Rollbacks911 require regulatory discretion as the Fintech industry expands

by James · May 2, 2023

“The Federal Trade Commission is committed to protecting consumers in the fast-moving realm of … FinTech.”(1) In fact, the FTC has filed lawsuits against companies across the FinTech industry, from mobile payment providers (PayPal) to virtual currencies, in a attempts to crack down on FinTech companies. Rollbacks911 Founder Monica Eaton is leading the push for more nuanced accountability within the multifaceted FinTech ecosystem – money movers, payment processors and software technology service providers operating as channel channel providers.

TAMPA BAY, Fla., 1 May 2023 /PRNewswire-PRWeb/ — The financial technology (FinTech) industry is currently experiencing a compound annual growth rate (CAGR) of 20.5% and is expected to reach 700 billion dollars in annual turnover by 2030.(2) Monica Eatonfounder of Chargebacks911, recognizes the potential within the FinTech space for providers to offer a wider range of applications and services.

Within the broad field of the FinTech industry, there are companies that offer banking and financial services, such as deposit receipts, payment processing and lending. Eaton maintains: “FinTech companies that move money should be regulated in the same way that banks are regulated, but companies that provide services to these companies are different and should not be subject to the same rules because, obviously, they have not the same (or some) control over the money.”

Service providers
“There is a distinction to be made,” says Eaton, “The same set of regulations and restrictions should not be applied universally to all software companies serving FinTechs, as many do not move money and play no role in banking. Rather, they provide an interface to connect two endpoints or a data processing service; examples include AWS, Tableau, and companies similar to DocuSign, which support financial institutions with configurable templates to standardize and streamline data inputs and outputs for the user.” An important differentiation with processing technologies is their role in payment accounts and money movements. For example, there is a significant difference between a payment processor and a service provider or supplier that provides a tool or service that the payment processor uses to support its workflows and business processes.

A technology platform provider like Chargebacks911 does not move money, nor does it have a role in opening or closing payment accounts for merchants or cardholders. It specializes in providing solutions that help automate cumbersome workflows and provides configurable interfaces to support the growing needs for chargebacks and dispute management. With the growth of e-commerce, there is increasing demand for business solutions that streamline processes, unify data sets and provide scalability – enabling businesses to move on from manual methods or reliance on mainframe environments that were not built to keep up with today’s digital marketplace. Service providers offering fraud scoring technology assist financial institutions with scaling constraints – while other types of platforms offer turnkey solutions that allow banks to automate their customer handling processes. Bottom line, service providers have an important role in the framework for commerce and FinTech. Without the ability to leverage solutions like these, the internet would be less secure, and consumer protection mechanisms would fail to deliver security and trust because they would rely on unscalable systems that were not built for this time.

In the same way that QuickBooks offers accounting software to automate bookkeeping, invoicing and inventory tracking, or ADP offers payroll software and services to manage changing tax rules, employee benefits and digital payroll input and output; Chargebacks911 provides chargeback and dispute management software and services to companies that need workflow automation and technology solutions to help manage chargebacks and disputes for their industry.

The distinction does not exempt consumer-facing companies that engage in fraudulent activities. One example: according to the FTC, starting in 2016, AH Media Group overbilled unsuspecting consumers $90 each for supposedly “free” samples of cosmetics and weight loss supplements and then enrolling them in unwanted subscription plans with extra monthly fees.(5)

Need new rules
As the FinTech industry continues to redefine itself, it will become increasingly important to understand the difference between companies that use financial technology to move money and those that provide financial technology services.

“What is needed,” says Eaton, “is a clearer understanding on the part of regulatory agencies about which is which. Lumping ALL companies that sell solutions that support a financial service or process or have clients that are FinTech into one group is “categorically ‘ error. It is dangerous for the economy and ultimately consumers. Managing chargebacks can be a tedious process, similar to processing payroll or compiling data for a unified business report. Solutions that specialize in automating these workflows deliver much-needed scale and, as a result, have grown in response to demand from retailers and financial institutions alike. The task of handling chargebacks and disputes will always be an important requirement for companies. It is important to ensure that trade and the mechanisms and policies that govern payments are not hampered by misaligned regulations that treat companies servicing a financial institution or merchant in the same way as a financial institution or merchant.”

About refunds911
Chargebacks 911 is a global leader in chargeback management technology. As a vendor or supplier to financial technology companies and retailers, Chargebacks911 helps secure more than 2.4 billion transactions per year on behalf of customers in 87 countries around the world. For details on Chargebacks911’s comprehensive dispute resolution solutions, visit https://chargebacks911.com.

References
1. “Financial Technology: Protecting Consumers on the Cutting Edge of Financial Transactions” Federal Trade Commission,
2. “With 20.5% CAGR, Fintech (financial technology) market to hit USD 699.50 billion by 2030 – Top Companies, Growth Rate, Recent Trends, Business Opportunities and Forecast Analysis – Adroit Market Research.” GlobeNewswire News Room, Adroit Market Research, 20 September 2022globenewswire.com/news-release/2022/09/20/2518804/0/en/
3. Bellan, Rebecca. “Twitter agrees to pay 150 million dollars for breaking privacy promises.” TechCrunch, 25 May 2022techcrunch.com/2022/05/25/twitter-agrees-to-pay-150m-for-breaking-privacy-promises/#
4. “FTC Completes Consent Order Requiring Credit Karma to Pay 3 million dollars.” Pymner, 23 January 2023pymnts.com/FTC finalizes-consent-order-requiring-credit-karma-to-pay-3 million dollars
5. “HomeAdvisor’s 7.2 million dollars Proposed settlement with FTC hits home with small businesses, gig workers.” Federal Trade Commission, 27 January 2023ftc.gov/business-guidance/blog/2023/01/homeadvisors-72-million-proposed-settlement-ftc-hits-home-small-business
6. “The Federal Trade Commission returns more than 5.4 million dollars to consumers.” Federal Trade Commission, 30 June 2022ftc.gov/news-events/news/press-releases/2022/06/federal-trade-commission-returns-more-54-million-consumers.