9th National Forum on Balancing Innovation with Consumer Protections in Emerging Payment Systems

Conference Ends – Lunch for Master Class B Participants

Boot Camp on the Technology Used in the Various Payment Processes: Practical, Legal, and Regulatory Considerations for Attorneys and Compliance Professionals

In order to provide accurate and effective advice to your company or clients, it is essential that you have an in-depth understanding of the technologies underlying new and emerging payment systems. This Boot Camp will provide attendees with a firm grip on the technologies that are used in a wide range of innovative payment systems, and how the underlying technology impacts legal and compliance considerations.

Topics to be addressed include:

• New technologies applied to traditional payment systems
• Analyzing the technology used in each step of the various emerging payment processes:
  • Internet Browser and Internet-Based Payments
  • Mobile Apps, Payments and Wallets
  • RFID
  • Near Field Communication
  • Text Messaging
  • QR Codes
  • Bluetooth
  • Host Card Emulation
  • EMV Chip Technology
  • Tokenization
  • Virtual Currency and Bitcoin
• Understanding the new and emerging data security technologies
• The range of information captured by emerging payment systems and devices: Where the information is stored
• Structuring new products and product enhancements in ways that are intuitive and easy for customers to use but that also ensure regulatory compliance and data security
• Examining the regulatory gaps and clarifying areas of uncertainty with the new technologies:
  • Reg E and Reg Z protections
  • Fraud prevention standards
  • UDAAP disclosures
• Where does the consumer go for protection – one regulator or many? – CFPB, FTC, FCC, Congress and Banking Committees, and more

Main Conference Registration and Continental Breakfast

Co-Chairs’ Welcoming Remarks

Apple Pay Case Study: The Mobile Payment Service That Everyone Has Been Waiting For, With Analysis on the Legal and Compliance Ramifications of Near Field Communication (NFC), Radio-Frequency Identification (RFID) and Tokenization

• The potential effects of Apple Pay on the payments ecosystem
  • Card networks, banks, processors, retailers/merchants and consumers; Mobile payments at POS
• The user experience
• Technologies underlying Apple Pay
  • Tokenization; Near field communication; RFI
• The potential legal ramifications for Apple as a company
  • Does this make them a ‘financial institution’ or ‘service provider’ subject to regulation by the CFPB?

Other New Products, Services and Technologies With a Focus on Mobile Payments & Wallets in a Retail Environment, eCommerce Platforms and Business Models

• Market outlook: overview of new and emerging payment products and services, and their expected impact on the market
• A to Z on the different types of virtual and digital currencies; open vs. closed loop; centralized vs. decentralized; inherent value of products vs. no inherent value
• How can this emerging market comply with regulatory considerations?
• An update from big banks
• The most prominent player: Bitcoin; customer disputes and customer protection?; conveying to the public customer service
  procedures in place
• The effects of digital and virtual currencies; effect on stability of traditional payment systems (prepaid); interplay with prepaid products; effect on the financial marketplace as a whole
• Mobile payments and mobile wallets in the retail context; how mobile wallets are being developed, offered, and marketed;
  assessing their success to date, or lack thereof; assessing whether mobile payment systems are regulated and, if so, by whom; incorporating other value-added services into mobile wallets; processing credit card transactions on mobile devices; assessing
  the convergence of deposits, checking accounts, stored value, and mobile payments
• How the telecoms are impacting the mobile payments landscape
• Gaming companies
• Social coupons and social buying websites
• Advertising, promotion, and conducting payments on social media
• New start-up companies in the mobile payments space; how they are overcame barriers to entry
• Google and Host Card Emulation (HCE)
• PayPal and Bluetooth Low Energy (BLE)
• Beacon Technology
• The overlay of payments and sharing economy business models (i.e. uber, lyft)
• Mobile phone image check deposits; Remote deposit capture and bank image processing; possible future developments: customer-to-

The Uncertainty of Virtual Currency/Bitcoin on the Ecosystem, EMV Chip, Bluetooth and Beacon, HCE, SMS Payments and QR Codes: Key Offerings for the Underserved, Convergence With Traditional Banking, Ensuring Consumer Protection and Overcoming Challenges in Introducing New Payment Channels

Networking Luncheon for Speakers and Attendees

Ensuring Compliance with the Increasingly Aggressive State Regulatory and Enforcement Framework Governing Emerging Payment Systems:

• State licensing requirements for Virtual Currencies; New York’s bit license rules; will other states follow suit?
• State regulators’ goals of the emerging payments task force
• Perspectives on the policies behind money transmission laws, regulations, and licensing requirements
• Assessing the key issues and pitfalls relating to money transmission
• Developments in state regulation of money transmitters; coverage of processors, foreign entities, and emerging payment entities
• Issues arising from state examination and enforcement orders for money transmitters
• How various payment models relate to money transmission; costs and difficulties associated with obtaining licenses in multiple
  jurisdictions; Impact on start-ups in the emerging payments space
• Avoiding state licensing requirements; structuring your operations and designing your products so as to avoid triggering requirements
• Money transmission as payment processing; issues that arise; which states have taken this view and why?; best practices for determining whether your company is a money transmitter or payment processor
• How states are reacting to new and emerging federal initiatives
• Analyzing existing state unclaimed property laws as they relate to emerging payment systems; complying with unclaimed property laws
• Preparing for and responding to increased state regulatory and enforcement efforts; lessons learned from recent actions
• Impact of applying existing regulatory paradigms to emerging payment systems
• Are certain states unduly burdening innovation without providing significant consumer protections?

Bit Licenses, New Issues Relating to State Money Transmitter Licenses (Including the Examination Process and Relationship Management), Payment Processing, and Other Considerations

Views and Practical Guidance from Speakers from the Federal Government: Perspectives on the Evolving Heightened Federal Regulatory and Enforcement Paradigm Affecting the Evaluation and Offering of Emerging Payment Systems and Services

• How regulators view the payments landscape
• Which products and services are of the most concern to regulatory and enforcement agencies?
• Preparing for and responding to increased federal enforcement efforts
• Overview of recent high-profile cases, as well as what penalties have been assessed against whom and why
  • Implementing proactive measures to minimize the risks of exposure to sanctions and penalties
• Consumer protection concerns raised by emerging payment systems
• Efficacy of existing regulations, many of which were written without emerging payment systems in mind
• How federal and state agencies will ensure that consumers are adequately protected
• Assessing the key issues and pitfalls at the federal level relating to money transmission
• Ensuring that your company has taken the necessary steps to satisfy regulatory scrutiny
  • Best practices for working with regulators to determine how best to meet compliance obligations
• FTC’s crackdown on payment processors
• – Payments using remotely created checks (RCC) or remotely created payment orders (RCPO)
• FTC and FCRA
• What will the regulatory landscape for emerging payment systems look like in the near future and which agencies will be involved?
• Piloting of new products by government agencies
  • Which products and services are government agencies interested in testing and using?

Afternoon Break

An Assesment of FinCEN’s Initiatives in the Emerging Payments Space: Virtual Currency Supervision and aCheck Back on the Prepaid Access Rule

• Assessing FinCEN’s guidance on virtual currency
  • Key terms; what is covered and what is not
  • Impact on emerging payment systems
  • Bitcoin not money transmitters
• SAR’s flagging Bitcoin
• Long-term outlook on virtual currency vs. gift cards
  • How will merchants react?
• Check back on FinCEN’s prepaid access rule
  • How have companies complied with the rule?
  • Lessons learned
  • Evaluating new and emerging guidance relating to prepaid access
  • Impact of the prepaid access rule on innovative payment products and systems
• Assessing the interplay between FinCEN’s virtual currency guidance and the prepaid access rule
  • Can a virtual currency fall outside of both the FinCEN guidance on virtual currency and the prepaid access rule?

Critical Updates for Mitigating Privacy, Data and Cyber Security Risks in the Emerging Payments Market: Endeavoring to Use New Technology and New BusinessPractices to Plug the Holes

• The fallout from the recent major data security breaches
  • Preventing breaches
  • Responding to a breach
  • Managing breaches
• Data security and privacy concerns relating to transactions conducted on mobile devices
  • Factoring in European data protection initiatives and international privacy efforts
• New and emerging privacy and data security risks associated with evolving technologies
• ‘How to’ deal with existing conflicting privacy regulations
• Privacy disclosures
• Assessing the available and emerging security options
  • Mag stripe; EMV standard; Chip-and-PIN
• Implementing enhanced data protection initiatives
• Maintaining communication between the legal and marketing teams
• Establishing an effective system of internal reporting and checks and balances in order to detect and solve problems early
• Assessing what data you collect, or may collect, from consumers, and how that data may be used
• Mitigating the risk of a data breach and minimizing the fallout when a data breach does occur
  • Preventing and protecting against data breaches
  • Risk management considerations
  • Insurance-related issues
  • State law requirements
  • How to respond after a data breach
• Location data and privacy considerations
• PCI compliance

Conference Adjourns

Continental Breakfast

The CFPB’s Continued Interest in Mobile Services & Payments:

• What other emerging payments products are within the CFPB’s sights(?)
• What activities are subject to the Agency’s jurisdiction?; disclosure issues; and what are the latest enforcement actions?
• CFPB scope of scrutiny on mobile services, including mobile payments
• CPFB GPR rules and impact: FDIC insurance? Overdraft protection? Limitations on fees? 6 Join the Conversation ACI: Financial Services @ACI_Finance / #ACIPayments
• CFPB and privacy: Enhanced/broader substantive privacy protections
• CFPB’s recent request for information on a wide array of mobile payments issues: interest in the under-banked: Reg B; enhanced customer experience
• FTC’s advisement to CFPB on mobile payments
• CFPB’s Project Catalyst: How the Bureau is working with the industry; who has met with the CFPB regarding Project Catalyst?; what are industry participants asking of the CFPB and vice versa?; assessment of Project Catalyst to date; industry impact
• Dodd-Frank: Section 1073 and remittance transfer
• Assessing the implementation and application of the CFPB’s remittance rules in relation to emerging payments products
  • Analysis of guidance provided to date; when and to whom are the new rules applicable?
• Specific areas of concern relating to cross-border remittances
• Ensuring compliance with new and emerging cross-border remittance regulations: Overcoming implementation hurdles
• The CFPB’s role with respect to new payment systems and, specifically, money remitters
• Assessing other new and emerging CFPB rulemaking and its potential impact on innovative payment products and systems

The Latest on the Activities and Products Subject to the Agency’s Jurisdiction, New Disclosure Issues, Rulemaking and Enforcement Actions, RFI on Mobile Payments, Project Catalyst, Remittance Rules and More

UDAP/UDAAP, Third-Party Risks and Managing Third-Party Vendors: Regulatory and Compliance Considerations for New Payment Models

• What is the real meaning of “Abusive” in UDAAP and how will this impact marketing practices? Deceptive practices?
• Key legal and regulatory considerations arising from marketing related to new payment systems and products
• Emerging trends and unique challenges in mobile marketing and advertising
• Mobile marketing best practices
  • Using third-party marketers without running afoul of UDAP/ UDAAP laws
  • Social media/social networking
• Marketing considerations relating to location data
• Disclosure requirements relating to location data
• Ensuring that consumer disclosures are in compliance with UDAP/ UDAAP
  • Analysis of UDAP/UDAAP provisions as they relate to emerging payment methods
• Dodd-Frank and remittance disclosures
  • Required disclosures for remittance transfer providers
• Strategic guidance for managing third-party risks
  • Conducting ongoing third-party monitoring and due diligence
  • Managing third-party vendors

Morning Coffee Break

Developing, Implementing, and Maintaining AML and Fraud Deterrence Programs That Will Pass Muster in a Hostile Enforcement Environment, Without Negatively Impacting the Customer/User Experience

• Striking the proper balance between AML compliance, fraud prevention, and the customer/user experience; legal implications; maintaining customer satisfaction and funds availability while also protecting against fraud and ensuring AML compliance; streamlining the technology and the underlying processes to minimize distractions and inconveniences for customers/users; working with the product team to avoid, or at least minimize, inconveniences for customers/users
• How AML regulations impact new payment products and systems
• Best practices for ensuring BSA compliance in the absence of clear guidance
• Beyond BSA: what other statutes come into play when addressing AML requirements?
• AML issues arising at the state level
• Identifying and assessing the money laundering and fraud risks that may arise in conjunction with the development of new payment products, delivery mechanisms, and technologies
• Best practices for identifying suspicious activity and filing SARs
• Evaluating your current AML program and identifying gaps or weaknesses
• Evaluating your current fraud deterrence program and identifying gaps or weaknesses
• ‘How to’ conduct an AML investigation
• Determining which parties are responsible for which aspects of AML compliance
• Working with retailers and other parties to acquire information necessary for AML compliance
• Drafting contracts and agreements to enhance AML compliance
• Asset forfeiture/seizure and its implications for emerging payment systems; Issues that arise in these cases; How they are investigated
• Understanding the fraud risks of emerging payment systems; How these new payment methods are being misused
• Identifying and combating fraud relating to tax refunds and government benefits
• Assessing the effectiveness of product safeguards and techniques used to reduce occurrences of fraud and improve risk management
• Putting holds on accounts that might be compromised
• Communicating with law enforcement
• Lawsuits arising from fraud and other criminal abuses of the system

Understanding the Role of OFAC Sanctions, Disclosure and Mandates Within Your AML Compliance Programs

• OFAC’s jurisdictional and sanctions authority
• How OFAC sanctions relate to new payment products and systems
• Ensuring compliance with OFAC mandates
• When OFAC screening is required and what it entails
• When and how to disclose in compliance with OFAC
• Case studies: Lessons learned from recent cases; Assessing the impact of recent significant OFAC fines

Lessons Learned and Critical Regulatory Challenges in the International Emerging Payments Landscape:

• The emerging global payments landscape: how international payment developments are affecting cross-border remittances, payment processing, and adoption and growth rates in key markets
• Expanding beyond North America: key considerations and proven strategies for entering into or accepting payments from new markets, including the EU, Asia, and Latin America
• Mobile payments and mobile wallets: how this disruptive and evolving technology is changing the face of the global payments market
• Specific areas of concern relating to cross-border remittances
• Ensuring compliance with new and emerging cross-border remittance regulations
• Overview of new and emerging payment systems being used around the world: China, Japan, the EU, the Middle East, India, and Africa
• Evaluating the EU’s E-Money Directive: key terms and definitions; impact on emerging payment systems; implementing policies and procedures to ensure compliance; Facebook’s impending e-money authorization in Ireland, and Google’s in the UK
• The EU’s Payment Services Directive: Key terms and definitions
• Assessing China’s regulatory framework: New and emerging regulations from the People’s Bank of China
• Best practices for dealing with multinational jurisdiction
• Establishing enterprise-wide, multinational compliance programs
• Lessons learned from the introduction of new payment systems into other countries: Application of existing regulatory paradigms to these new payment systems; how the new regulations that have been enacted to address emerging payment systems are working
• How foreign emerging payments start-ups have fared; how are they building emerging payment platforms differently than companies in the U.S.?; what challenges are they facing, both in their home countries and when doing business with the U.S.?
• International e-commerce facilitation
• International data security and privacy efforts: EMV standard; Chip-and-PIN
• Foreign exchanges and B2B

Assessing the Evolving Legal and Business Environments in Key Foreign Markets, Facilitating E-Commerce Abroad, Best Practices for Ensuring Compliance with Emerging Regulatory Schemes in the EU, Asia, and Latin America, and What the U.S. Market Can Glean from Foreign Markets

Credit, Debit, and Prepaid Cards: New Regulations and Reforms and Their Impact on ‘Traditional’ Payment Methods

With new and emerging reforms changing the face of the industry, credit, debit, and prepaid card companies are trying to stay afloat and remain in compliance. Participants in this Master Class will obtain a deeper understanding of the challenges and changes affecting the industry, and they will come away with best practices and effective solutions for the new regulatory paradigm. Topics to
be addressed include:

• How recent changes are impacting compliance initiatives
• Payments linked to general purpose reloadable prepaid cards: the effect of CFPB’s plan for coverage; filling in regulatory gaps given that the unbanked population is increasing their use of GPR cards to make mobile payments
• The Durbin Amendment and its impact on the debit and prepaid markets
  • Developing prepaid products that qualify for the exemption under Durbin
• Understanding new disclosure requirements
  • Best practices for disclosures
  • Modifying terms to ensure compliance
• Providing proper notice for opting into overdraft
• Navigating through increased transparency requirements, including additional disclosure on the Fed website
• ‘Plain English’ disclosures
• TILA/UDAP violations in the context of card issuance