Payments regulations are essential for protecting merchants, consumers, and stakeholders in the payments ecosystem. However, legislation and standards are always changing, and when they do,  it impacts how people do business.

As an ISV or VAR, you need to stay informed of regulatory changes and how you need to adapt the solutions you provide so you can comply. Here are some of the most consequential payments regulation changes to have on your radar:

• Antitrust Investigation into Token Technology
  The Department of Justice began an antitrust probe in 2021 against Visa to determine if the company uses anticompetitive practices in the debit card market. This investigation has received fresh scrutiny over tokenization that could lock in merchant clients.
  
  

• Interchange Fee Settlement
  Visa and Mastercard reached an antitrust settlement with U.S. retailers in March 2024. The pending settlement would reduce merchant fees on swiped transactions primarily by allowing merchants to negotiate lower rates. While this would help the merchant’s bottom line, these fees play a pivotal role in funding Visa rewards member programs. With less funding, these programs would likely result in fewer benefits for the consumer. In the long term, it could mean that consumer payment preferences shift from their rewards cards to other methods.
  
  

• Open Banking
  The Consumer Financial Protection Bureau (CFPB) has proposed new payment regulations that will give consumers more flexibility to move financial data from one service provider to another. This proposed rule accelerates the shift towards open banking and empowers consumers with greater control over how their personal financial data is used, and new protections against companies that misuse it. Additionally, the rule would jumpstart increased competition from new kinds of payment companies and other types of Fintechs.
  
  

• Buy Now, Pay Later Regulations
  In recent years, the CFPB has said it would provide more guidance to rising payment methods including buy now, pay later (BNPL) loans. However, little progress has been made. In general, oversight of the growing payments and Fintech sphere has been slow. A key challenge is that technology advancement and adoption are moving so fast that they often eclipse legislators’ and regulators’ knowledge of certain aspects of it. As a result, regulators often act reflexively, and tension rises in the absence of clear payment regulations. This is an area to watch and help merchants stay ahead of requirements for disclosures and other consumer protections of so they can continue to offer this payment method compliantly.
  
  
• Safeguard from AI Risks
  As fraud, particularly artificial intelligence (AI)-based attacks increase, the U.S. Senate is pressuring peer-to-peer payment providers like PayPal, Venmo, and Cash App to implement stronger fraud protections. Fraud actors can use these apps to push payments under false pretenses to conduct scams against businesses and consumers. Watch for the outcry to put antifraud measures in place to increase.