Payment processing and financial regulations can hit home. From Illinois’ groundbreaking but contentious swipe fee law to the growing popularity of Same Day ACH in the B2B world, there are plenty of shifts happening in the financial landscape. Consumers are demanding more payment options and flexibility, while businesses are exploring new ways to streamline transactions and improve efficiency. And with proposals like the Consumer Financial Protection Bureau’s (CFPB) new rule on Earned Wage Access products, the way many people manage and access their money could be on the verge of a significant transformation.
Curious about how these developments might affect you? Let’s dive in with this week’s issue of Fintech Rising Weekly!
Illinois Credit Card Swipe Fee Law Sparks Legal Fight with Banks
This article from Bloomberg Law explains how Illinois recently became the first state to prohibit credit card companies from charging swipe fees on retail tips and taxes, but the path to implementation is fraught with challenges. The law, part of the state’s omnibus budget, aims to save merchants money, though it’s expected to face legal pushback from banks. The complexities of implementation, as highlighted by the law firm of Womble Bond Dickinson, stem from the need for merchants to upgrade point-of-sale systems and the burden on financial institutions to navigate new regulations. While some see it as a potential model for other states, the complexity and opposition may keep Illinois alone in this effort for now.
Same Day and B2B ACH Shrug Off Real-Time Rally, Delivering Strong First Half
In this article, Bottomline explains how Same Day ACH is quietly proving its worth in the B2B space, delivering strong results in the first half of the year despite all the buzz around real-time payments. Businesses seem to appreciate the balance it offers—faster processing without the rush of real-time. As companies continue to navigate their payment strategies, Same Day ACH is carving out its place as a reliable and effective option for business transactions. NACHA agrees, stating in a recent article that Same Day ACH has reached new heights, contributing to the overall increase in ACH Network volume, signaling its growing importance in the payments landscape.
New Research Finds Consumers Demand Payment Choice
According to a recent press release from Paysafe, new research reveals that consumers are not only becoming more price-conscious but are also demanding greater payment options, from debit cards to digital wallets. With 56% of people having changed their spending habits, there’s growing concern over the loss of cash as a payment method despite the rise of cashless policies. Interestingly, while many are just getting by financially, there’s a strong sense of optimism about the future, especially among Gen Z, who are confident in their ability to achieve major life milestones such as buying a home and retiring early.
Industry One Step Closer to Achieving Straight-Through Processing
This article from FedPayments Improvement explains how the successful completion of the B2B e-remittance exchange pilot marks a significant step toward achieving straight-through processing in the industry. The pilot demonstrated how digitalizing remittance data can streamline payments and improve efficiency for businesses. As the industry moves closer to this goal, businesses can look forward to faster, more accurate transactions, reducing the manual work and errors often associated with traditional methods. It’s an exciting development for anyone looking to optimize their payment processes.
CFPB’s Proposed Interpretive Rule on Earned Wage Access Products
According to a recent article from Steptoe, the CFPB has proposed a new interpretive rule that could reshape how Earned Wage Access (EWA) products are regulated. The rule aims to clarify when these products fall outside the definition of credit, potentially making it easier for employers to offer early wage access without the red tape. If adopted, this could lead to broader adoption of EWA services, giving employees more flexibility in managing their finances. It’s a move that could change the game for both workers and employers alike.
As we navigate the rapidly evolving world of payment processing and financial regulations, it’s clear that both businesses and consumers are at the cusp of significant change. From Illinois’ bold move to curb credit card swipe fees to the steady rise of Same Day ACH, the landscape is shifting in ways that could offer more choices and efficiencies for everyone. Meanwhile, the push for greater financial flexibility, as seen with Earned Wage Access products, signals a future where managing money could become even more seamless and accessible. Stay tuned, because these developments are just the beginning, and they’re sure to have a lasting impact on how we all handle our finances.
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