Technology & Payments

Mar. 14, 2025: Technology & Payments Articles

Senate Votes To Scrap CFPB Oversight of Big Tech Payment Apps

FinExtra

The US Senate has voted to overturn a Consumer Financial Protection Bureau rule that would give the watchdog oversight of tech giants, such as Apple, Google and X, that offer digital payment apps and wallets.

Voting along party lines, the Senate backed a Congressional Review Act resolution introduced by Republicans Pete Ricketts and Mike Flood. It still needs to pass in the House of Representatives.

Finalised late last year, the CFPB rule is designed to ensure that the big nonbank players follow federal law just like large banks, credit unions, and others already under its supervision. In addition to the likes of Google, Apple and PayPal, it would likely impact X, which has outlined plans to add payment services this year.

X owner Elon Musk has been leading the Trump administration’s charge against the CFPB through the Department of Government Efficiency (DOGE). Last month he posted “CFPB RIP” with a tombstone emoji on his site. The CFPB had argued that the rule was necessary because the likes of Apple Pay and PayPal have gained significant market share in recent years without receiving the same regulatory scrutiny and oversight as traditional FS players.

Explaining his efforts to scrap the rule, Senator Ricketts says: “This one-size-fits-all solution in search of a problem unnecessarily expands the CFPB’s authority. Our legislation eliminates barriers to innovation, cuts red tape, and supports our job-creators.” Read more

Industry Survey Reveals Current Digital Technologies Adoption Rates

Tim Yalich, Wolters Kluwer/CUSO Magazine

82% Say Fully Digital Experience Is Important, Yet Only 9% Currently Offer a Full Suite of Digital Lending Experiences

Wolters Kluwer, a global leader in professional information, software solutions, and services, recently released the results of an industry survey of credit union executives that takes the pulse of the current environment for the adoption rate of digital transformation of back-office documents and workflow automation.

The online survey took place during the first week of May and was presented to more than 3,000 credit union executives across the U.S. The questions aimed to uncover what percentage of credit unions in the country are currently using digital tools for lending and other internal processes. However, the survey results illustrate a significant competitive gap amongst credit unions adopting and operating fully digital environments.

Most believe it’s important, but lack means
The majority of credit union executives (36%) said they are currently leveraging digital strategies and tools for digital lending experiences for members and align with internal digitized workflows. Another 32% said they offer basic digital lending (online banking) experiences for members.

Even though 82% said it is either “somewhat” or “very” important to create a fully digital experience, less than 10% of respondents (9%) said they currently offer a full suite of digital lending experiences, including banking and loan applications online. Read more

House Bill Seeks to Improve Accuracy in Improper Payment Reporting

Dave Kovaleski, Financial Regulation News

A bipartisan group of lawmakers are sponsoring a bill that seeks to strengthen transparency and accuracy in improper payment reporting.

The Improper Payments Transparency Act (H.R. 1771) would direct the President’s budget request to include the amounts and rates of improper payments at each executive agency. It would also direct the budget to have a detailed explanation of trends, and a summary of any corrective actions taken to address improper payments.

Including this data in the budget would correct the gaps in improper payment reporting. That, in turn, would streamline funding to essential government programs and reduce waste.

“Government waste and fraud continue to drain taxpayer dollars at an alarming rate, undermining public trust and fiscal responsibility. I’m proud to reintroduce this common sense, bipartisan bill to increase transparency and combat improper payments,” Rep. Rudy Yakym (R-IN), one of the bill’s sponsors, said. “The American people deserve full transparency and accountability in how their hard-earned money is spent, and this legislation is a crucial step toward ensuring responsible stewardship of taxpayer funds.”

The bill I cosponsored by Reps. Jack Bergman (R-MI), Jimmy Panetta (D-CA), and Scott Peters (D-CA).

Since 2003, the federal government has made $2.8 trillion in improper payments. In fiscal year 2023, 14 federal agencies reported a total of $236 billion in improper payments across 71 government programs. Read more

Robinhood Paying $29.75 Million to End US Regulator’s Probes

Jonathan Stempel, US News/Reuters

Robinhood Markets, the online trading platform, agreed to pay $29.75 million to resolve several Financial Industry Regulatory Authority probes into its supervision and compliance practices, including failure to respond to “red flags” of potential misconduct.

The brokerage regulator said on Friday that Robinhood will pay a $26 million civil fine and $3.75 million of restitution to customers.

FINRA accused Robinhood of violating “numerous” rules, including a failure to implement reasonable anti-money laundering programs that caused it to miss suspicious or unauthorized trading and hackings of customer accounts.

It also said Robinhood failed to properly supervise social media influencers who promoted the company, or respond to several warnings of delays in processing trades. FINRA said the latter turned into a “severe” problem in January 2021. Late that month, Robinhood restricted trading in “meme” stocks such as GameStop and AMC Entertainment Holdings.

Restitution will go to customers who were not informed about Robinhood’s practice of “collaring” market orders, which led to some trades being canceled and reentered at inferior prices. Robinhood did not admit or deny wrongdoing in agreeing to settle, and said it has remediated the problems, which date back to 2014. Read more

Mar. 7, 2025: Technology & Payments Articles

In A Win for Silicon Valley, Senate Votes to Overturn Key Payments Regulation That Could Benefit Elon Musk

Leo Schwartz and Jessica Mathews, Forbes

The Senate has voted to overturn key regulations that granted the Consumer Financial Protection Bureau supervision over payment services operated by platforms such as PayPal, Google, and Apple.

The largely party-line 51-47 vote on Wednesday is part of a broader campaign by the Trump administration to defang the CFPB, an agency created through the landmark Dodd-Frank financial reform of 2010 and championed by progressives like Sen. Elizabeth Warren (D-Mass.) Sen. Josh Hawley (R-Mo.) was the only Republican joining Democrats in opposing the resolution.

While the legislation must still go through the House for a vote, its passage in the Senate is a key step towards reversing the Biden-era rule, which was finalized in November. It’s a key win for trade groups representing Silicon Valley, which have long criticized the CFPB, alleging the agency had overstepped by establishing its own regulatory authority over digital payment apps like Venmo and Apple Pay.

Consumer protection advocates have raised concerns about a major conflict of interest involving any rollback. Elon Musk’s social media platform X plans to enter the payments space later this year, while Musk, through the Department of Government Efficiency, is overseeing the campaign to gut the CFPB. Read more

House Bill Seeks to Improve Accuracy In Improper Payment Reporting

Dave Kovaleski, Financial Regulation News

A bipartisan group of lawmakers are sponsoring a bill that seeks to strengthen transparency and accuracy in improper payment reporting.

The Improper Payments Transparency Act (H.R. 1771) would direct the President’s budget request to include the amounts and rates of improper payments at each executive agency. It would also direct the budget to have a detailed explanation of trends, and a summary of any corrective actions taken to address improper payments.

Including this data in the budget would correct the gaps in improper payment reporting. That, in turn, would streamline funding to essential government programs and reduce waste.

“Government waste and fraud continue to drain taxpayer dollars at an alarming rate, undermining public trust and fiscal responsibility. I’m proud to reintroduce this common sense, bipartisan bill to increase transparency and combat improper payments,” Rep. Rudy Yakym (R-IN), one of the bill’s sponsors, said. “The American people deserve full transparency and accountability in how their hard-earned money is spent, and this legislation is a crucial step toward ensuring responsible stewardship of taxpayer funds.”

The bill I cosponsored by Reps. Jack Bergman (R-MI), Jimmy Panetta (D-CA), and Scott Peters (D-CA).

“I’m proud to join Rep. Yakym in introducing this vital legislation to rein in out-of-control spending of taxpayer dollars in Washington,” Bergman said. “To get our country back on a fiscally responsible track and ensure Americans are keeping more of their hard-earned money, we must quickly eliminate waste within the federal government.” Read more

Leveraging the Payment Card to Combat Friendly and Malicious Fraud

Amanda Gourbault, Payments Journal

‍The Evolution of Card Payments and the Rise of Online Transactions
In the late 1990s, card payments entered a new era with the internet’s mainstream adoption. Traditionally, cardholders would swipe or dip their cards into a point-of-sale (POS) terminal in-store. This allowed some form of authentication to be carried out. However, the rise of e-commerce introduced card-not-present (CNP) transactions, where cardholders enter their details online without a physical interaction. This made it impossible for merchants to carry out in-person forms of authentication.

The Role of Zero Liability Policies in Online Card Payments
One factor that likely encouraged consumers to embrace online card payments was the protection offered by the Zero Liability policy. This ensured that cardholders were not held responsible for unauthorized charges should the card be used fraudulently, or the goods arrive incomplete or not at all. If an issue arises, consumers can initiate a chargeback process, requiring the merchant to prove that goods were delivered, and that the transaction complied with all relevant rules and regulations to avoid liability. Under certain circumstances, the liability for a fraudulent transaction will shift from the merchant to the card-issuing bank (a so-called liability shift). However, it is important to note that regardless of who is ultimately held liable, managing the chargeback process costs the issuer an average of $37 per disputed transaction.

The Surge in Transaction Disputes and Its Impact
Recently, there has been a notable increase in transaction disputes. In 2023, U.S. consumers disputed approximately 105 million charges worth an estimated $11 billion, with this number expected to rise by 40% by 2026. This surge can partly be attributed to the increasing simplicity of disputing transactions. 36% of US consumers view the ability to dispute charges in their mobile banking app as “extremely valuable.” Read more

75% of Financially Pressured Consumers Turn to Pay Later Plans

PYMNTS.com

When consumers learn about pay later availabilityThe use of pay later plans has grown as consumers seek more flexible payment options.

The PYMNTS Intelligence eBook “10 Impact Statements: The 2024 Pay Later Report” explored how these installment plans are being used, who benefits from them and the reasons behind their adoption. The findings revealed key trends in consumer payment preferences and offered insights into the future of financial flexibility.

Financial Struggles Drive Pay Later Adoption
For many consumers, pay later plans are a tool for managing day-to-day expenses. Among those living paycheck to paycheck, 75% have turned to these plans within the past year. This trend is not limited to low-income households. Even consumers earning more than $100,000 annually are turning to installment plans, signaling that these options appeal across all financial levels.

Consumers who face difficulty paying bills were four times more likely to use these plans than those with a more stable financial situation, per the eBook. This suggests pay later options are not only a financial lifeline, but also a preferred choice for many consumers looking to manage their budgets.

Convenience and Rewards for Financially Stable Consumers
While pay later plans are often a necessity for those facing financial hardships, they are also appealing to more financially secure individuals. According to the eBook, 18% of non-paycheck-to-paycheck consumers used these plans primarily for convenience, with 15% also seeking rewards. Read more

Feb. 28, 2025: Technology & Payments Articles

How Regulators, Banks, and Fintechs Can Prevent Another Synapse

Ian Moloney, American Banker

Last spring, innovative banks, fintechs, and regulators were shaken by the collapse of prominent fintech middleware provider, Synapse.

What ensued was a maelstrom of finger-pointing, legal proceedings, and regulatory activity, ultimately leaving the industry and consumers confused and, even worse, Synapse customers without access to their funds. Nearly a year later, fintech companies, banks, and regulators must all ask themselves if they have done enough–or what more is needed–to avoid another Synapse-level disaster.

To avoid the next Synapse, three key factors must be understood. First, banks partnering with fintechs hold the ultimate liability for the activities of the fintech, even though contractually they share this responsibility. Second, banks and fintech companies should focus due diligence on whether they are a good fit rather than on a speedy onboarding process. Last, having the right regulations, people, and processes in place is essential for robust, effective risk management.

Critically important to note, however, is that in the wake of the Synapse disaster, responsible innovative banks and fintech companies have doubled down on these three points. Operationally, this means conducting proper suitability analyses and holistic qualitative and quantitative risk assessments. While these activities create additional tasks for both parties and extend the onboarding timeframe, long-term partnership success is far more preferable and prudent than the most expedient go-to-market strategy. Read more

7 Fintech and Payments Trends That Will Reshape Retail Banking in 2025

David Evans, The Financial Brand

A new report offers a comprehensive look at key payments concepts that will impact retail banks, both in the near-term and longer. 

Executive Summary
Retail banking is approaching a transformative crossroads with emerging fintech innovations set to disrupt traditional payment ecosystems in 2025. Major changes include Apple’s opening of NFC access creating unprecedented wallet competition, behavioral biometrics shifting to passive ID verification, and virtual cards revolutionizing B2B expense management. Regulatory developments including PSD3 readiness and regtech adoption will be critical priorities.

Forward-thinking banking executives must prepare for increased wallet competition, embrace “glocal” payment solutions, strengthen fraud prevention through AI implementation, and develop sustainability-focused offerings to maintain competitive advantage in this rapidly evolving landscape.

Key Takeaways

  • Apple’s opening of its NFC ecosystem will trigger intense digital wallet competition, with traditional banks needing to develop competitive wallet offerings or risk market share erosion.
  • Virtual cards will transform B2B expense management with instant issuing, spend limits, and transaction tracking capabilities that dramatically reduce fraud and manual processing.
  • Behavioral biometrics used alongside static verification will create multilayered security systems with improved fraud detection and customer experience.
  • Banks must embrace “glocal” payment solutions and orchestration platforms to effectively serve customers across various regions and payment preferences. Read more
Durbin to Reintroduce Credit Card Competition Bill

Lynne Marek, Payments Dive

The Illinois senator plans to reintroduce the Credit Card Competition Act proposal in a bid to increase competition for Visa and Mastercard.

Senate Minority Whip Dick Durbin plans to reintroduce the Credit Card Competition Act bill sometime “soon,” according to a spokesperson for his office. It’s not clear whether the Democrat will strike an alliance again on the legislation with Republican Sen. Roger Marshall, but that would seem likely, given Marshall’s strong support previously for the bill as a co-sponsor. A spokesperson for the Kansas Republican didn’t immediately respond to a request for comment.

The bill would land this year in a changed political environment with President Donald Trump now in the White House and the Senate also held by a Republican majority, giving that party control of Congress. Durbin first introduced the legislation in 2022. One of a handful of Senate Republicans who backed the bill previously was J.D. Vance, who could throw his weight behind the bill as vice president. Trump has also proposed reform for the industry by suggesting during the presidential campaign that credit card interest rates be temporarily capped at 10%.

Nonetheless, Vance reportedly had backed away from the bill at one point last year as he campaigned during the run-up to the presidential election, according to a Politico report. If the bill were to pass, banks that issue credit cards would have to ensure that for every consumer swipe there was a network available to merchants for routing the payment that wasn’t Visa or Mastercard. By requiring at least one alternative, it would presumably inject competition into a market the two networks dominate. Read more

Despite Popularity in Europe, Pay-by-Bank Still Lags in North America

Tom Nawrocki, Payments Journal

Pay-by-bank payment methods appeal to less than one-third of Canadians, except among newcomers to the country. This trend reflects a broader pattern where pay-by-bank has gained popularity worldwide—yet remains less prevalent in North America.

Data from Payments Canada found that only 29% of Canadians find pay-by-bank appealing, while 33% do not. The only demographic where more than half (53%) of respondents showed interest was newcomers to Canada. Pay-by-bank allows consumers to make purchases directly from their bank account without manually entering account and routing numbers. However, in the U.S., credit and debit cards have long been the preferred payment methods for both online and in-store purchases.

In contrast, pay-by-bank adoption has been strong across many European markets. It ranks among the top three payment methods in the UK, Netherlands, Finland, Spain, and Germany. Visa is set to launch an account-to-account pay-by-bank service in the UK and Europe this year but has yet to announce any plans for North America.

Generational Gaps
There’s a notable generational divide in the adoption of pay-by-bank services. Payments Canada found that while 34% of younger Canadians are drawn to the service, that figure drops to 22% among older Canadians. Similarly, separate research from MX, which explored pay-by-bank usage in Europe, found that younger demographics were more likely to adopt the method. More than one-third of respondents ages 18 to 29 reported using pay-by-bank daily or weekly, compared to just 25% across all age groups.

Pay-by-bank payment methods appeal to less than one-third of Canadians, except among newcomers to the country. This trend reflects a broader pattern where pay-by-bank has gained popularity worldwide—yet remains less prevalent in North America.

Data from Payments Canada found that only 29% of Canadians find pay-by-bank appealing, while 33% do not. The only demographic where more than half (53%) of respondents showed interest was newcomers to Canada.

Pay-by-bank allows consumers to make purchases directly from their bank account without manually entering account and routing numbers. However, in the U.S., credit and debit cards have long been the preferred payment methods for both online and in-store purchases.

In contrast, pay-by-bank adoption has been strong across many European markets. It ranks among the top three payment methods in the UK, Netherlands, Finland, Spain, and Germany. Visa is set to launch an account-to-account pay-by-bank service in the UK and Europe this year  but has yet to announce any plans for North America.

Generational Gaps

There’s a notable generational divide in the adoption of pay-by-bank services. Payments Canada found that while 34% of younger Canadians are drawn to the service, that figure drops to 22% among older Canadians. Similarly, separate research from MX, which explored pay-by-bank usage in Europe, found that younger demographics were more likely to adopt the method. More than one-third of respondents ages 18 to 29 reported using pay-by-bank daily or weekly, compared to just 25% across all age groups.

Much of this reluctance may stem from habit. The MX study found that 78% of consumers prefer to stick with familiar payment methods. A majority of baby boomers said they would never use pay-by-bank, compared to an average of just 28% across all other generations.

Feb. 21, 2025: Technology & Payments Articles

‘There Are a Lot of Bad Actors’: Gen Z Is Finding Out the Hard Way Not to Get Their Financial Advice from Tiktok

Eve Upton-Clark, Fast Company

More young people than ever are turning to influencers for financial tips—but for some, bad advice has led to scams, IRS trouble, and costly mistakes.

The internet can be a great place to learn random life hacks and cry over anglerfish. But what about when it comes to managing your money?

According to new data from Intuit Credit Karma, 77% of Gen Z and 61% of millennials are turning to social media for financial advice. Millennials mainly seek out YouTube, Facebook, and Instagram for information, while for Gen Z, TikTok has emerged as an unlikely hub for financial advice, under the hashtag FinTok. Here, content creators such as @YourRichBFF and @JohneFinance have combined followings of millions with videos that offer tips on everything from credit card rewards to flight costs to 401ks, crunched into less than a minute.

Many finfluencers market themselves not so much on academic credentials or qualifications as on lived experience, with popular videos titles including “Money habits for a 6 figure net worth” and “How I manifested a million dollars.” Often the clips sound like solid money advice, but as is the case with anything online, if it sounds too good to be true . . . it often is.

Some have discovered this lesson the hard way. Despite the popularity of online finfluencers, 39% of Gen Z and one-third (33%) of millennials say they will never take financial advice from social media or online ever again, and doing so has negatively impacted their lives. Mistakes and poor financial decisions can be costly. For 37% of Gen Z and a quarter (25%) of millennials, they have ended up in trouble (hello, IRS audit) after taking action on financial advice from social media or online. A quarter of Gen Z and 23% of millennials also admit they’ve been scammed by bad actors pretending to offer financial guidance. Read more 

To Stamp Out Authentication-Based Fraud, Banks Want Metal Cards

PYMNTS.com/Arculus

Fraud is escalating, with 87% of banks reporting a rise in stolen credentials. Although these attacks are now the most common, current solutions are falling short. Passwords fail to address the threats of stolen credentials. Banks need stronger defenses.

In response, 77% of all banks surveyed express interest in tap-to-authenticate metal payment cards, and 55% of fraud leaders from banks mention adopting passwordless authentication as a likely step they will take to improve authentication in the next three years. These innovations aim to enhance security while also simplifying customer interactions. The fusion of tap-to-authenticate technology with metal payment cards could redefine how financial institutions (FIs) tackle fraud prevention.

These are just some of the findings detailed in “Fraud and Authentication: How Banks Are Rethinking Security and Customer Trust,” a PYMNTS Intelligence and Arculus collaboration. This edition builds off of our previous research to examine how FIs address rising fraud and evolving customer demands. It draws on insights from a survey of 200 heads of fraud and heads of product from banks. The survey was conducted from June 16, 2024, to July 2, 2024. Read more

JPMorgan Chase Plans Zelle Restrictions Due to Scam Risk

Joey Pizzolato, American Banker

JPMorgan Chase is taking new steps to curb payments made to scammers on peer-to-peer payments platform Zelle.

Starting March 23, 2025, the $4-trillion-asset bank will begin asking for additional information on payments it believes originated through contact on social media platforms and could decline or block those payments, according to forthcoming updates to its terms and conditions.

“Zelle is designed for sending money to others you know and trust, not for buying things on social media,” a JPMorgan Chase spokesperson told American Banker in an email, adding the bank wants to help its customers protect themselves from scams that originate on social media platforms.

JPMorgan Chase may request information about the purpose of a payment, the method of contact with the recipient or other details the bank “deems appropriate to assess whether your payment has elevated fraud or scam risk, or is an illegal, ineligible or improper payment,” according to the terms and conditions. Read more

BNPL Gets Boost from Bank Partnerships and Use in Credit Scoring

Earlier this year, PYMNTS Intelligence detailed that pay-later options were drawing widespread use among consumers versus payments via traditional credit cards.

The data showed that coming into the end of 2024, 56% of consumers used installment payment options in the last year. Within the various pay-later offerings, buy now, pay later (BNPL) was a standout, as 76% of BNPL users said they were highly satisfied with the experience of using BNPL to make everyday purchases and large-ticket transactions.

About 38% of consumers used BNPL, roughly at parity with those who used general-purpose credit card installment plans and above the 24% that used BNPL in the previous year. In the meantime, the use of credit card installments was static over that timeframe.

The implication, then, is that BNPL is gaining share within the pay-later sphere. Separate data showed that BNPL services appeal to those looking for immediate access to credit without long-term commitments, a factor cited by 27% of individuals.

The Consumer Financial Protection Bureau announced its own findings on BNPL last month.

“Before first-time BNPL use, consumers’ average credit card utilization rates increased, suggesting that less available credit card liquidity may encourage consumers to use BNPL,” according to a Jan. 13 press release. Read more

Feb. 14, 2025: Technology & Payments Articles

FIs Take Biometrics Approach to Battling Account Takeovers

Pymnts.com

Account takeovers are among the most insidious threats to banks and consumers.

Fraudsters use all manner of schemes to prey upon vulnerabilities and weak links that exist in the chain of interactions. Key to stealing money from accounts is the fact that criminals use advanced technology to pose as legitimate individuals, which furthers their ability to keep victims and banks from knowing they’ve been compromised.

In an interview with PYMNTS, Entersekt VP Product Development: Authentication Products Mzukisi Rusi said a multifaceted approach to fraud prevention is necessary. Central to it all is moving away from passwords, including one-time passwords, because credential attacks are still the leading cause of account takeovers.

“Banking has come a long way,” Rusi said. “Just a few years ago, passwords were the main authentication methods. But now we have biometrics, we have AI-powered fraud detection and real-time analysis to make transactions safer than ever.”

There’s a convenience factor in the mix, too, said Rusi, who added that using biometrics means consumers don’t need to remember passwords.

The Double-Edged Sword But there’s a catch.

It turns out that new banking technologies can represent a double-edged sword — where the same weapons deployed by financial institutions (FIs) can be used against them and aid account takeovers.

“Every new technology brings new risks,” said Rusi, who added that fingerprints can be stolen or duplicated. Artificial intelligence is used to generate deepfakes, giving rise to synthetic identities that bypass security checks. Most people live their lives on their phones, which have been a conduit for one-time passwords. But if an attacker can convince the carrier that a legitimate customer wants a new number (or they’ve lost their phone or want a new SIM card), those OTPs can also be compromised. Read more 

Identity Fraud for FEMA Disaster Relief Raises Questions on Timeline for Digital ID

Joel R. McConvey, Biometric Update

As regulatory bodies are stripped for parts, push for digital identity intensifies

In the worst tradition of disaster capitalism, fraudsters have targeted victims of California’s wildfires, committing identity theft to access financial assistance and other disaster relief through the Federal Emergency Management Agency (FEMA).

KTLA has the story of the Zweig family, who went to apply for aid – and discovered that their names and personal information had already been used to file an application, using an unfamiliar email address and phone number to commit identity fraud. As a result, the family has faced lockouts and delays of up to 30 days as the agency processes their fraud claim.

Judy Zweig says ID fraud is a “rampant problem” for FEMA. Stolen identities, acquired in data breaches and hacking attacks, can be modified to create fake accounts or claim benefits intended for real people. The result can be especially damaging for those, like the Zweigs, whose homes have been destroyed in climate disasters.

White House razes main consumer protection agency for financial sector
Stronger regulations are decidedly not forthcoming, with the regime in Washington currently vying to dismantle the Consumer Financial Protection Bureau (CFPB) – the primary consumer protection agency for the financial sector. As CNN puts it in a headline, “Consumer watchdog ordered to stop fighting financial abuse.” Read more

Affirm Plans to Bring Buy Now, Pay Later Debit Cards to More Users Through Deal With FIS

MacKenzie Sigalos, CNBC

Key Points

  • Affirm is partnering with fintech company FIS to bring its debit card functionality to more banks.
  • Affirm launched its own debit card in 2021, and is now extending its offering to third-party issuers for the first time.
  • In its earnings report last week, the company said its debit card now has 1.7 million active users, up more than 136% from the year-ago quarter.

Affirm, the online lender founded by Max Levchin, expanded beyond credit and entered the debit market four years ago with a card that let users pay over time. Now the company is making it possible for banks to offer that service to their customers.

Affirm, which pioneered the buy now, pay later business (BNPL), has partnered with FIS in a deal that will allow the fintech company to offer the pay-over-time service to its banking clients and their millions of individual customers.

Any bank that partners with FIS will be able to provide its own version of the Affirm Card, which launched in 2021, without asking customers to adopt a new piece of plastic. Consumers can access Affirm’s biweekly and monthly installment plans and have the money automatically deducted from their checking account.

There are approximately 230 million debit card users in the U.S., according to the Federal Reserve Bank of Atlanta. BNPL services have traditionally been tied to credit cards or standalone financing products, rather than to debit offerings. Read more

Court Battle Could Reshape Consumer Financial Data Landscape

Pymnts.com

The fight over the CFPB’s status and, in particular, the future of Open Banking Rule 1033 is on.

A Washington, D.C.-based trade group, the Financial Technology Association (FTA), is seeking to intervene in a lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB) final rule on personal financial data rights, commonly known as Rule 1033. The FTA’s move comes amid upheaval at the CFPB, raising questions about the agency’s ability to defend the rule.

The lawsuit, filed by Forcht Bank, the Kentucky Bankers Association, and the Bank Policy Institute, challenges the CFPB’s Rule 1033 finalized on Oct. 22. The plaintiffs argue that the CFPB exceeded its statutory authority and acted arbitrarily in creating the rule, which requires banks to share consumer data with consumers and authorized third parties through developer interfaces. They specifically take issue with the CFPB’s interpretation of the term “consumer,” the requirement to disclose payment initiation information, the delegation of authority to private standard-setting organizations (SSOs), and the ban on banks charging access fees.

The FTA disagrees. It argues that its members, including companies like Plaid, Ribbit Capital, Stripe and Wise, would be directly affected by a judgment vacating the rule. These companies rely on the ability of consumers to access and share their financial data to provide services such as streamlined access to credit, new payment options, and financial advisory services. The FTA contends that the rule fosters competition, innovation and greater consumer choice in the financial services market.

The CFPB’s final rule largely mirrored its proposed rule from Oct. 31, 2023, which the FTA had supported. The FTA has stated that it supports the incorporation of a recognized SSO to issue qualified industry standards because prescriptive technical requirements issued by the regulator would fail to keep pace with technological change. Read more

Feb. 7, 2025: Technology & Payments Articles

Fico to Add BNPL Data to Credit Scores

FinExtra

Following a year-long study with Affirm, Fico is planning to add buy now, pay later data to its credit scores.

BNPL loans have become increasingly popular at the checkout in recent years, prompting fears about rising consumer debt, but data on how the nascent instrument’s impact on credit scores has so far been scant.

“Given the growing popularity of BNPL loans, understanding how to effectively capture the benefit that BNPL data can have on Fico Scores is crucial to all stakeholders in the credit ecosystem,” says Ethan Dornhelm, VP, scores and predictive analytics, Fico.

The new study compares the Fico Scores of more than 500,000 consumers who opened at least one new Affirm BNPL loan against a benchmark population of people without an Affirm loan. Fico simulated the inclusion of these loans into credit reports, and then examined the potential impact to resulting credit scores.

The simulated inclusion of BNPL data into consumers’ credit files shows Fico Score impacts that were generally consistent with the opening of a new account – within less than +/- 10 points for over 85% of the consumers in the study.

There are higher scores or no score changes for the majority of consumers in the study who had recently obtained five or more Affirm BNPL loans. The impacts on Fico Score predictiveness ranges from modest improvement to no adverse impact, across a range of different use cases.

Says Dornhelm: “Our findings show that the inclusion of BNPL data via our innovative treatment can drive score increases for some consumers, while improving model risk performance for lenders.” Read more

Biometrics, Tokenization to Replace Credit Card Numbers by 2030

Lu-Hai Liang, Biometric Update

Click to pay push part of Mastercard’s plan to quash identity theft, online fraud

Mastercard intends to do away with the 16-digit number on their credit and debit cards and replace them with on-device biometrics and tokenization as part of a plan to quash identity theft and fraud.

In Australia the initial rollout of these new numberless cards will be via a partnership with AMP Bank, but other banks are expected to follow over the next 12 months.

Mastercard recently committed to phasing out manual card entry and static passwords by 2030 in favor of tokenization and biometrics, and to replace traditional authentication methods with on-device biometrics for users to authenticate purchases without exposing personal data online.

In a piece for The Conversation, the authors observed that we could ultimately be heading towards the end of cards. It is a fact that hackers often target businesses such as travel or hospitality operators or online companies. For example, Ticketmaster was hacked in a major breach last year resulting in several hundred million customers’ personal details accessed illegally. This means credit card numbers, among other sensitive information, are leaked.

Removing the numbers prevents fraudsters from using your card when they don’t have the physical card, which is known as card-not-present transactions. Read more 

Visa Leans into A2A Payments

Lynne Marek, Payments Dive

The network titan is pursuing account-to-account payment services as a way to expand beyond its card-based dominance in the market.

Visa is pitching account-to-account payment services as it seeks to capture business in payment flows beyond its card network sweet spot.

The biggest U.S. card network remains ready to offer A2A services in the United Kingdom this year, before rolling it out in other parts of Europe and elsewhere, Visa CEO Ryan McInerney said during the company’s fiscal first quarter earnings webcast Friday. The company talked about the U.K. plans last September too.

“We still are on track to launch Visa A2A in early 2025,” McInerney said. “After we announced it, we’ve done what we always do, which is have a bunch of great conversations with clients and partners and regulators in the U.K.”

Initially, the A2A offering will be focused on bill-pay services for merchants and consumers, the CEO said, noting that the company has spotted demand for the types of rules and processes that Visa has in payments.

The move by Visa is noteworthy because the card behemoth has increasingly leaned into developing other types of payments services as the card market in the U.S. and elsewhere matures. Read more 

‘Seismic Shift’ Will Define FinTech Future

Pymnts.com

The last half-decade of the 2020s looms, and for FinTechs and financial services in general, the dust has just started to be kicked up on Capitol Hill and in the White House in terms of new regulations and even a reshaping of the regulatory agencies themselves.

Consumer Financial Protection Bureau Director Rohit Chopra was removed, and there is a bill in Congress afoot to abolish the agency itself. The Federal Deposit Insurance Corp. issued a slew of consent orders that delve into AML and KYC.

Thredd CEO Jim McCarthy told Karen Webster that a seismic shift will define the sector.

“We’re finally seeing what I would consider to be the real washout,” McCarthy said. “…It’s going to be a case of winners and losers.”

A key reality that will separate the winners from the losers is that “people are willing to pay for value,” he said. “Payments are at the heart of commerce, and people need the ability to obtain liquidity, no matter if it’s a small business or a consumer.”

What regulators are overlooking is that end users are willing to pay for access to something they cannot get through traditional channels — and will use new and innovative services and products with responsibility.

For forward-thinking firms, however, there’s a silver lining. When it comes to innovation and meeting needs that have thus far been unmet, “where there’s a will there’s a way,” McCarthy said. There’s some dry powder on the sidelines in terms of venture capital, and that money will be put to work but only for the companies that have the right business models and a clear path to profitability. Read more

Jan. 31, 2025: Technology & Payments Articles

Apple, Google Coalition Seeks to Skirt Payments Rule

Patrick Cooley, Payments Dive

Tech advocacy groups argue the tech giants should not be subject to a Consumer Financial Protection Bureau rule because they aren’t payment companies, according to a lawsuit filed this month.

A coalition of tech companies that represent giants Apple and Google want to stop the Consumer Financial Protection Bureau from regulating their digital wallets in the same way it regulates payment companies.

Digital wallets like Apple Pay and Google Pay do not directly pay for goods and services and should therefore not be subject to an interpretive rule the CFPB finalized last November, TechNet and NetChoice — organizations that advocate for tech firms — said in a lawsuit filed Jan. 16.

The bureau’s interpretive rule — which went into effect Jan. 9 — said that providers of digital wallets and payments apps that involve at least 50 million transactions annually are subject to the agency’s supervision. The rule gives the bureau the right to supervise tech companies’ use of consumer data, monitor how they handle fraud and complaints, and scrutinize account shutdowns.

“There are fundamental differences between the regulatory standards implicated by funds transfer functionalities and wallet functionalities, given that the latter commonly do not store funds and merely transmit payment credentials (such as a consumer’s credit card information) to facilitate a purchase from a merchant,” the complaint filed in the U.S. District Court for the District of Columbia said. Read more

Financial Advice on Social Media Is Growing. And Risky.

Isabella Kwai, New York Times

Everyday investors are turning to financial influencers, or ‘fin-fluencers,’ to learn how to manage their finances, but experts say rooting out misinformation is challenging.

Amy Ryan was panicking about her savings when she went online for advice. It was April 2020, and the stock market had plunged, draining a nest egg that she had built up over the years.

Ms. Ryan, a 43-year-old sales engineer from Wales, had dumped her portfolio in the crash and was afraid of losing even more. Looking for guidance, she found Kevin Paffrath, a prolific finance influencer who discussed the economy and investing on his Meet Kevin YouTube channel.

“At the time, I was not really well educated in buying and selling shares,” she said, adding that she felt reassured that Mr. Paffrath had about one million followers. “I trusted this guy.”

Social media is an appealing way for inexperienced people like Ms. Ryan to learn how to manage their investments. Content creators are branding themselves as money experts, endorsing a range of financial products from credit cards to cryptocurrencies, and earning a sleek moniker: fin-fluencers. Read more

  • Related Reading: Could Walmart Replace Your Bank (And Should It)?

    This big box store offers more than just household goods. For many, Walmart is a one-stop shop for groceries, clothes, and other household items — and in some cases, banking. While it isn’t a bank itself, the Walmart MoneyCenter offers a wide variety of financial services at your local Walmart store in partnership with Green Dot Bank, an FDIC-insured bank.

With Illinois Interchange Ban Under Injunction, Banks and Merchants Await Next Move

Pymnts

A battle in Illinois over interchange fees could influence other states to decide whether these fees should be reshaped or banned.

Banks charge each other interchange fees to cover the processing costs of credit and debit card payments. When a consumer buys goods or services with a card, the merchant gets the remaining amount of the transaction excluding the interchange fees.

Illinois’ Interchange Fee Prohibition Act was signed into law in June and was slated to come into effect in July, but a federal judge ordered a preliminary injunction of the law in December.

The Illinois House of Representatives introduced a bill Tuesday (Jan. 28) with just a few lines of text, including: “The Interchange Fee Prohibition Act is repealed.” Should the bill make it through the state chambers and be signed by the governor, the repeal would become “effective immediately.”

The path toward what happens next will be paved through legislation and/or the courts, and although the prohibition has not become a reality, it’s worth noting what would happen. In broad strokes, banks would be prohibited from charging interchange fees on a slice of credit and debit transactions, specifically the state and local tips and taxes levied on goods and services.

“An issuer, a payment card network, an acquirer bank or a processor may not receive or charge a merchant any interchange fee on the tax amount or gratuity of an electronic payment transaction if the merchant informs the acquirer bank or its designee of the tax or gratuity amount as part of the authorization or settlement process for the electronic payment transaction,” the act stated. Read more

OPINON: So Long, Challengers? Here’s Why Neobanks Matter Today More Than Ever

Raman Korneu, Finextra

I recently found myself at a financial event, surrounded by representatives of big, conventional banks. You know the ones – massive institutions with even bigger egos. They’re like whales in the finance ocean, moving slowly but dominating their territory. As a digital bank CEO (we are at myTU those who are called “challengers”), I had a simple request: “Can we open an account?” The answer, again and again, was no.

“We don’t open accounts for financial businesses or neobanks,” they said.

After a few drinks, an advisor of one of such banks pulled me aside and said, “We know you’re a great company – innovative, interesting, etc. But there’s no way we’re going to acknowledge the competition.”

This is where we are in 2025. Legacy banks still lobby against innovation, clinging to outdated models while pretending fintech doesn’t matter. Moreover, traditional banks have questioned the sustainability of neobanks’ business models and criticized them for allegedly having lax financial crime controls. After Starling Bank was fined £29 million by the Financial Conduct Authority for inadequate financial crime systems, the voices grew louder with articles like “So long, challengers”.

But the numbers tell a different story. The numbers don’t lie. Read more

Jan. 24, 2025: Technology & Payments Articles

FIS Entangled in Capital One Outage Over Days

Dan Ennis, Payments Dive

Fidelity National Information Services blamed a local power loss and hardware failure for the issue, which Bank of Oklahoma said affected more than two dozen financial institutions.

A local power loss and hardware failure at Fidelity National Information Services appears to be at the root of a several-day service interruption that affected thousands of Capital One customers who were unable to access their direct-deposited paychecks, see their account balances or log in online.

Jacksonville, Florida-based FIS, in a statement Monday, confirmed the “system outage,” which began Wednesday, adding that it was not the result of any cyber incident. It also noted that affected clients “are back to processing business as usual.”

Capital One and Tulsa-based Bank of Oklahoma were among more than two dozen banks affected by the outage, CBS News reported. “Our digital platforms are back online, and balances should be displayed correctly,” the bank wrote Friday in a statement on its website. “We will refund fees incorrectly assessed on accounts impacted by the outage.”

The outage comes at a tenuous time for McLean, Virginia-based Capital One, which is trying to present itself to regulators as a worthy acquirer of the credit-card network Discover. The bank’s shareholders are set to meet next month to vote on the acquisition, which has received a green light from Delaware’s financial regulator. The companies have said they expect the transaction will close by March.

In another potential blow, though, the Consumer Financial Protection Bureau last week sued Capital One, alleging the bank “cheat[ed] millions of consumers out of more than $2 billion in interest” by failing to tell them of a higher-yielding savings account product. Read more

OPINION: Avoiding the Tyranny of Open Banking

Allyn VanDyk, CU*Answers/CUSO Magazine

Tyranny [ tir–uh-nee ] is often defined as the arbitrary or unrestrained exercise of power. In addition, most people reading that definition will assume that power belongs intrinsically to an outside force. However, what if that outside force has that power only because we cede it that power through lack of analytical thought and careful management of expectations?

Open banking uses APIs to share your financial account data and give you access to innovative financial services. More and more, online banking offerings are being expanded, not by native development of new functionality, but by adding third-party tools, often at the specific request of credit unions. Consequently, online banking may be less like a custom-built house produced by a single builder and more like a modular home where the sections are produced by separate designers who have no idea what the adjacent sections function like or look like.

Before you recoil in horror, picturing an ancient castle that seems like it might have housed Frankenstein’s Monster, you should realize that a good online banking vendor can do a lot to mitigate some of the ugliness that I have described. However, that is primarily at the cosmetic level. Since most of the security-related requirements will be determined by the vendor, it will be harder for the online banking vendor to mitigate underlying flaws without simply refusing to do the project completely. As I will explain below, this is an area where your initiative and analytical thought can help you manage expectations and avoid aspects of the tyranny of open banking.

The first question you need to ask yourself before you thrust yourself and those who depend on you into the brave new world of open banking is this: Is this a worthwhile thing to do? As you can see from the question, it is akin to a cost-benefit analysis. There are a minimum of six questions to ask yourself and your leadership team as you seek to answer this question, and each have its own set of questions to help provide answers. The list is meant to be a catalyst to your analysis rather than be exhaustive. Read more 

Behind the Report: How Banks and FinTechs Can Capitalize on the New Money Mobility Opportunity

PYMNTS.com

The money mobility ecosystem PYMNTS detailed in its new background report “The Modern Money Mobility Ecosystem” has been the topic of several research projects over the past year. In today’s on-demand economy, consumers expect instant gratification in every aspect of their lives — and financial services are no exception. Money mobility is no longer just about speed; it’s about providing a seamless, user-friendly experience that empowers individuals and businesses to manage their finances effortlessly. From mobile wallets to real-time payments, the report — and the following article — explores how innovation is reshaping the way we move money and the implications for the future of finance.

Basically, as new U.S. consumer account openings hit record levels, the financial sector is moving from simple transactions to a more complex, interconnected ecosystem known as money mobility where funds flow seamlessly between accounts through a network of banks, FinTechs, and technology providers.

According to The Modern Money Mobility Ecosystem, the meteoric rise in consumer demand for a range of financial services — evidenced by the 200 million new accounts opened last year reported by the Federal Reserve Bank of New York, representing one new account for 70% of all adults — has set the stage for a major change in how funds move across accounts.

This development allows businesses to strengthen customer relationships through instant payouts, virtual accounts and seamless integrations that are redefining the payments and financial services landscape.

At the core of this progress is the concept of money mobility, which is defined by four core components: the payment itself, the account, the mechanisms for funding (the movement of money in and out), and the processes for clearing, settling, and reconciling funds. These elements combined enable a more efficient, interconnected system, driving deeper engagement between businesses and their customers. Read more

PODCAST: Why Painless Payouts Matter

PaymentsJournal

The buzz is growing louder. Many merchants are tired of navigating intricate payout processes that drain valuable time and resources. They want to be rid of payment headaches and welcome more seamless efficiency. Merchants demand a cutting-edge payout solution that helps them focus on their business while giving them the peace of mind that the complexities of their payout operations have been managed.

A Personalized Payouts Experience
Payouts have historically taken a back seat to adding new payment acceptance functionality for consumers and the resulting experience can be fragmented and inefficient. Each market has its own set of payout rails that can be leveraged by domestic merchants but trying to cobble together a unified, global payout experience that allows for personalization has been a substantial challenge for organizations.

In a recent PaymentsJournal podcast, John McNaught, Senior Vice President and General Manager of Payouts at Worldpay, and Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, discussed the importance of payouts, the ways merchants can customize the customer experience and the innovative tools that can optimize payouts.

No Longer Ignored
One of the main reasons there hasn’t been substantial headway in the payouts space is that it hasn’t been a high priority for many organizations. While merchants have fiercely competed over the shopper checkout experience, payouts have often been deprioritized and accomplished using traditional systems.

Listen or read more here.

Jan. 17, 2025: Technology & Payments Articles

Can GenAI Restore the ‘Humanity’ in Banking that Digital Has Removed?

Steve Cocheo, Senior Executive Editor at The Financial Brand

Remote banking via mobile apps and the web made service more immediate and convenient. But increased digitization also excised much of the human touch that connected customers with their banks. Accenture’s Michael Abbott thinks increased use of generative artificial intelligence can re-animate the relationship for both customers and institutions.

Consultant Michael Abbott knows an Irish banker who recently received a deposit of €150,000. The funds arrived in the man’s account digitally and things might have ended there, just an unremarked large deposit.

As it happens, Abbott’s banker friend wound up talking to the customer. He learned the man’s father, a commercial fisherman, had died, and the inheritance had come to €150,000. He had no idea what he ought to do with the money and simply stuck it in his account.

Had the deposit not surfaced to the banker’s attention, there might never have been any timely human-to-human communication, and the customer’s funds would have sat, comparatively idle, in the account, for who knows how long. Or the funds could have left if another provider had dangled something more attractive. Abbott blames digitization for this kind of blindness.

“We’ve made banking functionally correct, but emotionally devoid,” says Abbott, senior managing director and global banking lead at Accenture. Digitization hardened banking customer journeys into channels that granted efficiency but often removed humanity and connective thinking from the equation, Abbott continues.

“Customers don’t have conversations anymore, the way they did when they routinely did their business in branches,” says Abbott. Digitization became a barrier.

A new study from Accenture, “Banking: The Future Is Back,” notes that digitization provided transactional service, but left alienated customers craving more. “Most of those who use the bank’s chatbot find it quick and responsive but infuriatingly limited,” the report says. Or they found themselves in telephone tree hell, struggling to get to a human. Read more

How Will Online Payments Change in 2025? Exploring 3 Main Trends

Dmytro Spilka, FinExtra

The world of online payments continues to adapt as technology advances, consumer expectations rise, and the need for security strengthens.

Now that we have settled into 2025 and look to the future, there are expected to be some significant changes that transform digital payments as we know them. As providers look to tighten up identity verification methods and introduce cryptocurrencies as an accepted payment method, this article will discuss three of the main trends that the year ahead is expected to bring.

The Use of Biometrics For Identity Verification
Identity fraud is one of the main components of cybercrimes and was projected to cost approximately $9.5 trillion worldwide during 2024.

As consumers are becoming more aware of their online security, traditional verification methods such as passwords and PINs are proving to not be enough. As online scams and viruses become more and more advanced, fraudsters are learning how to hack into devices and override digital verifications.

Biometrics offer a higher level of security as they are unique to the owner of the account, only allowing authorized users to gain access. Authentication methods may consist of fingerprint scanning, facial recognition, or iris scanning. Since these are different for every person, they cannot be replicated and avoid the risk of a password or PIN being stolen. Read more

Tech Groups Sue US CFPB to Block Rule on Payment Apps, Digital Wallets

Jonathan Stempel, Reuters/U.S. News

Two technology trade groups sued the U.S. Consumer Financial Protection Bureau on Thursday to block a new rule giving the regulator supervisory authority over payment apps and digital wallets from large non-banks.

NetChoice and TechNet said Congress did not give the CFPB free rein to aggressively, arbitrarily and capriciously police large non-banks offering consumer financial services through such products as Apple Wallet, Google Pay and Venmo. The trade groups also said the CFPB identified no consumer risks or gaps in regulatory oversight that justified the rule, which covers companies that process at least 50 million transactions annually, and more than 13 billion overall.

According to the complaint filed in Washington, D.C., federal court, “The bureau failed to show what consumer risks the rule was even meant to alleviate in its haste to dream up a problem in search of a solution.” The CFPB had no immediate comment on the lawsuit.

In announcing the final rule on Nov. 21, the CFPB said it would help give consumers who use big technology companies for processing payments the same protections against fraud, privacy violations and account closures they enjoy at banks. CFPB director Rohit Chopra said at the time that digital payments “have gone from novelty to necessity and our oversight must reflect this reality.”

NetChoice director of litigation Chris Marchese in a statement on Thursday called the rule an “unlawful power grab” that could stifle innovation, reduce competition and raise prices. Carl Holshouser, a TechNet executive vice president, in a separate statement said that the rule could also subject digital payment service providers to oversight of tax payments and other products that go beyond the CFPB’s mission. Read more

60% of US Consumers Use P2P Apps to Pay Bills

PYMNTS.com

Peer-to-peer (P2P) payment platforms have gained popularity, especially among young consumers who value quick and seamless transactions.

As adoption expands, however, these platforms face the challenge of balancing user convenience with the essential need to meet regulatory standards and prevent fraud. The PYMNTS Intelligence report “Peer Pressure: Balancing Convenience With Compliance in P2P Payments,” found that this balance has become a challenge for FinTechs seeking to maintain growth and trust in the P2P payments market.

Rising Popularity of P2P Payments Among Young Consumers
The appeal of P2P payments has been particularly strong among millennials and Generation Z. These groups are more attracted to digital-first payments and use them for online and in-store purchases. According to the report, 53% of consumers aged 18-25 and half of those aged 26-41 use P2P apps more frequently due to economic pressures like inflation. As a result, platforms like Zelle have seen growth of 27%. In contrast, traditional credit and debit payments grew by 3%.

The rise in use has led to the emergence of the super app trend, where companies integrate P2P payments into service offerings. For example, social platform X and influencer marketing platform Lydia have either incorporated or plan to integrate payment services into their product ecosystems. According to the report, 70% of consumers, particularly those with higher incomes, expressed interest in using a super app.

Challenges in Meeting Customer Expectations
P2P appsDespite the popularity of P2P payments, consumer satisfaction with these services is not universal. P2P platforms struggle to meet the diverse expectations of users, with many consumers encountering issues related to transaction speed and reliability. Consider that 60% of U.S. consumers use P2P apps to pay bills, but 70% of users experience friction when paying bills via mobile wallets. The report found that one-quarter of users cited security and authentication as their primary frustrations. Read more

Jan. 10, 2025: Technology & Payments Articles

Bank Insiders Are Leaking Data on Client Accounts as Scams Surge

Tom Schoenberg, Bloomberg

The new staffer was supposed to help Toronto-Dominion Bank spot money laundering from an outpost in New York.

She instead used her access to bank data to distribute customer details to a criminal network on Telegram, according to prosecutors in Manhattan. Local detectives who searched her phone allegedly found images of 255 checks belonging to customers, along with other personal information on almost 70 others.

It’s part of a little-noticed pattern popping up across US banking — from towers in Manhattan, to hubs in Florida and even suburban Louisiana.

As sophisticated scams targeting the life savings of Americans create headlines across the US, the industry’s lowest-paid employees keep getting caught selling sensitive customer information out the back door — emerging as a critical area of weakness in banks’ risk controls.

That’s an inconvenient trend as firms steadfastly argue to policymakers and the public that customers bear primary responsibility for ensuring they don’t get conned out of their savings. While many scams seemingly target people at random, some victims have said con artists who tricked them knew a lot about their finances at the outset.

“The more employees there are inside a company with access to sensitive customer information, the higher the risk that access is going to be abused,” said R.J. Cross, a privacy advocate at US Public Interest Research Group. “Companies need to have technical measures in place to ensure employees and contractors can’t run off with people’s information or access data that isn’t necessary for their job duties.”

There have been warnings for years. Read more

6 Key Payments Issues in 2025: Digital Wallets, Instant Payments, Debit Cards, Fraud, Megamergers, CFPB’s Fate

Steve Cocheo, The Financial Brand

Waves of change keep on hitting the vibrant payments business, from new channel opportunities to an uncertain whipsawing regulatory atmosphere. Here’s a review of what the industry will face this year.

You just can’t blink if you’re going to monitor the payments business. Challenges come from every direction and surprises lurk in all corners. Fresh competition can arise from without and within.

Six trends and expectations will be front and center in 2025, based on conversations with payments industry people.

1. Payments Fraud Continues to Escalate in All Its Forms
As the 2024 holiday shopping season approached, Erin McCune, who often uses her LinkedIn account to dive into complicated payments issues, instead put out a simple appeal, to “payments nerds” and other people in the industry. She asked them to warn friends and family when they saw them over the holidays to beware of payments scams. She’d already seen some coming her own way and felt that industry players could help get the word out about fraudsters’ tactics.

“I think fraud is our biggest, softest underbelly,” says McCune, expert partner in payments at Bain & Co. in an interview. She thinks the payments industry needs to work on these issues in a united and significant way, but in the meantime having industry insiders warning fellow consumers that banks don’t reach out for payments credentials (and other messages) would be an active stopgap.

“People are gullible and the fraudsters have very sophisticated psychological tactics,” says McCune. “They know how to manipulate people.”

It was coincidental that McCune shared her thinking only days before the Consumer Financial Protection Bureau dropped its holiday surprise on Zelle’s corporate parent, Early Warning Services, and on three of its seven bank owners and Zelle participants: JPMorgan Chase, Bank of America and Wells Fargo. The bureau sued them “for failing to protect consumers from widespread fraud on America’s most widely available peer-to-peer network,” per its announcement of the suit. Read more

CFPB Gives FDX Green Light to Issue Open Banking Standards

Finextra

The Consumer Financial Protection Bureau has approved Financial Data Exchange (FDX) as the first standard setting body for the regulator’s new open banking regime.

In October, the CFPB issued its Personal Financial Data Rights rule, requiring financial institutions, credit card issuers, and other providers to unlock an individual’s personal financial data and transfer it to another provider at the consumer’s request for free.

To help with the rollout, the regulator established a formal application process outlining the qualifications to become a recognised industry standard setting body, which can issue standards that companies can use to help them comply with the rule. FDX – which has over 200 members and works to improve and maintain a common, interoperable standard for secure consumer and business access to financial records – has now cleared the application process. The approval is subject to conditions.

Amid concerns that the big banks will dominate the process, the CFPB has previously warned that it will “not recognise any standard-setting organisation that is rigged in favour of any set of industry players”.

FDX’s approval is on condition that there is a ban on ‘pay-to-play’ and other conflicts of interest; the group provides mandatory reporting to the CFPB on market adoption; and FDX makes freely available to the public any consensus standards that it adopts and maintains, subject to reasonable safeguards, and to ensure that non-members have the same access as members do.

The new rule is facing pushback from some quarters: In October, The Bank Policy Institute and Kentucky Bankers Association filed a lawsuit against the CFPB, alleging that the regulatory agency overstepped its authority on the release of new open banking rules.

Essential Tips for Securing Your Online Platform Against Marketplace Risks

FinTech Global

Marketplace risk encompasses vulnerabilities that can undermine the integrity, functionality, or trustworthiness of an online platform. These risks may stem from fraudulent activities, operational inefficiencies, or external threats such as cyberattacks.

According to AIPrise, consider the example of counterfeit products appearing on a marketplace. Such incidents can deceive buyers, leading to a loss of trust and diminished user engagement. Similarly, a data breach exposing sensitive information can result in substantial legal and financial repercussions. Recognizing the breadth of marketplace risk is crucial for prioritizing preventive measures to safeguard your platform’s users and reputation.

Marketplace risks manifest in various forms, each presenting unique challenges. These include transaction risks, regulatory risks, data security risks, market volatility, compliance risks, and reputational risks. Each type demands specific strategies for mitigation.

For example, transaction risks involve issues that disrupt smooth transactions like payment fraud or chargebacks. Regulatory risks pertain to the legal consequences of non-compliance with laws and regulations, which could lead to severe penalties. Data security risks highlight the importance of protecting sensitive user information to avoid costly breaches.

Understanding these risks allows businesses to focus on areas needing attention and to develop targeted mitigation strategies. Read more