The Consumer Financial Protection Bureau (CFPB) is scrutinizing large merchant chains for charging fees to consumers who request cash back at the point of sale (POS) using debit or prepaid cards. Traditionally, cash back has been a no-cost service offered by many retailers, but some chains, such as Dollar General, Dollar Tree and Kroger, have begun charging fees, collecting over $90 million annually.
The CFPB’s report suggests that lower-income consumers in areas with limited banking access are disproportionately affected by these fees. Merchants argue that rising interchange fees from acquiring banks and their payment processing partners are the primary reason for imposing cash-back charges. The fees for cash back generally range between 50 cents and $1, but they can vary significantly by location, with some stores charging as much as $2.50.
While the CFPB acknowledged that only a few large retailers currently charge these fees, it is concerned about the implications for cash access. The agency plans to continue monitoring the situation to ensure fair access to cash for all consumers.
Researchers from the University of Massachusetts Amherst and Pennsylvania State University have identified significant security vulnerabilities in digital wallets, such as Apple Pay and Google Pay.
Their study revealed that outdated authentication methods and a focus on convenience over security leave users susceptible to fraud. They found that digital wallets rely on weak authentication processes, allowing fraudsters to use stolen card details to make unauthorized purchases. Additionally, when a card is reported stolen, banks often fail to re-authenticate the card stored in digital wallets, assuming existing security is sufficient.
The researchers disclosed their findings to banks and digital wallet providers, with some, like Google, stating they are working on fixes. However, the research team emphasized the need for both banks and wallet providers to take greater responsibility for enhancing security measures, such as re-authenticating cards and improving authentication protocols to better protect users against fraud.
PayPal is expanding its in-store payment presence by enhancing its rewards program and integrating its debit cards with Apple Wallet, enabling contactless payments. The company’s updated rewards program allows customers to earn 5 percent cash back on selected spending categories, such as groceries or clothing, and stack additional rewards from merchants like DoorDash and Instacart. PayPal has also streamlined the process for setting up digital debit cards and direct deposit, offering automatic balance reloads and physical debit cards at no extra cost.
These initiatives aim to provide a seamless omnichannel payment experience, combining the convenience of digital transactions with the security and benefits of PayPal’s rewards, PayPal stated, adding that by partnering with Apple, the company aims to boost its presence in physical retail stores and further solidify its role in the global payment ecosystem.
Juniper Research forecasted a 209 percent increase in global account-to-account (A2A) payment transactions, from 60 billion in 2024 to 186 billion by 2029. A2A payments, which enable direct bank transfers without intermediaries, are gaining popularity due to instant settlements and lower transaction fees.
The growth is fueled by open banking initiatives, which allow third-party providers to access financial data and initiate payments directly. In addition, variable recurring payments have emerged as a flexible and transparent alternative to traditional recurring payment methods like direct debits.
The launch of FedNow in the United States and the real-time payment rails globally are accelerating the adoption of A2A payments, which can offer enhanced security and cost-efficiency, appealing to both businesses and consumers. 
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