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AARP Survey Shows Stopping Scams is Everyone’s Business

5/19/2022

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​A recent survey by AARP found that 34 percent of Americans say they or someone they know has been targeted by criminals who try to trick them into paying a bogus debt with a gift card.

The survey of just over 2,000 American adults also found that 24 percent of the people surveyed bought gift cards in response to the request.

As we look to protect customers (and friends and family), it’s importance to recognize that these victims are falling prey to scams and not hacks. In other words, the most secure packaging and computer systems in the world cannot prevent someone from buying a gift card and then giving the numbers over the phone to criminals.

The survey also asked “[h]ow strongly do you agree or disagree that lawmakers need to do more to protect consumers from fraud and scams?” Not surprisingly 89 percent said they agreed with this statement. But laws already exist to prosecute criminals, and there are no laws Congress and state legislators can pass and implement that will totally prevent people from being tricked or misled.

Ultimately, we all need to be part of the solution to preventing these crimes. Laws and regulations are already in place to prosecute criminals, and law enforcement has developed tools like the FBI’s Internet Crime Complaint Center to improve reporting and investigations.

On the industry side, gift card issuers and distributors have built in fraud detection tools and created educational materials for shoppers. For instance, systems can spot unusual amounts of gift card loads or high numbers of activations. At that point they can prompt clerks to ask why the cards are being purchased, put a hold on the funds, or take other corrective action.

Of the people who reported that they bought gift cards as part of a scam, 25 percent said they were warned about the possibility of scams at the time of purchase. Clerks can only do this when the purchase seems unusual. Some criminals have gotten wise to this defense and warn their victims to purchase small amounts from multiple stores so that nothing tips off a clerk or store manager.

This brings us to the last lines of defense: education and social awareness. We need to educate git card buyers about the risks of scams. AARP did this in an article describing the most common types of scams, and industry groups like the IPA and Retail Gift Card Association have also provided information for consumers to avoid scams. The IPA also created an investigation for local law enforcement to make it easier for them to aid victims of card fraud of all types.  

Stores will often post warnings at their gift card malls that gift cards cannot be used for things like utility bill payments. Clerks have been trained to look for unusual purchases by customers.

Ultimately, we need to talk with our friends and family members about the proper uses of gift cards. Let them know they should call us first if someone ever tells them we are in jail or that they need to pay a bill and should buy a gift card. We need to make people comfortable about asking questions and not shame those who get tricked.

Gift cards have topped the holiday wish lists of consumers for the past 15 years, according to the National Retail Federation. They are popular because they bring recipients a lot of happiness and choice. By working together to protect the average American, law enforcement, industry, and friends and family can make sure gift cards remain a source of joy. 
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Talking Taxes, Fees, and Fintech Regulation with Brian and Brian

5/13/2022

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 Washington developments continue to affect the payments industry 
With all the news that comes out of Washington DC, it is easy to see why payments-related items might not be at the top of everyone’s minds. Nonetheless, a number of recent proposals, hearings, and releases show that the industry needs to be paying attention to what is going on beyond the headlines. 
In this episode we take a deep dive into some of these items with Brian Tate, the IPA’s CEO, and Brian Axell, of Axell Law, who has worked on compliance with Fintechs, issuing banks, and a variety of companies across the value chain.  
We look at the Consumer Financial Protection Bureau’s recent Request for Information on Fees, and their assertion of power to regulate Fintechs. We get into the Biden Administrations proposal on tax reporting for Earn Wage Access, and we even dip our toes back into the Interchange waters.  
To read Brian Axell’s blog on the EWA tax proposal, visit: Axell Law LLC | Biden Budget Plan Would Impose Earned Wage Access Tax Withholding Mandates on Employers 
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Technology Doesn’t Drive Innovation, People Do

4/25/2022

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What comes to mind as you think about innovation?

We often think of innovation as being driven by new technologies. They may take the form of new devices such as the next iteration of a smart phone, or new types of software such as artificial intelligence or blockchains.

While new technology is important, one theme that emerged from the IPA’s Innovative Payments Conference in Washington DC is that people drive innovation in payments. This is why companies need to keep the big picture in mind as they try to build the next set of products and features.

In session after session, our speakers talked about the importance of understanding people when it comes to driving innovation forward.

There is one thing that businesses need to exist – customers. Financial services touch people’s lives in a very comprehensive and personal way. So many things we do each day involve a payment. Understanding the needs, desires, and capabilities of potential customers is key. We heard from the Bureau of Fiscal service about how the government has looked for ways to meet the needs of benefits recipients from the days when checks were a new technology. Meeting people where they are is crucial, and so is bringing them along to the next level of innovation.

This coincides with the fact that the audiences that financial services providers are trying o reach are diverse ones. We had panels that discussed how to reach out to new groups of people, both inside and outside of an organization. Building a diverse team can provide more inhouse knowledge that will lead to building better products.

Of course, building products and entering new markets comes with risk. So, one big piece of advice was getting members of a team comfortable with the idea of failure. The people who need to be able to handle failure are not only the product development team, but also management and even investors. Not every idea is going to work, but it is better to test some of them than just avoid every path to innovation out of a fear of failure.
​
Watch this space for more insights from our conference and an announcement on how you can get access to recordings of the sessions!
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New Member Q&A: B4B Payments

3/29/2022

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What is your company’s role in the payments industry (program manager, issuer, processor, service provider, etc.)?
B4B Payments is a regulated Electronic Money Institution in the UK and Lithuania authorised by the FCA and Bank of Lithuania to issue e-money across the UK and EEA region. In the US, we are a prepaid card program manager and corporate payments service provider.  We are a Principal Member of Mastercard Europe and a partner of VISA Inc in the USA.  We specialise in end-to-end payment innovation. 
 
With over 15 years of expertise in payments and now as part of the Banking Circle group of companies, B4B Payments is a globally recognised and trusted provider of card issuing and payment services.  We launched our US business in 2019 and can service companies in both the European and American markets from a single platform.
 
Since 2006 we’ve supported thousands of businesses delivering seamless, flexible payment services, from virtual and physical card issuing, direct payments, global payment and FX solutions.
 
What kinds of payments do you support?
Our turnkey card issuing services provide everything needed to create and manage a secure and flexible corporate funded prepaid debit scheme. Typically we handle corporate expenses, disbursements, incentives and payroll spend.

We can also offer a scalable payment solution for managing high volumes of local and international payments, with low-cost foreign exchange rates and no hidden fees, corporates can pay and get paid globally, helping them benefit from new emerging markets, increased convenience, and reduced rates.

As a BIN Sponsor and an E-money issuer in Europe, we enable Program Managers to issue cards and products through the Mastercard® network and manage all associated regulatory compliance. We are also an Apple eligible issuer with experience of both Mastercard’s MDES tokenization platform, as well as VTES with Visa.
 
What kinds of special features do your products and services offer? 
Our turn-key card services and payment solutions are powered by an intuitive, easy to use platform and mobile app. The simple all in one management portal makes it easy to issue, activate and manage cards, load funds, and access a host of in-depth reporting features in real time.  We use tokenization to manage cards and transactions minimizing dependence on transmitting personal information.

Whilst the iOS and Android app allows cardholders to instantly view their card balance and transactions, and upload photographs of expense receipts, using the latest biometric login features to ensure the highest levels of cardholder security. 

Our robust and standard API allows corporates to integrate with a huge range of other software platforms, or build their own custom process. 

Our commercial model is streamlined, and uncomplicated, technical requirements are minimal and significant control is places in our client’s hands, we believe these are fundamentally important to our clients and partners

On top of our core solution, we can offer significant lateral capability with multiple features on the same platform.  As part of Banking Circle, we can leverage the core assets of the bank to take our value proposition to the next level so that clients of ours don’t need to go through a separate bank. This is hugely valuable to those who, on top of corporate expense, want to make volume payments outside of existing banking relationships, to send money overseas minimizing FX costs and make third party payments via secure accounts.

As a regulated EMI in Europe and with scheme principal membership, we offer full bin sponsorship capabilities combined with the added benefit of being able to provide a full back-end banking solution including safeguarding accounts, virtual ibans for collection and disbursement of banking funds across 25 currencies.

Our sister companies in the Banking Circle group can also offer BNPL and corporate financing solutions.
 
What kinds of companies are you looking to partner with?
Our innovative payment processing solutions enable any size organisation to manage expenses, pay-outs, reimbursements and incentives. Fintechs, insuretechs and other industry disruptors are also extremely interesting to us especially where they are looking for digital only payment solutions. Our solution is perfect as an embedded finance component, corporate businesses and aggregators can incorporate financial services into their own product and service to compliment what they already do.

We also want to talk to successful US programs that are keen to support their global clients into Europe. We understand your business and can offer fast to market solutions with end-to-end support via our turnkey product or full bin sponsorship is also an option.
 
What do you think the future of payments holds in the next five years?
It’s a very exciting time for payments in the US as interest in digital payments continues to grow, having benefited from some shifts in digital adoption which appear to be accelerated by COVID-19.

Innovators in all industries have embraced digital transformations and acceptance of digital first by consumers as such they are looking for embedded finance solutions within their own software and solutions versus going to a traditional bank for transactional services.   Consumers expect payments to be as seamless as delivery of any other services and want payments to be connected directly to the devices in their lives.  Industry innovators will partner with payment innovators rather than with traditional banks as those same consumers are now the corporates looking for the same level of service in the business world that they demand as individuals.

Digital wallets will become normal, checks will go away, payments across the globe will approach real time and the unbanked and underbanked will have options to receive and transmit payments without holding cash.
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The PayPal lawsuit Against the CFPB and What it Means

2/18/2022

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PayPal’s lawsuit against the Consumer Financial Protection Bureau entered a new phase on  

As a reminder, the CFPB is appealing Judge Richard Leon’s opinion in PayPal v. CFPB issued on December 31, 2020.  Please note that in its Opening Brief filed in August, the CFPB makes it clear that the “sole question presented by the decision below (in U.S. District Court by Judge Richard Leon) is whether the Bureau has statutory authority to adopt the short-form disclosure requirements.” 

In the latest episode of the IPA Payments Pod, we talk with Brian Tate, the IPA’s CEO, and Chris Stromberg, our head of government relations, about the possible outcomes for the case and what the suit might mean in the context of some of the Bureau’s other recent actions. 
​

Once you are done listening, you can find the recording of the oral arguments in the case here: https://www.cadc.uscourts.gov/recordings/recordings2021.nsf/B648C0D7905E3B97852587E50059E02D/$file/21-5057.mp3 
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B4B Brings a Global Perspective to US Payments: The company wants to help US partners looking to go abroad

2/11/2022

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​London-based B4B Payments embarked on its US expansion at the beginning of 2020. While the pandemic was a bump in the road, nevertheless the company has continued to build out its presence.  

In the latest episode of the IPA Payments Pod, we talk with Paul Swinton, B4B’s global CEO, and Kieran Draper, its head of North America, about why the opportunities they see in the United States, and how they can help their American cousins serve large global clients.  
​

We talk about the business-to-business market, how the U.S. market differs from other places in the world, and the future of fintech. Based on what they have seen in the market, they expect a shakeout in the market over the next few years.  
 
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Sen. Luján’s Absence Complicates Biden’s Nomination Agenda

2/8/2022

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Chris Stromberg

Director, Government Relations
Innovative Payments Association

​On Tuesday, United States Senator Ben Ray Luján’s (D-NM) office announced the senator had suffered a stroke and was recovering from surgery. While he’s expected to make a full recovery, thank goodness, the impact of his absence from the Senate floor cannot be ignored. 
 
With the Senate evenly split between Republicans and Democrats, every vote counts.  When senators deadlock on the floor, Vice President Kamala Harris is counted on to cast the tie-breaking vote. Indeed, Harris broke 15 ties during her first year in office, the most ever by a Vice President during a single year.
 
Unlike the House, which adopted proxy voting during the pandemic, senators must be physically present to vote.  Facing unified GOP opposition on most matters, without Senator Luján’s vote Democrats cannot muster enough votes to prevail even on questions that require a simple majority.  This is particularly worrisome for Democrats considering the number of important nominations currently pending in the Senate. 
 
It should be noted, however, that Republicans are not without their own Senate absences, and at any one time two GOP absences, like we saw last week, could empower Majority Leader Schumer with enough votes to overcome united GOP opposition without needing Senator Lujan’s vote.  
 
Supreme Court Justice Stephen Breyer has announced his retirement, effective at the conclusion of the Court’s current term in June. While a floor vote on Breyer’s replacement could be months away, the committee process could proceed in Sen. Lujan’s absence, so his absence may not cause a significant delay.
 
However, several important financial regulatory positions are currently awaiting Senate-confirmation, and Sen. Luján’s absence creates a predicament for the White House and Senate Democrats that, if extended for several months, could create further uncertainty and unpredictability for the financial industry.
 
Three Federal Reserve Board nominees received a hearing in the Senate Banking Committee this week: Sarah Bloom Raskin to serve as Vice Chair for Supervision, and Lisa Cook and Philip Jefferson to serve as Fed Board Governors.  Judging by the reception they received from  committee Republicans, it’s likely that one or two of them could fail to earn any GOP support in committee or in the full Senate.  Since Rep. Lujan does not serve on the Banking Committee, its process can continue as before.  Any delay in processing Banking Committee nominees would occur between the committee and the floor.  
 
In addition to Fed Nominees Jerome Powell, Lael Brainard, Bloom Raskin, Cook, and Jefferson, other financial regulatory nominees are awaiting confirmation, including Todd Harper (NCUA), Sandra Thompson (FHFA), Caroline Pham (CFTC Commissioner), Summer Mursinger (CFTC Commissioner) Kristin Johnson (CFTC Commissioner) and Christy Goldsmith Romero (CFTC). Powell and Thompson would also serve as voting members of FSOC.  
 
Lujan’s absence means, at least theoretically, Republicans at full numerical strength have the power to block all the President’s nominees on the Senate floor.  But given the fact that most of his nominees have received at least some degree of GOP support, a full blockade of nominees is unlikely.  But at a time when several important financial regulatory positions are awaiting Senate-confirmation, Sen. Luján’s absence creates a predicament for the White House and Senate Democrats that, if extended for several months, could create further uncertainty and unpredictability for the industry. 
 
IPA will continue to update members on the confirmation process and status of these financial regulators. Please reach out to Chris Stromberg (cstromberg@ipa.org) with any questions. 
 
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Musical Chairs at the Regulatory Agencies

1/25/2022

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​Changes at the top likely mean a new regulatory regime for the industry.

Changes are coming in the leadership of the financial regulatory agencies. The Consumer Financial Protection Bureau got a new director last year. The chair of the Federal Deposit Insurance Corp. has announced she is resigning, and the Office of the Comptroller of the Currency still only has an acting director. As the openings are filled, the regulatory climate will change for the financial services industry.

In this episode Brian Tate, the IPA’s CEO, and Chris Stromberg, the head of government relations, talk about what all these changes might mean and how some of the recent actions by the agencies provide clues as to their priorities. 
Listen Now
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If 2021 Showed Us Anything, It’s To Expect the Unexpected in 2022

12/16/2021

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The past year has been a busy one when it comes to payments regulation. Everything from disclosures to transaction routing has come to the attention of regulators and Congress. There is more to come in 2022. 

In the latest episode of the IPA Payments Pod, Brian Tate, the IPA’s CEO, discusses the impact of some of the biggest stories from the past year and what they might mean for 2022.  

We cover the PayPal lawsuit, which could change the way the prepaid products can offer credit, and the types of disclosures they need to provide.  

We talk about earned wage access and buy-now-pay-later products. These products have drawn interest from Congress and Brian testified in front of the House Financial Services Committee on earned wage access products. You can find a video of his testimony here: Buy Now, Pay More Later? Investigating Risks and Benefits of BNPL and Other Emerging Fintech Cash Flow Products | U.S. House Committee on Financial Services. 

We discuss how the Consumer Financial Protection Bureau and the Federal Deposit Insurance Corporation are at odds over a request for public comment on the Bank Merger Act. The CFPB published the request on its own site on Dec. 9, saying that the FDIC board had approved the request. The same day, the FDIC published a release on its own site that said no request for information had been voted on by the board and that it looked for to a collegial relationship with other regulators in the future.  

We also cover the nomination of Saule Omarova to be comptroller of the currency, routing requirements, and even what might happen with Crypto.  

Listen here and leave us a review! 
 
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Have Digital Driver’s Licenses Arrived? Apple has struck a deal with several states, but is it a good one?

12/7/2021

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Nearly everything in a physical wallet can be put into a digital wallet. For a long time, the one exception was your driver’s license, but that may soon change.  

Apple has struck deals with a number of states to put licenses into iPhones. In this episode, Jason Mikula, the publisher of Fintech Business Weekly, talks about what he found when he reviewed the deals and how they look nearly identical from state to state and give Apple much of the control over the programs. The company has said on its iOS 15 Web site that it will launch a driver’s license or ID feature in 2022.  

We discuss the pros and cons of digital driver’s licenses and of private companies getting into what was once purely a government domain.  

You can find Jason on Twitter at @mikulaja and subscribe to his newsletter at: Fintech Business Weekly | Jason Mikula | Substack.   
 
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