DOCSLIB.ORG

Study of the Payments of the State of New York – Project

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Study of the Payments of the State of New York – Project State of Payments Study of the Payments of the State of New York Project Findings May, 2019 1 CONFIDENTIAL ‐ May not be distributed or reproduced without express permission. © 2019 Mercator Advisory Group Contents . Executive Summary . Introduction – Project purpose – Approach – Current State . Overview of Alternative Payment Products – Debit Push Payments – Virtual Cards – Person‐to‐Person (P2P) Payments – Prepaid Cards –Same Day ACH . High‐value Opportunities . Summary of Payment Applications . Appendix 2 © 2019 Mercator Advisory Group Executive Summary . New York State Comptroller’s Office processes in the range of 6.5 million payment transactions within the Statewide Financial System (SFS) on behalf of 84 business units/agencies during the course of a fiscal year. – 52% of these payments are made via paper check and 48% via e‐payment. – There are multiple purposes (use cases) for these payments, with “specialty” cases representing a vast majority of the check volume. • In addition, the New York State issues individual payments through agency sole custody processes outside of the Statewide Financial System and records only the financial impact of those payments within the financial system. – Benefit programs such as Women, Infants, and Children (WIC), Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), and Unemployment Insurance (UI) process payments via electronic payments and/or payment cards – Personal Income Tax refunds and payments for State Insurance Fund, for Workers' Compensation, and to Medicaid providers are paid via a combination of paper check or ACH payments. – These account for an additional total of 16.5 million payments (not including Medicaid), of which 2.8 million (16.9%) are checks. 3 © 2019 Mercator Advisory Group Executive Summary (cont’d) . The payment flows involve five general process steps that run directly or indirectly through the State Financial System. They result in one of three payment types: ACH, check, or wire transfer. Through a review of available payment files, Mercator Advisory Group identified 11 use cases representing two outstanding opportunities for improvement through use of both existing and alternative payment types. – Expense reduction through use of e‐payments rather than checks – Improved experiences for both New York State citizens and the supplier base . Additional opportunities are also available through digital process adoption and further analysis of payment flows beyond the use cases identified that have high initial potential. 4 © 2019 Mercator Advisory Group Introduction . Project Purpose . Project Approach . Current State Analysis 5 © 2019 Mercator Advisory Group Introduction: Project Purpose The project originated through the vision of Mastercard to fund such analysis in order to uncover pain points in state government payment flows and identify opportunities for process improvements. The results of the study can potentially benefit the State of New York and other state governments by the subsequent report distribution through NASACT. The objective of Mercator Advisory Group’s engagement with the State of New York is to document the number, dollar value, tender type, and business case (purpose) of the outgoing disbursements originated by the State. This presentation summarizes findings from Mercator Advisory Group’s analysis of the payments data and discussions with individuals in the Office of the New York State Comptroller. The presentation provides recommendations and highlights opportunities to assist the State of New York to improve the efficiency of their payment operations based on knowledge of industry best practices. Through the Office of the New York State Comptroller, New York State has already provided an overview presentation to the National Association of State Comptrollers (NASC) at the annual event in April of 2019. The full report will be subsequently posted to the National Association of State Auditors, Comptrollers and Treasurers (NASACT) website. New York State hopes that all state governments can use this information as a case study for understanding state payments and the option available to effective make these payments in today’s world, potentially improving their payment operations. 6 © 2019 Mercator Advisory Group Introduction: Project Approach Mercator Advisory Group did the following: . Reviewed documentation provided by New York State to better understand state government nomenclature, structure, and operations, and then had ongoing discussions to clarify open questions. Analyzed the provided data to understand the current state of payments. Identified opportunities based on: – Current high‐volume use of a less efficient payment type, primarily checks. – Current use cases where a payment application is identified as being particularly cumbersome. – Where a change in payment solution could make a meaningful, positive difference to the recipient. Selected specific use cases representing identified opportunities and outlined solutions for consideration. Provided summary matrix of payment type attributes that may help to identify solutions for additional use cases. 7 © 2019 Mercator Advisory Group Current State: Generic New York State payments taxonomy Agency Office of the New York State Comptroller PSP Document Payables OSC Filter OSC Approval Payment Review . Compare invoices . Invoice/P.O. SFS‐originated . Authorized party . Payment type is received in SFS matching is payment reviews aligned with against purchase completed. requests are transactions. vendor file orders (P.O.s). Payment request routed to Manual (MAN) description. Auto entry for appropriate OSC native and OCR is initiated in payment types . Routing for unit for review. e‐invoices. SFS. are reviewed payment Manual entry Both . Payment and entered execution: for certain paper automated requests that into SFS with ACH, Wire to invoices. and manually originated from program and/or bank . Non‐P.O. entered. an agency not account code. documents are Checks to using SFS (e.g., . Approved cleared for . Payment is ERP, Payables, internal state payment. assigned a transactions are processing Bank system) are released for Medical records, program and/or handled by operations jury attendance, payment. account code. assigned OSC etc. unit. 8 © 2019 Mercator Advisory Group New York State processes 6.53 million payments through SFS during a fiscal year, essentially split between checks and ACH. Total Number (Millions) of Payments Percentage Payment Type Processed and General Categories 0.0% 6.53 4.06 48.2% 51.7% 2.18 0.3 0.1% 0.01 ACH Wire Check MAN Total Regular Specialty Travel Foreign Payments Vendors Vendors Expense Source: Mercator Advisory Group analysis, New York State payment data files 9 © 2019 Mercator Advisory Group SFS payment transactions to specialty vendors are highly skewed toward checks, which are inefficient. 1% 5% 6% 4% 31% Regular Payment Value % Specialty Vendors Vendors 59% ACH 9% CHK 84% MAN <1% Wire 5% 32% Payment Transactions % Regular Specialty Vendors Vendors 68% 94% Source: Mercator Advisory Group analysis, New York State payment data files 10 © 2019 Mercator Advisory Group Nearly one half of all Regular and Specialty Account checks (47%) are to pay refunds. Top 10 Reasons for Checks Number of Checks (millions) Refunds 1.58 Local Grants and Public Assistance .28 Clinical and Laboratory Services .23 Jury Service per Diem .22 Dental Supplies and Materials .06 Total number of checks = 3.36 million Medical Supplies and Materials .06 Total value= $7.5 billion Attorney for Child .05 Average check size = $2,289 Postage .04 Phone—Local and Long Distance .04 Food & Related Consummable Supplies and… .04 Source: Mercator Advisory Group analysis, New York State payment data files 11 © 2019 Mercator Advisory Group The top 10 departments account for 71% of all T&E checks. Top 10 Departments for T&E Checks Dept of Corrections and Community 3,851 Supervision State University of NY 2,766 Department of Transportation 2,541 Division of Homeland Security 1,587 State Education Department 1,232 Assembly 1,037 Total number of checks = 21,735 Office for People with Developmental Total value = $4.6 million 802 Disabilities Average check size = $215 Department of Health 651 Division of State Police 521 Office of Children and Family Services 486 Source: Mercator Advisory Group analysis, New York State payment data files 12 © 2019 Mercator Advisory Group Alternative Payment Products . Debit Push Payments . Virtual Cards . Person‐to‐Person Payments . Same Day ACH . Prepaid Cards 13 © 2019 Mercator Advisory Group Alternative Payments: Debit push payments use debit card credentials to credit accounts. A less expensive alternative to distributing Only the payee’s name, debit card number, and checks to consumers and small businesses that card expiration date are required. have a debit card. Transactions can be used to fund traditional Referred to as a push payment because the bank accounts as well as general purpose sender authorizes (that is, “pushes”) a credit to reloadable prepaid debit cards. the recipient. Transactions are never debit “pull.” Debit push payments can be acquired through larger financial institutions. Transactions are processed through the debit card networks. The Mastercard Send version of debit push payments operates as a platform that allows the Both Mastercard and Visa operate debit push sender to send transactions to both holders of payments (Mastercard Send and Visa Direct) Mastercard and holders of Visa debit
Load more

Recommended publications
  • PAYMENTS DICTIONARY Terms Worth Knowing
    PAYMENTS DICTIONARY Terms worth knowing 1 Table of contents Terms to put on your radar Terms to put on your radar ..............................3 Card not present (CNP) Card acceptance terms ....................................4 Transaction in which merchant honors the account number associated with a card account and does not see or swipe Chargeback terms ..........................................7 a physical card or obtain the account holder’s signature. International payment terms ...........................8 Customer lifetime value Prediction of the net profit attributed to the Fraud & security terms ....................................9 entire future relationship with a customer. Integrated payment technology terms ............ 12 Omnicommerce Retailing strategy concentrated on a seamless consumer Mobile payment terms ................................... 13 experience through all available shopping channels. Payment types .............................................. 15 Payments intelligence The ability to better know and understand Payment processing terms ............................. 18 customers through data and information uncovered from the way they choose to pay. Regulatory & financial terms .......................... 23 Transaction terms ......................................... 25 Index ........................................................... 27 References ................................................... 31 2 3 Card acceptance terms Acceptance marks Credit card number Merchant bank Sub-merchant Signifies which payment
    [Show full text]
  • ULTIMATE RETAIL PAYMENTS FIELD GUIDE Everything Merchants Need to Know from Those in the Know YOUR ULTIMATE GUIDE
    ULTIMATE RETAIL PAYMENTS FIELD GUIDE Everything Merchants Need to Know from Those in the Know YOUR ULTIMATE GUIDE Today’s payments landscape is the stuff of dreams for merchants. New markets are in your grasp. New payment methods offer unlimited potential. And new customers knock at your doors. But those dreams can quickly become a nightmare without the right strategies and solutions to bring them all together. In this guide, you’ll get expert insights into the hottest issues in retail payments. We’ll explore new frontiers in payments, examine investment trends and even help prevent chargebacks. And that payments jargon? Consider it covered. TABLE OF CONTENTS 1 INVESTMENT TRENDS IN RETAIL ...................................................................................................................4 2 CROSS-BORDER eCOMMERCE EXPANSION: AN ACI FRAUD PERSPECTIVE ..............................5 3 FIVE SIMPLE STEPS TO PREVENTING MORE CHARGEBACKS ..........................................................8 4 NEW FRONTIERS IN MERCHANT PAYMENTS............................................................................................10 5 DECIPHERING PAYMENTS JARGON: EIGHT KEY TERMS DEFINED .................................................12 2 3 RETAILERS ARE BATTLING RISING COSTS THROUGH INVESTMENT INVESTMENTS IN INNOVATION 48% of retailers have suffered from a rise in payment operating costs TRENDS IN over the last three years. To combat this, retailers are investing in their 1 payment platforms. 48% expect to increase their investment in payments over the RETAIL next 18-24 months 36% are investing in payment acceptance capabilities to support growth In 2018, ACI® and Ovum 16% want to improve the integration between payments and partnered to produce the 2018 other systems to drive efficiencies Global Payments Insight Survey KEY TAKEAWAY for Merchants. In it, global Strategic investments in payments will deliver more integrated and merchants shared their opinions cost-effective platforms that can enable growth.
    [Show full text]
  • Brazilian Charge Cards
    ® THE MOST POPULAR CREDIT CARDS USED FOR PRODUCT PURCHASES IN BRAZIL Credit cards are a major payment method for online purchases in Brazil including the Brazilian brands Aura and Hipercard. However, credit cards issued in Brazil, even Visa's and MasterCard's, are often restricted to local purchases in Brazil. With Alternative Payments, you can reach this market by accepting these local payment methods. Hipercard is a credit card with its own brand. Controlled by Itau, Hipercard is popular in the North- east and South of Brazil, with 470 thousand accredited establishments and more than 13 million cards issued in 2010. It was initially created as a loyalty card for Bompreço grocery stores in Recife back in 1969. Its expansion started in Recife in 1991, when its name was changed to Hipercard and by 1993 it was fully operating as a credit card. This expansion turned Hipercard into the first store card to be accepted by other commercial establishments as a credit card. In 2004, it was acquired by Unibanco, which now belongs to Itau. Through its partnership with merchant acquirer Redecard it is accepted in more than six thousand commercial establishments. Hipercard started as a private label credit card company for the Bompreço chain of supermarkets and is now an independent credit card company and one of the most popular Brazilian online payment method. Cetelem (BNP Paribas) is one of larger Aura credit card issuers, who has entered into a partnership with MasterCard for Aura-MasterCard co-branded cards. Currently there are over 3 million co-branded Aura cards in Brazil.
    [Show full text]
  • Alternative Internet Payments Outside the Banking System
    Journal of Economic Crime Management Fall 2002 Volume 1, Issue 2 The Risk of Alternative Internet Payments Susan Lynch, Director of Financial Solutions Searchspace Abstract Alternative Internet Payment systems have been created as an option for consumers to use instead of credit cards, debit cards and checks while conducting electronic commerce on the web. Developed to mimic paper cash systems, alternative payments are identified by a variety of names such as: electronic currencies, cyber payments, Internet dollars, digital currency, etc. The companies that offer the service promote the ability to transfer value (typically through e-mail), anonymously between people and /or businesses through private closed networks. Many of the providers are located outside the United States; those in the US have expanded to allow international transfers. Because the networks are private and do not utilize the traditional federally insured banking systems to move funds, they do not have to comply with government regulatory policies such as the Bank Secrecy Act. The ability to transfer value anonymously has attracted the attention of government regulators as well as law enforcement agencies. The concern is that the methodology is yet another avenue to move funds for a potentially criminal enterprise. This article will identify the risks and make recommendations to mitigate the exposure to unlawful activity. Introduction “Money in the 21st century will surely prove to be as different from the money of the current century as our money is from that of the previous century…Electronically initiated debits and credits will become the dominant payment mode, creating the potential for private money to compete with government –issued currencies.” – Jerry L.
    [Show full text]
  • SOFORT the Pan-European Direct Payment System
    SOFORT The Pan-European Direct Payment System SOFORT GmbH based in SOFORT is one of the safest Sofort advantages: Munich, Germany, was founded online payment systems on the in 2005 and offers products Internet, because, with International business and services for the secure SOFORT, customers make opportunities in 13 purchase of physical and digital payments using their familiar European countries goods on the Internet. online banking details. In this way, security and privacy are of High bank coverage SOFORT is the market leader highest priority. amongst the online banking- throughout Europe based payment methods in In 2014 Sofort was acquired by Germany and Austria. Klarna and Klarna group was High sales potential established. due to the widespread On average, 3 million Sofort use of online banking transactions are made every The name “Sofort month. More than 35.000 Überweisung” changed to Easy and secure online merchants offer Sofort “Sofort” with local translations as a payment scheme to their for each country respectively payment method customers. (e.g. "Pay now" in English). To date, SOFORT Banking is available in 13 countries. Besides in Germany, the system is available in Austria, Belgium, the Netherlands, Poland, Italy, Spain, Slovakia, Switzerland, France, United Kingdom, Hungary and Czech Republic. Alternative Payments is an Award-Winning Alternative Billing Solutions Provider that specializes in bringing the latest technological advanced payment platforms to merchants worldwide. Product Description Bank Transfer Product Process Upon purchase, the consumer logs into their own online bank and authorizes the payment. The funds are then directly debited from their bank account in real-time and the merchant will receive an immediate payment confirmation.
    [Show full text]
  • The Trustpay Platform Provides Instant Bank Transfers Between Its Partner Banks
    ® A SECURE ONLINE PAYMENT The TrustPay platform provides instant bank transfers between its partner banks. TrustPay is EU licensed and regulated payment institution. A principal member of Visa, MasterCard and UnionPay, SEPA SCT and SDD scheme participant and a member of SWIFT. ADVANTAGES: -No Chargeback Processing currency: EUR -Real-time bank transfers are one of the fastest payment Risk of chargeback: NO methods Payment guarantee: YES -Available 24/7/365 -Provides secure payments -Merchants have absolutely no risk. Each transaction must be authorized by the consumer -No need to process consumers’ personal data Alternative Payments is an Award-Winning Alternative Billing Solutions Provider that specializes in bringing the latest technological advanced payment platforms to merchants worldwide. Product Description Bank Transfer Product Process After initiating a payment, consumers choose a bank from the list of the supported banks and pay via their own bank account. They do not need to disclose any personal data to TrustPay. All they need is an account with a TrustPay supported bank. Countries Supported Czech Republic and Slovakia Merchant Advantages •Provides an additional real-time online payment acceptance method to convenience consumers with no risk of chargeback for the merchant •Increases sales by offering a local trusted payment solution to customers •Excellent alternative payment solution for declined card transactions and blocked customers Consumer Advantages •Clients of the bank are automatically enrolled and do not need to register. They simply select TrustPay as their payment method and approve the payment •Provides a trusted and familiar local payment method that is supported by the consumer’s own bank •Convenient, reliable, and simple transaction process •Offers access to more products and services •No credit or debit card needed.
    [Show full text]
  • Schedule L Alternative Payments
    SCHEDULE L Alterative Payments This Schedule L supplements the MSA to which it is attached and sets forth the terms applicable to PROVIDER provision of the specified services for the Card transactions set forth below: Paypal _______ Google Check Out _______ 3D Secure Services _______ Bill Me Later _______ 1. FEES: The products selected above are collectively referred to as (“Alternative Payments”) unless otherwise specified in this Schedule L. Each sale, authorization, and/or capture message, as well as refunds, reauthorizations will be charged as individual transactions for billing purposes. All other fees outlined in the MSA, including interchange, will be charged in accordance with the terms of the MSA and as set forth in Schedule C. 2. Terms and Conditions (as applicable): By accepting the Alternative Payments selected above, PROVIDER and CUSTOMER do hereby agree as follows: Customer acknowledges that PROVIDER provides access to the services selected by CUSTOMER pursuant to this Schedule. CUSTOMER is solely responsible for entering into any necessary agreements with the third parties selected herein for such services and any fees and charges imposed upon CUSTMOMER by such third parties. 3. Agreement Confirmation. IN WITNESS WHEREOF, this Schedule L has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first written below. All terms and conditions of the Bankcard Addendum shall remain in full force and effect. 1 STMS Master Services Agreement Rev. 1608 Kasr Kirk 010215 BILL ME LATER TERMS AND CONDITIONS BILL ME LATER – In addition to CUSTOMER’s acceptance terms and conditions above, CUSTOMER further agrees as follows: Definitions.
    [Show full text]
  • Next Generation Alternative Retail Payments: User Requirements EBA Working Group on Electronic Alternative Payments
    Opinion Paper on Next Generation Alternative Retail Payments: User Requirements EBA Working Group on Electronic Alternative Payments Version 1.0 13th May 2014 CONTENTS INTRODUCTION 3 OVERVIEW 3 DRIVERS FOR CHANGE IN RETAIL PAYMENTS 4 SEGMENTATION OF ALTERNATIVE PAYMENT SOLUTIONS – CASE STUDIES 4 CONSUMER AND MERCHANT REQUIREMENTS 6 SOME DESIGN CAVEATS 7 FAST FORWARD – THE 2020 USER EXPERIENCE 7 BANK WINNERS AND LOSERS 9 E-AP – SEVEN CHALLENGES FOR EBA MEMBERS 9 RESEARCH REFERENCES 10 GLOSSARY OF TERMS 11 Copyright © 2014 Euro Banking Association (EBA) professional advice. The views expressed are those of the members of the EBA Working Group on Electronic Alterna- All rights reserved. Brief excerpts may be reproduced for tive Payments and not necessarily the views of the EBA. non-commercial purposes, with an acknowledgement of EBA or its affiliates do not accept any liability whatsoever the source. arising from any alleged consequences or damages arising from the use or application of the information and give no The information contained in this document is provided for warranties of any kind in relation to the information provided. information purposes only and should not be construed as layout: www.quadratpunkt.de photo credit: © fotolia.com / Dreaming Andy, cirquedesprit 2 EURO BANKING ASSOCIATION: Opinion Paper on Next Generation Alternative Retail Payment (e-AP) User Requirements INTRODUCTION OVERVIEW In 2013, the EBA set up a Working Group with a brief Banking professionals now almost universally recog- to help the Board and members to gain a deeper nise that retail payments are undergoing significant understanding of the changing structure of retail pay- and rapid changes.
    [Show full text]
  • Small Business Payments Tookit
    Remittance Coalition | Volume 2 | 2016 Table of Contents Introduction ............................................................................................................................................................................ 3 Payment Types Explained ................................................................................................................................................. 4 Understanding Automated Clearing House (ACH) .................................................................................................. 6 What Small Businesses Should Know About ACH ............................................................................................... 6 Consumer vs. Corporate Accounts in ACH ............................................................................................................ 9 ACH Payments and Remittance Solutions ............................................................................................................10 Working with Your Banker ...............................................................................................................................................11 How to Talk to Your Bankers about Payments ......................................................................................................11 Bankers, Small Businesses and ACH: Getting on the Same Wavelength ....................................................12 Tips on Getting Started Originating ACH ..............................................................................................................13
    [Show full text]
  • Alternative Payment Methods in General
    PAYMENTS Alternative REPORT payment methods Tricia Lines Hill of First Atlantic Commerce believes payment companies need to diversify and accept many forms of online payments to succeed in today's anti-fraud environment hile I was getting ready for bed last movers and shakers are offering sideline activities so night, I gazed at my rolled-up tube of as not to lose their already acquired customers (that toothpaste sitting on the bathroom coun- want to play a different game) to other operators. Wter, and as my eyes rolled over the brand – Aquafresh Likewise, payment gateways, which in their sim- Extreme CleanTM – I thought about how consumer- plest form used to be the switch between the mer- buying behaviour toward toothpaste has changed in chants and the banks for credit card processing, are the past three decades. now offering other forms of online payment to satisfy Remember when toothpaste was simply there to their customers. Those that differentiate themselves clean your teeth and prevent cavities? Today, how- will gain market share and continue to lead the online ever, toothpaste has morphed into that whole mouth- payment space, while those that stick to credit card Tricia Lines Hill clean trend. It whitens, brightens, freshens breath, processing only will surely fall behind. is vice-president, fights plaque, fights cavities, controls tartar build- Apart from secure and reliable credit card process- Marketing & up, tastes like mint or cinnamon or bubblegum. ing, the leaders are providing other forms of payment Corporate Com- munications, at First through their platform such as debit card processing, Atlantic Commerce PayPal, virtual cash in the form of Ukash and/or Pay- (FAC), a Bermuda- Changing business models safecard, inbound bank transfers and payout solutions based, international Bear with me, I am coming to my point here.
    [Show full text]
  • Futureofpayments.Pdf
    Contents Introduction 3 Executive Summary 4 Paper Trails 5 Fear and Fraud 8 Time for Realism 10 Perspectives from the UK and U.S. 11 Change in Time 12 2 Introduction As the decline of cash continues, alternatives are rising to take its place. And it is not just cash they are leaving in their wake. Last year cash accounted for less than half of all payments made by consumers, businesses and financial institutions in the UK for the first time.1 In the first three months of 2016, meanwhile, use of both contactless credit and debit cards overtook cheques.2 These are just a few milestones as we witness “the slow death of cash”,3 and are reflected in trends in the U.S., where non-cash payments continue to grow relentlessly.4 But while it’s long been clear that consumers and businesses are walking away from cash, it’s less clear where they’re going. In addition to traditional cards, electronic payments and transfers, a whole range of alternative payments now proliferate: contactless cards, pre-paid cards, payments apps and other mobile payments, mobile banking, e-money accounts and virtual currencies. Yet none is ubiquitous. This paper, based on new analysis by the Centre for Economics & Business Research (Cebr) for Paul Hastings as well as a YouGov survey of consumers and businesses, examines where we are now and attempts to look ahead. Based on surveys of both the public and businesses, it explores their priorities, acceptance, and use when it comes to payments innovation. We also look at some of the barriers these technologies face as they battle to become mainstream, and what this means for the banks and fintech challengers involved.
    [Show full text]
  • Making Paypal Pay: Regulation E and Its Application to Alternative Payment Services
    MAKING PAYPAL PAY: REGULATION E AND ITS APPLICATION TO ALTERNATIVE PAYMENT SERVICES † ERIC PACIFICI ABSTRACT In light of the growth of data breaches in both occurrence and scale, it is more important than ever for consumers to be aware of the protections afforded to them under the law regarding electronic fund transfers and alternative payment services. Additionally, it is important that agencies like the Consumer Financial Protection Bureau (“CFPB”), charged with the protection of unsuspecting and often defenseless consumers, are carefully monitoring these protections to ensure they keep pace with the technological evolution of the payment services they regulate. Alternative payment services, such as PayPal, are conducting an enormous number of payments and providing an extremely beneficial service in the era of e-commerce. This Issue Brief argues that, as currently written, the Electronic Fund Transfer Act, implemented by Regulation E, does not adequately protect consumers using these alternative payment services. Regulation E is insufficiently specific and provides circular language in its key definitions, including those for the terms “financial institution” and “account.” These deficiencies could leave consumers engaged with alternative payment services in the unique position of facing unlimited liability for losses resulting from unauthorized electronic fund transfers from their alternative payment service account. Thus, this Issue Brief argues that in order to ensure that Regulation E is written broadly enough to apply to all the functions of PayPal, the CFPB should clarify its language. † Duke University School of Law, J.D. expected 2015; Western Michigan University, Lee Honors College, B.A. Summa Cum Laude, 2010. Special thanks to Professor Jeremy Mullem, Professor Lawrence Baxter, Taylor Bartholomew, Danny Beaulieu, Francesca Bochner, Jonathan Hayes, Matt Kelsey, Zach Lloyd, Mark Loftus, Cameron Williamson and Josephine Woronoff for their various contributions.
    [Show full text]