Fintech and Payments 2024 – Predictions for the Year Ahead
While there is never a dull year – or day, week, second, or moment – when it comes to fintech and payments, the next 12 months promises to be busier than most. With an election year looming and with more, to put it mildly, focus on bank and fintech partnerships, 2024 may make it more difficult for even the most attentive stakeholders to keep up.
With that in mind, here are some high level predictions on what we can expect in the world of fintech and payments in the year ahead.
2023 saw a handful of long awaited, or predicted, banking and payments rules finally proposed for public comment. These included a CFPB rule covering open banking and data sharing under Section 1033 of the Dodd-Frank Act and an update to the Durbin Amendment and Regulation II from the Board of Governors of the Federal Reserve.
While many of these rules, including the two cited above, either just closed their comment periods or are still in the process of collecting comments, we would expect to see final versions of the rules relatively soon. What’s the rush you might ask? Given the fact that 2024 is an election year, regulatory agencies will be seeking to avoid the fate that befell the CFPB’s mandatory arbitration rules at the hands of the Congressional Review Act (“CRA”) during the 2016 election cycle. Given the CRA’s 60-day lookback period, and the fuzzy math that goes into calculating the period’s beginning and end, we would expect to see final rules on these and other topics well in advance of the end of the year.
In case you expected the regulators, and the CFPB in particular, to rest on their rulemaking laurels, think again!
The impending election results, and the foreknowledge of the regulatory whiplash that may result from another change in administrations, will only incentivize agencies to propose and finalize any rulemakings on their agendas now.
On the regulatory agenda for 2024, we expect to see rules covering the following –
- Buy Now, Pay Later
- Earned Wage Access
- Overdraft for traditional checking accounts
And . . . More Enforcement (yes, that is possible)
2023 saw banking and financial regulators flex their enforcement muscles. From UDAAP violations stemming from access to funds in frozen accounts, to demands from the FDIC concerning misrepresentations of the insured status of account products, regulators sent a clear message to banking and payment providers (and their fintech programs in particular) – consumer protection and strong third party oversight programs must be the focus going forward.
In the year ahead, we expect this trend to continue, with more actions being brought not just from the CFPB, but from other banking regulators as well.