Visa, Mastercard and Google go big in India; U.K. interchange suit moves forward

Google, Visa and Mastercard are rolling out new features and products to dive deeper into one of the world's fastest growing digital payment markets. 

Google Pay is adding several new features in partnership with India's real-time payment network, the United Payments Interface, that are expected to roll out later this year and are designed to increase use of the country's real-time payment network, the technology company said on the last day of Global Fintech Fest 2024. 

Users will be able to add family members and close friends as "delegates," who will be able to make payments without having to add their own bank account information. Users can approve payments on a transactional basis or set a monthly limit. 

Google Pay will also add integrations for UPI vouchers, which allow consumers that aren't on the UPI network to pay with a prepaid voucher connected to their mobile number, bill payments using ClickPay QR code scanning and prepaid utility payments, among others. Google is one of the largest users of India's UPI rail, which is the world's largest real-time settlement network. 

Visa also announced a suite of new products on the last day of Global Fintech Fest aimed at driving digital payment adoption in India. 

The payment-processing company said it is working with HDFC Bank to create a compact payment device for merchants that integrates point-of-sale, QR code scanning, and soundbox, which provides audio alerts when a digital payment is received and confirms the amount of the payment. Visa is also working with payments India-based Paytm and Asia-based Pine Labs on two separate soundbox devices that integrate QR codes. 

Other initiatives include: Neo for Merchants by Axis Bank and Visa, a mobile payments application for payment acceptance, transaction reporting and service requests; PayU Push Provisioning, which allows for the sharing of card tokens; and new credit and debit card offerings with HSBC and IDFC First Bank, respectively. 

Meanwhile, Mastercard launched a pilot program for its biometric-enabled payments passkey with Axis Bank, online merchants and payment aggregators such as Juspay, Razorpay and PayU. The passkey initiative is in response to rising one-time password fraud, which rose 300% in the last two years, according to the Reserve Bank of India's 2023-2024 annual report. 

Mastercard plans to roll out the program to additional financial institutions in the coming months, according to a company release. —Joey Pizzolato

Nearly 5,000 miles away from India, Visa and Mastercard face a more than $5 billion class action lawsuit over the fees merchants pay to accept cards in the U.K.

The U.K.'s Competition Appeal Tribunal has ruled that lawsuits by trade groups such as UK Hospitality and the Association of British Travel Agents can proceed as a class action case.

The trade groups and other merchants are arguing the multilateral interchange fees are too high, resulting in damages of about $5.2 billion, according to Harkus Parker, the law firm representing the plaintiffs. The merchant claims are between June 2016 and June 2022, and the law firm is contending that the claim will go higher based on the date of a settlement or judgment. It is also recruiting other U.K. merchants to join the suit.

In the past, British merchants such as Tesco and Sainsbury's have won multi-million-dollar settlements in interchange lawsuits against Visa and Mastercard.

"We disagree with the basis of this claim. Businesses get real value when they choose to accept cards issued on our network, helping them grow their sales, ensure a guaranteed payment, reach new customers and reduce fraud," Mastercard's public relations office said in an email.

Visa did not return a request for comment by deadline.

The card networks also face legal pressure in the U.S., where interchange lawsuits can be traced back at least 20 years. A federal judge in June dismissed a settlement between Visa, Mastercard and merchants.

Under the scuttled U.S. settlement, the card networks agreed to lower interchange fees, though trade groups such as the National Grocers Association and Merchant Payments Coalition said the settlement would only provide temporary relief. —John Adams

Lloyds, Natwest, Virgin Money and Nationwide have all suffered technology glitches in recent days that left consumers unable to make payments or view transactions on online banking apps, unintentionally endorsing the Bank of England's plans to improve payment system resiliency.

Thousands of consumers filed complaints with tracking website Down Detector either on late Friday or early Monday. Lloyds and Virgin Money said their payment services were functional by the end of business Monday. Down Detector did not report outages at any of the four institutions as of Wednesday.

The glitches followed an outage at the Bank of England in July that impacted mostly high-volume transactions such as mortgage payments.

The BofE is mandating improvements in the operational resiliency of payment systems, setting a March 2025 deadline. These improvements include stronger backups to ensure impact tolerance, or the length of time permissible before outages harms consumers or businesses.

"Confidence in financial markets infrastructure services (FMI) is critical to having a vibrant and prosperous economy," said Sasha Mills, executive director of the Bank of England, in an April speech.  "For the calibration of impact tolerances, we expect to see greater engagement than we have seen thus far between FMIs, their participants, and the wider market." —John Adams