Page 8 - gs260702

NewsBriefs

This article contains summaries of news stories recently posted under support, improve fraud education, investigate unauthor-
Breaking Industry News on our homepage. For links to these and other ized transactions and stop making misleading claims
full news stories, please visit www.greensheet.com/breakingnews.php. about Cash App's safety.
UK expands oversight of BNPL
raising bar for providers

New U.K. regulations took effect July 15, bringing most
third-party buy now, pay later (BNPL) products under Fi-
nancial Conduct Authority oversight. Lenders must now
conduct affordability checks, provide clearer repayment
Consortium-backed Open USD information, support borrowers in financial difficulty and
raises stakes in stablecoin race offer eligible consumers access to the Financial Ombuds-
man Service and Section 75 purchase protections. Industry
Open Standard said it plans to launch its Open USD executives largely welcomed the changes, saying stronger
(OUSD) stablecoin this year, backed by a consortium of oversight should build consumer trust, while cautioning
more than 140 companies, including Visa, Stripe, Black- that affordability checks must be integrated seamlessly
Rock and Coinbase. Unlike traditional stablecoins, OUSD into checkout to avoid abandoned purchases.
will distribute most reserve revenue among consortium
participants rather than a single issuer. RS2 CEO Radi El Others warned the rules could create uneven treatment
Haj called the initiative a shift toward shared payments between third-party lenders and merchant-financed cred-
infrastructure, comparing it to cooperative networks such it. Processors and acquirers also face new operational re-
as SWIFT. quirements involving transaction classification, reporting
and dispute handling.
He said the model could broaden adoption but warned
that governance, reserve yield allocation and settlement x402 Foundation becomes operational
priorities may become more complex as usage grows. He under Linux Foundation
also expects processors to route transactions across mul-
tiple stablecoin networks. The x402 Foundation became operational July 14, com-
pleting the Linux Foundation's initiative to provide open
Banks explore debit network deal that governance for the x402 payments protocol. Designed to
could reshape interchange landscape enable secure payments over HTTP, the protocol aims to
let AI agents, applications and APIs exchange value as
JPMorgan Chase, Bank of America, Wells Fargo and PNC easily as they exchange data. About 40 organizations have
Financial Services reportedly have held preliminary talks joined the foundation, including Fiserv, Mastercard, Visa,
about acquiring Fiserv's STAR and Accel debit networks, a Stripe, Google, Amazon Web Services and American Ex-
move that could reshape the U.S. debit payments market. press. Under the Linux Foundation's governance model,
Reports suggest banks believe owning a debit network members will collaborate on developing an interoperable
could exempt certain transactions from Durbin Amend- standard supporting multiple payment methods, from
ment interchange caps, allowing them to retain more fee cards to stablecoins. Industry participants said the initia-
revenue. tive could help establish a secure, vendor-neutral foun-
dation for emerging AI-driven and machine-to-machine
The discussions follow Capital One's acquisition of Dis- commerce.
cover Financial Services and its Pulse debit network. Mer-
chant groups are expected to oppose any effort that in- Fed gauges consumer readiness
creases debit interchange; analysts question whether com- for pay-by-bank at POS
munity banks and credit unions would support a bank-
owned network. A new Federal Reserve Bank of Kansas City report sug-
gests U.S. consumers may be ready to adopt pay-by-bank
Block settles with states over Cash App allegations at the POS, but widespread use will depend on stronger
incentives. Pay-by-bank enables direct account-to-account
Block Inc. agreed to pay $45 million to settle allegations by payments through networks such as ACH, RTP and Fed
46 states that it misled consumers about Cash App's secu- Now, offering merchants lower acceptance costs and con-
rity, failed to adequately protect users from fraud and did sumers greater spending visibility.
not properly investigate fraud claims. Oregon and Texas
led the investigation, with settlement funds earmarked to The Fed found adoption is most likely among younger,
reimburse affected consumers. Separately, Block agreed higher-income consumers already using mobile banking
to pay Washington state $20 million to resolve allegations and payment apps, while older consumers remain less fa-
involving fraudulent unemployment benefit transfers dur- miliar with mobile payments. Although mobile payment
ing the pandemic. Under the multi-state settlement, Block use continues to grow, credit and debit cards still domi-
agreed to strengthen fraud controls, expand live customer nate POS transactions.

8 8