Surcharging

So I walked into a Dr's office yesterday and there is a sign saying that as of May 1 they are adding 3.5% whenever a patient chooses to pay with a Credit or Debit card. This doc happens to be a personal acquaintance so I choose to do a little calm education by sharing one of many blurbs I found with a simple web search stating very clearly that surcharging is not allowed on Debit, even Signature Debit. She was quite surprised and said her processor assured her it was allowed. She reached out to them and got back more BS trying to justify their position. Now sadly as often is the case with legislation there are unintended consequences and since most merchants pay a blended rate they don't get the benefit of reduced costs on Debit cards, their PSP does. Arguably if the PSP didn't get that extra margin all the blended rates likely would have risen in recent years. Stay tuned as this story unfolds. She asked me to talk to her PSP. p.s. they offered me the option to pay with Venmo without any surcharge which I did. A day later - I spoke to their PSP who is actually an old school ISO. The person I spoke to seemed genuinely surprised that he and his company did not understand the rules. He promised that they would try and find a POS solution that would not surcharge Debit cards.

Zelle and Fraud

As someone who is intimately familiar with Reg E, the Electronic Funds Transfer Act, reading news like this - https://www.finextra.com/newsarticle/41920/senators-urge-regulators-to-take-action-on-zelle-fraud - is thought provoking. The actual fraud losses by consumers relative to the total amount transacted is very, very small. However, if you are one of the people who loses their life savings due to one of these scams, that does not matter very much. As a user of Zelle, Venmo, CashApp, PayPal, etc. I have noticed a significant increase in messaging about how to prevent one of these scams from occuring which is great. I also appreciate that for the most part consumers are not charged for these transactions and hence why the FIs and non FIs (ie; PayPal, Venmo, CashApp) are reluctant to reimburse their customers. However, this was the same for ATM transactions in general and REG E was imposed and the systems not only survived, they thrived. So, I think a balanced solution is needed. REG E or something similiar should be implemented to protect consumers using Zelle and these other services. The money the service providers save by having these TXs done electronically is massive and either already or over time paid services will be added making these systems profit generators. But consumer confidence is critical and therefore the regulation is a necessity.

Nostalgia

As we draw 2022 to a close I thought I would share a link to a few photos I have in my archive which I lovingly call the Klebe Payment Museum. Happy New Years to All! Lets hope 2023 is a better year for the world and the world of payments! Peace Steve

Crypto and Mainstream Payments

hi! it has been a long while since I have posted anything but since I am in semi-retirement mode, I thought I would start it up again. I keep reading the press releases about this site and that ecommerce platform adding crypto payments to their platforms. What am I missing? I emphasize the context of the post - "mainstream" payments. I see ZERO reasons how this adds value in this context. I define "mainstream" as your typical retail purchase transaction for physical goods or services. This article generally sums up my perception of the situation. If properly regulated, the costs added to be regulated and the customer service requirements that would entail would likely signifcantly diminish any economic benefits. Thoughts?

Keep an eye on the pie chart

I was reading this article today; https://seekingalpha.com/article/4395431-apple-pay-payments-systems-are-getting-and-attention and it reminded me of something I have been projecting for a long time. As electronic payments make up a larger and larger portion of overall payments, heavier regulatory scruitiny is ineveitable here in the US. In Europe and Australia there has been significant regulatory influence and of course the Durbin Amendment was a sign of things to come here. Open Banking mandates in India, Singapore and Europe are further examples. Covid will probably have now accelertated the move towards even more regulation even sooner. If you look at a state like California and how PG&E is regulated, you get a sense of where this will eventually be.

ETA EXPERT INSIGHTS: MOBILE PAYMENTS ON CONSUMER DEVICES – DRIVING ADOPTION

http://www.electran.org/publication/transactiontrends/eta-expert-insights-mobile-payments-on-consumer-devices-driving-adoption/

Bitcoin

So, I have an interesting BitCoin story. Back in April of 2014 when the craze was just starting, of course, I had to try it out. So, I opened up a CoinBase account and bought $100 worth. I spent $20 at Overstock.com just to see how the user experience was, which was fine and then basically tuned out and forgot about it. Recently the frenzy caught my attention so I went and checked on my account. The remaining $80 had turned into between $600 and $700 depending on which way the wind blew on any given day. So, I spent another $50, again at Overstock, which went smoothly. Just checked today and after having spent $70 of my original $100, I have a balance of $690. Not bad!! Maybe I should have invested my entire 401k? NOT! As I felt from the beginning and continue to feel the volatility and the lack of regulatory protections are going to keep this in the corners of the payments world for many years to come. Let me know what you think!