US Federal Reserve Finalizes Card-Not-Present Transactions Rules
The US Federal Reserve has adopted new regulations that ensure retailers have a variety of networks to choose from when routing card-not-present transactions.
Debit card issuers are required to offer businesses the option to select between at least two unaffiliated networks when routing transactions, per a rule first proposed in 2011.
The market did not, however, have the technologies in place at that time to support a variety of networks for card-not-present transactions.
Although technology has advanced to address this, some issuers continue to only support one network, a problem that has gotten worse with the rise of online payments.
"The final rule will encourage competition between networks and incentivize them to improve their fraud-prevention capabilities," according to the Fed.
Fed Governor Michelle Bowman issued a dissenting statement over questions about how the rule will affect community banks with respect to fraud and the cost of compliance.
Earlier, Fazzaco reported that six major U.S banks announced to join in a Fed-led pilot program designed to enhance the ability of supervisors and firms to measure and manage climate-related financial risks.
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