Posts Tagged: transactions
FTC orders Mastercard to open debit transactions to competing payment networks
The Federal Trade Commission has ordered Mastercard to start providing competing payment networks with the information they need to process debit card payments. In a proposed enforcement action announced on Friday, the FTC said Mastercard had allegedly violated a provision of the Dodd-Frank act known as the Durbin Amendment by prohibiting merchants from routing transactions over alternative networks.
The action targets “tokenization,” the technology that underpins mobile payment applications like Apple Pay, Google Pay and Samsung Pay. When you go to make a debit or credit card purchase with your phone’s mobile wallet, the software substitutes sensitive information, including the primary number associated with your account, with a separate set of single-use “tokens.” Mastercard and Visa say the practice prevents fraud since tokens contain no exploitable information when they’re in transit. It’s only when they arrive at Mastercard or Visa’s servers, and they’re mapped back to their original account holder, that they point to someone.
According to the FTC, Mastercard has historically stopped competing networks from accessing its token vault. That means whenever consumers decided to pay with a mobile wallet, merchants had to route the transactions over Mastercard (or Visa) and pay the company's transactions fees, which are typically higher than that of its competitors. The Durbin Amendment calls for banks to support two competing payment networks on all debit cards. It was a provision Congress introduced to promote competition among networks. The FTC didn’t say if it reached a similar agreement with Visa.
“While we are taking these steps to bring this matter to a close, there should be no question that tokenized transactions provide an increased level of protection to both consumers and merchants,” Mastercard spokesperson Seth Eisen told Bloomberg. “This focus on security guides our efforts in a highly competitive market and provides the incentive for us to continue investing in innovations that promote the peace of mind every person expects.” Eisen added Mastercard would “continue to work to update our processes to comply with the consent order and provide even greater choice.”
The FTC plans to collect comments from the public before voting to finalize the order against Mastercard.
NFT marketplace halts most transactions due to proliferation of fake and plagiarized tokens
Cent, the company that last year helped Jack Dorsey auction an NFT of his first tweet for $ 2.9 million, is temporarily halting most transactions to address “rampant” sales of fake and plagiarized tokens. In an interview published on Friday, Cameron Hejazi, the CEO and co-founder of the company, told Reuters Cent stopped allowing users to buy and sell most NFTs on February 6th. It continues to operate its Valuables marketplace, the place where people can purchase non-fungible tokens of tweets, but that’s about it.
"There's a spectrum of activity that is happening that basically shouldn't be happening – like, legally" Hejazi told Reuters. He said Cent has tried to ban bad actors but compared the effort to a game of whack-a-mole. “Every time we would ban one, another one would come up, or three more would come up,” Hejazi said.
Last month, OpenSea, one of the largest NFT marketplaces on the internet, said more than 80 percent of the tokens recently created through its free minting tool involved plagiarized work, fake collections and spam. The admission came after the company had tried to limit the number of NFTs users could mint for free. After reversing the decision, the company said it was working on several solutions to deter bad actors. Before January’s announcement, artists and photographers had complained for months that the company hadn’t done enough to address the issue of plagiarism.
"I think this is a pretty fundamental problem with Web3," Hejazi told Reuters. In the immediate future, he said Cent may introduce centralized controls to facilitate a reopening of its marketplace. The company could then later explore more decentralized solutions to the problem.
Samsung’s Galaxy S8 iris scanner may help users unlock financial transactions
New reports out of Korea indicate there may be some growing interest from financial firms like banks or credit card companies to incorporate iris scan security into the methods used to secure financial transactions. Iris scanning may be familiar to more users now with the launch of the Samsung Galaxy S8 and Galaxy S8+ which […]
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