The Green Sheet Online Edition
May 22, 2017 • Issue 17:05:02
Editor's Note: Following are excerpts from news stories we've covered recently. For the full stories and additional breaking industry news posted on our home page, please visit www.greensheet.com/breakingnews.php?flag=previous_breaking_news.
CFPB seeks input on small business lending
On May 10, 2017, the Consumer Financial Protection Bureau said it had "launched an inquiry into ways to gather and use new and existing information to identify the financing needs of small businesses, especially those owned by women and minorities." The 2010 Dodd-Frank Act, which established the CFPB, requires the bureau to collect data about small business lending to help identify needs and opportunities in the market and to facilitate enforcement of fair lending laws.
"Small businesses fuel America's economic engine, create jobs, and nurture communities," said CFPB Director Richard Cordray. "Yet little is known about how well the lending market serves their financing needs. This inquiry will help us learn how we can best fulfill our duty to collect and report information on small business lending."
First Data brings Alipay to U.S. merchants
On May 8, 2017, First Data Corp. expanded its relationship with Alipay, becoming the first payments technology company to implement Alipay at the POS for U.S. businesses on a scalable basis. Following a successful pilot in California and New York, First Data will now embark on initial rollout of Alipay at U.S.-based First Data Clover-direct merchant locations. This is expected to take four to five months to complete.
Alipay, owned by Ant Financial Services Group, with an estimated 450 million registered users ranks second behind PayPal in number of mobile wallet users. At this point, the new payment option will primarily target the 4 million Chinese tourists who visit the states each year.
FTC website helps SMBs avoid scams, cyber attacks
The Federal Trade Commission reported that it launched ftc.gov/SmallBusiness, a new website containing articles, videos and other information compiled to help small business owners avoid scams and protect their computers and networks from cyberattacks and other threats. This looks like good news for ISOs, merchant level salespeople (MLSs) and the merchants they serve.
"Small businesses are critical to our economic strength, building America's future, and helping the United States compete in today's global marketplace," said FTC Acting Chairman Maureen Ohlhausen, who spearheaded development of the new resource. "This innovative new website is a one-stop shop where small businesses can find information to protect themselves from scammers and hackers, as well as resources they can use if they are hit with a cyberattack."
Sage to sell U.S. payments business
U.K.-based Sage Group PLC confirmed during a May 3, 2017, earnings call that it will divest its U.S.-based Sage Payment Solutions division. The news follows word in December that a potential sale was under review, which is part of a global strategy executed by Sage Chief Executive Officer Stephen Kelly.
Sage noted that after a strategic review, its North American payments business is "now classified as an asset held for sale and a discontinued operation." Although growth in Canada remained strong at 9 percent, slower recurring revenue growth in the United States lowered overall growth in its North American segment to 5 percent for the six-month period that just ended.
PayPal service targets SMBs
PayPal's Business in a Box launched May 1, 2017, during National Small Business Week. It is a comprehensive set of resources and services for small and midsize business (SMB) owners.
The solution includes social media support by WooCommerce and online accounting services by Xero Ltd. PayPal said the service is part of a broad objective to serve the small business community through financial services and tools to help them start and grow their businesses.
Startup businesses don't always have the web design capabilities to develop an online store or know how to set up online or POS payment methods, PayPal representatives stated. PayPal Business in a Box is designed to solve these logistical challenges while helping merchants manage finances, obtain a real-time view of cash flow and acquire customers through an online store.
IBM, Verizon jointly attack cybercrime
Verizon Communications Inc. disclosed May 2, 2017, that it will sell its cloud and managed hosting services to IBM Corp. for an undisclosed sum. The agreement is part of an ongoing effort to help Verizon customers securely connect to their cloud-based resources and solutions, said George Fischer, Senior Vice President and Group President at Verizon Enterprise Solutions.
"We are notifying affected customers directly although we do not expect any immediate impact to their services as a result of this agreement," Fischer said. "We will formally notify and update customers as appropriate with additional information nearer to the close of the deal. We expect the transaction to close later this year."
Battle lines harden in debate over prepaid card rules
The Consumer Financial Protection Bureau officially rolled back the effective date on new regulations targeting prepaid debit cards so it can review and tweak the rules. That hasn't mollified detractors in Congress, who continue to push for repeal of the comprehensive rules. Nor does it sit well with consumer groups, some of which are crying foul and mounting an aggressive campaign against congressional efforts to repeal the prepaid card rule.
The CFPB adopted sweeping rules in 2016 that put prepaid debit cards on an equal regulatory footing with credit cards and traditional debit cards with an Oct. 1, 2017 effective date. Among other things, the rules call for clear disclosures detailing fees and other requirements, would limit cardholder liability when lost or stolen prepaid cards are promptly reported, and would require card issuers to perform credit assessments before offering cardholders overdraft protection services.
Debate over online, offline tax parity heats up
On April 27, 2017, Sen. Michael Enzi, R-Wyo., reintroduced the Marketplace Fairness Act, legislation originally approved by the Senate in 2013, but not voted upon by the House. Rep. Kristi Noem, R-S.D., reintroduced the House version, also delayed, entitled the Remote Transactions Parity Act. The two measures seek to end sales and use tax exemptions for large, ecommerce merchants selling to customers in states where the merchants have no physical presence. Said sales and use taxes currently apply to all brick-and-mortar merchant locations.
According to sales tax service provider TaxCloud's Marketplace Fairness Act website, http://markeplacefairness.org, nearly 350 organizations support the legislation. "Right now, thousands of local brick-and-mortar businesses are forced to do business at a competitive disadvantage because they have to collect sales and use taxes and remote sellers do not," Sen. Enzi said. "This legislation promotes Internet fairness by putting Main Street businesses on a level playing field with online retailers."
Chipotle doubles down on security
A data security breach at Denver-based Chipotle Mexican Grill recently roiled the quick service restaurant chain. Intruders reportedly gained access to the company's POS systems, capturing data from payment card transactions between March 24 and April 18, 2017. Chipotle has enhanced its POS security and is working with its payment processor, law enforcement and forensic security experts in an ongoing investigation, company representatives stated.
"Because our investigation is continuing, complete findings are not available, and it is too early to provide further details on the investigation," read the company's April 25, 2017, statement. "We anticipate providing notification to any affected customers as we get further clarity about the specific timeframes and restaurant locations that may have been affected."
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