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NewsBriefs

This article contains summaries of news stories recently posted under FTC alleges payment processor violations
Breaking Industry News on our homepage. For links to these and other of 2015 I Works settlement
full news stories, please visit www.greensheet.com/breakingnews.php.
The Federal Trade Commission is seeking to hold payment
processor Cliq Inc. and two of its executives in contempt of
court, alleging they violated a 2015 settlement that barred
them from facilitating fraudulent payment activity. In a
motion filed Jan. 13 in the U.S. District Court for the Dis-
trict of Nevada, the FTC accused Cliq, formerly CardFlex
Inc., along with CEO Andrew Phillips and Chief Technol-
ogy and Security Officer John Blaugrund, of repeatedly ig-
noring obligations imposed under a stipulated court order
tied to a major online fraud case.
The FTC is seeking at least $52.9 million in compensatory
Digital payments spur growth, ETA study finds relief for consumers, a permanent ban preventing Phil-
lips and Blaugrund from working in payment processing,
Digital payments generate more than $350 billion in an- and the appointment of a receiver to ensure compliance.
nual U.S. economic output and play a critical role in job According to the agency, Cliq processed hundreds of mil-
creation, income growth and entrepreneurship, according lions of dollars in transactions for merchants that were ex-
to a study published Jan. 15, 2026, by the Electronic Trans- plicitly prohibited, including at least three listed on Mas-
actions Association and conducted by PwC. tercard's MATCH database for excessive chargebacks or
rule violations.
Drawing on 2024 data from the U.S. Bureau of Economic
Analysis, Bureau of Labor Statistics and Census Bureau, The agency further alleged Cliq helped clients evade bank
the research examines the direct, indirect and induced and card network risk controls, failed to properly screen
economic impact of electronic payments nationwide. high-risk merchants, and inadequately monitored transac-
tions for signs of fraud. In some instances, the FTC said,
The study found the U.S. payments industry directly sup- Cliq stopped processing for certain merchants without
ported 556,600 jobs in 2024, with total employment impact determining whether deceptive conduct was occurring,
exceeding 2 million jobs when indirect and residual effects while continuing to support other high-risk clients.
are included. Average direct labor income in the industry
reached $165,000 per job, more than double the national The contempt action stems from the long-running I Works
average, while total labor income tied to payments activity enforcement case. The FTC alleged in earlier filings that I
totaled $210 billion. Works defrauded consumers out of more than $275 mil-
lion through deceptive trial offers, with payment proces-
In terms of GDP, the industry directly contributed $148 sors enabling the scheme. CardFlex, Phillips and Blau-
billion and generated $354 billion in combined national grund settled in 2015, agreeing to strict compliance re-
economic output, accounting for 1.2 percent of U.S. GDP. quirements and partial monetary penalties. The FTC now
argues those obligations were ignored, underscoring its
Economic impact varied by region. Large states such as continued focus on enforcing long-standing court orders.
California, Texas, Florida and New York generated sig-
nificant absolute activity, while states with concentrated Surcharging a complex challenge
financial-services ecosystems, including Delaware, South for merchants, J.D. Power finds
Dakota, Virginia and Utah, showed higher relative depen- Credit card surcharging is becoming more common among
dence on payments-related activity.
U.S. merchants, but it remains a delicate tradeoff between
recovering costs and preserving the customer experience,
Researchers concluded digital payments are advancing ef- according to the J.D. Power 2026 Merchant Services Satisfac-
ficiency and entrepreneurship by lowering barriers to en- tion Study, a new study from J.D. Power. The firm found
try and enabling businesses to scale more easily.
that 35 percent of card-accepting businesses now impose
surcharges on credit card payments. At the same time, 32
According to ETA CEO Jodie Kelley, small businesses can percent of merchants said customers occasionally or fre-
begin accepting digital payments in minutes and typically quently abandon purchases rather than pay the additional
see sales increase 8 to 10 percent, contributing an addition- fee, highlighting the risk of lost sales.
al $34 billion in revenue. The study also found payment
efficiencies save small businesses an estimated 806 million Surcharging is most prevalent among newer small busi-
labor hours annually. nesses and restaurants, where margins are often tighter.
J.D. Power noted growing tension between merchants'
desire to accept more payment types and their efforts to

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