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The payments landscape for community banks is changing rapidly as traditional payments converge with new instant payment systems and emerging cryptocurrencies. It is critical for Community Banks to maintain awareness of developments in the payments space to assess new opportunities, mitigate risks, and ensure that their payment strategy aligns with overall business plans.
May 10, 2021
The Federal Reserve Board invited public comment on proposed changes to Regulation II (Debit Card Interchange Fees and Routing).
Details: The changes would clarify that debit card issuers should enable, and allow merchants to choose from, at least two unaffiliated networks for card-not-present debit card transactions, such as online purchases.
Background: The Fed said two unaffiliated networks are often not available to process card-not-present debit card transactions because some issuers do not enable them, which prevents merchants from having a choice between competing networks when routing such transactions.
Report: The Fed also issued its latest biennial interchange report, which found that U.S. payment card networks in 2019 processed 79.2 billion debit and general-use prepaid card transactions valued at $3.1 trillion. Total transaction volume grew 7 percent in 2019, in line with the 7.8 percent average annual growth rate from 2009 to 2018.
Next: Comments are due 60 days after publication in the Federal Register.