Payments Part 2

The biggest payments stories of 2016: Part II

Four payments stories that made a big impact during 2016.

January 6, 2017

In my last post, I covered four of the year’s biggest payments stories: EMV, blockchain, ACH, and retailer wallets.

Here are four more stories that made a big impact during 2016:

Retailer pushback

Although interchange tensions are hardly new, when a customer ready to complete a purchase presented a card, merchants typically bit their tongues and got on with business.

Until recently.

Wal-Mart stopped accepting Visa in a growing number of its Canadian stores amid attempts to negotiate more favorable terms.

In some U.S. regions, Kroger has refused to accept signature debit even at the cost of cart abandonment by customers unwilling/unable to use a PIN or produce another card.

Then there were the lawsuits brought by various combinations of retailers (aimed more at Visa than MasterCard due to objections over debit routing restrictions) that upped the ante at the same time an appeals court threw out the $7.25 billion card fee settlement between retailers and the networks.

PayPal makes a deal (or two)

Still relatively early in its life as a standalone public company, PayPal achieved a level of détente with Visa—and soon after, MasterCard—that placed cards on firmer footing alongside ACH as a payment option on the service.

Its stock took an immediate hit on the news. But PayPal is playing a long game, and the full effect of these “partnerships,” other aspects of the agreements, and PayPal’s over-arching strategy (note its recent “new money” TV ad campaign) will reveal themselves over time.

Data breaches

Although the year lacked a high-profile consumer incident, it wasn’t exactly smooth sailing either.

Hackers made different kinds of headlines by breaching the Democratic National Committee, and the European payment network SWIFT got a black eye as well—leaving Bangladesh’s central bank out $81 million and the New York Fed scrambling to assure markets its own systems were safe.

The latest news on this front offers a mix of comfort and concern. SWIFT acknowledges persistent and increasingly sophisticated attacks on its system, but also alludes to evidence the Bangladesh perpetrators had inside help.

Credit unions felt a disproportionate level of pain from a breach affecting a certain fast food franchise, one that was not formally acknowledged until well after its impact had been noted.

So it may be several months before we know whether 2016’s slate was as clean as it currently appears.


A few weeks before the election, at the Money 20/20 conference I heard bankers and fintech executives adopt conciliatory tones regarding regulators, signaling a desire to involve them constructively early in the product rollout process.

At that time, most were anticipating a Hillary Clinton administration and a D.C. status quo. I wonder how that tone might differ were the conference held today.

The post-election boom in bank stocks is due in part to the expectation of relaxed regulation and the potential unwinding of Dodd-Frank and the Durbin Amendment.

A post-election spike in bond yields has renewed hopes for a long-awaited recovery in net interest income, and some see the possibility of a rebound in fee revenue as well.

This is sure to be a key area to watch in 2017.

GLEN SARVADY is managing partner at 154 Advisors and senior payments expert with Best Innovation Group, a CUNA consulting partner. Follow him on Twitter via @154Advisors.