Today's edition covers Mastercard's recent outage, UK regulatory scrutiny on interchange fees, a new digital wallet launch, and the CFPB dropping its lawsuit against Zelle.
Welcome to Today in Payments.
I’m your host, Patti Murphy, here with your daily dose of payments notes.
Mastercard Outage Affects 65 Countries
Mastercard experienced an outage on Sunday, March 9, impacting hundreds of cardholders across 65 countries, including the U.S. According to reports, Down Detector, a website that monitors service disruptions, observed a surge in Mastercard issues in the U.S., UK, Japan, France, and Australia around 9 a.m. UK time.
The disruption was attributed to a "technical issue" that Mastercard resolved within a few hours. However, last month, a more severe outage lasted over 48 hours, leaving customers unable to access their funds. No detailed explanation has been provided for either incident.
UK Regulator Investigates Visa and Mastercard Interchange Fees
Interchange fees are a hot topic not just in the U.S. but also in the UK, where Visa and Mastercard face regulatory scrutiny for their pricing practices. The UK’s Payment Systems Regulator (PSR) has warned both companies that action will be taken to address concerns over competition and transparency in card payments.
According to the Financial Times, Visa and Mastercard control 95% of all debit and credit card transactions in the UK and have raised merchant fees 25% above inflation since 2017. The PSR is now considering capping these fees.
Previously, as part of the EU, the UK adhered to interchange caps of 0.3% for credit cards and 0.2% for debit cards. Since leaving the EU in 2020, it has been responsible for regulating its own payment schemes. Merchants have voiced concerns over rising costs, and the PSR has found evidence suggesting that Visa and Mastercard may have overcharged businesses by millions of dollars due to insufficient competition.
Visa, along with Revolut, a fintech company with 50 million customers as of November 2024, is challenging the PSR’s decision. The regulator also criticized Visa and Mastercard for failing to provide clear, detailed information about processing fees, leading to confusion among businesses and payment acquirers.
New Digital Wallet Integrates Fiat and Stablecoins
BVNK, a London-based B2B money transmitter, has launched a digital wallet that combines fiat currencies and stablecoins. This embedded wallet is available globally and allows users to access blockchain networks and traditional payment systems such as SWIFT and ACH, improving the efficiency of money transfers.
BVNK’s modular API offers flexibility, enabling clients to integrate its features according to their specific needs.
CFPB Drops Lawsuit Against Zelle
The Consumer Financial Protection Bureau (CFPB) has dropped its lawsuit against Early Warning Services, the operator of Zelle, over fraud concerns linked to the peer-to-peer payment service. The lawsuit was dismissed with prejudice, meaning it cannot be refiled.
This move is part of a broader trend by the CFPB to withdraw legal actions initiated during the Biden administration. Reports indicate that the agency has also dropped cases against Capital One and Rocket Loans and rescinded a proposed rule that would have capped bank overdraft fees at $5.
In a February statement, the White House referred to the CFPB, established by the Dodd-Frank Act, as “another woke, weaponized arm of the bureaucracy.”
Final Thoughts
That’s it for Today in Payments. Thanks for tuning in, and be sure to check back for your daily dose of payments industry news.
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