Democrats Push For A Digital Dollar; Buy Now, Pay Later Expands To Gas Stations

U.S. Lawmakers Introduce ECASH Bill in New Push to Create a Digital Dollar

A group of U.S. lawmakers says the U.S. Treasury Department may be the right government entity to create a digital dollar, not the Federal Reserve. A new bill introduced Monday would authorize just that. Four Congressional Democrats introduced the “Electronic Currency And Secure Hardware Act” (ECASH Act) to direct the Treasury Secretary to develop and issue an electronic version of the U.S. dollar, with an eye to preserving privacy and anonymity in transactions. The electronic dollar, as defined in the bill, would be a bearer instrument that people could hold on their phone or a card. The system would be token-based, not account-based, meaning if someone were to lose their phone or card, they would lose the funds. In other words, it would be like losing a wallet with dollar bills in it. [CoinDesk]

Buy Now, Pay Later Expanding to Storefronts and Gas Pumps

Buy now, pay later, the traditionally-online financing option that allows consumers to pay off their purchases in installments, is making the pivot to also be available in stores and at gas pumps. BNPL has become increasingly popular in recent years and is expected to reach $680 billion in transaction volume across the world by 2025. Some BNPL companies have begun offering their services for in-store transactions. Among them is BNPL provider Klarna, who in late February announced a multi-year partnership with Brookfield Properties, a global real estate developer and operator, to bring its payments to Brookfield’s portfolio of more than 150 shopping centers in the U.S. [Fox Business]

Banks Weigh Using Zelle to Challenge Visa, Mastercard

Banks are debating a plan to bring Zelle to the checkout at big retailers. Some banks want to expand it to retail payments. The money-transfer service boomed during the pandemic, when people avoided ATMs and replaced cash and checks with digital money transfers. Zelle recorded some 1.8 billion transactions in 2021 totaling $490 billion, both more than double their pre-pandemic levels. [The Wall Street Journal]

CFPB Finds Credit Card Companies Charged $12 Billion in Late Fee Penalties in 2020

The CFPB issued a report showing that credit card issuers charged $12 billion in late fees in 2020. Late fee penalties are charged in addition to interest when a cardholder does not make the minimum payment by the due date. Significant findings in the report include: many major issuers charge the maximum late fee allowed under the immunity provisions set by the Federal Reserve Board of Governors in 2010; subprime cards and private label cards are particularly susceptible to late fee charges; late fee volume fell when stimulus checks arrived in 2020 and 2021, particularly for households with lower credit scores; and low-income areas, areas with high shares of Black Americans, and areas with lower economic mobility all bear more of the late fee burden. [CFPB]

Apple Working on First-Party Financial Services under Codename ‘Breakout’

Apple is currently developing new technology and infrastructure to bring a wide range of financial services for consumers in-house, reducing its reliance on outside partners. The multiyear plan is said to include payment processing, risk assessment, fraud analysis, credit checks, and additional customer service functions. Part of the project has been dubbed by the internal codename “Breakout.” Currently, the project is focused on future Apple financial projects and not current ones. Apple relies on third-party financial companies like Goldman Sachs for services related to Apple Card and its own financing programs. [Apple Insider]

PayPal’s Credit Card Will Offer Up to 3% Cashback

PayPal has revealed its upgraded credit card, which will now offer users more cashback, depending on how they make their purchases. As before, users will still get unlimited 2% cashback on anything they buy, wherever a Mastercard is accepted. However, if you check out with PayPal, you’ll get unlimited 3% cashback. This goes for online, mobile and in-store (with the PayPal QR Code) payments. The new PayPal Cashback Mastercard still has no annual fee and you’ll now get cashback daily, rather than having to wait for a monthly statement. [Engadget]

AI-Based Advanced Analytics Is Making Credit, Debit Cards Smarter

Banking and fintech firms have been using artificial intelligence (AI) for the last few years to improve fraud detection on credit and debit cards, analyze patterns of defaulters, caution users from overspending and even help them determine their spendings. Some companies have now also begun using predictive analytics to enhance how credit and debit cards are being used in real time. [Mint]

House Republicans Want to Axe Citi Contracts Over Bank’s Abortion Benefits

Dozens of Republican lawmakers are urging the U.S. to cancel government contracts with Citigroup after the banking giant offered to pay the travel costs for employees seeking abortions. Citi, the nation’s fourth-largest bank, provides credit cards to members of the House of Representatives to pay for flights, office supplies and other goods. Rep. Mike Johnson and 44 other lawmakers are urging House Chief Administrative Officer Catherine Szpindor to cancel the contract, arguing the legislative branch has long adhered to a policy of not funding abortions with taxpayer money. [CBS News]

Adyen Adding Tap to Pay to iPhones by End of 2022

Dutch payments group Adyen has teamed up with Apple to bring Tap to Pay to iPhones for U.S. customers later this year, allowing them to accept contactless payments on their mobile devices without adding other hardware or payment terminals. Tap to Pay on iPhone enables businesses to accept contactless payments using their iPhone XS or later and a supporting app, including payments via Apple Pay, contactless credit or debit cards or other digital wallets. [PYMNTS]

Cash App Users Can Now Invest Their Paychecks into Bitcoin

U.S. customers of Cash App, a mobile payment service run by Block (formerly Square), will be able to automatically invest a portion or the entirety of their direct-deposit paychecks into bitcoin. The feature, called ‘Paid in Bitcoin’, allows Cash App’s clients with activated Cash Cards (Visa debit cards connected to the service) to have a percentage of their direct deposits automatically converted into bitcoin at no cost. Customers can choose to have their deposits converted, from as little as 1% to 100%, to bitcoin with the ability to reconfigure at any time. [Forbes]

How Walmart Thwarted $4 Million in Elder Gift Card Scams

Technology developed by Walmart helped the retail giant identify and freeze nearly $4 million in gift cards that had been bought by thousands of primarily elderly victims at the direction of con artists who duped them. The U.S. Department of Justice, after being notified by Walmart, recently seized that money through a federal court action in Arkansas. Now victims of the frauds can claim the money. In the first nine months of 2021, consumers reported losing $148 million in frauds where gift cards were used to pay scammers, according to Federal Trade Commission data. In comparison, $114 million was reported lost in gift card frauds for the entirety of 2020, the FTC says. [CNBC]

The Mobile Money Industry Processed More Than $1 Trillion in 2021

Mobile money hit a new milestone last year as the value of transactions processed globally surpassed $1 trillion for the first time. A rise in merchant payments, international remittances, and governmental humanitarian assistance are some of the factors that led to the 31% growth in transaction value over 2020. According to GSMA, which has released 10 consecutive annual reports, there were 316 mobile money services in 98 countries last year, compared to 169 in 71 countries in 2012. [Quartz Africa]