Welcome to Innovating Payments Top 3 News Headlines for the Week of August 6, 2023. In this issue, PayPal announced the launch of a U.S. dollar stablecoin. Paxos Trust, the firm issuing the new stablecoin, calls it a "watershed moment" in cryptocurrency. In other news, the Federal Trade Commission (FTC) will meet with Amazon ahead of an antitrust lawsuit officials prepare to file against the retail giant. Bank of America imposters are renewing a notorious Zelle scam, as bank imposters trick customers into sending them money through the quick-pay app.
Read on to learn more.
1. PayPal Launches U.S. Dollar Stablecoin (PayPal)
Fully-backed, regulated stablecoins have the potential to transform payments in web3 and digitally native environments. To address that emerging potential, PayPal today accounted the launch of a U.S. dollar-denominated stablecoin, PayPal USD. PayPal USD is designed to contribute to the opportunity stablecoins offer for payments and is 100% backed by U.S. dollar deposits, short-term U.S. Treasuries and similar cash equivalents. PayPal USD is redeemable 1:1 for U.S. dollars and is issued by Paxos Trust Company. (Read more.)
2. Report: FTC to Meet with Amazon Ahead of Lawsuit (PYMNTS.com)
Amazon could face the toughest challenge in its 30-year history as Federal Trade Commission (FTC) officials prepare to file an antitrust lawsuit against the retail giant. Representatives from Amazon will reportedly meet next week with FTC officials in the latest sign that the agency is close to filing a complaint. According to the Wall Street Journal Monday (August 7), the meetings will be held with the FTC chairperson, Lina Khan, along with commissioners Rebecca Kelly Slaughter and Alvaro Bedoya. These meetings, known as "last rites" meetings, are the final step before the agency votes on filing a lawsuit. (Read more.)
3. Bank of America Imposters Renew Zelle Scam, Telling Victims 'Ignore Fraud Warnings' (abc7news.com)
A notorious Zelle scam is back, as bank imposters trick customers into sending them money through the quick pay app. Banks are now sending fraud warnings to Zelle users -- but it may not be enough. Crooks are always one step ahead of the banks. Imposters know Bank of America is sending out warnings when it detects a suspicious money transfer. But the imposters simply tell victims: you're gonna get an alert. Just ignore it. Rachael Adler believed the man on the phone was really from Bank of America. "The guy was very friendly, calm, kind, clearly educated... it was very creepy in retrospect," she said. (Read more.)
From the industry's perspective, why might financial institutions consider PayPal's issuance of a U.S. dollar stablecoin a "watershed moment?" What could the FTC's decision on whether to file an antitrust lawsuit against retail giant Amazon mean for financial institutions? How can financial institutions better educate customers about current and emerging Zelle scams?
Check back soon for our next issue, highlighting the industry's most pressing and need-to-know developments. Until then, visit us online at Innovating Payments.
AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.