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Payment fraud is becoming increasingly serious, and the U.S. banking industry is brewing joint countermeasures. At the Nacha conference, Con Edison treasurer Frank D'Amadeo bluntly stated that banks need to take on more responsibility, sparking discussion. Federal Trade Commission data shows that consumer fraud losses increased 30% year-over-year to $8.8 billion in 2022, with bank transfer losses doubling to $1.6 billion. Nacha has proposed a new risk management framework for comment, but obstacles remain in data sharing among banks.
EWS plans to launch the Paze digital wallet, supported by seven major banks, in June, with a full rollout in the fall. The wallet will be pre-installed on 150 million Visa and Mastercard accounts, but faces challenges in user adoption, merchant partnerships, and security.
In 2022, the cryptocurrency industry laid off over 26,000 people, and the wave of layoffs continued into early 2023, but Binance expanded its hiring against the trend. Bitcoin's price rebounded above $23,000 in January, and Goldman Sachs listed it as the best-performing asset of 2023. Bank institutions have divergent attitudes: Bank of America is preparing for a mild recession, JPMorgan Chase's CEO remains skeptical, while BNY Mellon persists in developing digital assets. On the regulatory front, the Federal Reserve and other agencies issued a joint warning, the New York State Department of Financial Services requires banks to obtain prior approval for crypto activities, and SEC and CFTC commissioners call for rule-making. The FTX bankruptcy hearing continues until April, and Bankman-Fried is set to stand trial in October.
The payment industry will move forward amid challenges in 2023: venture capital tightens, startups struggle, and traditional giants may acquire smaller companies; embedded finance and real-time payments (FedNow) are expected to break through; BNPL matures amid regulation and weak consumption; M&A deals are expected to increase, and cybersecurity becomes a top priority.
Three years ago, FIS and Fiserv sought economies of scale through multi-billion-dollar acquisitions, but now, amid intensifying competition and economic headwinds, both companies face profit pressure, and investors are demanding business splits. FIS has already been pressured by activist investors, while Fiserv has responded through cost cuts and divestitures.
The Federal Reserve's FedNow real-time payment system is set to launch next year, but industry experts point out that businesses and consumers may still have to wait years before relying on widespread instant payments. The U.S. lags behind countries like China in real-time payments, and FedNow aims to expand services by connecting thousands of smaller banks, but faces challenges including pricing, interoperability, fraud protection, and resistance from large banks.
As the buy now, pay later (BNPL) industry expands rapidly, major players such as Klarna, Affirm, Afterpay, and Zip have yet to achieve profitability, with costs growing far faster than revenue, while regulatory pressure and intensifying competition further squeeze profit margins.
