From Browsers to Bank Battles

Google is doubling down on payments with new remittance and BNPL features, while gift card sales continue to climb. Meanwhile, the White House takes aim at debanking and J.D. Power finds more small merchants adding surcharges.

Welcome to Today in Payments, I’m your host, Patti Murphy, here with your weekly dose of payments notes.

Google Plans Additional Payments Plays

Google wants to get deeper into payments. The search engine giant just announced plans to incorporate remittance services into its digital wallet. To make this work, Google said it has teamed up with several remittance providers including Ria Money Transfer, which has over 55,000 locations in the U.S. and 500,000 worldwide. Also Wise, an online money transfer service that counts nearly 15 million customers in 80 countries.

Initially Google Pay customers will only be able to send remittances to India, Brazil, Mexico and the Philippines. But expect more markets to open up. In fact, some reports say Wise is already testing the U.S. market with Google. Payments will be processed by Stripe 

Google, in a blog post, also said it also plans to incorporate buy now pay later options into the autofill function on its Chrome browser. For that it’s expanding its relationship with BNPL firm Klarna.

Payments Dive, an online news site, quotes several industry experts who point to the need for Google to deepen its relationships with consumers and merchants with an eye toward enhancing utility as the impetus for getting deeper into payments. One obvious reason: Open AI is readying a web browser to compete with Chrome.

Giving the Gift of Card Payments

2025 is shaping up to be a good year for gift card sales. A new report from Bank of America and The Strawhecker Group shows increasing gift card purchasing over the past year as consumers find new ways to give, receive and use gift cards.

Overall, 81 percent of consumers purchased gift cards in 2024, a six percent increase over 2023. That number includes both physical and digital cards were purchased with greater frequency.

38% of consumers purchased digital gift cards last year; up from 32 percent in 2023. Sales of physical gift cards rose 5 percent, to 68 percent of consumers surveyed saying that’s what they purchased. 

I know I’m not necessarily representative of the buying public, but I often purchase gift cards for my personal use. Recently, I needed to replace the dishwasher in a rental property. I purchased gift cards at my favorite grocery store, which has a loyalty program that offers money off on gas. I earned enough on that purchase to fill-up my 30-gallon monster truck for free.

But back to the BofA-Strawhecker survey. Queried about their gift card purchasing plans for 2025, 23 percent of consumers said they plan to spend more on gift cards than they did in 2024.

Also worth noting, 57% of consumers say gift cards inspire them to try new places. 

Debanking in White House Cross Hairs

It’s rare to read something coming out of the White House that mentions payment processing. But that was before “debanking” became a force to be reckoned with.

Debanking – sometimes called de-risking – refers to the practice of banks closing or refusing to open accounts for individuals or organizations deemed too high risk. Operation Chokepoint – where regulators looked askance at banks providing payment processing and other services to businesses like gun shops, payday lenders, and more recently cryptocurrencies – has caused a lot of consternation.

An Executive Order signed by President Trump earlier this month prohibits financial institutions from engaging in “politicized or unlawful debanking.”

The order is titled Guaranteeing Fair Banking for all Americans. It imposes numerous requirements on federal banking regulators and the Small Business Administration. For example: 

• Regulators need to comb through examination handbooks, reports and related materials to identify instances of debanking, including businesses denied payment processing services;
• They also must notify and provide renewed options to any clients or prospective clients that were denied access to payment processing or other serviceis because of politicized or unlawful debanking actions.    

JD Power Finds One-Third of Merchants Surcharge Credit Card Payments

The JD Power 2025 Merchant Services Satisfaction Survey reveals surcharging is catching on with small businesses. 

Better than a third of the nearly 4,000 small business owners surveyed assess surcharges on credit card transactions. Surcharging is especially popular with newer and smaller merchants, JD Power said.

Surcharging has been an option for merchants for quite some time. There is no federal law against it, and just a few states have laws on the books that specifically prohibit surcharging – Connecticut, Massachusetts and Puerto Rico.

In most states where it’s legal, surcharging is capped at either the merchant’s actual cost or a maximum percentage, typically 3% - 4% of the ticket.

New York passed a law last year that requires surcharging merchants to either display the higher credit card price alongside the standard price, or a single unified price that is inclusive of any surcharge. The reason being that buyers need to know upfront what something costs – there can be no calculations done at point of sale to come up with total cost. Additionally, under New York law a surcharge cannot exceed the merchant’s actual cost of acceptance.

That’s all for Today in Payments. Stay tuned for your weekly dose of payments notes.