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NewsBriefs

This article contains excerpts from news stories recently posted under Durbin Amendment. Webster suggested that merchants
Breaking Industry News on our homepage. For links to these and other may lack confidence in alternative networks due to con-
full news stories, please visit www.greensheet.com/breakingnews. cerns about fraud protection and transaction declines. She
php. also defended Visa’s investments in fraud prevention and
network resiliency.
Online fraud gives consumers pause

Two recent surveys highlight growing consumer distrust
in digital payments due to widespread fraud. A survey by
Chubb revealed that 61 percent of 2,600 consumers across
eight countries have changed their behavior or reduced
their use of payment platforms because of cyber scams.
Among the respondents, 63 percent had either experi-
enced a cyber scam or knew someone who had.
Merchants cheer DOJ going after Visa Phishing, impersonation scams and fake product purchas-

Merchants are applauding the U.S. Department of Jus- es were cited as the most common concerns. Key findings
tice's lawsuit against Visa, which accuses the company of showed that 32 percent don't trust the security of digital
monopolizing the debit card network market and block- payments, 53 percent worry about account hacks, and 37
ing competitors and technology companies from entering percent fear they won’t recover their money if scammed.
the space. Retailer groups support the lawsuit but argue
it doesn't go far enough. Stephanie Martz of the National Similarly, ACI Worldwide's 2024 Speedpay Pulse Report
Retail Federation and Doug Kantor of the National As- found that while 77 percent of Americans prefer paying
sociation of Convenience Stores both pointed out Visa’s bills digitally, nearly 19 percent have fallen victim to on-
dominance in both credit and debit card markets. line identity theft. Two in five reported identity theft in-
cidents leading to unauthorized accounts being opened
Legal experts expect Visa to fight the lawsuit vigorously. in their names. The survey also revealed that 50 percent
James Huber of Global Legal Law Firm emphasized Visa’s of consumers feel companies fail to educate them on data
powerful position in debit card transactions, while attor- security.
neys from Mintz pointed to a 2018 Supreme Court decision Regulator, trade groups vie over
supporting credit card networks' "two-sided platforms" Illinois interchange law
involving both merchants and consumers, suggesting this
could aid Visa's defense. The Office of the Comptroller of the Currency joined fi-
nancial institutions in opposing Illinois' Interchange Fee
Karen Webster, CEO of Market Platform Dynamics, ar- Prohibition Act (IFPA), a law that exempts sales tax and
gued that the DOJ's lawsuit overlooks how Visa’s four-par- tips from interchange fees. The OCC filed an amicus brief
ty network has benefited merchants since the 1960s. She with the U.S. District Court for the Northern District of Il-
noted that merchants already have options to route debit linois, echoing concerns raised by bank trade groups that
transactions through various PIN networks under the the IFPA could disrupt the credit and debit card payment
system. The OCC called the law "unworkable" and warned
it could lead to fragmentation of the payment system.
Also find us on Facebook, Merchant groups, including the National Association of
LinkedIn & Twitter for the Convenience Stores and the National Retail Federation,
most up-to-date stories, support the law, arguing that it challenges Visa and Mas-
can’t miss events and newest tercard's control over swipe fees, which they claim are
industry announcements. centrally set and inflationary. The groups have requested
to intervene in the lawsuit or file their own amicus brief
supporting Illinois.

The IFPA, set to take effect in July 2025, would bar finan-
cial institutions from charging interchange fees on taxes
and tips and restrict the use of transaction data. Banks ar-
gue this would undermine fraud prevention, compliance
https://www.facebook.com/TheGreenSheetInc and operational processes. They also claim the law con-
https://www.linkedin.com/company/the-green-sheet flicts with federal statutes like the National Bank Act and
https://twitter.com/The_Green_Sheet Durbin Amendment. The OCC warned other states might
adopt similar laws, creating a fractured payment system.

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