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Tech Talk: Faster payments on track, EMV card cloning, a fintech milestone, and more!

  • Fed on track with faster payments network
  • Bank hit with $80M breach penalty
  • EMV-bypass card cloning
  • A fintech milestone
  • Big tech partners with banks
  • Current launches rewarding program
  • Alternative credit solution for SMBs
  • Payments after the pandemic
  • Creating a sound connection with consumers
  • Spam, Scams & Breaches
  • Updates, Patches & Alerts
  • and on the lighter side...

Fed on track with faster payments network
Among many other things, the global pandemic has highlighted the need for real-time payments that would provide millions of Americans and small businesses instant access to funds rather than waiting days for checks to clear. The Federal Reserve has released more details about its FedNow interbank 24x7x365 real-time gross settlement (RTGS) service that will enable real-time payments settlement and clearing. The Fed announced its targeted release of the service for 2023 or 2024 with earlier pilot programs planned and a phased approached to incorporating additional features and functionality to the RTGS. Get all the details at Federal Reserve.

Bank hit with $80M breach penalty
In a consent order issued by the Office of the Comptroller of the Currency (OCC), the regulator dealt Capital One Financial Corporation a hefty penalty for last year’s massive data breach involving more than 106 million accounts. The OCC based its action on the bank's "failure to establish effective risk assessment processes prior to migrating significant information technology operations to the public cloud environment and the bank's failure to correct the deficiencies in a timely manner." In addition to an $80 million penalty, the OCC and the Federal Reserve have issued cease and desist orders against the bank. Banking Dive has the details.

EMV-bypass card cloning
While EMV technology was deployed to make it harder, if not impossible, for card data thieves to create cloned payment cards, there are still many companies that have not implemented EMV card readers. This has forced card issuers to encode the data needed to make payments on both the magnetic stripe and the EMV chip and is providing criminals with EMV-bypass cloning opportunities. Cybersecurity firm Gemini Advisory reports two recent security incidents that involved hackers stealing data from cards that were compromised during EMV transactions. Security Week has the details.

A fintech milestone
In a major milestone for fintechs, U.S.-based mobile banking startup Varo has become the first fintech to be granted full regulatory approval and a national bank charter from the Office of the Comptroller of the Currency (OCC). The banking charter will enable the fintech to branch out to credit cards, loans, and savings products. Varo's over 2 million accounts, currently held by The Bancorp Bank, will transition to the newly chartered Varo Bank in a phased process. Tech Crunch has the details.

Big tech partners with banks
To expand their customer base and provide consumers with innovative tools, banks are increasingly finding the value in partnering with fintech firms. In many cases, those banks operate in the background with little or no brand visibility. Tech giant Google is teaming up with banks on the co-branded, FDIC-insured digital savings and checking accounts that will be offered via Google Pay and built on top of the banks' existing infrastructure. So far, eight U.S. banks are on board to launch the digital bank accounts, reports Finextra.

Current launches rewarding program
Google is launching checking accounts amid heavy competition from challenger banks. Mobile-only bank Current is launching a rewarding new program that will allow its checking account customers to earn up to 15x points on everyday debit card purchases. The users' points can accumulate to certain thresholds and then be redeemed for cash at a rate of 100 points per dollar. Current is the first neobank to roll out a points-based rewards program in the U.S., reports TechCrunch.

Alternative credit solution for SMBs
Retailers and other small and medium-sized businesses have been deeply impacted by the global pandemic. To support these businesses with the cash flow they need as businesses reopen, Lightspeed Payments has partnered with payment processor Stripe to launch Lightspeed Capital. To help fund their recovery and growth during and after the COVID crisis, U.S.-based merchants who use Lightspeed Payments can qualify for up to $50,000 of financing from Lightspeed Capital. PYMNTS.com has the details.

Payments after the pandemic
The rapid transition to operating businesses at a distance, remote working, and the deployment of digital services to meet corporate and consumers' needs during the COVID crisis has created challenges for all sectors, including the payments industry. Global payments industry group P20 has released a series of best practices and action steps for payment firms as they navigate the post-Covid-19 environment. Finextra has the details and a download to the full report.

Creating a sound connection with consumers
The banking industry has experienced a remarkable transformation from the days of brick-and-mortar branches and basic ATM services to the wide range of digital services that are now (literally) at consumers' fingertips. Financial providers are exploring sound and voice technology to bring a new level of speed, convenience, and "personality" to customers' banking experience. Integrating voice and sound technology across mobile and digital channels may become a key factor in forging more sound (pun intended) consumer connections, reports PaymentsSource.

Spams, Scams, and Breaches

Updates, Patches, and Alerts...

See what other current hot cyber and technology topics affecting financial institutions BOL users are discussing in the Technology Forum.

And on the lighter side...

Life as we once knew it changed suddenly and drastically when the COVID-19 crisis spread rapidly around the world. Whether you are still one of the millions who are stuck at home or among those who are returning to work even in states where reported cases are on the rise, there are some new tech products designed to make life a little less stressful and a bit safer during the pandemic.

First published on 08/07/2020

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