15 March 2019

15th March 2019
  • Digital & eCommerce
  • Acquiring/Processing
  • Biometrics
  • Open Banking/PSD2
  • Realtime payments
  • Corporate Activity
  • Blockchain/DLT/Cryptocurrencies
  • Regulation

DIGITAL and eCOMMERCE

Visa‘s UK Consumer Spending Index – Feb 2019.  http://tinyurl.com/yy3596ru

Face-to-Face expenditure falls -2.5%, eCommerce spend decreases by -1.1%

 

PayPal has announced that its Working Capital offer in the UK has provided a total of £1bn in cash advances. http://tinyurl.com/y3r9kadv

More than 37,000 British small businesses have now taken advantage of the service launched in 2014 with advances increasing by 60% in 2018.

 

Laybuy, a NZ based Klarna look-a–like, has officially launched in the UK with Footasylum. http://tinyurl.com/yxve48vp

Laybuy has been onboarding merchants in the UK online and in store since October 2018 but is using the Footasylum implementation to announce its arrival. Post an Experian credit check, shoppers are allocated a spending limit between £60 and £720 with Laybuy taking the credit risk. Interest free repayment is over six months.

 

Alternative Airlines, a UK search platform, is now offering Klarna as a payment method.  http://tinyurl.com/y62498jy

Passengers can delay flight payments by up to 30 days or pay in three equal monthly payments.

 

Vipps  and Nets have announced an agreement to increase the number of payment options for consumers and simplify invoice and bill payments in Norway. http://tinyurl.com/y4v253x4

The move will combine the functionality of Vipps and eFaktura to digitise all paper and email-based invoices.  In the long-term it is hoped to make the physical invoice obsolete. More than 3.2m Norwegians use Vipps and around 2.6m use eFaktura.

 

EU Member States have reached agreement on detailed measures needed to simplify VAT rules for sales of goods online. http://tinyurl.com/y3z9zbuo

The move will also ensure that online marketplaces play their part in the fight against tax fraud as they will be expected to keep records of sales of goods or services made by businesses using the platform. The new VAT rules will apply from 1 January 2021 with Member States having until the end of 2020 to transpose the new rules of the VAT Directive into national legislation.

 

KBC customers in Belgium can now link their number plate to the KBC Mobile app to pay at Q-Park car parks. http://tinyurl.com/yyhm545r

Cameras at the entrance to Q-Park car parks read the number plate to open the barrier and again on the way out, automatically triggering a payment from the current account linked to the KBC Mobile app.

 

Yandex has looked at the popularity of online sales made on instalment plans. http://tinyurl.com/y4a4lg2o

The study covers payments made using the Installments service launched by Yandex.Checkout in March 2018, which is now used by more than 8,000 businesses selling goods and services online.

 

PayPal is launching Instant Transfer to bank in the US with International expansion of the service expected in the near future.  http://tinyurl.com/y5d3mnvg

Using its expanded partnership with JPMorgan Chase, PayPal is able to access the Real Time Payments network from The Clearing House to enable bank ACH transfers. There is a 1% transfer fee while the PayPal’s standard bank transfer functionality remains free of charge. 

 

ACQUIRING/PROCESSING

Barclaycard has announced a new agreement with Alipay allowing retailers to accept Alipay transactions in the UK. http://tinyurl.com/y2zcqx7g

The new agreement will enable UK retailers to accept in-store Alipay payments without replacing their existing POS system.

The move follows recent agreement for the acceptance of UnionPay and Discover Network cards.

 

IATA and PayCargo are launching a joint IATA-PayCargo System. http://tinyurl.com/y3tmx48f

The move will see the PayCargo web-based payment platform serving the freight and logistics industry being made available globally to IATA members. Previously CNS, a US-based subsidiary of IATA, had been offering the PayCargo-CNS System to customers in the US only.

 

BIOMETRICS

NatWest has instigated a small trial alongside Gemalto of biometric debit cards. http://tinyurl.com/y43tnoux

The aim is to use fingerprint technology to remove the current £30 limit for contactless cards.

 

DIGITAL/RETAIL BANKING

UK Finance has posted details of the latest BVA BDRC SME Finance Monitor. http://tinyurl.com/y3j8stbf   Monitor http://tinyurl.com/y577ko2g

The Monitor indicates that 24% of SMEs now see political uncertainty as a major barrier to their business going forward, up from 15% a year ago. The survey also indicates that only 5% of SMEs see access to finance as a major barrier to growth, while 80% of SME applications for finance are approved.

 

Lloyds Bank, Natwest and Barclays are to pilot shared business banking hubs for SMEs. http://tinyurl.com/yyuud6je

The hubs have been specifically designed to enable businesses that manage cash and cheque transactions to pay in large volumes of coins, notes and cheques and complete cash exchange transactions. The hubs will operate from 8am to 8pm, 7 days a week.

 

Nationwide is partnering with fintech 10x Future Technologies to build a new digital platform.  http://tinyurl.com/yyz8pp22

The partnership will help deliver a SME focussed business current account that it is planning to launch towards the end of the year. The deal also involves a £15m investment in the fintech by Nationwide, giving it a minority shareholding.

 

Nationwide is using SAS analytics to examine how to improve the handling of customer enquiries. http://tinyurl.com/y27cbkja

Using AI and natural language processing to analyse customer emails Nationwide is now using the information to improve enquiry handling by guiding more members towards digital channels and reduce the number of enquiries received.

 

Marqeta Consumer Behavior Survey.  http://tinyurl.com/y3yk7mj9  Survey http://tinyurl.com/yyxdmr99

The survey included 1,200 people in the US, 500 in UK and 100 from France, Germany and Spain.

In the UK 41% of respondents are considering a switch to a digital-only banking service with 37% willing to consider a change to a bank operated by Facebook, Amazon or Google.

 

BBVA says 25%+ of all new Spanish customers now start their relationship with the bank through an online platform. http://tinyurl.com/yyapcwan

Over half of those joining via digital now also use the bank’s online mobile onboarding system that allows customers to open an account via web or app-based platforms that includes biometric authentication using a photograph and video.

Accenture has published its Global Financial Services Consumer Study for 2019. http://tinyurl.com/y26rsc8u

The Study surveyed 47,000 banking and insurance customers across 28 globally to gain insight into what consumers prioritise. There are five key findings including that Consumers are willing to share data with their providers in return for better advice and more attractive deals.

 

OPEN BANKING/PSD2

The OBIE has published the OB February highlights.  http://tinyurl.com/y2lo9zqd  PDF http://tinyurl.com/y69ekbky

There are now 110 regulated providers made up of 76 TPPs and 34 account providers, with 20 third party providers live with customers.

 

The OBIE has also published details of significant changes relating to the UK’s OB project and PSD2. http://tinyurl.com/y27omhnz

Four developments are taking place

  • Managed roll out of OB Standard v3.1
  • Introduction of eIDAS Certificates
  • Testing Facility Open to Third Parties
  • Rollout of Managed Conversion and Launch Assistance Programme

Not all the banks are able to move at the same pace in launching available features and some will miss the deadlines set in the Road Map.

 

The OBIE has released the OB Standard, v3.1.1. http://tinyurl.com/y55o92lf

This minor update provides clarifications to previous versions and introduces enhanced functionality, guidelines and features to enable further PSD2 compliance. Read/Write API Specification v3.1.1    Customer Experience Guidelines v1.2

 

ING has made three PSD2 APIs available on the ING Developer Portal. http://tinyurl.com/y44ewg74

The APIs are for AIS, PIS and Confirmation of Available Funds and meet the deadline by which banks must make their open APIs available for testing by payment and account information service providers.

 

iovation has published a report developed with Aite Group entitled, “PSD2: Advent of the new payments market in Europe.”

The report analyses the consequences for the global online payments market of PSD2. It concludes the stricter requirements for fraud prevention in the EU will drive fraud to other regions such as the U.S. It also finds that most companies are unprepared for its implementation.

 

The EBA has published clarifications to the first set of issues raised and discussed by the Working Group on APIs under PSD2. http://tinyurl.com/y29rm3e4  Clarifications document http://tinyurl.com/yy6otd62

The issues covered are

  • The reliability of testing platforms
  • Aligning functionalities and data requirements between API initiatives
  • The listing of QTSPs issuing PSD2 eIDAS certificates

On the latter the issue remains for any UK player of how they obtain a valid certificate once we have left the EU. At present there is no UK QTSP.

 

REALTIME PAYMENTS

ACI Worldwide has published a Whitepaper Get More from Real-Time Payments

The study sets out recommendations for banks, processors and merchant acquirers and outlines services that allow all participants in the payments ecosystem to create new revenues, increase margins, and shorten the time to ROI. Banks, processors and merchant acquirers need to adopt holistic real-time and Open Banking strategies in order to monetize real-time payments.

 

CORPORATE ACTIVITY

Mastercard is to acquire cross-border account-to-account money transfer network Transfast.  http://tinyurl.com/yyry8ktr

Transfast currently supports the Mastercard Send solution for B2B and P2P payment services. Terms of the agreement were not disclosed.

Prior to this announcement, Mastercard lapsed its offer for Earthport in order to focus on the integration and expansion of Transfast. The withdrawal clears the way for Visa to make a bid.

 

Mastercard has also agreed to acquire card fraud solutions provider Ethoca. http://tinyurl.com/y6fwqmgs

Ethoca’s network enables merchants and card issuers to collaborate in real-time to identify and resolve fraud in digital commerce. Mastercard intends to further scale these capabilities and combine Ethoca with its current security activities, data insights and artificial intelligence solutions. Terms of the agreement were not disclosed.

 

Tide is looking to match the £60m its partner ClearBank was awarded by the RBS BCRB in February. http://tinyurl.com/y6ddana6

Tide plans to use the resulting £120m funds pool to mount a significant attack on the SME Banking market. It is aiming to capture at least 8% of the SME market by 2023, starting with a claimed 1.2% share at present.

 

Pagantis has closed a €65m Series B funding round that will be used to provide eCom consumer finance in Italy, France and Portugal. http://tinyurl.com/y3uhvl74

Pagantis, a Madrid-based fintech, provides automated consumer finance for e-commerce transactions. Applications are evaluated in real-time and consumers and merchants are instantly informed of the decision while Pagantis assumes the full risk of the credit transaction.

 

Network International is planning a London IPO. http://tinyurl.com/y2fwryy3  IPO web page http://tinyurl.com/y37jntam  Announcement http://tinyurl.com/y5gc8ssg

The Company intends to have a free float of at least 25% of the Company’s issued share capital, which is being given a possible valuation of $3bn. It has also appointed Ron Kalifa (Worldpay Director) as incoming Chairman.

 

EVO Payments has announced the acquisition of Irish gateway Way2Pay. http://tinyurl.com/yynn2bab

The Way2Pay gateway has been integrated into EVO’s global infrastructure through the Snap platform and intends to expand it into additional verticals and across all markets in which the Company operates. Terms of the acquisition were not disclosed.

 

BLOCKCHAIN/DLT/CRYPTOCURRENCIES

The BIS Basle Committee has issued a statement on crypto-assets. http://tinyurl.com/y3hzql3p

The statement that iterates the Committees concerns on the growth of crypto-asset trading platforms and new financial products,   lists  four key standards that financial institutions should comply with when dealing with crypto assets.

 

REGULATION (ICS)

The Bank of England has taken supervisory action over Visa Europe’s June 2018 partial outage incident. http://tinyurl.com/yxv67y5v

The Bank has directed Visa Europe to fully implement the recommendations of the independent review carried out post the incident and to appoint an independent third party, PricewaterhouseCoopers (PwC), to assess Visa Europe’s progress in implementing these recommendations.

 

 

Latest News Round-up

17 May 2019

Industry Videos

New technology in banking

The latest ING International Survey indicates Europeans are wary of new technology in banking, despite a high demand.

New technology, such as facial and voice recognition, is giving more options than ever before, but despite these advances, acceptance is far from complete with 65% of Europeans having never used fingerprint or voice recognition to log into their banks’ app.

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