This week, we have the first of a two-part conversation with WorkWave CEO David F. Giannetto, where we talk more in depth about the factors that ultimately drove the company to choose the PF model. He also shares some of the issues the team faced and how the process changed the way they operate.
Delivering the keynote address, Poynt founder and CEO Osama Bedier described payments capabilities as “plumbing,” telling the audience that you “can’t create a great customer or merchant experience” without them.
The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) have increasingly targeted actors in the payments industry—including processors and independent sales organizations (ISOs)—for allowing “bad” merchants into, or to remain in, the payments ecosystem.
Nearly two-thirds of consumers would consider switching to a different healthcare provider based on their payments experience.
That’s potentially a sobering statistic to people in the healthcare industry. But it’s one that InstaMed – as a healthcare payments network and particularly as a payment facilitator – feels well positioned to address.
As Know Your Customer (KYC) regulations become increasingly critical in the underwriting process, payment facilitators may seek to better understand high-risk merchants by collecting information separate from what is provided by the applicants themselves. Corporate registration records offer reliable, useful data that may help to paint a more complete picture than application information alone. Knowing where to look and what to look for may lead to more effective Customer Due Diligence (CDD) or Enhanced Due Diligence (EDD) efforts.
The Financial Crimes Enforcement Network (FinCEN) has announced a $185 million civil money penalty against U.S. Bank for what it said was failure to adhere to several provisions of the Bank Secrecy Act (BSA).
Last year was a regulatory year to watch in the U.S., as a new – more anti-regulation – administration took the helm.
And it certainly did deliver some drama as CFPB Director Cordray departed, kicking off a fight for control of that agency.
We asked Deana Rich, CEO of Rich Consulting, to go beyond the spectacle and talk about any impact the new administration has had on regulatory issues and what payment facilitators should watch for in 2018.
As the payment facilitator model evolves, the card networks are increasingly embracing it as a driver of merchant acceptance globally. A recent rule change from Visa further affirms that PFs are in a solid position.
Interest in the business of payment facilitation is growing, not just among companies lured in to monetize transactions and the investors excited to fund fast-growing startups, but also regulators wanting to make sure a new third party isn’t taking advantage of consumers.
And all these eyes on the industry mean payment facilitators themselves, and companies thinking about switching to the model, are hungry for more information about how to run their business to take full advantage of all the opportunity in the space.
In the U.S., regulators, businesspeople and other groups are in the midst of a debate about how financial technology firms should be regulated. The OCC’s proposed special purpose national bank charter for fintech companies is one example; a white paper outlining policy objectives around the fintech sector issued by the Obama administration at the end of its term is another.
But the U.S. is hardly the only place where the deliberation over just how to oversee this rising sector is taking place. Financial technology is on the minds of governments worldwide, which signals real opportunity for payment facilitators.
In the announcement last week that Western Union had agreed to pay $586 million as part of a settlement with the Justice Department and the Federal Trade Commission to resolve investigations into anti-money laundering and consumer fraud violations, authorities described the settlement as the “largest forfeiture ever imposed on a money services business.”
What should payment facilitators take away from this settlement?
The unexpected election of Donald Trump has left many wondering what the impact will be to the regulatory environment of the financial services industry. A Republican president and Congress will have the potential to alter that environment, but questions remain about how much and how soon. Marsha Jones, president of the Third Party Payment Processors Association, shares her organization’s perspective.
The president-elect spoke on the campaign trail about dismantling regulations, including the Dodd-Frank Act. So far, many of his appointees have been businessmen with anti-regulatory tendencies. The Republican Party has majorities in both the House and the Senate. Does this political climate mean payment facilitators should say good-bye to their compliance teams? Not so fast.
Facebook is charging back into the payments space but this time charging hard — taking 5% on every donation it processes through its recently launched non-profit features, announced to page administrators Tuesday. Facebook introduced a Donate button for 19 select non-profits in 2013, but didn’t charge a fee, instead sending 100 percent of donations to the charity. The social media giant says of each donation made through Donate buttons that keep donors on a non-profit’s page:
“We’re committed to building products that make it as easy and safe as possible for people to contribute to the causes they care about. To make this possible, starting in August, 2% of contributions will be used to cover a portion of the costs of nonprofit vetting, security, and fraud protection, operational costs and payment support and 3% of contributions will go to payment processing. The remaining 95% will go straight to the nonprofit. Facebook’s goal is to create a platform for good that’s sustainable over the long-term, and not to make a profit from these charitable giving tools.”