Visa, Mastercard won't raise European fees; Alipay adds AI copilots

While Visa and Mastercard's interchange fee battles with U.S. merchants has dragged on for nearly two decades, the card brands have reportedly reached an agreement on some payment fees in Europe.

Visa and Mastercard will maintain a cap on fees for payments made in Europe with cards issued outside of the EU. The card brands agreed to the fee reduction in 2019 following an investigation by the EU, which alleged Visa and Mastercard were violating competition rules by charging higher fees for "tourist cards," which the EU claimed increased expenses for all payments at European merchants.  

That deal with the European Commission, which was set to expire this October, will run through at least October 2029, according to Reuters. Visa and Mastercard did not provide comment by deadline.

The fees cannot be higher than 0.2% for debit cards and 0.3% for credit cards. For card-not-present payments, which cover most e-commerce purchases, the caps are 1.15% for debit cards and 1.5% for credit cards. These fees are about 40% below their pre-2019 levels. Under the extension, the EC retains the right to investigate the card networks.

In the U.S., the card brands have long battled merchants over payment fees. Visa and Mastercard settled with merchants, making a deal to lower fees following years of court cases, disputes and appeals that date to 2005. But a judge in a Brooklyn federal court in late June told the parties that the settlement was likely to be rejected, suggesting that the legal battles are here to stay. —John Adams  

The Payments Association is calling on the U.K.'s incoming government to impose a financial penalty on social media and other large technology companies for payments fraud that is linked to the platforms. 

The lobby group, which represents more than 200 banks and payment companies covering most of the U.K., argues that the government should require social media companies and other "Big Tech" firms to compensate consumers or other parties that are victimized under U.K. rules that require polluters to bear the costs of environmental damage. The Payments Association is also calling for an anti-fraud minister to coordinate fraud investigations and prevention across different agencies.

The Labour party won the U.K.'s recent elections, ending 14 years of Conservative Party dominance. The Labour government is expected to push for harsher financial penalties against technology companies for failing to protect consumers from financial fraud. 

The association is also pushing U.K. regulators to lower the maximum bank refund for payments fraud from about $560,000 to about $38,000, costs that large technology firms would presumably absorb. —John Adams  

Chinese technology company Ant Group has introduced what it's calling artificial intelligence "smart assistants" to support a range of payments and other services for its Alipay app.

The first assistant enables users to directly request functions via a large language model, using "I want to order a tall iced latte from Starbucks" as an example. That results in an automatic order, payment and pickup at the nearest store.

A second copilot, Zhixiaobao, supports investment and insurance. Users can access market analysis, portfolio management, insurance underwriting and claims through generative AI. Zhixiaobao at launch has 43 million users through the Ant Fortune and Ant Insurance services that can be accessed through Alipay.

A third product, called Angel, includes augmented reality to help consumers navigate hospital visits and access telehealth services that are also part of the broader Alipay app. Ant contends that a test at a local hospital reduced desk inquiries by 50%, with deployments planned for more hospitals in China. 

At a company event, Ant also demonstrated how AI can produce and fight deepfakes used in financial crime. Ant, which is affiliated with Alipay and the e-commerce firm Alibaba, additionally introduced versions of AI designed for large corporate deployments and to measure the environmental impact of business strategies and product development. 

In the U.S., banks are using AI copilots to help employees produce drafts for projects, aid contact-center scripts, support loan officers and other functions. Payment companies such as Stax, Tipalti, Klarna and Stripe are using copilots as personal assistants, aiding in internal technology projects, marketing and risk management. —John Adams