In the November issue cover story, “The 10 Most Pressing Issues in E-Payments,” Digital Transactions’ Jim Daly and John Stewart highlight the biggest hurdles and setbacks e-payments faced in 2013, and may continue to battle in the coming months.
Below is a breakdown of a few of those issues:
• The Interchange War — The enduring interchange battle rages on with court decisions, such as Judge Richard Leon’s July “swipe fee” ruling. Judge Leon stated the Fed wasn’t in accordance with Congress’s intent regarding the Durbin Amendment. The ruling overturned the 21-cent cap on interchange fees. The Fed appealed the ruling.
- Increased Regulation — Federal agencies took an interest in e-payments in a big way in 2013. From cracking down on Independent Sales Organizations (ISOs) and prepaid program managers, to working toward eliminating specific payment methods for telemarketing transactions, the payments business is feeling regulatory pressures left and right.
- The EMV Muddle — The Durbin Amendment and the aforementioned swipe fee ruling continue to wreak havoc on the industry’s EMV implementation plans. Meanwhile the liability shift deadline continues to loom closer and closer. Additionally, EMV’s appeal is fading for some merchants for a number of reasons, including cost, unrealistic deadlines, lack of fraud prevention regarding card-not-present transactions, and debit-routing issues.
- Virtual Currency Woes — Ongoing criminal activity carried out via virtual currency continues to cause serious problems regarding this payment option’s widespread use. On the bright side, this summer, virtual currency supporters revealed efforts to establish a “Digital Asset Transfer Authority” as an industry group that will promote self-policing.
- Prepaid’s Growing Pains — The controversy over prepaid card fees has settled some over the past few months, but hasn’t completely dissipated. Employers continue to go back and forth regarding prepaid’s “profit and loss” debate.
These are just a few of the issues discussed in the Digital Transactions’ article. Despite these notable bumps in the road, the electronic payments industry continues to survive and even thrive, with an estimated $119 billion in electronic transactions taking place in 2012. As with any industry undergoing seismic shifts, there are bound to be trouble spots. This will not stop consumer demand for innovation. The companies and organizations with visionary leaders who can work around, under, and through these hurdles will be the ones to win favor with target consumers.