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Implementation Of Surcharge Law In New York: What Does It Mean For Merchants?

Last year, on December 13, 2023, New York introduced Assembly Bill No. 2672 (Act), modifying the existing ban on credit card surcharges. Governor Hochul endorsed two laws designed to safeguard consumers. The first law requires clear notifications to consumers about upcoming automatic renewals for subscriptions, including explicit instructions for cancellation. The second law addresses pricing clarity, mandating merchants to display the highest possible price a consumer might pay for a product, irrespective of the payment method used. So, what is the impact of this new surcharge law in New York on merchants? Let us find out.

Starting from February 11, 2024, these laws will be in place. When customers purchase using a credit card, merchants must inform the buyers about the highest price that applies during the transaction. They should also let customers know the price for payment methods like checks, debit cards, or cash. It’s important to note that any additional charges cannot go beyond what the businesses charge by their credit card processor. This means these charges can only be passed on to customers without markups. Failure to comply with these regulations may lead to penalties of up to $500 per violation.

Implementation Of Surcharge Law In New York: What Does It Mean For Merchants?

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Key Takeaways:

Revamping Credit Card Surcharges in New York: New York’s Assembly Bill No. 2672, signed into law by Governor Kathy Hochul, marks a significant shift in the regulation of credit card surcharges. Merchants can now impose surcharges with clear conditions, including transparent display and adherence to credit card company processing fees.
Enhanced Consumer Protection and Transparency: The legislative changes aim to improve consumer protection and transparency in pricing. Merchants must now clearly display the total price for items in credit card transactions, including surcharges, and ensure that these surcharges do not exceed the credit card company’s transaction processing fees.
Dual Pricing System and Compliance Measures: The amended law formalizes a two-tier pricing system, allowing merchants to display distinct prices for credit card and cash transactions. Non-compliance may result in civil penalties of up to $500 per violation, with enforcement by municipal consumer affairs offices or designated legal representatives.
National Trends in Credit Card Surcharges: Despite New York’s flexibility on credit card surcharges, a broader trend towards limiting such charges is evident. New Jersey has passed similar restrictions, and credit card issuers like Visa are actively enforcing regulations. US lawmakers are also considering the CCC Act of 2023, aiming to introduce more competition in the credit card processing sector, indicating ongoing debates and challenges in this regulatory landscape.

Surcharge Law In New York

Governor Kathy Hochul has enacted a modification to Section 518 of the New York General Business Law through the signing of Assembly Bill No. 2672. The previous law prohibited merchants from adding a surcharge when customers chose to pay for services or goods with a credit card. With the amendment, merchants are now explicitly allowed to impose a surcharge, provided they adhere to the following conditions:

Display the total price for an item in credit card transactions, including the applicable surcharge.
Ensure that the surcharge does not exceed the amount charged to the merchant for transaction processing by the credit card company.

Governor Hochul, a Democrat, highlighted the law in a press release on December 13, presenting it as a measure to enhance consumer protection and boost purchasing power for New Yorkers.

Legislators supporting the law emphasized its benefits for consumers, emphasizing increased transparency in understanding the final transaction cost before checkout. Jeremy Cooney, Democratic Sen., stated in a press release that transparency in pricing is essential for informed decision-making when spending hard-earned money.

This legislative amendment makes the New York Court of Appeals ruling in the Expression Hair Design vs. Schneiderman case official. The court’s decision emphasized that any additional fee for customers using credit cards should be included in the price rather than being shown as a separate surcharge. The revised law now allows merchants to have a two-tier pricing system displaying two prices: one for credit card transactions (including the surcharge) and another for cash transactions (without the surcharge). This system often leads merchants to adjust prices for all products to include the surcharge, along with providing a discount on the surcharge amount for customers who pay with checks, debit cards, or cash.

The New York law allows businesses to implement a dual pricing system. According to the governor’s release, New York businesses can display two prices for specific sales transactions—one for credit card payments and another for cash transactions. The legislation aims to foster transparency and ensure consumers are well-informed about their purchases by mandating that businesses disclose the highest potential price a consumer might pay.

Merchants found violating the amended law may face civil penalties, capped at $500 per violation. Enforcement can be carried out concurrently by the director or commissioner of a municipal consumer affairs office or by designated legal representatives of a municipality or local government, such as a town attorney or city corporation counsel. The amended law is set to become effective on February 11, 2024.

This recent legislation grants merchants added flexibility in deciding whether to transfer the expense of credit card acceptance to customers. However, it maintains the ongoing trend of requiring merchants to assess individual state regulations to ascertain specific requirements regarding how the surcharge should be presented to the customer.

Kristen Larson, a counsel attorney affiliated with Ballard Spahr in Minneapolis, noted the growing federal emphasis on transparent pricing. There is a concern at the national level that consumers might only be fully aware of the costs associated with the services and products they purchase once they reach the checkout or POS and encounter additional fees. Larson expressed the view that New York aims to address this potential confusion.

Trend Towards Limiting Credit Card Surcharges Gains Traction

Despite the recent state law providing merchants with more flexibility on credit card surcharges, credit card issuers and networks are pushing to curb the surcharges imposed by merchants. Similarly, in August, New Jersey passed a law mandating merchants to restrict credit card surcharges to the actual costs incurred in processing payments.

Visa has also taken steps to enforce credit card surcharge regulations, notifying payment processors that compliance with their standards will be strictly monitored, and any non-compliance could lead to fines of up to $1 million.

Additionally, US lawmakers, led by Dick Durbin and Roger Marshall, support the CCC (Credit Card Competition) Act of 2023, aiming to introduce more competition into the credit card processing sector. While the bill has yet to secure a vote in either chamber, retailers and supporters are gearing up to push for its passage, while opponents from banks and card companies are preparing for the upcoming debate.

All in all, from a policy standpoint, the law is grounded in the idea that promptly revealing the credit card price for a product or service enhances transparency for consumers who might otherwise be unaware of a surcharge until the checkout stage.

Assemblymember Amy Paulin emphasizes that the new regulation ensures clear disclosure of credit card surcharges, allowing consumers to be fully informed from the outset rather than discovering such fees only during the payment process. The legislation prioritizes transparency, fairness, and the prevention of consumer misguidance when using credit cards for purchases.

Conclusion

Implementing the surcharge law in New York, effective February 11, 2024, marks a significant shift in credit card transaction practices. This legislative amendment allows merchants to impose surcharges, provided they adhere to strict conditions, including clear display and compliance to processing fees. Governor Hochul’s approval reflects a commitment to consumer protection and transparency in pricing.

The law formalizes the court ruling and enables a dual pricing system, encouraging informed consumer decision-making. However, the broader trend towards limiting credit card surcharges, both at the state and federal levels, suggests ongoing challenges and debates within the credit card processing sector. The law, grounded in transparency and consumer fairness, emphasizes the importance of clear disclosure in credit card transactions.

Why Do One-Third Retail SMBs Opt Out Of Credit Even If They Require It?

Small and Medium Businesses (SMBs) are the most important part of most economies, particularly developing countries. Retail SMBs constitute the majority of businesses worldwide, making substantial contributions to job creation and global economic development.

SMBs are a crucial client segment for banks, presenting a key opportunity to enhance their revenues, especially during rising interest rates and industry turbulence when depositors may consider relocating their funds.

The financial potential is substantial, particularly in the United States, where over 30 million small businesses comprise 99% of the nation’s enterprises. They employ over 60 million workers, contributing to 47% of private-sector jobs. Small-business banking generates approximately $150 billion in annual revenue for the US banking industry across various products, including deposits, loans, cards, cash management, and merchant services. However, a recent report indicates that almost 34% of SMBs do not utilize credit but express the desire to do so, highlighting a potential gap in credit accessibility for these businesses.

30 million small businesses comprise 99% of the nation's enterprises

Key Takeaways

Challenges in External Financing: SMBs need help securing external financing, hindering their ability to achieve established objectives. Despite being a crucial client segment for banks, a significant portion (34%) of SMBs express the desire for credit but face barriers, emphasizing the need for improved financial support mechanisms.
Diverse Reasons for Lack of Financial Resources: The lack of credit access compels SMBs to seek alternative funding, with 8% relying solely on personal financing and others turning to friends and family. Common barriers include difficulties meeting collateral demands, inadequate financial documentation, limited investor awareness, and challenges navigating complex regulatory frameworks.
Risk of Closure and Urgent Need for Solutions: SMBs relying on personal savings and limited cash face closure risks, particularly in the retail sector. This highlights the urgent need for comprehensive financial solutions to address challenges such as insufficient funding, cash flow issues, and slowed sales expansion.
Rise of Corporate Credit Cards as a Strategic Tool: SMBs increasingly turn to innovative fintechs and financial platforms when facing limitations with traditional banks. Corporate credit cards have emerged as a popular choice, offering advantages such as interest-free access to working capital and flexibility in carrying a revolving balance. This shift underscores the crucial role of alternative financial solutions in supporting SMBs’ economic well-being and growth aspirations.

The Ongoing Struggles Faced by Retail SMBs in Securing External Financing

Raising capital is getting more challenging by the day for SMBs as they find external financing sources to fulfill their capital requirements. One-third of the SMBs need help to find their footing while securing. These hurdles restrict their efforts and create a significant barrier to realizing the business’s established objectives. In the ever-changing retail market, where capital serves as the lifeblood for expansion, banks actively seek ways to support small businesses by offering new products and services.

Nevertheless, as of July of last year, just 47% of SMBs with yearly earnings of $10 million or fewer had the option of personal or business loan options. Different industries have different levels of financing access; 41% of small businesses have access to financing.

SMBs’ Struggle Due To Lack Of Financial Resources

The absence of credit access places SMBs in a challenging position, compelling them to seek alternative funding sources. Recent studies reveal around 8% of SMBs rely solely on personal financing, while many turn to friends and family for loans. This reliance intensified for businesses launched in March 2020, worsening challenges such as insufficient funding, cash flow issues, slowed sales expansion, and ineffective hiring—a profound impact amid the great resignation. Other common reasons why businesses are unable to secure funding are:

Lack of Collateral:

Small businesses frequently encounter challenges meeting the collateral demands of traditional lenders. These financial institutions often necessitate tangible assets as collateral, posing a barrier for many SMBs that may need such assets. This limitation curtails their ability to secure loans based on conventional lending criteria.

Inadequate Financial Documentation:

SMBs often need help furnishing comprehensive financial documentation and statements that align with lenders’ requirements. The absence of financial records, audited statements, or reliable financial projections can impede their capacity to secure financing.

Limited Investor Awareness:

Attracting the attention of potential investors proves to be a struggle for SMBs. Venture capitalists, angel investors, and other investment firms may predominantly focus on more significant deals or possess limited knowledge about the opportunities presented by SMBs. This lack of awareness creates challenges for SMBs in finding suitable investors.

Regulatory Constraints:

SMBs frequently grapple with navigating intricate and evolving regulatory frameworks. Ensuring compliance with laws and regulations related to taxation, employment, health and safety, data protection, and environmental standards poses challenges, especially for smaller businesses with limited expertise or dedicated compliance departments.

SMBs relying on personal savings face a precarious situation as these resources deplete over time. Additionally, funds from friends and family may need to be improved to sustain daily operations, leading to a concerning trend. Approximately 8.6% of retail SMBs face closure risks, with retailers even at the higher risk of about 19% with access to less than $5,000 in cash. This underscores the urgent need for comprehensive financial solutions to support SMBs in steering through these critical challenges.

The Rise Of Corporate Credit Cards As A Strategic Tool

The limitations of traditional banks have paved the way for innovative fintechs and financial platforms open to extending favorable services to SMBs and their economic challenges. SMBs increasingly turn to external financing to overcome these hurdles, recognizing it as a pivotal strategy to avert closures and foster growth. And most SMBs plan to boost their workflow with their credit products to meet their diverse business needs.

Among the preferred options for financing, corporate credit cards emerge as a popular choice for SMBs. Leveraging corporate credit cards as a form of working capital offers numerous advantages. For instance, businesses utilizing these cards for supplier payments or services enjoy interest-free access to operating capital, with payments deferred by 30 to 60 days. Additionally, the flexibility to carry a revolving balance becomes invaluable during periods of tight cash flows. This shift in financial strategies underscores the evolving landscape where alternative financial solutions are pivotal in supporting SMBs’ economic well-being and growth aspirations.

Conclusion

Small and Medium Businesses (SMBs) encounter diverse obstacles when securing funding. These challenges range from limited access to bank loans to difficulties such as insufficient collateral, financial documentation, lack of awareness, and regulatory constraints. The unavailability of credit options compels SMBs to explore funding sources, often relying on financing or loans from friends and family. Unfortunately, this reliance puts a percentage of SMBs at risk of closure.

Acknowledging these difficulties, other funding resources like corporate credit cards have emerged as a tool for SMBs, providing them an interest-free way to access working capital. As traditional banks face limitations in meeting their needs, innovative fintech companies and financial platforms have stepped in to offer solutions that support SMBs in navigating uncertainties and fostering growth. Financial tools have become crucial for SMBs seeking sustainable economic well-being and striving to achieve their growth goals.

PSR Proposes Cap On Cross-Border Card Fees To Safeguard UK Businesses

The UK’s Payment Systems Regulator (PSR) has proposed a groundbreaking measure by provisionally suggesting implementing a price cap on cross-border card fees or interchange fees for credit and debit cards. Primarily targeting major U.S. payment technology giants, Mastercard Inc. and Visa Inc., this move is orchestrated to shield UK businesses from potentially excessive interchange fees. The PSR has expressed initial concerns by unveiling its provisional report for the ongoing market review into cross-country interchange fees.

Visa and Mastercard might have elevated these fees to an unwarranted level, particularly in online retail payments between the UK and the European Economic Area (EEA). This provisional step by the PSR reflects a proactive stance to ensure fair practices and foster a conducive environment for businesses engaged in cross-border transactions, aligning with its commitment to regulatory vigilance.

Key Takeaways:

Regulatory Response to Fee Hikes: The PSR’s proposal for a cap on cross-country interchange fees directly responds to substantial fee increases by major payment technology giants, Mastercard and Visa. This regulatory action aims to alleviate the pressure on UK businesses facing elevated interchange fees, providing a safeguard against potentially excessive charges.
The Dominance of Mastercard and Visa: The proposed fee cap highlights the dominance of Mastercard and Visa, which collectively account for over 99% of online payments at UK businesses with EEA-issued cards. The PSR’s concern over potential market dysfunction emphasizes the significant impact of these two payment networks on cross-border transactions and the need to ensure fair practices.
Industry Pressure for Fair Practices: With the PSR advocating for a cap, the pressure on Mastercard and Visa to limit cross-border merchant fees in the UK intensifies. The proposed measures seek to protect merchants from heightened charges, addressing concerns raised by the PSR about the impact of fee increases on businesses, estimated to result in additional costs of £150 million to £200 million last year.
Exploration of Alternatives: The PSR’s actions demand immediate action to explore alternatives to reliance on Mastercard and Visa, surpassing the proposed cap. The suggestion to examine a digital alternative aligns with broader aspirations to develop a domestically grown payment solution, emphasizing the need for a competitive and resilient market in the evolving landscape of cross-border transactions.

Cap On Cross-Border Card Fees: Pressure Mounts On Mastercard And Visa

Mastercard and Visa are facing pressure to limit cross-border merchant fees in the UK. The PSR recently updated its review of cross-country interchange fees for transactions between UK businesses and the EEA. The PSR is suggesting a cap to safeguard merchants from excessive charges.

This move comes in response to fee hikes by Mastercard and Visa and prompts the regulator to publish an interim report. The two payment networks, accounting for over 99% of online payment transactions at UK businesses with EEA-issued cards, raised their interchange charges for debit cards from 0.2% to 1.15% and for credit cards from 0.3% to 1.5% throughout 2021 and 2022.

Typically assessed per transaction and based on transaction type, these fees are a percentage of the total transaction value. While justifying the increases, Visa and Mastercard informed the UK’s Treasury Committee last year that the adjustments were necessary to counter the heightened risk of fraud in cross-border transactions. They also clarified that they, as payment networks, don’t directly benefit from the raised fee; instead, it goes to the customer’s card issuer.

The EU’s Interchange Fee Regulation has traditionally limited the interchange fee. However, since the UK’s departure from the EU in January 2020, this protection no longer covers domestic and cross-border transactions between the UK and the EEA.

Chris Hemsley, the managing director of the PSR, expressed concerns that the fees charged by Mastercard and Visa to UK businesses accepting payments from the EEA might be excessively high. He noted that the market doesn’t seem to function optimally, estimating that UK businesses paid an additional £150 million to around £200 million last year due to the fee increases.

A spokesperson from Mastercard provided a statement expressing disagreement with the conclusions reached by the PSR. The statement emphasized Mastercard’s commitment to educating the PSR on the significance of electronic payments to the economy of England.

In their statement, Mastercard asserts that in an intensely competitive payments market, interchange fees mirror the value delivered to consumers and businesses. They emphasize that Mastercard facilitates rapid, secure, and straightforward transactions, safeguards consumers from fraud, and fosters business growth in the UK and globally.

Similarly, Visa challenged the findings of the PSR in a separate statement, emphasizing the substantial value that secure, innovative, and reliable digital payments bring to UK businesses, particularly when engaging in international sales. Visa asserted that the interchange rates apply to less than 2% of UK card payments for EEA cardholders purchasing online from a UK seller, acknowledging the complexity and higher risk of fraud associated with these transactions.

The PSR is seeking input on the outlined proposals until the conclusion of January, with the last report anticipated in the first quarter of 2024. Suppose the PSR determines that all markets are not functioning effectively and deems it necessary to intervene. In that case, this report will be succeeded by a consultation on the proposed remedy package.

In a report commissioned by the government last month, it was suggested that Britain should explore a digital alternative to dependence on Visa and Mastercard, regardless of the PSR’s actions. This aligns with longstanding aspirations in the EU to develop a domestically grown alternative to the American payment duopoly, which has yet to materialize.

Why Is The Payment Systems Regulator Taking This Step?

Cards are the market’s most widely used method to make payments for any purchase in the EEA and the UK. Therefore, it is imperative that the payments in the market function effectively.

These businesses incur interchange fees when consumers use Visa or Mastercard EEA-issued cards for online payment transactions within the UK markets. Following substantial increases in a few of these charges by Mastercard and Visa during 2021 – 2022, the Payment Systems Regulator has been evaluating these costs to see if they, along with other indicators, point to a market failure.

Initial worries have been voiced through PSR that Visa and Mastercard may have increased these costs to an unreasonable degree, which would have a detrimental effect on UK businesses. According to the PSR, as Visa and Mastercard cards account for nine out of ten transactions made online at UK-based companies employing cards issued by EEA, these enterprises have few options but must incur increased costs.

About Payment Systems Regulator

Established in 2013 by the Financial Services (Banking Reform) Act, the Payment Systems Regulator (PSR) is an independent economic regulator in the United Kingdom. Tasked with ensuring the development and operation of payment systems align with users’ best interests, particularly emphasizing consumer protections, the PSR plays a pivotal role in the financial landscape. Beyond safeguarding consumer interests, the PSR actively fosters competition and innovation within payment systems, promoting a dynamic and responsive economic environment.

Endowed with expansive authority, the PSR can issue “generally applicable requirements.” This authority encompasses the ability to give general directions to regulated payment system participants and impose broad requirements on the operators of such systems. Operating from its headquarters in the Olympic Park, Stratford, the PSR signifies a commitment to regulatory oversight and the continual evolution of efficient and secure payment systems in the UK.

Conclusion

The Payment Systems Regulator’s (PSR) groundbreaking proposal to cap cross-border interchange charges for credit and debit cards, mainly targeting major players like Mastercard and Visa, underscores its commitment to safeguarding UK businesses. The interim report, addressing potentially excessive fees in online retail transactions between the UK and the European Economic Area (EEA), demonstrates the PSR’s proactive approach to maintaining fair practices.

As pressure mounts on Mastercard and Visa, the proposed fee cap protects merchants from escalating charges, fostering a conducive environment for cross-border transactions. The PSR’s initiative reflects a dedication to regulatory vigilance, ensuring the optimal functioning of the market and signaling its commitment to consumer protection, competition, and innovation in the evolving payments in the market. The final report, anticipated in the first quarter of 2024, will further illuminate the regulatory direction in this critical domain.

Affirm and Blackhawk Network Collaborate to Expand Consumer Options for Gift Card Purchases

Affirm, a payment network in the US, has joined forces with Blackhawk Network, a digital gift card distributor. This partnership offers consumers more options when buying gift cards, especially as they become popular during the holiday season.

Thanks to this collaboration, shoppers can use Affirm to purchase digital gift cards from a wide range of brands, including those in entertainment, dining, fashion, outdoor gear, and home products, among others. The process is simple: consumers undergo a quick real-time approval after selecting their desired gift card on Affirm’s website or app. Once approved, they can choose from various payment plans, some with 0% APR for qualifying purchases. The full cost is transparently displayed upfront, ensuring no surprise fees or extra charges later.

Key Takeaways:

Enhanced Gift Card Accessibility: Affirm’s collaboration with Blackhawk Network expands consumer options for purchasing gift cards, providing a seamless and flexible payment experience. With instant approvals and various repayment plans, including 0% APR options for eligible purchases, consumers can easily acquire digital gift cards from a diverse range of brands, from entertainment and dining to fashion and home products.
Transparent and Flexible Financing: Affirm’s platform ensures transparency in cost, displaying the full amount upfront without hidden fees. This transparency, combined with the flexibility of payment plans, aligns with consumer preferences and addresses the growing demand for clear and adaptable payment options, especially during peak shopping seasons like the holidays.
Strategic Partnership for Market Expansion: The collaboration between Affirm and Blackhawk Network leverages the strengths of both companies to tap into the rapidly growing digital gift card market. With Blackhawk Network’s extensive global reach and Affirm’s innovative financing solutions, the partnership is poised to significantly expand Affirm’s presence in the gift card sector and drive merchant fees through increased sales.
Commitment to Sustainability and Innovation: Beyond the partnership, both Affirm and Blackhawk Network demonstrate a commitment to environmental sustainability and innovation. Blackhawk Network’s collaboration with Visa to transition to more sustainable materials for prepaid cards reflects a proactive approach to reducing environmental impact. Meanwhile, Affirm’s comprehensive platform and diverse merchant partnerships underscore its dedication to fostering digital and mobile-based shopping experiences tailored to evolving consumer needs.

Affirm and Blackhawk Network’s Partnership In Gift Card Financing

Affirm has teamed up with Blackhawk Network, a leading digital gift card distributor in the US, to provide consumers with clear and flexible payment choices for buying gift cards. For those looking to purchase digital gift cards, Affirm offers a straightforward financing option. Customers can apply for a loan directly on the Affirm platform and receive instant approval. After approval, they can select from various repayment plans. What’s more, eligible purchases come with a 0% APR, meaning customers won’t pay any interest on the loan, making it an attractive option.

Becca Stone, Affirm’s VP of Strategic Partnerships, highlighted the company’s commitment to providing fair payment options. She mentioned that Affirm believes in not penalizing people for late payments or last-minute shopping, especially during the holidays. Stone pointed out that a recent survey by Affirm revealed that 70% of Americans plan to buy gift cards this holiday season. With Affirm’s clear and adaptable payment choices, customers can easily purchase these popular gift items. She also expressed excitement about the partnership with BHN, as it allows Affirm to reach new customers and broaden its network.

Customers can buy digital gift cards with confidence through Affirm’s platform, knowing the total cost upfront and without any surprise fees, even if they miss a payment. This transparent approach applies to various brands in dining, entertainment, fashion, home goods, outdoor gear, and more, available directly on Affirm’s website or app.

The recent collaboration with Blackhawk Network opens doors for Affirm in the rapidly growing digital gift card market. Blackhawk Network collaborates with around 37,000 partners and has roughly 400,000 global touchpoints. With Blackhawk Network serving over 300 million global shoppers daily, Affirm’s reach is set to expand significantly.

For Affirm, partnerships like this offer a chance to increase merchant fees by driving more sales through their financing options, especially their popular 0% APR plans. This flexibility, allowing customers to buy now and pay later in installments, aligns with the growing popularity of Affirm’s financing solutions.

Brett Narlinger, who leads Global Commerce at Blackhawk Network, mentioned that they’re enthusiastic about teaming up with Affirm as trusted partners to some of the world’s biggest brands. Together, they aim to offer consumers a clear and adaptable way to buy gift cards. Narlinger highlighted the rapid growth of digital gift cards, which are expanding at twice the rate of physical ones. With the US gift card market projected to hit $260 billion in the next three years, this partnership allows merchants to provide extra payment options for holiday shoppers, especially when shipping deadlines are tight.

Blackhawk Network’s Recent Strategic Collaborations and Initiatives

Blackhawk Network, a key player in global branded payment technologies, has pursued initiatives to foster stronger connections between brands and their stakeholders. The company’s multifaceted portfolio encompasses a variety of offerings such as Gift Cards, eGift products, promotion and distribution services for revenue enhancement, Rewards, and Incentives, and comprehensive Payment solutions that facilitate seamless fund transfers for businesses and consumers alike.

Environmental Sustainability Partnership with Visa

In a noteworthy move at the onset of September 2023, Blackhawk Network forged a significant partnership with Visa. The collaboration aimed to launch a global environmental sustainability initiative, signaling a commitment to eco-friendly practices.

As part of this initiative, Blackhawk Network announced plans to transition Visa open-loop prepaid cards offered through third-party retail networks from conventional plastic materials to more sustainable paper-based alternatives. This transition underscores Blackhawk Network’s dedication to reducing environmental impact while maintaining its robust payment solutions.

Expansion of Digital Distribution Capabilities with Recharge.com

Additionally, in July 2023, Blackhawk Network strengthened its existing partnership with Recharge.com, a leading digital marketplace. The expanded collaboration sought to enhance the digital distribution of gift cards across key markets in the US and Canada.

Through this strategic alliance, Blackhawk Network aimed to diversify its offerings on Recharge.com’s platform by introducing a range of e-gift and virtual prepaid card brands. Notable additions to the digital marketplace included merchant-specific gift cards, versatile open-loop cards, and multi-store e-gifts, thereby enriching the consumer experience and broadening Blackhawk Network’s digital footprint.

About Affirm

Affirm Holdings Inc. runs a platform that focuses on digital and mobile-based shopping in the US, Canada, and worldwide. Their platform offers various services like a point-of-sale payment solution for businesses, an app for consumers, BNPL solutions, and partnerships with banks and financial markets. This setup allows customers to spread out their payments for purchases over as long as 60 months.

The company serves a diverse range of merchants, from big companies to small shops, including those with both online and physical stores. These merchants come from various sectors such as outdoor gear, home goods, travel bookings, fashion, electronics, etc. Founded in 2012, Affirm is based in San Francisco, California.

About Blackhawk Network

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Blackhawk Network, Inc. offers prepaid and payment services across the US and Canada. They provide various card-based financial products, including retail gift cards for popular brands, general-purpose gift cards, sports and event tickets, phone and telecom cards, and reloadable debit cards. The company also provides convenient services like CoinMaster kiosks, DVDPlay machines, in-store banking, ATMs, and an ACH payment network called Fast Forward. They distribute their digital content through gift card displays in various retail outlets such as mass retailers, grocery stores, and specialty shops.

Originally known as Blackhawk Marketing Services, the company changed its name in 2006. Founded in 2001 and based in Pleasanton, California, Blackhawk Network operates globally with offices in Germany, Canada, Mexico, the UK, France, and Australia. It functions as a subsidiary of Blackhawk Network Holdings, Inc.

Conclusion

The collaboration between Affirm and Blackhawk Network marks a significant step forward in enhancing consumer accessibility and flexibility in the digital gift card market. By combining Affirm’s innovative financing solutions with Blackhawk Network’s extensive network and brand partnerships, the partnership meets the growing demand for transparent and adaptable payment options, drives merchant growth, and expands market reach.

Moreover, the commitment to sustainability and consumer-centric initiatives further underscores the companies’ dedication to fostering responsible and inclusive commerce. As the holiday season approaches and the gift card market thrives, this strategic alliance sets a precedent for future collaborations prioritizing consumer empowerment and sustainable business practices.

Nuvei Launches Card-Issuing

Nuvei Corporation has rolled out its card-issuing solution in 30 countries worldwide. This means Nuvei’s clients can now provide their customers or staff with physical and digital white-label cards. By combining this new feature with its existing payment services, Nuvei offers itself and its clients a unique advantage.

This dual capability brings several advantages, such as same-day funding, streamlined processing, optimized interchange fees, and real-time transaction updates. Currently, the service covers 30 countries in the European Economic Area (EEA), with plans to expand to the US, Latin America, and the UK in 2024. Businesses can use these cards for various purposes, including virtual cards for B2B transactions with suppliers.

Key Takeaways:

Global Expansion: Nuvei Corporation has significantly expanded its global presence by introducing its card-issuing solution in 30 countries within the European Economic Area (EEA), with future plans to expand into the US, Latin America, and the UK in 2024. This move underscores Nuvei’s commitment to serving diverse markets and enhancing its global reach.
Enhanced Financial Operations: The introduction of Nuvei’s card solution offers businesses improved working capital efficiency and better transaction approval rates. This enables businesses to access funds promptly, streamline payouts, and increase the likelihood of transaction approvals, which is particularly beneficial in retail scenarios.
Innovative Payment Solutions: Nuvei’s collaboration with Curve and Microsoft showcases its dedication to fostering technological advancements in the payment industry. By partnering with leading platforms, Nuvei aims to optimize card transactions, offer new payment options, and provide localized payment solutions tailored to specific markets.
Client-Centric Approach: Nuvei’s Wallet-as-a-Service option and focus on custom-branded cards highlight its commitment to delivering tailored solutions for clients. By offering seamless integration, cost-effective distribution of funds, and opportunities for customer loyalty programs, Nuvei empowers businesses to enhance customer relationships and drive growth.

Nuvei Corporation Expands Global Reach with Innovative Card-Issuing Service

Nuvei Corporation, a leading Canadian FinTech firm, has introduced its card issuing service in 30 countries across EEA. This feature empowers Nuvei’s clients to furnish their customers, staff, or contractors with custom-branded digital and physical cards. The expansions to the US, Latin America, and the UK are also on the horizon.

Philip Fayer, Nuvei’s Chair and CEO, expressed excitement about this addition to their tech platform. He emphasized that this launch underscores their commitment to innovating for their clients across various sectors while expanding their market reach. A standout benefit of Nuvei’s cards is enhanced working capital efficiency. With virtual cards, businesses can promptly access and use funds from their customers, supporting their financial operations.

Nuvei’s card solution offers several advantages, including better transaction approval rates. When merchants issue refunds using Nuvei’s cards for physical and online purchases, the chances of transactions getting approved increase. This is especially useful in retail, where customers can conveniently spend their refunded money in the same store.

The system also streamlines payouts, making them both easy and cost-effective. Whether it’s physical or virtual cards, Nuvei’s solution allows quick distribution of funds to customers or employees, often at a lower cost than traditional methods. This feature can be particularly handy for scenarios like insurance payouts, online gaming, government benefits, or payments in the gig economy. Furthermore, merchant-branded cards can boost customer loyalty. By linking card usage with reward programs, businesses can incentivize repeat purchases and foster a stronger customer connection.

They also provide a Wallet-as-a-Service option, handling everything from start to finish for their clients. So, as soon as a transaction is completed, businesses can instantly create virtual cards to pay employees, suppliers, or other clients.

This capability finds a practical application in the retail sector, especially when merchants refund their customers using virtual or physical cards, and these customers subsequently utilize the refunded amount within the same store. Utilizing the same payment processor for card issuance and transactions enhances approval rates. The process is not only seamless but also cost-effective, as virtual and physical cards can be swiftly issued.

Businesses benefit from these cards by efficiently disbursing funds to their customers or workforce rapidly, often at a lower cost than traditional payouts to existing cards or bank accounts. The immediate usability of virtual cards adds value in scenarios where businesses or governments need to pay for segments of the population without access to traditional banking services.

Nuvei’s Partnership With Curve

In a recent development, Nuvei partnered with Curve, a banking platform, to make digital wallet payments smoother. This alliance aims to improve card transactions and bring new payment options to Curve’s platform. Using Nuvei’s technology, Curve can efficiently process VISA and Mastercard payments, ensuring transactions are approved more often while keeping costs in check.

Additionally, Nuvei has expanded its footprint by opening an office in China. This strategic move reflects Nuvei’s goal to support online businesses in the Asian-Pacific market. They’re committed to helping e-commerce companies in the region grow internationally by offering both global reach and local market know-how.

Montreal’s fintech company, Nuvei, also teamed up with Microsoft. This partnership aims to use Nuvei’s flexible payment technology in the Middle East and Africa. Microsoft plans to tap into Nuvei’s expertise in local markets to enhance payments for subscription services and individual purchases, including their popular Xbox and Office products.

Ajith Thekadath, Microsoft’s Vice President of Global Payments, highlighted the importance of smooth transactions for their customers, whether making a one-time purchase, subscribing to software, or buying in-game items. He expressed enthusiasm about expanding their payment solutions to Africa and the Middle East by collaborating with Nuvei, making payments more accessible and convenient for users.

Furthermore, Microsoft will benefit from Nuvei’s global payment capabilities, which include better transaction approval rates and effective risk management to reduce payment errors. Additionally, Nuvei’s system allows Microsoft to offer local payment options specific to each market, all through a single integration.

About Nuvei Corporation

Nuvei Corporation Expands Global Reach with Innovative Card-Issuing Service

All images source: Nuvie

Established in 2003, Nuvei Corporation stands as a global leader in providing cutting-edge payment technology solutions. With a widespread presence across Europe, North America, Africa, the Middle East, Asia Pacific, and Latin America, Nuvei’s mission is to empower merchants and partners with seamless payment experiences. At the core of Nuvei’s offerings is a robust platform that transcends geographical boundaries, allowing customers to effortlessly make or accept payments irrespective of their device, preferred payment method, or location.

Nuvei goes beyond conventional payment solutions by offering a turnkey system designed to deliver frictionless payment experiences. In addition to its innovative payment technologies, Nuvei provides a diverse suite of data-driven business intelligence tools and risk management services.

The company’s go-to-market strategy involves the distribution of its solutions through both indirect and direct sales channels. Nuvei tailors its offerings to meet the needs of Small and Medium-sized Businesses (SMBs) and collaborates with eCommerce resellers to extend its reach and impact. Headquartered in Montreal, Canada, Nuvei Corporation operates with a commitment to excellence and a vision to redefine the landscape of payment technology.

Conclusion

Nuvei Corporation’s introduction of its card-issuing solution marks a significant stride in the FinTech industry, amplifying its global footprint and bolstering its comprehensive payment offerings. The dual capability of physical and digital white-label cards promises enhanced financial flexibility and efficiency for businesses across various sectors.

As Nuvei continues to expand its reach into new markets and forge strategic partnerships with industry leaders like Curve and Microsoft, it underscores its commitment to innovation and client-centric solutions. By seamlessly integrating advanced payment technologies with data-driven insights and risk management services, Nuvei remains poised to shape the future of frictionless payment experiences worldwide.

PayPal Takes Action Against Chargeback Fraud

Merchants often face chargeback challenges, especially when customers dispute transactions or claim items weren’t delivered. This situation can strain a business’s resources and impact its revenue. Merchants might feel vulnerable to these chargeback issues without the right tools and data. Making matters more complex, incorrect fraud prevention strategies can lead to significant financial losses and damage a business’s reputation. Recognizing this challenge, PayPal is taking steps against chargeback fraud.

PayPal has informed its users and sellers about upcoming changes to its terms of service aimed at better protecting against chargeback fraud. Specifically, PayPal has warned sellers that they risk having payments reversed if they don’t promptly and accurately respond to customer claims or chargebacks. Additionally, PayPal is eliminating the option for buyers to claim items not received for chargeback disputes related to credit card purchases. These changes indicate PayPal’s commitment to enhancing security and reducing fraudulent chargebacks for its users.

Key Takeaways:

Policy Updates: Effective January 16, 2024, PayPal is refining its Seller Protection policy. The key change excludes seller coverage against Item Not Received claims from credit card chargebacks. This shift is part of PayPal’s strategy to manage financial risks and reduce liabilities.
Impact on Sellers: The revised policy means sellers using PayPal may face increased vulnerability to financial losses from chargebacks. While protection against unauthorized transactions remains intact, eliminating coverage for certain Item Not Received claims requires sellers to be more vigilant and proactive in their transaction management.
Fraud Prevention Challenges: Friendly fraud, where buyers deceitfully dispute genuine transactions, has increased. PayPal’s adjustments come as a response to the surge in payment fraud since 2019, further intensified during the COVID-19 pandemic. The changes reflect PayPal’s commitment to enhancing security measures and reducing fraudulent activities within its platform.
Merchant Precautions: To mitigate the risks associated with friendly fraud and chargebacks, merchants are advised to adopt a series of best practices. These include maintaining comprehensive transaction records, leveraging PayPal’s seller protection features like QR codes for in-store payments, adhering to shipping guidelines, and promptly responding to PayPal’s communications regarding disputes. By implementing these measures, merchants can enhance their defense against potential financial setbacks and protect their business reputation.

PayPal Is Taking Steps Against Chargeback Fraud: PayPal UpdateS Seller Protection Policy

Effective January 16, 2024, PayPal is updating its Seller Protection policy, no longer offering coverage for sellers when buyers claim Item Not Received through credit card chargebacks. Previously, sellers were shielded from such cases if the transaction met specific criteria.

Under the current policy, PayPal’s Seller Protection could come into play when a buyer alleges an “Unauthorized Transaction” or “Item Not Received.” However, for the latter, sellers must ensure the transaction is marked as “eligible” on the Transaction Details page to qualify for protection.

The revised policy protects unauthorized transactions but excludes Item Not Received claims resulting from chargebacks on card-funded transactions. This change could expose sellers to financial risks from chargebacks they were previously safeguarded against.

This adjustment is part of PayPal’s ongoing efforts to manage costs and reduce liabilities. Notably, last year, PayPal’s decision to end the Return Shipping On Us program just before Black Friday drew criticism from buyers.

PayPal, based in San Jose, California, is revising its policies in response to the surge in payment fraud since 2019, particularly intensified during the COVID-19 pandemic in 2020, which saw a significant uptick in online orders. Notably, there has been a rise in chargeback fraud, where individuals deceitfully purchase items and then seek refunds under false duplicities.

This type of fraud is, most of the time, friendly fraud. Friendly fraud can be referred to as frauds that are unorganized or unplanned. In such cases, perpetrators make a genuine purchase using a credit or debit card, only to dispute the transaction afterward, aiming to secure a refund despite having already received the goods or services, the reason can be anything whether the customer doesn’t like the product or just thinks it is not what they were expecting.

PayPal advises closely examining the notices and getting acquainted with the upcoming changes. If you continue using our services after implementing these changes, you agree to abide by them. If you have no objections, no additional steps are required from you. However, if you choose to decline the changes, you must close your PayPal account before the specified effective date, as outlined in the user agreement.

How Will PayPal’s New Policy Changes Affect Businesses That Use It For Payments?

PayPal Takes Action Against Chargeback Fraud

Essentially, PayPal’s recent adjustments don’t simplify matters for businesses, especially when there’s a rise in cases of friendly fraud. Previously, PayPal offered certain advantages over traditional credit card transactions with other payment providers. With these changes, businesses using PayPal need to take extra steps to prove they’ve delivered products or services to customers.

Additionally, taking precautions might not always guarantee protection. Many credit card issuers tend to be forgiving when cardholders dispute charges. This leniency is often exploited, with some individuals falsely claiming items arrived damaged, weren’t delivered, or even that they didn’t make the purchase at all—known as first-party misusage. Surprisingly, a recent study revealed that 23% of consumers admitted to such deceptive practices.

Furthermore, PayPal is no stranger to scams, with numerous reports of merchants falling victim to fraudulent schemes within its community. To put it into perspective, merchants expect a staggering $117 billion in 2023 due to chargebacks, as estimated by Justt. Given these alarming figures, the recent adjustments to PayPal’s Seller Protection Program only add to the challenges merchants face.

What Businesses Can Do?

To safeguard against the risks of friendly fraud in PayPal transactions, merchants can take several proactive measures. Firstly, collecting detailed information for each sale is essential, such as the buyer’s name, address, and card details. Secondly, for in-store payments, using PayPal’s goods and services QR code can help ensure you’re covered by PayPal’s seller protection program.

Additionally, when shipping items, always send them to the address in the PayPal Transaction Details because redirecting shipments could jeopardize your protection. Choosing trusted shipping services over unfamiliar ones is also advisable, even if the buyer suggests it. Keeping records of shipments and deliveries is crucial; this documentation can be invaluable if PayPal investigates a chargeback claim. Lastly, always respond promptly to any communications from PayPal regarding disputes, ensuring that any specified deadlines are met.

About PayPal

image source: Paypal

PayPal Holdings, Inc. is a leading global company that offers a technology platform to facilitate digital payments for businesses and individuals worldwide. Serving a diverse range of customers, the company operates various payment solutions under multiple brand names such as PayPal, Braintree, PayPal Credit, Xoom, Venmo, Hyperwallet, PayPal Zettle, Paidy, and PayPal Honey.

With its extensive reach, PayPal’s platform allows users to make and receive payments in roughly 200 markets. This broad coverage extends to supporting transactions in approximately 150 different currencies. Furthermore, users can directly withdraw their funds in 56 different currencies to their bank accounts. Additionally, the platform enables users to maintain balances in their PayPal accounts across 25 different currencies, providing a versatile and convenient way to manage money internationally.

Founded in 1998, PayPal has established its headquarters in San Jose, California, and has since become a prominent player in the digital payment industry. Its innovative solutions and widespread accessibility have contributed to shaping the landscape of online transactions, making it easier and more efficient for businesses and consumers alike to engage in electronic commerce.

Conclusion

PayPal’s proactive measures against chargeback fraud signify a pivotal shift in the digital payment landscape, emphasizing the company’s commitment to security and reliability. While these policy adjustments may pose challenges for sellers, particularly in addressing friendly fraud, they also underscore the importance of diligence and robust transaction management.

As businesses continue to adapt to evolving payment environments, staying informed and implementing best practices remain paramount. PayPal’s role as a global leader in digital payments reinforces the significance of these changes and offers a glimpse into the future of secure and efficient online transactions.

Payroc Teams Up with Dingg to Boost Online Payments for Spas and Salons; Introduces PayByBank’s New API

Payroc WorldAccess LLC, a leading name in payment processing, and DINGG, a trailblazer in salon and spa software, have joined forces to revolutionize the beauty and wellness industry.

This collaboration is big news for salon and spa owners. By combining Payroc’s strong payment solutions with DINGG’s innovative salon software, they’re offering a one-stop solution for businesses in the beauty and wellness sector. This means salon and spa owners can run their operations more smoothly and effectively, even in a competitive market.

Hot on the heels of this partnership, Payroc has also expanded its payment services to the US and Canada. Their new PayByBank feature allows Independent Software Vendors (ISVs) and merchants to accept various types of payments through a single system. This includes recurring payments and one-time transactions, all with top-notch security.

At the heart of Payroc’s expanded services are advanced payment features like a flexible API for custom payment pages, virtual terminals, and tailored payment systems. The real breakthrough with Payroc’s payment system is its simplicity. One integration allows partners to tap into a seamless payment network covering the US and Canada. This means less hassle with multiple setups or tricky solutions, letting partners concentrate more on what matters most: their business goals. With this expansion, partners in the US and Canada can now process secure payments more efficiently, whether one-time or recurring.

Image source

Key Takeaways:

Strategic Partnership for Salon and Spa Excellence: Payroc and DINGG have formed a transformative alliance to redefine the beauty and wellness sector. By melding Payroc’s robust payment processing capabilities with DINGG’s innovative salon software, the collaboration offers a comprehensive solution, enabling salon and spa owners to manage operations more efficiently in a competitive market.
Seamless Payment Solutions in North America: Payroc’s expansion into the US and Canada brings forth its PayByBank feature, a groundbreaking API that allows Independent Software Vendors and merchants to accept diverse payment types through a unified system. This simplifies transactions and boosts security, positioning Payroc as a leading payment solutions provider in both countries.
Enhanced Security and Flexibility with PayByBank: The PayByBank feature introduces token-based card and account-to-account payments, enhancing security measures like tokenization for ACH in the US and PAD in Canada. This safeguards customer information and offers US and Canadian partners a streamlined, secure, and efficient payment processing experience.
Growth Opportunities and Market Adaptation: With Payroc’s established presence in the US market and DINGG’s innovative software capabilities, the partnership is poised to support DINGG’s growth and adaptability. Furthermore, the collaboration serves as a platform for DINGG to leverage insights from the US market, contributing to advancing the beauty and wellness industry, particularly in India.

Payroc and DINGG Team Up to Transform Salon and Spa Services

Payroc WorldAccess and DINGG, an advanced software company specializing in the beauty and wellness sector, are thrilled to announce a strategic partnership set to redefine the Salon and Spa industry. This collaboration is a major milestone in the beauty and wellness realm, uniting Payroc’s strong payment processing solutions with DINGG’s groundbreaking salon software to provide seamless and efficient services to salon and spa businesses. Together, they present a unified solution, empowering salon and spa owners to thrive in an increasingly competitive market.

Annette Cristerna, Director of Inside Sales at Payroc, expressed the goal of providing salon and spa owners with a seamless, user-friendly, and efficient way to manage various business operations, from scheduling to payment processing and customer management. She further conveyed their excitement about teaming up with DINGG to bring innovation and efficiency to the Spa and Salon industry.

Through this collaboration, Payroc and DINGG are committed to boosting the Salon and Spa industry in today’s tough market. They’re rolling out a comprehensive “Business in the Box” package, designed to give business owners all the essentials and guidance they need to excel.

Akshay Poorey, co-founder of DINGG, pointed out that companies often need a solid marketing strategy to quickly impact a new market. When entering a new market, having a partner familiar with local dynamics can be invaluable. With Payroc’s established presence in the USA’s payment processing sector and a diverse range of businesses like salons and spas on its platform, they’re well-positioned to support DINGG’s growth as a tech partner.

He also noted that the US leads the way in technology. As DINGG learns and adapts from the US market, they can apply those insights back home in India, contributing to the growth of their industry there as well.

Apart from this announcement, Payroc also unveiled exciting news on its expansion with PayByBank. Let’s see what it is all about in the next section.

Payroc Widens Payment Services Across the US and Canada

Payroc LLC has introduced a game-changing API that enables clients to seamlessly offer its PayByBank solution for both the US and Canada through a single interface. This development eliminates the previous need for separate interfaces in each country, streamlining operations and reducing complexities. PayByBank empowers merchants and ISVs to receive token-based cards and account-to-account payments, providing a secure and efficient transaction process.

The introduction of this unified interface allows ISVs and merchants to tokenize banking information for transactions routed through the automated clearing house (ACH) in the US and for Preauthorized debits (PAD) in Canada. PAD permits merchants or billers to withdraw funds from a consumer’s bank account on a one-time or recurring basis. The API’s implementation is expected to open up new growth opportunities for merchants and ISVs operating in both countries.

Marcus Dagenais, managing director for Canada and corporate development at Payroc, highlighted the significant improvement in convenience and flexibility for partners. With this expansion, Payroc aims to provide unparalleled ease and security, unlocking substantial growth potential for partners in both the US and Canada. Dagenais emphasized that the API development now allows merchants and ISVs to connect once to the platform for access to both countries, simplifying their operations.

PayByBank’s Tokenization and PAD Features Benefit US and Canadian Partners

PayByBank helps merchants enhance the security of their customers’ banking information. This is achieved through tokenization, providing an additional layer of protection for transactions ACH (for US) and PAD (for Canada). Businesses can obtain payments straight from customers’ banking accounts by using the PAD option, ensuring the safety of sensitive data, thereby fostering trust and bolstering customer confidence in the payment processing system, be it for single or recurring transactions.

For Canadian collaborators, PayByBank’s PAD processing is among them, offering a substantial advantage. Since PADs are widely accepted as forms of payment in Canada, incorporating PAD processes into the payment network enables their Canadian businesses to take advantage of a tried-and-true payment option, improving consumer convenience and giving them a competitive advantage in the market.

Chief Product Officer Casey Conley was excited about this most recent expansion, which allows partners to expand their reach and simplify transactions throughout the US and Canada with a single connection. Conley underlined that partners receive unparalleled ease, flexibility, and security with the latest release combined with PayByBank. According to the corporation, partners in each country will have substantial growth prospects due to this release.

Partners that use Payroc can take advantage of a streamlined payment environment that covers every step of the process, from settlement to authorization and is backed by specialized customer service from start to finish.

About Payroc

Payroc WorldAccess LLC is a rapidly growing player in the world of payment processing. Handling above $80 billion in payments annually across 40+ countries for 151,000 plus merchants, Payroc WorldAccess is a force to be reckoned with.

What sets Payroc apart is its top-notch sales support and cutting-edge payment processing technology, which are available globally. The company provides comprehensive merchant acquiring solutions, incorporating necessary services such as sponsorship registrations for card brand networks and payments. Notably, Payroc (and its subsidiaries) is a registered third-party servicer for Mastercard and Visa, offering encryption support and serving as a payment facilitator for Fifth Third Bank. In Canada, Payroc is registered with People’s Trust Company, solidifying its presence and reliability on an international scale.

About Dingg

DINGG is a software company that’s revolutionizing how salons and spas manage their business. Their platform is designed to streamline daily tasks, from handling clients and bookings to tracking inventory and managing finances.

With DINGG, salon and spa owners have everything they need in one place. They can manage client appointments, track expenses, handle invoicing, and even monitor employee attendance and commissions. Plus, there’s no need to call or visit vendors to book services. Users can do it all through the app from their phones and stay updated on wait times. What’s more, DINGG offers users real reviews from verified customers and special deals from vendors, rewarding loyal customers with exclusive offers. Founded on October 29, 2018, in Pune, Maharashtra, by Akshay Poorey and Santosh Patidar, DINGG is changing the game for salon and spa businesses.

Conclusion

The partnership between Payroc and DINGG marks a significant advancement in the beauty and wellness industry, particularly for salon and spa businesses. By integrating Payroc’s robust payment solutions with DINGG’s cutting-edge software, they have created a unified platform that simplifies operations and enhances efficiency.

The introduction of PayByBank’s new API further amplifies this by providing a seamless payment experience across the US and Canada. This streamlines transactions and elevates security measures, fostering greater trust among customers. Overall, this collaboration sets a new salon and spa management standard, offering owners a comprehensive solution to thrive in an increasingly competitive market.

2024 Payment Industry Projections

The payment industry has undergone a significant transformation. From frantically combing through our pockets for spare change to just tapping our cards at POS terminals, the evolution has been marked by increased convenience. While payment methods have evolved to offer greater flexibility and enhanced security, our collective desire for convenience remains unwavering. As we look forward, it’s evident that payment trends will continue to evolve.

For businesses, staying abreast of these evolving payment trends is crucial. It ensures customer satisfaction and enables them to be ahead of these latest advancements and streamline processing errors. So, what lies ahead in payment trends for 2024? Let’s see what are the payment industry projections for 2024 and beyond.

Payment Industry Projections- Top 8 Trends Shaping The Industry In 2024

Top 8 Trends Shaping The Payments Industry In 2024

1. The Emergence of Micropayments as an Alternative to Subscriptions

Micropayments, known as microtransactions, are becoming a viable alternative to traditional subscription models. Defined as small online purchases for digital products, micropayments typically involve transactions under one dollar, occasionally extending up to $10. This payment method allows customers to make small, incremental payments for accessing online services or purchasing digital content. The charging model varies, with users either paying each time they use a service, making a content purchase, depositing a lump sum, or being charged as a bundled unit after a specified time period.

As a potential substitute for subscription models, micropayments are expected to address the challenges posed by rigid subscription plans, reducing cancellations. Major content providers are considering formally introducing micropayments in response to rising subscription cancellations. A 2023 survey revealed that one-fourth of US consumers canceled video streaming subscriptions due to pricing concerns, with a quarter citing budget constraints.

Micropayments offer numerous advantages for businesses, ranging from startups to large enterprises. Companies can attract a broader audience and boost sales by enabling customers to purchase individual movies, songs, or content selectively. Additionally, the post-payment option encourages impulse buying, especially among consumers interested in acquiring downloadable games and entertainment products at affordable prices.

2. The Dominance of Mobile Payments and Digital Wallets in 2024

A significant shift is underway in 2024, with mobile payments and digital wallets taking center stage. Projections indicate that mobile payment adoption is set to reach 4.8 billion by 2025, paving the way for substantial revenue growth, particularly for leaders in specific countries or regions. This surge is fueled by the extensive integration of many mobile apps into providers’ broader financial services. Notably, global digital payments recorded a transaction value of $9.46 trillion in 2023, showcasing the widespread embrace of digital wallets for their convenience and security.

Mobile payments have transformed how people conduct transactions, offering a swift and convenient method for paying for goods and services through smartphones. With the escalating prevalence of e-commerce, digital wallets have emerged as a favored payment choice for consumers. Beyond providing a secure means to store payment information, these wallets offer additional features like loyalty programs and rewards. The acceptance of mobile payments is expanding in offline retail, with businesses increasingly embracing platforms such as Samsung Pay, Google Pay, and Apple Pay. As technology advances, the prevalence of digital wallets is expected to grow, fundamentally reshaping how we manage our finances.

3. The Rise of Account-to-Account (A2A) Transactions

Account-to-account (A2A) payments mark a transformative shift by sidestepping intermediaries like credit cards and payment processors. This approach facilitates direct and instantaneous money transfers from one party’s account to another, offering a swifter, more convenient, and cost-effective alternative to traditional bank transfers.

While A2A payments aren’t novel, the convergence of API technology and the advent of open banking have propelled their widespread adoption. The momentum is poised to escalate globally as instant digital payment solutions gain further traction in retail and corporate realms. The successful implementation of payment innovation under PSD2 in Europe has shaped this trajectory. PSD2, the revised Payment Services Directive, governs payment systems in the European Union (EU), regulating access to payment data beyond banks and obliging banks to grant firms access to payment accounts with user consent.

The Rise of Account-to-Account (A2A) Transactions

Anticipating the future, the US is gearing up for new rules in the upcoming year. These rules are strategically designed to navigate the challenges observed in open banking strategies elsewhere, positioning the US market for accelerated adoption and increased innovation opportunities. Noteworthy initiatives like FedNow and providers leveraging “Pay by Bank” options are set to expand in 2024. By harnessing open banking technologies and A2A payments, these advancements promise real-time money flows and reduced processing costs for merchants, potentially reshaping payment solutions.

4. PCI DSS 4.0 will Create a New Paradigm Shift in Payment Security

The imminent arrival of PCI DSS 4.0 predicts a paradigm shift for payment professionals, introducing critical alterations that demand more attention. As a linchpin of payment security, this updated version brings forth revamped requirements and fortified guidelines to counter emerging threats. Vigilance is key for merchants and payment professionals as they track these changes, ensuring compliance and mitigating the risks of handling sensitive cardholder data.

This evolution may prompt merchants to shift the responsibility of PCI requirements onto third-party tokenization platforms, offering respite from compliance-related challenges. Adapting to and comprehending these changes becomes paramount for businesses seeking to streamline payment processes while upholding data security standards. While the implementation date of PCI DSS 4.0, slated for March 31, 2024, for the first phase, is close, proactive preparation is imperative for IT security professionals, compliance officials, and executives.

Assessing current compliance status, identifying potential hurdles, and communicating the PCI DSS 4.0 revisions, especially to key stakeholders, are essential steps. The significant shift lies in the heightened emphasis on security within PCI DSS 4.0, enabling adaptable data practices seamlessly integrated into an organization’s security framework. This updated standard prioritizes flexibility by acknowledging that new technologies must neatly fit into rigid, prescriptive control structures.

5. More People Adopting BNPL for High-Value Items

In an era of higher living costs, the BNPL financing method has become an enticing option for consumers. True to its name, this loan type divides the purchase price into equal installments, with the initial payment due at checkout. This approach allows buyers to make immediate purchases while spreading the remaining balance over time. Notably, the model often features minimal or 0% financing and does not necessitate an initial credit check.

The appeal of BNPL is steadily growing among North Americans, particularly for high-value purchases. Consumers find it easier to justify these buying decisions when they can opt for a phased payment approach rather than a lump sum. However, the landscape for BNPL companies may transform in 2024 as traditional financial institutions enter the arena with similar services.

The global buy now, pay later market, valued at $256.54 billion in 2022, is projected to surge to an estimated $3.8 trillion by 2031, reflecting a CAGR of 30.5%.

6. Using Consumer Insights for Strategic Growth

In the payments industry, the ability to decipher crucial payment data emerges as a linchpin for informed decision-making. As businesses traverse diverse payment channels, establishing a singular, authoritative repository for payment data gains paramount significance. Taking ownership of this data marks the initial stride toward unleashing its potential, strategically leveraging it to glean valuable insights into consumer behavior and market trends.

The judicious utilization of these consumer insights empowers businesses to tune their marketing and promotional campaigns finely. This tailored approach resonates more effectively with the target audience, building customer engagement and fortifying brand loyalty. This, in turn, becomes a linchpin for achieving sustainable and organic growth within the competitive marketplace.

Using Consumer Insights for Strategic Growth

When wielded adeptly, consumer insight opens avenues for businesses to personalize products, aligning them with the unique needs, desires, and demands of their customer base. Microsoft’s research indicates that organizations leveraging customer behavior to extract insights surpass their peers by an impressive 85% sales growth.

These insights serve as a catalyst for expanding services and product portfolios, devising innovative marketing strategies, preparing detailed customer personas and journey maps, and enhancing existing offerings. The strategic deployment of customer insights elevates the overall customer experience and translates into enhanced revenue streams.

7. Payment Expectations with Digital Wallets are Still High!

Digital wallets are ushering in a new era, steering away from traditional payment methods. In 2024, businesses keen on meeting consumer demands must closely track this transformative trend. The widespread adoption of these secure and convenient digital solutions promises streamlined transactions and a redefined set of user expectations. The projected growth is staggering, with digital wallets expected to encompass over 5 billion users by 2026.

To stay in sync with evolving consumer preferences, businesses must adopt digital wallet functionality and align with the redefined standards for seamless and secure payment experiences. This shift will fundamentally transform how individuals interact with money and financial services. Understanding and embracing these developments will be imperative for businesses striving to stay ahead, adding significant user value and setting their platform apart in a competitive market.

8. Importance of Cybersecurity in 2024

As digital transformation continues to reshape various sectors, the specter of cybercrime looms larger, particularly within enterprises. The expansion of the attack surface, propelled by near-field communication technology in the payments realm, has ushered in new cyber risks for digital transactions. Cybercriminals, focusing on exploiting vulnerabilities in digital payment systems, actively seek to pilfer credit card details and other sensitive customer information. Recent developments have cleared that businesses urgently need to review their cybersecurity plans. It is clear from the rising wave of cyber attacks that the old methods of fending off these constantly changing threats are insufficient. Companies must future-proof the security of the data measures in this situation.

To address the mounting cyber risks, companies are intensifying their cybersecurity investments by 7% this year and projecting a 14% increase for the next. On average, companies with revenues ranging from $250 million to $1 billion will allocate $2.9 million next year.

In the face of escalating cybercrime, safeguarding digital payments becomes paramount for companies in 2024 and beyond. This imperative stems from the need to protect customer data and uphold trust and loyalty. Payment processing solutions equipped with robust security features, encompassing advanced encryption technologies, tokenization, and machine learning algorithms designed to identify unusual credit card transactions, stand as essential tools to thwart data leakage and fraud.

Conclusion

The payments industry in 2024 reflects a dynamic market of evolving trends and transformative shifts. The emergence of micropayments as a subscription alternative addresses consumer concerns, offering a flexible payment model. Mobile payments and digital wallets take center stage, reshaping how transactions occur and highlighting the importance of adaptability. Account-to-account transactions significantly move away from intermediaries, promising swifter and cost-effective transfers.

The impending PCI DSS 4.0 signals a paradigm shift in payment security, necessitating proactive measures for compliance. Buy now, pay later options gain traction, especially for high-value items, while consumer insights become pivotal for strategic growth. The ascent of digital wallets underscores the need for businesses to align with changing user expectations, emphasizing the crucial role of cybersecurity in safeguarding digital transactions. Staying informed and agile is important for businesses seeking success in the ever-evolving payments industry.

Frequently Asked Questions

Visa Strengthens Digital Payments In Mexico With Majority Stake Acquisition In Prosa

The global payments giant Visa has finalized an agreement to buy out a majority stake in the Mexican payment processor PROSA. The undisclosed transaction aims to enhance digital payment adoption in Mexico. The deal is set to conclude in the second half of 2024, subject to regulatory approvals and standard closing conditions.

Under the agreement, PROSA will maintain its independence and use its technology. Visa will support PROSA in expanding its product offerings and share expertise with its existing leadership, who will be retained. The remaining stake in PROSA will continue to be owned by its current shareholders, including HSBC Mexico, Banorte, Santander Mexico, Invex, Banjército, and Scotiabank Mexico.

Key Takeaways:

Visa’s Strategic Commitment: Visa’s acquisition of a majority stake in Prosa underscores a strategic commitment to transform Mexico’s payment system. The focus is on adopting innovative and secure digital payment methods within the country, aligning with Visa’s global network strategy.
Empowering Global Payments Ecosystem: The investment is poised to empower participants in the global payments system, enabling them to shape Mexico’s payments sector actively. This collaboration promises to broaden possibilities for consumers and merchants, emphasizing the importance of innovation and tech in advancing the payment sector.
Enhancing Prosa ‘s Offerings: Visa’s support aims to improve Prosa ‘s offerings by introducing new digital payment solutions and leveraging Visa’s expertise. The collaboration anticipates introducing novel services, including real-time transactions and more advanced technology, fostering increased competition in the Mexican market and benefiting consumers.
Strategic Integration Impact: The anticipated closure of the deal in the latter half of 2024 marks a significant development, aligning with Visa’s vision to enhance and diversify capabilities globally. Beyond a mere business transaction, this integration signifies a collaborative exchange of expertise, emphasizing Visa’s commitment to technological advancement and financial inclusivity on a global scale.

Visa’s Strategic Investment In Prosa To Transform Mexico’s Payment System

Visa has made a solid commitment to buy a majority stake in Prosa, a prominent payments processing company in Mexico. The deal’s primary goal is to expedite the country’s adoption of secure and innovative digital payment methods.

Image source: Prosa

According to the deal’s agreement, the Mexican giant will maintain its autonomy as a standalone entity, retaining its technological infrastructure. Visa aims to enhance Prosa ‘s offerings by introducing new digital payment solutions and leveraging its global network expertise.

Visa’s investment is anticipated to empower participants in the global payments ecosystem to play a more prominent role in shaping Mexico’s payment sector. This move is poised to broaden the possibilities for merchants and consumers. It’s worth noting that, as per the acquisition agreement, Prosa ‘s existing shareholders, which include HSBC Mexico, Banorte, Santander Mexico, Invex, Banjército, and Scotiabank Mexico, will retain ownership of the remaining portion of the company.

Eduardo Coello, Visa Latin America’s and the Caribbean’s regional president, emphasized the significance of technology and new creation in their business. He stated that this investment aligns with their network of networks strategy, where they integrate top-notch technologies globally to complement their own. With the advanced technology infrastructure from Visa’s worldwide payments network, they are laying the foundation to create new, innovative payment methods for SMBs and consumers. This development will be in collaboration with local acquirers and issuers in Mexico.

Visa’s move to buy Prosa is set to empower participants in the global payments system, enabling them to play a better role in shaping Mexico’s payment market. This move promises to expand various possibilities for merchants and consumers. Furthermore, Prosa will be ready to bring several fresh advantages to the payment environment in Mexico.

After the deal closes, Prosa will aggressively market these advantages to Mexican cardholders in association with issuers and other payment industry players. This includes a goal to improve Visa brand services, such as more tokenized payments, and the technology underpinning Prosa ‘s brand-agnostic services. He went on to say that Prosa, by using Visa’s array of offerings, will also work to provide new services to the market that will enable real-time payment transactions using more sophisticated technologies. The goal of this continuous innovation-driven solution creation is to boost competitiveness in the Mexican market, which will ultimately benefit consumers.

Prosa ‘s director, Salvador Espinosa, expressed that this transaction will empower them to utilize their capabilities and reinforce their market position. It will broaden their commercial horizons, providing added value to their clients.

Visa’s acquisition of Prosa is anticipated to open avenues for Prosa ‘s partners to offer SMBs new digital payment options, facilitating their expansion by incorporating various Visa products. Through the transformation of transaction data into useful information, these technologies enable companies to improve cardholder experiences overall, maximize revenues and operations, and make well-informed decisions.

Visa sees this deal as an opportunity to expand its global network. Prosa enables the business to provide tokenized transactions and data services. The goal of the additional services that will be progressively added is to improve the e-commerce transaction experiences for both merchants and customers. Visa’s extensive portfolio of AI-powered fraud management solutions will enable this, guaranteeing more dependable and effective transactions for all stakeholders.

When Can You Expect The Visa-Prosa Deal To Close, And What Significance Does It Hold For Visa’s Future Strategy?

Image source: Prosa

The anticipated closure of the deal in the latter half of 2024, contingent upon approval from financial authorities, marks a significant development recently. This follows a thorough investigation by COFECE (Mexico’s Federal Economic Competition Commission) last September, focusing on market concentration within Prosa and other processors. The investigation, which concluded with recommendations for operational adjustments, set the stage for this strategic shift.

Visa’s strategic acquisition of Prosa aligns seamlessly with its overarching vision to enhance and diversify capabilities by harnessing cutting-edge technologies on a global scale. This move positions Visa to propel Prosa ‘s existing solutions into new frontiers through the infusion of innovative digital capabilities. Beyond a mere business transaction, this acquisition signifies a collaborative exchange of expertise, where Visa aims to share its wealth of knowledge in managing a worldwide payments network.

Not only that, but this strategic integration between Visa and Prosa holds promise for the evolution of digital payments in Mexico and beyond, emphasizing a commitment to technological advancement and financial inclusivity on a global scale.

About Visa

Visa is the unparalleled leader in digital payments, orchestrating a revolutionary shift in global commerce. At the heart of its influence lies VisaNet, an advanced global processing network that ensures secure and reliable payments worldwide and can handle over 65,000 transaction messages every second. Fueled by an unwavering commitment to innovation, Visa is a driving force propelling the rapid evolution of connected commerce across diverse devices. This relentless pursuit of progress aligns with a grand vision—a future where cashless transactions become ubiquitous for individuals across the globe.

Visa extends its impact through a diverse portfolio encompassing payment cards, mobile payments, transaction processing services, commercial payments, merchant solutions, and various digital services. Beyond its global reach spanning Europe, the Americas, the Middle East, Africa, and Asia-Pacific, Visa plays a pivotal role in supporting local businesses. Headquartered in the innovation hub of San Francisco, California, Visa’s presence reverberates worldwide, underscoring its commitment to shaping a dynamic, interconnected, and technologically advanced future for global financial transactions.

About Prosa

Prosa is a crucial electronic transaction processor in Latin America, boasting over 50 years of dedication to promoting payment methods. Throughout its history, Prosa has been committed to simplifying financial operations, introducing transparency, and enhancing security. This commitment has earned the company recognition as one of the most innovative entities in Mexico.

Specializing in the financial sector, Prosa is a crucial player in the payment media market. The company provides products that streamline card issuance, facilitate transactions at commercial points of sale, and manage ATM transactions. Its services are predominantly utilized by financial institutions operating in the payment media market. With a robust client base comprising issuers and acquirers, Prosa processes over 10 billion transactions annually through its network.

Conclusion

Visa’s majority stake acquisition in Prosa signifies a strategic leap toward transforming Mexico’s payment sector. The commitment to bolstering digital payments aligns with Visa’s global network strategy, emphasizing innovation and collaboration. The autonomy granted to Prosa and Visa’s expertise promises an enriched digital ecosystem in Mexico. The partnership empowers businesses and consumers through new offerings, real-time transactions, and advanced technology.

The anticipated closure in the latter half of 2024, pending regulatory approval, marks a significant milestone in Visa’s international expansion. Beyond a business transaction, this move fosters a collaborative exchange of expertise. It reflects Visa’s dedication to technological advancement and financial inclusivity on a global scale.

Michael G. Rhodes Takes The Reins As CEO And President Of Discover Financial Services

Credit card industry leader Discover Financial Services (DFS) has officially named Michael G Rhodes its CEO and president. The appointment is set to take effect on or before 6th March this year, coinciding with his inclusion on the Company’s Board of Directors. Additionally, Mr. Rhodes will assume the role of President at Discover Bank and be appointed to the Discover Bank Board of Directors, effective on the same date.

John Owen, who has served as the interim CEO, President of the Company, and interim President of Discover Bank since August 14, 2023, will continue in these roles until Mr. Rhodes officially joins Discover. Following Mr. Rhodes’ official commencement, Mr. Owen will transition to serving as a member of both the Company’s Board of Directors and the Discover Bank Board of Directors.

Key Takeaways:

Leadership Transition at Discover Financial Services: Discover Financial Services (DFS) announces the appointment of Michael G. Rhodes as its CEO and President, effective on or before 6 March this year. This marks a strategic leadership transition for the credit card industry leader.
Rhodes’ Extensive Financial Industry Experience: Michael G. Rhodes, a seasoned veteran from TD Bank Group, brings over 25 years of extensive experience in the financial industry to Discover. His background includes leadership roles at TD Bank Group, Bank of America, and MBNA America Bank.
Comprehensive Compensation Package Underscores Significance: As part of his compensation package, Rhodes will receive a base salary of $1 million, annual short-term and long-term incentive awards, and a transition award from Discover. This comprehensive package emphasizes the significance of his role in leading DFS.
Strategic Leadership Amid Compliance Challenges: Rhodes takes charge at a critical time for Discover as the company addresses regulatory issues and reinforces its compliance efforts. With nearly $500 million dedicated to compliance and risk management, Discover aims to resolve major compliance issues by mid-2024 under Rhodes’ leadership.

DFS Welcomes Michael G. Rhodes as CEO and President: A Look at His Strategic Role

Discover Financial Services has chosen Michael G. Rhodes, a seasoned veteran from TD Bank Group, to step into the role of CEO and president. John Owen, who has been acting as the interim CEO and President of the Company, as well as interim President of Discover Bank since August 14, 2023, will continue in these roles until Mr. Rhodes officially joins Discover. Simultaneously, Mr. Rhodes will undertake the responsibilities of President at Discover Bank and join the Discover Bank’s Board of Directors, with both positions effective on the same date.

As part of his compensation package, Rhodes will receive a base salary of $1 million, according to Monday’s filing by Discover. Mr. Rhodes brings over 25 years of extensive experience in the financial industry to Discover. Before being a Group Head at TD Bank Group (Canadian personal banking), he oversaw a retail product division serving customers through a network of over 1,000 branches, telephone support, and award-winning online and mobile capabilities.

Mr. Rhodes has held several important positions at TD, including Group Head of Technology, Shared Services, and Innovation. He joined the company in 2011 to oversee the North American Credit Card and Merchant Services unit. Senior leadership positions at Bank of America and MBNA America Bank further highlight his wealth of expertise in the financial services industry.

Mr. Rhodes expressed his honor in joining Discover at a pivotal moment for the company. He looks forward to leading the team of 20,000 employees in fulfilling the essential mission of assisting people in achieving brighter financial futures. Drawing from his career experience, he emphasized his clear understanding of delivering an excellent customer experience at every interaction point.

Confident in Discover’s strong foundation and dedicated employee base, Mr. Rhodes believes the company is well-prepared to seize market opportunities. He eagerly anticipates collaborating with Tom, the management team, and his colleagues as they collectively work towards advancing Discover’s culture, emphasizing compliance and customer service, and driving sustainable long-term financial performance.

TD Bank Group had announced Michael Rhodes’ resignation a few days before the recent announcement, which disclosed that Rhodes had been considered a potential candidate for the Chief Executive Officer position at TD Bank Group.

Discover had been actively seeking someone new for the position of CEO following the abrupt resignation of Roger Hochschild in August. The company faced compliance issues recently, prompting the search for a suitable candidate. Interim CEO John Owen stated that Discover was looking at external and internal applicants for the position during the company’s third-quarter results call in October.

Tom Maheras, Chair of the Board, highlighted that Michael’s appointment results from a thorough search process to find the right leader to guide the company in achieving its strategic and financial objectives. He emphasized Rhodes’ extensive experience and proven leadership in various global banking and payments industry roles. Maheras noted Rhodes’ successful track record in leading sophisticated financial services operations.

Expressing confidence in Rhodes’ leadership, Maheras believes that Discover, under his guidance, will realize its full potential. He expects Discover to provide exceptional customer care at the highest industry standards while continuing its commitment to enhancing risk management, corporate governance, and compliance.

Maheras also extended gratitude to John for his leadership during the CEO search. On behalf of the entire Board, he expressed appreciation for John’s contributions and looks forward to continuing to benefit from his experience and insights as a valued member of the Board.

Michael G. Rhodes Takes Charge At Discover Amid Compliance Challenges

Rhodes will take over as CEO of Discover at a pivotal moment as the business strengthens its compliance efforts and deals with various regulatory concerns. Discover resolved a consumer compliance investigation at its subsidiary, Discover Bank, in September by entering into a consent settlement with the Federal Deposit Insurance Corporation. The SEC is conducting an inquiry after the business revealed in July that there was a problem with the mishandling of cards, which impacted merchants and acquirers.

Due to ongoing regulatory issues, the company is selling its portfolio of student loans. This year, Discover plans to spend close to $500 million on risk management and compliance to address these problems. CFO John Greene expects spending to be the same or higher in the upcoming year. By mid-2024, the corporation hopes to resolve the most significant compliance issues. While at TD’s merchant banking and credit card division in North America, Rhodes played a key role in moving TD’s Canadian credit division from sixth to the top of the industry.

About Michael G Rhodes

Michael G. Rhodes currently serves as the Group Head at TD Bank Group in the position of Canadian Personal Banking, the largest retail bank in Canada, catering to over 13 million customers. His previous roles within TD included the Group Head for Technology, Shared Services, and Innovation from 2017 to 2021. Before that, he held positions such as the Head of Wealth Management at TD Bank and Head of the Consumer Bank at America’s Most Opportunely Bank.

Image source

2011 Michael joined TD to lead the North American Credit Card and Merchant Services business. During his tenure, he was pivotal in advancing TD’s Canadian Credit card business from the sixth to the first position within three years.

With over 25 years of experience in the financial services industry, Michael has held senior executive-level positions at Bank of America and MBNA America Bank. His extensive career has taken him across the United States, Canada, Spain, Ireland, and the United Kingdom, where he has contributed to various roles within payments and banking. Notably, he served as the CEO of a portfolio company backed by a top-tier private equity fund, Golder, Thoma, Cressey, Rauner, Inc.; CMO of Maryland Bank National Association America Bank; and CEO of Maryland Bank National Association Europe Bank Limited. Michael began his engineering career at Failure Analysis Associates, a leading engineering and scientific consulting firm.

Michael is a valued member of the Executive Council of The Canadian Bankers’ Association. Beyond his professional commitments, he actively supports several significant social causes. He serves on the Board of Trustees of Duke University and engages in fundraising efforts for St. Michael’s Hospital, a prominent teaching and research hospital in Toronto. Additionally, he is involved with the Boys and Girls Club. His past community involvements include contributions to the United Way, Christiana Care Health Systems, the Thurgood Marshall Scholarship Fund, Winterthur Garden Museum and Library, and the Delaware Symphony Orchestra.

Michael holds a Master of Business Administration from the Wharton School at the University of Pennsylvania. Alongside his business education, he has an engineering degree from Duke University. His commitment to professional excellence and philanthropy reflects his dedication to positively impacting various spheres of life.

About Discover

Discover Financial Services is a holding company that is actively involved in providing direct banking and payment services. Its operations are divided into the Direct Payment and Banking Services segments. The consumer banking offerings encompass a range of products and services, such as personal loans, private student loans, deposit products, and home equity loans. On the other hand, the Direct Banking segment focuses on providing Discover-branded credit cards to individuals and small businesses through the Discover Network.

The Payment Services segment includes Diners Club, PULSE, and the company’s network partners business. This involves issuing debit, prepaid, and credit cards by third parties on the Discover Network. Established in 1986, the company is headquartered in Riverwoods, IL, and has been a significant player in the financial services landscape.

Conclusion

Michael G. Rhodes assumes a pivotal role as the CEO and President of Discover Financial Services, bringing over 25 years of extensive financial industry experience to the position. His appointment, effective in March this year, comes at a crucial juncture for Discover as it addresses compliance challenges. Rhodes, a seasoned veteran from TD Bank Group, is set to lead Discover’s 20,000 employees in achieving the essential mission of fostering brighter financial futures.

The “wide” compensation package underscores the significance of his role, with a focus on customer experience, compliance, and long-term financial performance. As Discover goes through regulatory issues, Rhodes’ proven leadership is anticipated to guide the company toward realizing its full potential, emphasizing exceptional customer care and strategic growth.