On Oct. 29, 2024, a jury awarded $8 million to California-based ISO Cliq Inc. after a three-year legal battle against Capital Managers LLC, Eventus Holdings LLC (dba Boom Commerce), and their principals, Sabin Burrell and John Hynes. The defendants were found guilty of multiple violations, including breach of contract, unfair competition and usury, as well as fraudulent practices that left Cliq "captive" under restrictive financial arrangements.
Led by James C. Huber and Joshua Herndon of Global Legal Law Firm, Cliq argued that Burrell and Hynes orchestrated “loans to own” schemes where repayments were collected from monthly portfolio residuals. The defendants allegedly fabricated defaults and withheld residual payments to maintain control over ISOs. Additionally, evidence suggested Burrell's companies contributed to merchant attrition at Cliq.
The $8 million award includes $3 million in punitive damages against Burrell but excludes attorney fees, which are yet to be determined. The case emphasized the need for fairness in the payments industry, with Global Legal urging ISOs to challenge predatory practices.
Senator Dick Durbin (D-Ill.), architect of the Durbin Amendment in the 2010 Dodd-Frank Act, is making a final push for the Credit Card Competition Act before Democrats cede control of the U.S. Senate. Durbin, who chairs the Senate Judiciary Committee, held a hearing on Nov. 19, 2024, to discuss the legislation, dubbed "Durbin 2.0," which aims to promote competition in credit card transaction processing. Representatives from Visa, Mastercard, merchants, banking and consumer advocacy groups were invited.
The Act would require large credit card issuers (assets over $100 billion) to enable processing over at least two networks, one of which cannot be owned by Visa or Mastercard. This proposal has bipartisan, bicameral support, with sponsors including Sen. Roger Marshall, R-Kan., Sen. Josh Hawley, R-Mo., and Vice President-elect J.D. Vance, R-Ohio, as well as several House members. Merchants cited the bill's benefits for competition and reduced interchange fees; banking groups argued it prioritizes merchant costs over consumer data security.
Shift4 Payments Inc. joined the S&P MidCap 400 on Nov. 20, 2024, replacing R1 RCM Inc., which is being acquired by TowerBrook Capital Partners and Clayton, Dubilier & Rice. The S&P MidCap 400, a key benchmark for U.S. midsize companies with market capitalizations between $3.2 billion and $13.1 billion, bridges the gap between larger and smaller indices, signaling a company's financial stability and sector significance.
Shift4’s inclusion highlights its growth since its 2020 IPO, driven by its innovative payment solutions for industries like hospitality, retail and ecommerce. The company’s advancements in payment processing technology, strategic acquisitions and revenue growth have solidified its market position. Joining the index enhances Shift4’s visibility among institutional investors and funds tracking the S&P MidCap 400. Shift4’s elevation underscores confidence in its trajectory as a leader in financial technology.
The Credit Card Competition Act faced scrutiny in a Senate Judiciary Committee hearing as lawmakers from both parties criticized Visa and Mastercard's dominance in setting interchange fees and routing card transactions. Co-authored by Senators Roger Marshall (R-Kan.) and Dick Durbin (D-Ill.), the bill targets large issuers, requiring them to enable at least two networks for processing, only one of which can be owned by Visa or Mastercard. While unlikely to pass this Congress, its principles may shape future legislation.
Senator Marshall argued that the legislation is feasible, citing JPMorgan Chase's adoption of an alternative network in France. Durbin emphasized the need to disrupt Visa and Mastercard's "stranglehold." Both pointed out that EU interchange fee caps haven't hindered the companies' profits.
Criticism of Visa and Mastercard included allegations of anti-competitive behavior similar to those outlined in a DOJ lawsuit accusing Visa of maintaining a debit monopoly through "disloyalty penalties" and suppressing competition. Witnesses and lawmakers urged Visa and Mastercard to collaborate with merchants to create fairer solutions.
Visa launched the Visa Flexible Credential (VFC), a platform enabling payments from multiple funding sources through a single card. This aligns with Visa’s goal of becoming a comprehensive payment network, supporting various transaction types beyond traditional credit and debit, starting with buy now, pay later.
In the United States, Visa partnered with Affirm, offering the Affirm Card to over 1.4 million users, enabling flexible payments at any Visa-accepting location. Concurrently, Visa is introducing VFC in the UAE with Liv Bank, supporting multi-currency accounts for seamless cross-border transactions.
First launched in Japan with SMCC’s Olive Card, VFC has already attracted 3 million users, 70 percent of whom switch between debit, credit, prepaid and extended credit options.
Jack Forestell, Visa’s chief product and strategy officer, emphasized that VFC adapts to diverse consumer needs. Industry expert Richard Crone views VFC as transformative, potentially reducing reliance on interchange fees, a major friction point for merchants. Visa’s long-term vision positions VFC as a platform akin to iOS or Android, enabling retailers and payment networks to build apps while leveraging Visa’s infrastructure.
The Consumer Financial Protection Bureau finalized a rule bringing large tech companies offering digital payment apps under its oversight, aligning them with banks and financial institutions already subject to CFPB regulation. Effective by year’s end, the rule applies to companies processing over 50 million annual transactions in U.S. dollars. This threshold, revised from the initially proposed 5 million transactions, excludes digital currencies.
CFPB Director Rohit Chopra emphasized the importance of oversight in a sector handling over 13 billion consumer transactions annually. Digital payment apps, now rival traditional payment methods in usage, and process over a trillion dollars yearly. The rule empowers the CFPB to proactively examine big tech firms for compliance with consumer protection laws, addressing risks such as data privacy, fraud, errors and “debanking,” where consumers lose access to apps or funds without notice. The rule drew praise from banking groups as a step toward ensuring accountability. However, the Financial Technology Association, representing firms such as Block and Stripe, argued that most consumers report positive experiences with payment apps under existing regulations. 
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