Our Bryan Cave-affiliated sister site, the BC Retail Law Blog, recently published two posts that may be of interest to our banking, fintech and payments clients.

In “Bans on Credit Card Surcharges Face First Amendment Challenges,” the Retail Law Blog looks at how state laws that prohibit retailers from charging customers a surcharge for using a credit card are being challenged on First Amendment grounds.

For more than four decades, California’s Song-Beverly Credit Card Act of 1971 prohibited retailers from charging credit card customers such a surcharge. In Italian Colors Restaurant, et al. v. Harris, 99 F.Supp.3d 1199 (E.D. Cal. 2015), a federal judge ruled that the law unconstitutionally limits retailers’ freedom of speech. The California attorney general appealed, and the case is set for oral argument before the Ninth Circuit Court of Appeals on August 17.

One consequence of these actions may be to make credit cards more expensive to the consumer, which, in turn, could encourage further development of alternative forms of payment.

In “Get Ready for New Data Transfer Security Standard for POS Systems,” the Retail Law Blog looks at upcoming revisions to the Payment Card Industry Security Standards Council (PCI-SSC) data transmission standards, and its impact on retailers.

There is not a liability shift in the rules specifically related to the new standard, but merchants will be subject to fines and the deficiency will become apparent when they undergo their periodic security audit after the June 30 date. However, the old standard is being dropped by the Payment Card Industry Security Standards Council because it leaves the POS systems still using it vulnerable to hacking. Now the hackers will be probing to find big systems that have not upgraded to the less porous technology.

Although focused on the impact for retailers, the evolving data standards should also be of interest to all banks involved in the credit card industry.