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NewsBriefs

This article contains excerpts from news stories recently posted under to load funds onto school lunch accounts, with some low-
Breaking Industry News on our homepage. For links to these and other income families paying as much as 60 cents for every dol-
full news stories, please visit www.greensheet.com/breakingnews. lar spent.
php.
These fees add up, with school lunch payment processors
collecting over $100 million annually, and despite regula-
tions requiring fee-free options, many school districts do
not provide meaningful alternatives, the bureau noted.
The report singled out three major players in the mar-
ket: MySchoolBucks, SchoolCafe, and Linq Connect. The
CFPB, which has regulatory authority over payment pro-
cessors, has previously targeted companies like ACTIVE
Network and BrightSpeed Solutions for similar practices.
Visa stops $40B in fraud using AI The CFPB's findings underscore the need for more over-
sight as digital payment options expand in schools.
Visa successfully prevented 80 million fraudulent transac-
tions valued at $40 billion globally in the past year, thanks Americans increasingly favor debit cards
to its significant investments in artificial intelligence (AI).
Charles Lobo, Visa's regional risk officer for Eastern Eu- A recent study by Discover Financial Services’ PULSE deb-
rope, the Middle East and Africa, shared these figures in it network shows a significant increase in the use of debit
an interview with Reuters at a conference in South Africa. cards among Americans, with 80.5 percent of demand de-
Over the last five years, Visa has invested more than $10 posit accounts linked to debit cards. Of these, 66.3 percent
billion in various technologies, including $500 million are actively used, averaging 34.6 transactions per month
specifically in AI and data infrastructure, to protect cli- in 2023, including POS purchases, account transfers and
ents from fraud. ATM withdrawals.

As cybercrime is projected to reach $10.5 trillion globally The average debit transaction ticket was $46.89, contrib-
by 2025, the importance of such technological advance- uting to an annual spend of $17,274 per card, up 8.1 per-
ments is clear. The federal government has also employed cent from 2018 to 2023. Debit cards are not just popular at
AI to combat financial fraud, particularly in mitigating physical stores; 32 percent of users prefer them for online
check fraud, which has risen by 385 percent since the pan- purchases, with card-not-present transactions making up
demic. The Consumer Financial Protection Bureau (CFPB) 36 percent of debit activity. Mobile wallet use is also grow-
reported that nearly half of acquirers are currently using ing, with 38 percent of debit cards loaded onto mobile wal-
AI for fraud detection. lets, averaging three transactions per month per card. The
study highlights the growing importance of debit cards,
CFPB slams processors over school lunch fees though potential market shifts could influence future
trends.
The CFPB criticized payment processors for charging high
transaction fees on parents who pre-fund their children's Zelle, banks under fire
school lunches, labeling them as "junk fees." The CFPB's
report, Costs of electronic payments in K-12 schools, revealed The peer-to-peer payment network Zelle is under scrutiny,
that parents pay an average of 4.4 percent per transaction with Senator Richard Blumenthal urging the CFPB to in-
vestigate the dispute resolution practices of Early Warn-
ing Services (EWS), which operates Zelle, and three major
Call me today! banks that own EWS—Bank of America, JPMorgan Chase,
Let me help you and Wells Fargo. These banks account for 73 percent of
with your all Zelle transactions. The call for investigation follows a
advertising Senate subcommittee report that criticized the banks for
their handling of scams and fraud affecting Zelle users.
success. Despite claims from the banks and EWS that less than a
707-284-1693 tenth of a percent of transactions are fraudulent, consumer
advocates argue that the current system leaves victims in-
adequately protected.
The subcommittee's hearings, coupled with a previous
New York Times report on Zelle-related scams, have height-
ened concerns about the transparency and fairness of the
R R ick Aston banks' dispute resolution processes. Blumenthal asked the
CFPB to ensure these banks comply fully with the Elec-
Senior Media Partnership Specialist tronic Funds Transfer Act and to consider strong enforce-
Rick@greensheet.com ment actions if violations are found.
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