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NewsBriefs

This article contains summaries of news stories recently posted under could influence how quickly AI-driven, agent-led transac-
Breaking Industry News on our homepage. For links to these and other tions become mainstream in global payments.
full news stories, please visit www.greensheet.com/breakingnews.php.
Dueling decisions on debit interchange
Federal judges in Kentucky and North Dakota issued con-
flicting rulings on the legality of the Federal Reserve's
debit interchange cap set under the Durbin Amendment to
the 2010 Dodd-Frank Act. On Sept. 12, 2025, Judge Gregory
F. Van Tatenhove of Kentucky upheld the cap—21 cents
plus five basis points and a one-cent fraud-prevention ad-
justment—saying the Fed properly balanced competing
Fed to raise FedNow transaction cap to $10M interests. Linney's Pizza, the plaintiff, had argued the rule
was "arbitrary and capricious," claiming the Fed ignored
The Federal Reserve will increase FedNow's transaction true transaction costs. The judge disagreed, calling trans-
cap to $10 million in November 2025, marking the sec- action-specific pricing "nigh impossible" given the volume
ond hike this year as instant payments gain momentum. of daily payments.
The Fed's earlier increase in June raised the ceiling from
$500,000 to $1 million. The higher limit aligns FedNow His ruling contrasts sharply with a North Dakota decision
with The Clearing House's RTP network, which raised its by Judge Daniel M. Traynor, who found the Fed exceeded
own cap to $10 million in February. According to the Fed, its authority and included costs Congress never intended.
the new threshold will allow businesses to use instant That case, brought by Corner Post Inc., is paused pending
payments for high-value transactions such as payroll, ven- appeal. Meanwhile, the Fed's proposal to cut interchange
dor payments and real estate transfers. caps by more than 30 percent remains stalled. Federal Re-
serve Governor Michelle Bowman, now vice chair over-
Financial institutions retain flexibility to impose lower in- seeing bank supervision, publicly opposed the cut, under-
ternal limits and may use new risk-mitigation tools, like scoring continuing divisions over debit fee regulation.
account activity thresholds, to manage exposure. Mark
Gould, chief payments executive for Federal Reserve Fi- Settlement proposed covering Discover lawsuits
nancial Services, said the move "reflects growing demand A proposed settlement aims to resolve three related fed-
for instant payments" and underscores FedNow's adapt- eral lawsuits alleging Discover misclassified certain con-
ability. Launched nationwide in July 2023, FedNow now sumer credit cards as commercial cards, causing inflated
counts more than 1,400 participating institutions. Officials interchange fees for merchants, acquirers and processors.
said the expanded limit will accelerate modernization and Filed in the U.S. District Court for the Northern District
support wider business use cases for real-time payments of Illinois, the suits claim misclassification led to higher
across the United States. processing costs between Jan. 1, 2007, and Dec. 31, 2023.
Google and PayPal partner to Discover denies wrongdoing, and the court has not ruled
advance AI-driven commerce on the merits. If approved, the settlement would provide
financial relief and clarify procedures for affected parties.
Google and PayPal entered a multiyear strategic partner-
ship to accelerate AI-driven digital commerce and develop Notices were sent beginning Sept. 11, 2025, to class mem-
new standards for "agentic commerce" in which AI agents bers via mail and email, explaining rights, options and
transact on users' behalf. Under the deal, PayPal's branded deadlines for submitting electronic claims. A dedicated
checkout, Hyperwallet and Payouts services will be em- information portal—www.discovermerchantsettlement.com—
bedded more deeply across Google's ecosystem, including offers FAQs and updates on the case. Industry observers
Google Ads, Cloud and Play. In turn, PayPal will expand said the dispute highlights the complexity of card classifi-
its use of Google Cloud to modernize its infrastructure. cation and the potential costs of errors over long periods.
Google's AI capabilities are expected to enhance PayPal's The settlement is expected to bring closure for thousands
products, improving personalization and fraud detection. of merchants while reinforcing scrutiny of issuer and pro-
cessor compliance with interchange fee categories.
Both companies will promote Google's Agent Payments
Protocol, an open standard for secure agent-initiated
transactions. PayPal CEO Alex Chriss said the collabora-
tion will bring PayPal's reach "to billions of Google users," Also find us on Facebook,
while Google CEO Sundar Pichai described it as advanc- LinkedIn & Twitter for the
ing commerce that is "simpler and more secure." Analysts most up-to-date stories,
view the partnership as part of a broader industry trend can’t miss events and newest
toward standardizing AI-based transaction frameworks. industry announcements.
Although financial terms weren't disclosed, the alliance

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