COVID19 has led to speculation that the pandemic could be the catalyst for the arrival of the cashless society, but research suggest that our assumptions on how the pandemic is shaping payments may need revisiting.

Stay-at-home measures and pandemic fears have led to an increase in online shopping. At the same time, some brick and mortar merchants are refusing cash as a defense against germs. Nonetheless, consumers haven’t abandoned cash just yet. 
Rachel Huber, senior analyst in payments at Javelin Strategies and Research completed a study on the health of cash for ATM provider Cardtronics in late 2019. Given the pandemic, the company thought that she should do another survey to see how the pandemic changed things. 

To give you a sneak preview, it might be too soon to call it a day for cash payments just yet. And our assumptions about who is using cash and why may not be correct. In looking at cash in the context of other payments, Huber learned a few things about contactless adoption as well. 

You can hear about how things are playing out in the episode and find the complete study online. 

Interested in becoming an IPA member and helping to shape the future of payments? Reach out today and talk to us about the benefits of joining. Go to www.ipa.org  to learn more.

Listen to this episode now. 

The Consumer Financial Protection Bureau (Bureau) today filed its motion for summary judgement in the PayPal case. This filing comes in response to PayPal’s own motion for summary judgement from May. In brief, the Bureau is urging the Court to deny PayPal’s motion for summary judgement and to consider its motion for summary judgement. The Bureau also defends the Prepaid Rule in its entirety and argues that PayPal’s challenges distort the governing statutory framework, the Bureau’s reasons for adopting the Rule, and the scope of the Rule itself, and asks the Court to reject them. 
 
Specifically, the Bureau lays out the following arguments in defense of the Prepaid Rule: 
 

• Congress delegated the Bureau broad authority to promulgate rules to ensure that consumers understand the terms and conditions of financial products so that they can make informed financial decisions.
• The Rule easily satisfies the Administrative Procedures Act’s requirement for reasoned decision making.
• The Bureau thoroughly considered the benefits and costs of the Rule in compliance with its statutory obligations
• The Rule’s disclosure requirements are entirely consistent with the First Amendment.

 
In addition, the Bureau argues that even if the Court concluded that some of PayPal’s challenges had merit, that would not warrant the wholesale invalidation of the Rule that PayPal seeks. The Bureau, therefore, requests that if the Court rules one portion of the rule is invalid, the court should “sever and affirm” the remainder.
 
PayPal will now have the opportunity to file a reply in support of its motion for summary judgment and opposition to the Bureau’s motion for summary judgment, which is due by August 21, 2020. We will discuss this development further our Monthly GRWG call, which will take place on Thursday, June 9th at 2 PM ET.

The COVID19 pandemic has created new challenges for individuals, businesses, and government agencies as they try to manage money and deliver payroll or benefits. 

Prepaid cards have filled gaps for a variety of payments, and in this episode Lori Breitske and Jerry Uffner, from payments processor FIS, explain how. They talk about how prepaid has been used for everything from school lunch benefits to payroll. They also cover how new developments will create payments innovations that will yield benefits beyond the current crisis. 

This podcast contains an edited extract of the audio portion of a Webinar presented by the IPA and FIS. 
You can find a video of the full Webinar at our site or on our YouTube channel.

Interested in becoming an IPA member and helping to shape the future of payments? Reach out today and talk to us about the benefits of joining. 

As countries struggle to help their citizens deal with the economic fallout of the COVID19 pandemic, many are finding that prepaid cards and accounts offer a fast and convenient way to support people. 

The pandemic has shifted the payments behavior of governments – through the way they disburse funds and the way they look at different payment types – as well as the behavior of individuals. Now the question is, what changes will last beyond the pandemic and what will the future look like?

We have pulled together an international panel to try to answer some of these questions. In this episode, we talk with Jennifer Tramontana of the Canadian Prepaid Providers Association, Matthias Spangenberg of Prepaid Verband Deutschland, Diane Brocklebank of the Prepaid International Forum, Kevin McAdam of Global Processing Services, and Brian Tate of the Innovative Payments Association.

We cover how prepaid cards have been used to distribute benefits in various countries. We talk about the regulatory response to the crisis and prepaid’s role in relief. We also cover the future of payments in general and the future of cash in particular. While the world is in constant flux, it is safe to say that more things change, the more some things will stay the same. 

To learn more about the Canadian Prepaid Providers Organization, visit: https://cppo.ca/
To learn more about the Prepaid International Forum, visit: https://prepaidforum.org/
To learn more about the Prepaid Verband Deutschland (German Prepaid Association) , visit: https://www.prepaidverband.de/en/
To learn more about Global Processing Services, visit: https://globalprocessing.net/
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Interested in becoming an IPA member and helping to shape the future of payments? Reach out today and talk to us about the benefits of joining. 

The COVID-19 pandemic presented the payments industry with challenges that had never been seen before and that required immediate responses and solutions. The IPA is proud to say that the payments industry stepped up to help local, state, and the federal governments distribute emergency funds during our current national emergency. Whether it was ensuring that Economic Impact Payments and state unemployment benefits were safely and quickly delivered to those most in need during this national emergency or continuing to keep prepaid programs operational in the midst of a shift to a work from home culture on the turn of dime, the prepaid industry showed why it continues to be a trusted product for consumers, businesses, and government agencies. 

While the industry worked hard to effectively respond to the COVID-19 pandemic, the IPA also worked hard to support the industry’s immediate response as well as ensure that the IPA was continuing to advance the long-term priorities of the industry. The IPA wanted to take a moment to highlight the Association’s efforts to support the industry since early March.

IPA Comment Letter in Response to FDIC Notice of Proposed Rulemaking (NPR) on Brokered Deposits – In the NPR, which was first released in December 2019, the FDIC proposed that payments companies be able to apply for an exemption to the FDIC’s brokered deposits regulations. This exemption could help lower the costs for deposit insurance for prepaid deposits, which means prepaid and other similar transaction accounts will continue to be attractive to consumers. 

IPA Comment Letter in Response to the CFPB's Request for Information (RFI) to Assist Taskforce on Federal Consumer Financial Protection Law – In late March, the CFPB issued an RFI to assist the Taskforce on Federal Consumer Financial Law. The CFPB’s Prepaid Rule regulates prepaid cards, digital wallets, and peer-to-peer payments. Given the important role the CFPB plays in regulating the payments industry, the IPA submitted comments in late May that highlights the industry’s response to the COVID-19 and recommends rule changes that could be beneficial to consumers. 

IPA Comment Letter in Response to FDIC Request for Information (RFI) on its Sign and Advertising Rules – In February, the FDIC issued an RFI seeking input regarding potential modernization of its sign and advertising rules to reflect that deposit-taking via physical branch, digital, and mobile banking channels continues to evolve. As innovation in the payments industry has accelerated, it is important the FDIC understands the myriad of new avenues that banks acquire deposits and what effect their regulations have on both banks and those who place deposits with them. 
In addition, the IPA took immediate action after the emergence of the COVID-19 pandemic to support and bolster the industry’s response. Notably, the IPA sent a letter to Treasury Secretary Steve Mnuchin in April on the IRS’ web tools (Non-Filers and Get My Payment). The IPA’s letter urges IRS to update its online portals and clearly list prepaid cards as a viable option (alongside checking and savings accounts) in regard to receiving Economic Impact Payments (EIP) to reduce public confusion and significantly reduce the time for Americans without traditional banks accounts to receive much needed financial support. 

This is just a snapshot of what the IPA has been hard at work on over the past few months in the policy arena. We also continue to engage in conversation with regulators, legislators, and their staff informally to ensure that they are aware of what is going on in the industry and ways that the industry continues to serve Americans. 
Outside of the policy arena, the IPA continues to assist our members in their efforts to combat fraud and provide our members with new educational resources. The IPA’s Financial Crimes Task Force meets regularly to exchange information and coordinate with law enforcement. If you would like to learn more about or join the Task Force, please contact Ben Jackson, IPA COO, at bjackson@ipa.org.

The IPA has additionally worked hard to bring IPA members new educational resources. In May, the IPA released an updated version of its Prepaid Glossary. The Glossary is designed to give an overview of the most common terms used by the prepaid card industry. It includes definitions of the types of prepaid card programs, common transaction terms, and high-level definitions of several regulatory concepts. 

The IPA’s focus on educational resources also includes webinars. Earlier this month, the IPA hosted our Virtual Compliance Bootcamp. The IPA will also host a virtual happy hour for our annual award ceremony on July 7th. Looking ahead, the IPA is working to bring exciting new webinars throughout the rest of the summer as part of our Summer of Learning series. Please stay tuned for more updates on these upcoming webinars! 

Thank you for all you do and for your continued support for the IPA. If there is anything we can do to support your efforts further, please don’t hesitate to contact me at btate@ipa.org.

The economic effects of the COVID19 pandemic are far reaching and will last longer than the pandemic itself. These affects are rippling through financial institutions’ portfolios as borrowers feel pressure from lost wages and the economic slowdown. 

Despite moratoriums on evictions and foreclosures, it is not clear that these will last long enough to let the economy recover enough to prevent a wave of defaults.

But companies don’t need to stand by as problems ripple through their client bases and portfolios. As the IPA noted in an earlier blog, companies do not need to wait for government action to alter their policies to help their customers. Resources exist to help companies find aid for borrowers who need to regain a solid financial footing.  

In the latest episode of the IPA Payments Pod, we talk with Rochelle Gorey, the co-founder and CEO of SpringFour, a fintech that helps lenders find assistance for borrowers in financial trouble. We talk about how Springfour provides resources for call centers and online customer services and the business case for connecting customers to vetted nonprofits and government agencies that can provide aid. 

To learn more about Spring Four, visit: https://springfour.com/

Whether it is using outside resources like SpringFour or making internal policy changes and resource decisions, companies should take control of their own destinies and look for ways to help their customers and clients weather the storms that everyone is facing right now. 

Originally posted here. 

The COVID 19 pandemic has caused a lot of chaos for every industry in the economy. But when it comes to payments, the effects of the pandemic likely will be far reaching. 

In the latest episode of the IPA Payments Pod, Brian Tate, the CEO of the Innovative Payments Association, and the Association’s government relations director, Grant Hannah, talk about how the pandemic is affecting the industry now, and what the long-term implications might be. They cover COVID19 payments and the role that prepaid plays in delivering them and how future oversight might lead to more regulations.

Of course, the pandemic is not the only thing happening in payments. Events that preceded the COVID19 outbreak have continued on their course. So, our guests talk about how the ongoing PayPal lawsuit against the Consumer Financial Protection Bureau will have its own effect on the payments landscape independent of the virus.

If you want to stay on top of new developments in the industry, plan to attend the IPA’s compliance boot camp on June 3. The boot camp will feature sessions spread out over a day that cover topics such as fraud, the PayPal lawsuit, and earned wage advance products. Register today!

Interested in becoming an IPA member and helping to shape the future of payments? Reach out today and talk to us about the benefits of joining.

Congress passed the CARES Act in March to help provide relief to individuals, businesses, state and local governments, and others during the ongoing COVID-19 pandemic. This $2 trillion package expanded unemployment insurance, provided over $850 billion for loan, grant, and investment programs to rescue and bolster businesses of all sizes, and additional funding for state and local governments and the healthcare system. In addition, in order to help American households, the CARES Act authorized relief payments, called Economic Impact Payments (EIP), of up to $1,200 for individuals and $2,400 for married couples and tasked the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) with distributing these funds.

As of May 8th, the IRS reports that it has disbursed approximately $200 billion to 130 million Americans. 
Given the unprecedented size of the CARES Act, it is only natural that Congress would want to ensure that waste, fraud, and abuse are minimized and exercise as much oversight over the distribution of these funds as is possible.

​To do this, Congress created two new mechanism in the CARES Act for oversight of the business focused programs. First, they created a congressional oversight panel, called the Congressional Oversight Commission (Commission). According to the CARES Act, the Commission is tasked with “…conducting oversight of the implementation of the business loan, grant, and investment programs under Title IV of the CARES Act by the Department of the Treasury and the Board of Governors of the Federal Reserve System.” The Commission is also tasked with submitting reports on the findings of their oversight activity to Congress as well. 

Congress also created an inspector general position at Treasury to oversee the business loan, grant, and investment programs that were created by Title IV of the CARES Act, and perhaps some of the other non-business related programs as well. This new inspector general position is called the Special Inspector General for Pandemic Recovery (SIGPR). According the statute the SIGPR shall:
“…conduct, supervise, and coordinate audits and investigations of the making, purchase, management, and sale of loans, loan guarantees, and other investments made by the Secretary of the Treasury under any program established by the Secretary under this Act, and the management by the Secretary of any program established under this Act…”

On April 3rd, President Trump announced that he would nominate Brian D. Miller to be Special Inspector General for Pandemic Recovery. Mr. Miller currently serves in the Office of White House Counsel and has previously served as Inspector General for the General Services Administration. 

The Senate Banking Committee held a hearing on Mr. Miller’s nomination on May 5th. This is just the first step in the confirmation process. The full Senate Banking Committee will vote on whether or not to send Mr. Miller’s nomination to the full Senate for consideration. Only after a favorable vote from the Banking Committee would the full Senate consider his nomination. 

While there are no oversight provisions in the CARES Act that directly address Economic Impact Payments, in order to prepare for the road ahead, it is best to assume that a broad approach to oversight will be taken by the Commission and the SIGPR. It is possible these two entities will examine how Treasury and IRS implemented the Economic Impact Payment program, how financial institutions assisted Treasury/IRS in this process, and what financial institutions did to ensure their customers quickly had access to their full funds. 

Regardless of what happens with the Commission and SIGPR though, congressional committees will also play a part in the CARES Act oversight. The House Oversight and Reform Committee, House Ways & Means Committee, House Financial Services Committee, Senate Finance Committee, Senate Banking Committee, and Senate Homeland Security and Governmental Affairs Committee will all likely hold oversight hearings and issue reports on the CARES Act. 
When it comes to the Economic Impact Payment program specifically, the House Ways and Means Committee, Senate Finance Committee, House Financial Services Committee, and Senate Banking Committee are the most likely to examine the Economic Impact Payment program. The House Financial Services and Senate Banking Committees have the relevant jurisdiction to examine how financial institutions aided both Treasury and IRS in the distribution of Economic Impact Payments and ensured that their customers were able to access their full payment expeditiously. 

The IPA will be keeping track of all hearings, reports, etc. from the various entities discussed above and will be keeping our membership updated through our Government Relations Working Group (GRWG). Additionally, the IPA will continue the conversation with policymakers on how the prepaid industry serves governments, businesses, and Americans of all backgrounds, and how the industry responded to the COVID-19 crisis. 

​If you would like to join to the GRWG, please contact Grant Hannah, Director of Government Affairs, at ghannah@ipa.org.
 

The Vice President’s visit to the Mayor Clinic last month caused a stir after pictures were posted of him not wearing a mask during the tour. 

Putting political punditry aside, the event offers a lesson for companies about cybersecurity, especially in the COVID19 era when so many people are working remotely. 

The Mayo Clinic has a policy that everyone on its campus needs to wear a mask. Making sure the Vice President was following that policy was the responsibility of the Mayo Clinic staff. 

So how did he end up not wearing one? Maybe no one felt comfortable telling the Vice President that he had to don a mask. Maybe someone thought it was someone else’s responsibility. Either way, the Mayo staff did not strictly enforce their own procedures and a bad situation resulted. 

What does this have to do with cyber and financial security?

​Much of the fraud that we see today comes from social engineering and business e-mail compromise. An account specialist gets an e-mail that looks like it is from a corporate vice president, or even the CEO, and then they end up transferring money to a fraudulent account. The employee gets an e-mail that they aren’t comfortable questioning, or they think it is someone else’s responsibility. 

What they should do when something seems suspicious is to stop and go back to the established protocols and procedures. When something seems funny or not quite right, it is time to call someone (ex: maybe a Compliance Officer) and doublecheck, especially in this time when you can’t just walk down the hall or catch someone in the break room. 
Brian Kreb’s recently did an article on this in regard to consumer-based fraud, but it is as important in business settings as well. You can find that article here: When in Doubt: Hang Up, Look Up, and Call Back.

​Following these steps when something seems wrong will save a lot of time and money. It might lead to a few awkward conversations, but policies and procedures are established for a reason, and everyone needs to follow them.