Lawmakers May Be Smarter About Payments, But Providers Can’t Let Their Guard Down

Be careful what you wish for. For years, payments processors have contended that state and local lawmakers and regulators would enact better regulations if they were better-informed about how payments work. The good news is that’s now happening, said Kim Ford, senior vice president of government relations at Fiserv Inc. The bad news is that state lawmakers’ understanding of the payments business remains fragmentary.

“Legislatures know payments are important, and are a little bit smarter. It means we [still] have a responsibility to educate them about how payments work,” Ford told attendees this week at the ETA Transact conference in Las Vegas. The job is especially difficult with state and local governing bodies, where lawmakers can change every few years. “We’re always starting from scratch,” the lobbyist said.

The onset of the pandemic didn’t help matters. Ford pointed to an executive order in Georgia in 2020 to “suspend the use of PIN pads” in that state, ostensibly to help control the spread of the Covid-19 virus. “The governor didn’t know that with [electronic benefit transfer] cards, you have to enter a PIN,” Ford told the audience. Unwittingly, the governor “was cutting off access” to a crucial benefit at the very time the pandemic was underscoring its need, she added.

More recently, she added, state lawmakers have caused other headaches for the payments business. In California, she said, legislation was proposed to hold payments processors liable for products sold by online marketplaces that are found to be “faulty.” Industry lobbying succeeded in stopping the proposal, but its emergence in the first place was “scary,” Ford said.

“Lawmakers know payments are important, and are a little bit smarter about payments,” Ford said. But it remains for the payments industry to be vigilant about proposed legislation affecting the industry, she added. “It means we have a responsibility to educate them.” 

Still, even with better-educated legislatures, “sometimes strong voices from processors get lost in the shuffle,” Ford told the audience.

ETA Transact is convened annually by the Electronic Transactions Association, a Washington, D.C.-based trade group for the payments industry.