The Consumer Financial Protection Bureau and the Federal Trade Commission both have indicated they have concerns about buy now, pay later (BNPL) transactions, but no new regulations appear imminent. In a report released in September 2022, the CFPB highlighted its concerns about BNPL products and the potential risks posed to consumers.
And the consumer watchdog agency said it was considering "interpretive guidance" to ensure providers understand they must abide by the same laws and regulations that apply to credit card companies. In a September 2022 blog post, the FTC also expressed concerns and fired off a warning to BNPL companies and their partners.
"If your business offers BNPL payment options as a retailer or BNPL company – or if you play a role in the BNPL ecosystem as a marketer, collector, etc. – remember that basic consumer protection ground rules of the FTC Act apply," Helen Clark, an FTC attorney wrote.
U.S. policymakers and financial leaders are exploring approaches to banking-as-a-service (BaaS), a popular practice in Europe that experts believe is ready for mainstream adoption in the United States. Paul Davis, director of market intelligence at Strategic Resource Management, commented on BaaS in a recent report titled, Keeping Watch Over the Watchdogs: SRM's Take on What to Expect from the CFPB.
"The regulatory landscape is changing at an unprecedented rate," Davis said in a statement. "It's challenging for financial institutions to keep up as they already have a full plate." The SRM study, published Feb. 1, 2023, highlighted open banking considerations and four other areas the Consumer Financial Protection Bureau is reviewing: junk fees; credit card late fees; bank and fintech partnerships; and buy now, pay later.
America's love affair with gift cards continues unabated. And whether purchasing these closed-loop prepaid debit cards for themselves or for others, the preferred vehicle is plastic, not digital cards, according to a new survey from Fiserv.
The survey, part of the 20th annual installment of Fiserv's prepaid consumer insights survey, also revealed that inflation worries are affecting gift card sales. Fiserv's survey queried over 1,000 adults, spanning all regions of the country, in November 2022. Better than a third of consumers said they were purchasing fewer gift cards due to inflation, contributing to a slight reduction in overall sales in 2022 compared to 2021, Fiserv reported. Meanwhile, many retailers report average gift card loads are down, said Tom Niedbalski, vice president of gift card solutions at Fiserv.
But it's not all bad news. "Some brands delivered well, especially those that ran promotions," Niedbalski said during a telephone interview. Such promotions – like buy a $50 gift card, get a $10 gift card bonus – are a great way to fend off a slow-down in gift card sales. "Everyone should be running promotions. They pay for themselves," Niedbalski said.
A new study from SEON, Fraud Trends 2023: What They Really Mean for Fraudsters and Your Business, foresees escalating attacks against individuals and corporations in 2023.
Bad actors are increasingly sophisticated and savvy, researchers warned, and employ a range of attack vectors largely driven by AI and advanced automated technologies. Researchers noted the current obsession with frictionless commerce has lowered barriers to entry for fraudsters across mobile apps and ecommerce sites.
They recommended implementing cross-sector collaboration and anti-fraud machine learning and AI to mitigate these types of attacks. Tamas Kadar, CEO and co-founder of SEON, stated the report highlights the evolving nature of internet fraud.
"Clearly, fraud is growing around the world, and those committing these acts are becoming more brazen and refined in their approach," he said in a statement. "If we're not careful, nascent technologies, such as AI could be leveraged by fraudsters even more dangerously in the future."
Leading acquirer Worldpay will once again be a solo act. Its parent, FIS, is spinning off the merchant acquiring business within the next 12 months. FIS was a major provider of software and services to financial institutions when it purchased Worldpay in 2018 for a reported $43 billion. (At around the same time, Fiserv, a major competitor to FIS, purchased First Data Corp. for a reported $22 billion.)
But the move proved a drain on FIS's balance sheet. Since the Worldpay purchase, FIS shares have lost more than half their value.
FIS brought in a new management team and announced a "comprehensive assessment" of its business in late 2022, which led to the planned spinoff. Stephanie Ferris, FIS president and CEO, said, "We will create two more focused, agile companies that can pursue tailored strategies that are aligned with specific long-term growth opportunities." 
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