Payments News Update – August 8, 2025
Legal and Regulatory Developments
SPOTLIGHT:
Bloomberg Law – August 7, 2025
Retailers won a key legal battle over debit card swipe fees after a federal judge determined the Federal Reserve went beyond what Congress allowed in setting rules more than a decade ago.
Lawmakers only permitted banks to charge retailers interchange fees that would cover incremental costs of processing debit card transactions on card networks such as Visa Inc. and Mastercard Inc. under the 2010 Dodd-Frank provision known as the Durbin Amendment, Judge Daniel M. Traynor of the US District Court for the District of North Dakota said in a Wednesday order.
But the Fed exceeded its authority by allowing fraud-prevention and other costs to be included in the interchange fee calculation when it finalized rules in 2011, Traynor said. The payment card networks set the fees, with banks and card issuers retaining most of the money. . . .
Australian Financial Review – August 7, 2025 (subscription may be required)
Banks will force customers to pay higher interest rates and account fees on credit cards, while retailers will charge more for purchases if the Reserve Bank of Australia cuts wholesale payment costs and bans surcharges, international payments giant Mastercard has warned.
The US company, which operates a debit and credit card network alongside its main rival Visa, said retailers that charged payment surcharges, which the RBA estimated last month cost shoppers $1.2 billion a year, would pass on the amount to customers through general prices if the practice was banned.
Customers would ultimately pay $1.5 billion each year because of higher prices and credit costs, Mastercard said, or $300 million more than the central bank’s estimated cost of surcharges. . . .
Bloomberg Law – August 5, 2025
The Consumer Financial Protection Bureau is running out of money and won’t be able to fully replenish it under a new funding cap imposed by Republicans, jeopardizing the agency’s spending on personnel and cybersecurity.
As of early July, the federal consumer finance watchdog was down to $160 million to cover personnel and other expenses through Sept. 30, multiple people familiar with the agency’s financial status said, requesting anonymity to discuss internal budgetary matters.
It’s spending around $18 million every two weeks on wages and benefits, the agency’s largest expense despite most work being halted, people familiar with the matter said. . . .
Payments Dive – August 1, 2025
Visa filed its formal response Thursday to the U.S. Department of Justice’s 2024 debit card antitrust lawsuit, denying claims that it operates an illegal monopoly in the U.S. debit card market.
“Visa had legitimate business justifications for the conduct at issue, including in response to the Durbin Amendment and the new regulations impacting the industry, its conduct was procompetitive and outweighed any alleged anticompetitive effects, and its practices were and are reasonably justified,” the filing said.
Separately, the plaintiffs and defendants filed a revised schedule Thursday for managing the case, with the fact discovery process ending March 17, 2026, and expert witness discovery ending Aug. 7. No witness should be deposed more than once, U.S. District Judge John Koeltl in New York City ruled last month. . . .
Banking Dive – July 31, 2025
The White House Working Group on Digital Assets called upon regulators and lawmakers Wednesday to cement rules and regulations around registration, custody and trading of digital assets in pursuit of “the new American Golden Age.”
In 166 pages, the group called upon the Securities and Exchange Commission and Commodity Futures Trading Commission to use their existing powers to legalize cryptocurrency trading at the federal level. The report also urged Congress to draft legislation granting the CFTC authority to regulate spot markets in non-security digital assets, something a bill introduced by Sens. Kirsten Gillibrand, D-NY, and Cynthia Lummis, R-WY, in 2022 aimed to do.
The group also said federal banking regulators – the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and National Credit Union Administration – “should never again pursue the Biden Administration’s policies of Operation Choke Point 2.0 and should instead embrace the opportunities digital assets and blockchain technologies offer to banks nationwide.” . . .
Industry Developments
SPOTLIGHT:
Digital Transactions Magazine – August 1, 2025
Merchants are right to dispute what they pay for card transactions. Technology has an answer—if the networks will listen.
Interchange is the foundation of branded-payments theory: Remove friction at the register for increased sales traffic, at the risk of higher fraud. Yet, despite decades of fraud-fighting tech and policy wins, interchange rates remain defiant and unchanged. Now, given the abundance of alternative payment choices available today, the dominance of branded payments may be on the verge of a systemic shift.
The interchange model has been around for more than a century. Early examples included American Express and Western Union. Arguably, the first modern credit card was created by Diners Club in the 1950s. All of these cards were based on the premise of engaging more merchants with more consumers. . . .
Payments Dive – August 5, 2025
Banking giant JPMorgan Chase may have more than just cards in mind if it’s bidding to take over tech behemoth Apple’s credit card portfolio.
The nation’s largest bank is likely looking to make inroads in servicing other Apple products, and market in other ways to Apple Card users as it tries to wrest control of the card portfolio from rival Goldman Sachs, according to consultants who follow the credit card industry.
“This could be an opportunity for them to have a really compelling digital bank solution that appeals to the users of Apple Pay and the Apple card base [which is] more of a younger millennial target market,” said Tom Bell, senior advisor at the consulting firm AlixPartners. . . .
Digital Transactions Magazine – August 1, 2025
Spoiler: It may not always be a piece of plastic or metal you dip or tap.
More than 25 years ago, the U.S. automotive industry made its first notable move to hybrid-powered cars with the debut of the 2001 Toyota Prius. Now, the payments industry, specifically, the card segment, is well under way with its own hybrid adaptation of credit and debit cards for a digital world.
One of the first hybrid credit cards, the Apple Card issued by Goldman Sachs, debuted six years ago. Today, many issuers offer a strong digital component, with many able to issue a digital version to a mobile wallet prior to the arrival of the physical card in the mail. . . .