Payments News Update – September 12, 2025
Legal and Regulatory Developments
SPOTLIGHT:
Digital Transactions Magazine – September 1, 2025
With merchants prevailing in their long-running legal battle to overturn debit rate caps set by the Federal Reserve, the largest debit card issuers could wind up the biggest losers, while Capital One Financial Corp. emerges as the big winner.
U.S. District Court for the District of North Dakota Judge Daniel M. Traynor in August delivered a huge blow to debit-issuer revenues with a ruling that the debit card interchange rates set by the Fed must reflect issuers’ actual cost per transaction. The Fed can set debit rate caps under the terms of the Durbin Amendment to the Dodd-Frank Act, enacted 15 years ago.
Prior to Traynor’s ruling, the Fed set debit caps using a so-called blended formula that takes into account myriad costs issuers incur with a debit card transaction, including fraud prevention and fraud loss recovery. . . .
C-Store Dive – September 10, 2025
The National Association of Convenience stores along with FMI – The Food Industry Association and numerous other industry associations are pushing Congress to permanently ban fees on SNAP EBT transactions, saying they pose burdens to retailers and merchant processors.
In a joint letter to the House and Senate agriculture committees, the trade groups urge Congress to enact the bipartisan Ensuring Fee-Free Benefit Transactions (EBT) Act in either a multi-year Farm Bill or other legislation.
The letter notes that retailers already invest “significant” resources to participate in SNAP — including equipment upgrades and worker training — and that SNAP EBT should not be treated as a commercial payments system like credit and debit card markets. . . .
Payments Dive – September 8, 2025
An “unlawful” open banking bill from the Biden administration might not be so terrible after all.
The Consumer Financial Protection Bureau is reformulating its views on how a U.S. open finance regime should work, an about-face after asking a federal judge in May to vacate the “unlawful” rule bureau leaders had found lacking in several regards.
The CFPB is collecting public comment through Oct. 21 on three dozen questions it posed last month as it sorts through the intentions of Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. . . .
Law360 – September 3, 2025 (subscription required)
A New York federal jury ordered American Express Co. to pay over $12 million to a class of Illinois consumers after finding the company liable under Illinois state law for overcharges that the class says they experienced due to so-called antisteering rules Amex imposed on merchants that accept Amex cards.
A final verdict sheet issued last week states that the Illinois plaintiffs proved Amex engaged in an unfair or deceptive practice, in violation of Illinois state law, that a class of Illinois nonreward cardholders relied upon. The class was awarded roughly $6 million in compensatory damages and $6.5 million in punitive damages by the jury.
The suit also included plaintiffs from several states including Alabama, Kansas and Maine as well as Washington, D.C. However, according to the verdict sheet, the jury did not find Amex liable as to any of these plaintiffs’ antitrust claims, including that Amex’s rules did not unreasonably restrain trade. . . .
Bloomberg – September 2, 2025 (subscription may be required)
Stripe Inc. is among the first financial-technology firms to directly and publicly appeal to the US Consumer Financial Protection Bureau to take immediate action against banks charging for access to their customers’ financial data.
Allowing JPMorgan Chase & Co. to charge fees while the CFPB considers whether to allow the bank and others in the industry to do so “will cause significant damage to the marketplace and consumers,” Stripe said in comments filed with the agency Friday and made public Tuesday.
The comments by Stripe, a payments-focused firm, come as the CFPB attempts to revamp its rule governing the sharing of personal financial data. . . .
Law360 – September 2, 2025 (subscription required)
A New York federal judge has rejected Visa and Mastercard’s latest effort to ditch antitrust claims brought by Intuit and Block in long-running multidistrict litigation over payment processing fees, agreeing with a magistrate judge’s finding that the court has already considered and rejected the credit companies’ arguments.
In an opinion unsealed last week, U.S. District Judge Margo K. Brodie denied Visa and Mastercard’s motion for an injunction forcing the dismissal of certain antitrust claims based on transactions in which Intuit Inc. and Block Inc., formerly known as Square, acted as “payment facilitators” for their merchant customers.
The motion is “substantively identical” to a motion Visa and Mastercard filed last year looking to enforce a merchant settlement against Intuit and Block, Judge Brodie said. . . .
CU Today – August 28, 2025
America’s Credit Unions is again calling for the Federal Reserve to withdraw its proposed interchange rule, pointing to a recent court decision that complicates how it could be administered.
A district court invalidated the Fed’s Regulation II interchange fee standard in August, finding it unlawfully allowed recovery of costs beyond the incremental authorization, clearance, and settlement costs specified in the Durbin Amendment.
America’s Credit Unions wrote to the Fed outlining these concerns, noting “the court’s ruling complicates the administration of any future rule based on the Board’s 2024 proposal which is premised on the assumptions about allowable costs (i.e., categories other than incremental ACS costs) which are likely to be part of the ongoing litigation.” . . .
Industry Developments
SPOTLIGHT:
Digital Transactions Magazine – September 1, 2025
Artificial intelligence has had a year to gestate. Now, as the critical fourth quarter beckons, both good and bad uses of AI are ready to take control of the checkout.
As the fourth quarter gets under way, retailers are eager to boost their online sales as much as possible. The risk is that criminals look at the last three months of the year as a bounty, theirs to unlock with all sorts of tools developed to extract the highest yield for themselves.
This year is no different, except that criminals have had a year to refine their use of artificial intelligence tools to help extract that ill-gotten yield. It won’t be a free-for-all, however. Merchants, payments companies, and fraud-prevention firms also have had a year to improve their AI tools and clarify how they might use them. . . .
Payments Dive – September 10, 2025
Visa has high goals when it comes to leading consumers to tokenized transactions, which are the type that replace a card holder’s personal card information with a random code, or token, for processing a payment.
The San Francisco-based card network giant aims to have all digital card transactions tokenized, but it’s only halfway there, according to its chief product and strategy officer, Jack Forestell, who spoke Tuesday at an investor conference.
“We’ve got 50% to go, and a big part of that 50% is tokenizing guest checkout and tokenizing form-filled transactions,” Forestell said at the Goldman Sachs Communacopia + Technology Conference. . . .
CNBC – September 9, 2025
Online lender Klarna priced its IPO at $40 per share on Tuesday, above its expected range, in a deal that values the Swedish company at about $15 billion.
Klarna, known for its popular buy now, pay later products, said it raised $1.37 billion for the company and existing shareholders, who are looking to exit a portion of their long-held positions. The company will list its shares on the New York Stock Exchange under the symbol “KLAR.”
The public markets have shown an increased appetite for tech IPOs of late, with companies like crypto firm Circle and software vendor Figma soaring in their highly anticipated debuts. Klarna, which competes with Affirm, was initially aiming to go public earlier this year, but put its plans on hold due to U.S. President Donald Trump’s April announcement of reciprocal tariffs on dozens of countries. . . .
CoinCentral – September 5, 2025
The competition for global stablecoin payment infrastructure intensified this week as two major players unveiled new networks targeting enterprise adoption.
Stripe and venture capital firm Paradigm officially launched Tempo, a new blockchain designed specifically for stablecoin transactions. The project aims to process tens of thousands of transactions per second with sub-second finality.
Patrick Collison, Stripe’s CEO, said existing blockchains don’t meet the company’s throughput requirements. He explained that current networks denominate fees in blockchain-specific tokens rather than user-friendly fiat currencies. . . .
VentureBeat – September 4, 2025
Visa is opening its vast payment network to artificial intelligence agents that can shop and buy products on behalf of consumers, marking a significant expansion of AI into the $4.6 trillion global payments industry.
The financial services giant announced Thursday the release of new developer tools that allow AI agents to connect directly to Visa’s payment infrastructure, enabling what the company calls “agentic commerce” — a system where AI bots handle everything from product discovery to checkout completion based on consumer preferences and spending limits.
The move puts Visa at the forefront of a technological shift that could fundamentally alter how people shop online. . . .
AppleInsider – September 4, 2025
Apple Pay Later is gone, but third-party buy now pay later offerings are now easily accessible and manageable in the Wallet app.
The service was shut down in 2024 after a short, rocky run. It never gained wide traction, and Apple quietly ended the service. But Apple hasn’t walked away from the “buy now, pay later” market.
Instead, the company is handing customers to third-party providers like Klarna and Affirm, now fully integrated into the Wallet app. The new Wallet feature, called “Pay Later Options,” rolled out in September 2025 across iOS 18 and iOS 26. . . .
Digital Transactions News – September 3, 2025
PayPal and Venmo users will get early access to a new artificial intelligence-based tool that could herald the payment company’s next steps with agentic commerce. Perplexity.AI’s Perplexity Pro, typically a $200 annual subscription, is now available to PayPal and Venmo users in a 12-month free trial. It is part of the subscription component within PayPal and Venmo.
PayPal and Venmo users in the United States and some global markets get early access to the AI tool, which is available in Perplexity’s Comet browser. Access to the browser is currently waitlisted, but PayPal and Venmo users get early access via the subscription hub in the respective apps.
San Francisco-based Perplexity added PayPal to its Commerce Suite in May, enabling it to offer PayPal and Venmo as a payment method within its AI tool. . . .
Payments Dive – September 2, 2025
Visa plans to begin enforcing a new combined fraud prevention and dispute management program for merchants and their bank partners by the end of this month.
The card network began testing the program April 1, but that “advisory period” ends this month, the company has said, putting more of the onus for thwarting fraud on merchants and financial institutions as of Oct. 1.
Now, merchants, and the acquiring banks that process their credit card transactions, will face new fees, and potentially fines, based on the card giant’s assessment of how well they’re fending off fraud. Visa is intent on using the updated program to increase its defenses in the face of rising fraud. . . .