Yesterday’s House Financial Services Committee hearing, “Future of Payments: Promoting Innovation and Fair Markets,” made clear that Congress has an opportunity to modernize America’s outdated payments system by passing the bipartisan PACE Act. 

Lawmakers and witnesses, including Stripe Vice Chair Eileen O’Mara and Davis Polk partner David Portilla, underscored that the current framework has not kept pace with how consumers, small businesses, gig workers, and entrepreneurs move money today, and highlighted how the PACE Act would create a clear, tailored federal framework that makes payments faster, cheaper, and more competitive while maintaining strong oversight.

Across the hearing, four themes came through clearly:

• A new payments landscape requires a new legislative framework — current “bank or nonbank” categories don’t fit how modern payment companies actually operate;
• PACE would help small businesses, gig workers, and working families access their money faster — cutting the delays that turn into late fees and missed bills;
• The U.S. needs PACE to stay competitive — America is the only G7 nation that doesn’t grant nonbanks regulated direct access to payment infrastructure; and
• Similar policies abroad have safely fostered innovation — the EU and UK have implemented direct access without degrading banking stability.

The hearing also capped a week of building momentum outside Washington. ASAP this week released a petition signed by more than 8,000 voters and local business owners from across the political spectrum urging Congress to pass the PACE Act, and ASAP spokesperson John Glennon issued a statement following the hearing calling on lawmakers to act to modernize the payments system and support the PACE Act. 

Together, the testimony, the petition, and the voices of small business owners nationwide point to the same conclusion: the time to modernize is now.

A New Payments Landscape Requires A New Legislative Framework

“Today, new technologies, business models, and market participants are reshaping the payments landscape, creating new opportunities to improve efficiency, expand access, and strengthen competition. This market-driven evolution in turn raises important questions about the future of our regulatory framework.” — Rep. Andy Barr

“As innovation continues to transform financial services, it is the responsibility of Congress to assess how existing regulatory and chartering frameworks are adapting to new technologies and business models.” — Rep. Andy Barr

“The remedy should not be to force new business models into ill-fitting categories. Rather, innovation is often best favored by updated and clear legal standards that match today’s markets.” — David Portilla, Partner, Davis Polk & Wardwell LLP

Eileen O’Mara, Vice Chair at Stripe, similarly explained that the current framework treats companies as either banks or nonbanks, even though payment companies perform different activities and face different risks.

“So the current framework is defined as you’re a bank or you’re not a bank, and our point of view is that it is not fit for purpose for a company like Stripe.” — Eileen O’Mara, Vice Chair, Stripe

“We are advocating that we be regulated for the business activity that we do, which is payment processing, as opposed to banking.” — Eileen O’Mara, Vice Chair, Stripe

PACE Would Help Small Businesses, Gig Workers, and Working Families Access Their Money Faster

“At the end of the day, American working families have to pay rent, utilities, and groceries. So if the funds are not directly accessible to them, they can end up waiting for maybe over a week, especially around the holidays. If the PACE Act were to become law, what could you build for American small businesses and gig workers?” — Rep. Young Kim

“If the PACE Act were enacted, it would provide a framework for us to work with small businesses and give them a lot more confidence and credibility in the flow of funds and in their ability to make a solid plan for when and how they can extend their business models, who they can hire, and most importantly, it will give them confidence in the system.” — Eileen O’Mara, Vice Chair, Stripe

“Today, with the patchwork quilt that we have to operate in, a lot of small businesses are challenged with simply knowing when that money will clear and whether they will have access to it for the services they have already delivered.” — Eileen O’Mara, Vice Chair, Stripe

O’Mara also highlighted that businesses across the country are asking for reliability and faster access to funds.

“The conversation that I have with businesses all over this country is focused around two things: one, how can they grow their business reliably, and two, how can they get access to their funds quickly?” — Eileen O’Mara, Vice Chair, Stripe

The USA Needs PACE to Stay Competitive in Payments

“As I understand it, England, France, Germany, Japan, Canada, Italy, Australia, Singapore, the EU, and others all offer non-banks direct access to payments infrastructure, and they do so through a regulated approach. The U.S. is the only G7 nation to fail to grant non-banks direct access to payment infrastructure.” — Rep. Sam Liccardo

“It’s incomprehensible that the United States is the only G7 country without faster payments regulations. So if we do not act now and take steps to pass legislation like my PACE Act, we are at risk of falling behind at the cost of our working families and small businesses.” — Rep. Young Kim

Similar Policies Internationally Have Safely Fostered Innovation

“What we’ve seen in other jurisdictions like the EU and the UK, which have already implemented direct access, is a wave of innovation that’s happened as a result …. I think if we were to move forward with something like the PACE Act, we would very quickly see innovative solutions and companies that want to build and serve the American people with solutions that are difficult to provide today.” — Eileen O’Mara, Vice Chair, Stripe

“We’re regulated to the highest standards in the EU under the Central Bank of Ireland, under the FCA in the UK, and are very familiar with operating in a regulated payment way and obviously to huge success with that. We saw no degradation on banking business in those jurisdictions as we operated under those regulated entities.” — Eileen O’Mara, Vice Chair, Stripe

“The United States stands at a critical inflection point in the future of payments. We are living through an era of rapid financial technology advancement. New firms are reimagining how families, workers, and small businesses send, receive, and store value. If our chartering framework does not evolve alongside this innovation, we risk falling behind.” — Rep. John Rose

As the hearing made clear, Congress has an opportunity to modernize America’s payments system by passing the bipartisan PACE Act. The bill would create a clear, tailored federal framework for qualified payment companies, maintain strong oversight and safeguards, strengthen competition, and help ensure consumers, workers, and small businesses can benefit from faster, cheaper, and more reliable payments.