to maintain a stable value relative to the U.S. dollar. While today stablecoins are primarily used to facilitate trading of other digital assets, stablecoins could be more widely used in the future as a means of payment by households and businesses.

American Express debuts digital checking for small businesses

Oct 28, 2021

American Express is rolling out a digital checking account for small businesses that comes with the card network's first U.S. debit card and pays a 1.1% interest rate. The Amex Business Checking app launches Thursday, and by early next year Amex credit card users will gain the option to convert their Amex Membership Rewards loyalty points to cash within the app, the New York card network announced.

Justice Department Probes Visa’s Relationships With Fintech Firms

Oct 28, 2021

The Justice Department is scrutinizing Visa Inc.’s relationships with large financial-technology companies as part of its antitrust investigation of the card giant, according to people familiar with the matter. Antitrust investigators are looking into the financial incentives that Visa gave Square Inc., Stripe Inc. and PayPal Holdings Inc., the people said. Investigators want to know if those deals kept the payments firms from using other card networks or money-movement technologies, the people said.

Bakkt's stock surges on Mastercard, Fiserv deal to broaden use of crypto in payments

Oct 27, 2021

Cryptocurrency exchange Bakkt stock soared on Monday, after announcing a partnership with Mastercard (MA) to offer crypto debit and credit cards, making it easier for consumers to pay using digital coins. Via Mastercard and Bakkt (BKKT), businesses and banks will be able to issue their own branded crypto debit and credit cards to consumers who want them. Holders can use bitcoin purchased through Bakkt with the card, or link to a fiat-based funding source, and receive bitcoin rewards.

Data fintech Plaid takes a fresh stab at payments

Oct 27, 2021

The financial data company Plaid is betting it can serve a demand for payments directly between bank accounts, a type of transaction that could reduce the need for cards. Plaid on Thursday launched a program that pairs Plaid's technology with a network of partners to facilitate consumer and business payments funded by bank accounts. Nearly 50 companies in Europe and North America are in the network, including Checkout.com, Marqeta, Currencycloud, Square, Dwolla, Galileo, SoFi, Railsbank and Silicon Valley Bank.

The CFPB’s Order Asking for Payments Data From Six Big Tech Companies Stokes Controversy

Oct 22, 2021

The Consumer Financial Protection Bureau order handed down Thursday that asks Google, a unit of Alphabet Inc., Apple Inc., Facebook Inc., Amazon.com Inc., Square Inc., and PayPal Holdings Inc. to turn over information about their payments products, plans, and practices has industry observers lining up on both sides of the fence. Some experts are of the opinion that the CFPB’s order, the first major action under its new executive director Rohit Chopra, is an indication the agency intends to take a harder regulatory stance under Chopra.

Square, Goldman, Capital One: Big names crash buy now/pay later party

Oct 21, 2021

Buy now/pay later — pioneered largely by fintechs such as Klarna, Afterpay and Affirm — has become a global phenomenon. The surge in demand has begun to draw the interest of card issuers, commercial banks and payment companies, which are also worried about the threat installment lending poses to their businesses. Some are entering the market through acquisition or partnership. Others are adapting existing credit and loan offerings to the popular pay-in-four model. Whatever their approach, these nine companies are planting a flag in the BNPL market.

Is PayPal pining for Pinterest?

Oct 21, 2021

Digital payments giant PayPal is reportedly contemplating an acquisition of social media and shopping platform Pinterest, potentially creating a marketplace juggernaut. The $45 billion deal turns on San Jose, California-based PayPal offering $70 a share for Pinterest, ladling a 25% premium on Pinterest’s stock, according to a report from Bloomberg, citing unnamed sources. A spokesperson for San Francisco-based Pinterest declined to comment. A spokesperson for PayPal didn't respond to a request for comment.

How GoDaddy became a payment facilitator

Oct 20, 2021

GoDaddy's web management platform hosts 20 million small merchants, a base the company hopes will be attracted to use it — and not banks or fintechs — to handle online payments. "Payments are central to what's happening now," said Greg Goldfarb, vice president of commerce products for GoDaddy. "We want GoDaddy to enable businesses to sell anywhere, whether that be online or in person."

The Merchant Advisory Group

Driving positive change and innovation in the payments industry that serves the merchants interest through collaboration, education, and advocacy.