While the advancement of open banking regulations may be seeing a small skip due to the spread of the coronavirus, many countries saw business and typical banking operations halted right after deciding upon new online privacy rules.
Global lockdown to fight the virus’s spread means many regulators will likely not come to any final conclusions regarding open banking within the next month or so, and it also means lawmakers have new perspectives to consider when these debates resume. Collecting and sharing data is a critical part of business today — especially during this period where most work and payments are being conducted online — and that means regulators have tough choices to make when determining what banks, businesses or even consumers have access to data and why.
In the latest Merchants Guide to Navigating Global Payments Regulations, PYMNTS examines the latest data privacy and online banking regulations taking shape in the United States. The Tracker also looks at how COVID-19, the disease caused by the coronavirus, may impact the development of these rules in both the U.S., European Union and other regions currently fighting the pandemic.
Around The Data Protection And Security World
Merchants and banks are not immune to the impact of COVID-19, leading entities to shutter their physical storefronts and some branches in favor of online interactions. The virus is sweeping through the U.S. at a time when the country’s regulators are still fiercely debating how digital data and privacy should be treated, a topic somewhat elevated in importance now that the majority of business is being conducted through such channels. Sen. Kirsten Gillibrand of New York, for example, had proposed the creation of a federal agency that would handle consumer complaints regarding privacy breaches one short month before the COVID-19 quarantine period began. The potential reach and creation of such an agency is still currently being debated.
State regulators such as those in California, New York and Washington also recently passed rules just before the outbreak, with California regulators in particular still discussing potential changes to its California Consumer Privacy Act (CCPA). The state’s lawmakers are examining small changes to the procedures that companies are required to provide consumers on their websites to opt-in to data collection, among others, with the proposed changes coming just a few months after the CCPA went into effect at the beginning of 2020. It remains to be seen if COVID-19 will have any effect on future developments of this rule.
Considering the global nature of COVID-19, regulators outside of the U.S. also found themselves fielding questions and requests from companies thanks to recent regulatory shifts surrounding privacy. The virus once again tested the boundaries of the EU’s GDPR rule, which has governed the transmission of online information in the region since 2018. The rule bars companies from being able to share private health information, for example, but there are provisions that allow for certain data to be sent during emergency situations — such as a global pandemic. Exactly what data can be shared under these emergency rules is still up in the air, however, and has left many companies questioning regulators.
For more on this and other stories, visit the Tracker’s News And Trends section.
Developing new regulations that can accurately protect massive quantities of online data while still enabling competition is tricky, especially when multiple regulators from multiple states get involved. From California to New York, numerous states are looking for ways to offer fair access to data, but sometimes these rules do not quite overlap with the restrictions designed by their neighboring states. This can leave merchants and retailers operating online platforms in various states caught in the middle, said Nicholas Ahrens, vice president of innovation for retailer trade group the Retail Industry Leaders Association (RILA), in a recent interview with PYMNTS. To find out more about how U.S. merchants are remaining compliant without losing their competitive edge, visit the Tracker’s Feature Story.
US Open Banking Fragmentation And Its Impact On Merchants
Merchants may have lingering questions over the shifting regulations in the U.S., but rising data breaches and online hacks are evidence of the necessity of the rule. Fraudsters are finding new ways onto online platforms using data filched from numerous large-scale breaches in the past two years, leading multiple states in the U.S. to create online privacy and sharing rules to block their entry. Merchants must still provide the personalized support that consumers are used to, however, even as multiple states in the country seek to shore up their online transaction rules in order to keep out these bad actors. To learn more about U.S. open banking shifts, visit the Tracker’s Deep Dive.
About The Tracker
The Merchants Guide To Navigating Global Payments Regulations, powered by Ekata, is the go-to monthly resource for updates on the trends and changes regarding PSD2 as well as other privacy and data protection regulations.