Government Relations Newsletter: Vol 14, Issue 1

"Things to Pay Attention to in 2026"

By:  Members of the Government Relations Strategic Interest Group (SIG)

2026 is expected to bring a rapidly evolving mix of regulatory shifts, technological advancement, and emerging risk areas that will shape the payments and financial services landscape. From state‑level consumer‑protection expansions to developments in digital assets, interchange reform, fintech competition, agentic commerce, and high‑risk product categories, each trend carries meaningful implications for operational, compliance, and strategic planning. The following sections highlight the most significant areas to watch in 2026 and why they warrant close attention.

State Consumer Protection

State regulators and law enforcement agencies continue to expand their scrutiny of business-to-business sales and marketing practices. Entering 2026, New York’s amendments to its General Business Law—through the Fostering Affordability and Integrity through Reasonable (FAIR) Business Practices Act—extend enforcement authority beyond deception-based standards to include unfair and abusive acts. Notably, the amendments recognize harm to small businesses and nonprofits, broadening the scope of potential UDAAP exposure beyond traditional consumer relationships. This evolution reflects a broader shift among states seeking to fill perceived federal enforcement gaps through more discretionary, policy-driven approaches.

Digital Assets

Following the federal government’s passage of the Genius Act in July 2025, which established a regulatory framework for stablecoin issuance and use, the payments industry has seen early adoption, including stablecoin offerings from PayPal and Fiserv. Market observers anticipate potential issuance by large merchants as well. While the Act may preempt certain state money transmission requirements for qualified issuers, entities remain subject to varying state-level digital asset laws—particularly in jurisdictions such as New York and Louisiana, and with California’s Digital Financial Assets Law taking effect July 1, 2026. Stablecoin issuers will need to continue monitoring a dynamic and fragmented regulatory landscape.

Interchange

Interchange-related legislation continued to gain momentum in 2025 and is poised to remain a major focus in 2026. Numerous states are expected to revisit proposals restricting the application of interchange fees on components such as sales tax, gratuities, and charitable contributions. The industry is also awaiting the U.S. District Court’s ruling on the 2024 Illinois Interchange Fee Prohibition Act (IFPA), a decision that is likely to shape the trajectory of future state-level initiatives. At the federal level, the Credit Card Competition Act (CCCA) remains central to ongoing efforts to reduce interchange costs by limiting restrictions on network routing for certain credit card issuers.

Entrance of Technology Firms into the Banking and Payments Space

Financial technology firms continue to broaden their offerings and compete directly with traditional financial institutions for transaction accounts and related services. This expansion places pressure on banks and credit unions to deliver more advanced, technology-driven customer experiences. Institutions argue fintechs operate under comparatively lighter regulatory oversight and have increasingly advocated for more consistent supervisory standards. Policymakers are now evaluating issues such as fintech access to payment systems, eligibility for limited-purpose charters, and the role of the Federal Reserve in facilitating accounts for these firms. These debates are unfolding alongside ongoing uncertainty regarding implementation of cryptocurrency-related requirements under the Genius Act.

Prediction Markets

Prediction markets—platforms that allow the trading of contracts tied to the outcomes of future events—remain subject to federal oversight by the Commodity Futures Trading Commission, which classifies these contracts as financial instruments. However, some state gaming regulators argue that sports-related contracts constitute gambling activity under state law. This jurisdictional tension has resulted in legal challenges and cease-and-desist actions in several states, reflecting a continued struggle to reconcile federal and state regulatory perspectives in this evolving market.

Agentic Commerce

Agent-driven payments are transitioning from conceptual frameworks to operational reality as card networks, issuers, processors, and platforms implement systems enabling AI agents to execute transactions within predefined parameters. These models raise important considerations related to authorization scope, consent, identity verification at the 'agent' layer—often framed as Know Your Agent (KYA)—and allocation of liability for unauthorized or erroneous actions. Stakeholders are also assessing how existing Reg Z, Reg E, and card-network dispute processes apply to agent-initiated transactions. Early use cases include automated rebooking, recurring purchase optimization, subscription management, and threshold-triggered settlement disbursements. Visa’s October 2025 rules formally recognize 'Agentic Payment Providers' and 'Agentic Payment Enablers,' requiring Intelligent Commerce program registration, direct tokenization, strengthened consumer consent and identity controls, and adherence to cardholder-defined spending criteria.

Peptides

Peptide-based products continue to generate substantial regulatory, consumer-protection, and payments-risk concerns. Many such products are marketed with anti-aging, fitness, or therapeutic claims despite lacking FDA approval for human use. Merchants often attempt to mitigate scrutiny by labeling products as 'for research only' or 'not for human consumption,' while simultaneously providing dosing guidance or supplement-style packaging that contradicts those disclaimers. These practices have resulted in numerous FDA warning letters for misbranding or marketing unapproved drugs. They also contribute to elevated dispute rates, unauthorized returns, and increased fraud risk. Furthermore, marketing practices involving health claims, negative-option billing, telemedicine tie-ins, or testimonials have drawn attention from the FTC and DOJ for potential deception, dark patterns, and subscription-billing abuses.