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C|C Payments Weekly News Update

Posted  March 13, 2019
By Kristian Soltes

March 13, 2019

Legal and Regulatory Developments

SPOTLIGHT: The Battle for Real-Time Payments Dominance in the U.S.
Finextra – March 11, 2019

Since Fed catalysed the private sector to deliver real-time payment capabilities, there has been advocacy for the central bank backed, real-time payments (RTP) scheme. Many feel the lack of a ubiquitous RTP infrastructure has become a road block to innovation in financial technology and even created a competitive disadvantage for the U.S. economy.

But could this be about to change? In October 2018, the Federal Reserve (Fed) re-ignited the issue by releasing a request for comment around its plans for a unified RTP system. Challenger and community banks, tech giants, fintechs and major U.S. retailers all strongly and publicly backed the proposal. . . .


EU Antitrust Chief Says To Regulate Data, Not Break Up Tech
PYMNTS – March 11, 2019

European Union Competition Commissioner Margrethe Vestager said that breaking up big tech companies like Facebook and Google should be seen as a last resort, and that the better idea might be to find a way to regulate data usage.
Vestager was speaking at SXSW, according to reports.

“To break up a company, to break up private property would be very far-reaching, and you would need to have a very strong case that it would produce better results for consumers in the marketplace than what you could do with more mainstream tools,” she said. “We’re dealing with private property. Businesses that are built and invested in and become successful because of their innovation.” . . .


What ATMs and Open Source Have To Do With Payments Innovation
PYMNTS – March 7, 2019

It might be the case that 2019 takes shape as a watershed year for payments regulation, marked by PSD2 and GDPR. Stakeholders in the financial services and payments arenas are navigating new rules about how data is collected, stored and shared.

However, the way payments innovation is pursued — and becomes reality — is changing, too. The rise of Open Banking is helping to open up payment ecosystems, encouraging collaboration between traditional financial firms and smaller, tech-focused upstarts. Part of that collaborative movement involves working with open source technology, where, generally speaking, software is made (freely and publicly) available for users to develop and modify as they see fit. . . .


Brexit Threatens Chaos for Cross-Border Payments—and That’s How This Fintech Likes It
PaymentsSource – March 6, 2019

Companies are scrambling to shore up Brexit strategies to ensure their payment systems work, a difficult if not impossible task given the political uncertainty. But it’s also an unavoidable complication, which Tipalti hopes will provide a boost for its service, which is built to expect uncertainty. “Brexit is a major change, but there’s regulations breaking every month in some jurisdiction that we have to respond to,” said Chen Amit, CEO of Tipalti. “It’s usually smaller and tactical, but part of what we have to do is to make a response quickly.”

The San Mateo, Calif.-based Tipalti just released a new FX product that funds an account in a single currency, then converts those funds to local currencies before the payout occurs. The product is designed for use cases such as a company that’s headquartered in one country, but may have small staffs or dispersed employees in one or more distant markets. . . .


Amazon May Provide Mexico With a Government-Backed Mobile Payment System
Mashable – March 6, 2019

Mobile payments may soon be coming to Mexico, courtesy of Amazon.

Mexico’s central bank, Banxico, is currently in talks with Amazon to developer a mobile payment system backed by the country’s government. The payment system, known as CoDi, would allow customers to pay for purchases, both online and in-person, using QR codes on their smartphones. As Reuters points out in its report, more than half of Mexico’s population does not have a bank account. Banxico is looking to change this with CoDi. . . .

Industry Developments

SPOTLIGHT: Mark Zuckerberg Wants Facebook to Emulate WeChat. Can It?
The New York Times – March 7, 2019

SAN FRANCISCO — As Mark Zuckerberg begins shifting Facebook to private messaging and away from public sharing and open conversations, the vision he has sketched out for the future of social networking already exists — just not in the United States. Instead, it is a reality in China through a messaging app called WeChat.

Developed by the Chinese internet giant Tencent in 2011, WeChat lets people message each other via one-on-one texts, audio or video calls. Users can also form groups of as many as 500 people on WeChat to discuss and debate the issues of the day. While Facebook users constantly see ads in their News Feeds, WeChat users only see one or two ads a day in their Moment feeds. That’s because WeChat isn’t dependent on advertising for making money. It has a mobile payments system that has been widely adopted in China, which allows people to shop, play games, pay utility bills and order meal deliveries all from within the app. WeChat gets a commission from many of these services. . . .


WOMEN’S HISTORY MONTH: The Most Influential Women in Payments, 2019
PaymentsSource – March 12, 2019

Our annual Most Influential Women in Payments feature, now in its seventh year, highlights the women who are creating change and opportunities in the payments industry. They represent startups, investors, retailers, banks and payment networks from across the globe. For many, their path to success wasn’t a straight line, and they credit their mentors with setting a clear example.

Payments executives from all backgrounds can draw lessons from the diverse initiatives spearheaded by these leaders. BillingTree’s Christine Lee, for example, is bringing her digital acumen to bear on the still often archaic world of healthcare payments while Walmart’s Karla Allen is steering the retail giant toward a completely new approach to mobile payments. And in a reflection of the global nature of the payments community, list newcomer Kikelomo Lawal, who was born in Nigeria and earned her law degree in the U.S., is driving a seismic shift at leading Canadian payments firm Interac. . . .


Fintech Startup Stash to Launch “Stock-Back” Debit Card Rewards
Bloomberg – March 12, 2019

If you’re looking for a new credit or debit card, you’ll quickly notice that there are a lot, and I mean a lot, to choose from. Uber Technologies Inc. will let you work toward free food deliveries; Amazon.com Inc.’s includes a gift card; Ikea’s looks like it’s made of wood.

From the card operators’ perspective, you had better make sure you have a unique enough offering to stand out in a massive pool of options. The latest company to try is Stash Financial Inc. The New York-based personal finance and investing startup plans to announce on Tuesday a new “stock-back” feature on Stash debit cards. . . .


Samsung Pay Will Integrate Cryptocurrencies for 10 Million Users: Report
CCN – March 11, 2019

Even before the official announcement of Samsung Electronics on the launch of the Samsung Blockchain Wallet, local publications speculated that Samsung Pay could be behind the high-profile crypto integration for the Galaxy S10. On January 29, The Korea Herald reported that Samsung is set to integrate a cryptocurrency wallet into the Galaxy S10, well over a month before the formal release of the Samsung Blockchain Wallet on February 21.

Industry sources reportedly told the publication that Samsung Pay, a widely utilized digital payments application with over 10 million active users, is behind the Galaxy S10’s cryptocurrency wallet. “The arrival of the new Samsung phones could start popularization of the cryptocurrency wallet system in Korea,” an industry executive said. On March 8, three weeks following the release of the Samsung Blockchain Wallet, Donga, one of the largest mainstream media outlets in South Korea, reported that Samsung Pay considers cryptocurrency integration as a way to expand its user base internationally.


IBM Cuts Credit Unions Deal For Blockchain Services In $1.7 Trillion Industry
Forbes – March 11, 2019

IBM and Denver-based credit union service organization CULedger, have struck a collaboration deal by which new blockchain-based services will be pioneered to help credit unions provide their members with greater efficiencies and an enhanced user experience. CULedger focuses on delivering “innovative applications” to credit unions via its cross-border global distributed ledger platform.

Specifically, IBM and CULedger, a consortium of credit unions, are to  work together to use permissioned blockchain technologies to create an immutable audit trail, which can be used to create new business models and transform existing business processes for credit unions. . . .


Can Citi and Chase Beat Fintechs at Their Own Game?
PaymentsSource – March 8, 2019 (subscription required)

The long-dominant credit card is under attack — not only from outside the industry but also from within. Consumers who want to finance expensive purchases, whether it’s a new refrigerator or the latest smartphone, often pull out plastic instinctively. The revolving balances that result from their well-ingrained shopping habits represent a lucrative business for many banks.

But upstart lenders are now mounting a challenge to the card industry, aiming to change both the decisions that shoppers make in checkout lines and their willingness to roll over their debts on an indefinite basis. These companies are focusing on millennials, whose financial behavior is still more malleable than that of older cohorts. . . .


Eye on Contactless: CPI Card Group Sees ‘Gradual’ Growth for Dual-Interface EMV; A Cashless Forecast
Digital Transaction News – March 6, 2019

Observers of the U.S. payments market who have been expecting a surge in conversions to dual-interface cards may have been disappointed Wednesday morning as CPI Card Group Inc., one of the nation’s biggest card manufacturers, said it expects “dual interface to grow gradually as a proportion of the U.S. market” in 2019.

The prediction, which CPI Card Group officials stated during a brief call to discuss the company’s fourth-quarter and full-year 2018 financial performance, is one of the earliest indications of how the industry that produces payment cards sees demand from financial institutions and other issuers. . . .

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