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December 7, 2022

On the wires

Billtrust Releases 2022-23 Gen Z and Digital Payments Study

Businesswire

“A new study released today by B2B accounts receivable automation and integrated payments leader Billtrust examines Generation Z – those born between 1997 and 2012 – and their evolving views and behaviors when it comes to digital payments and what these shifts mean for industries across the board. Billtrust’s 2022-23 Gen Z and Digital Payments Study — composed of a survey to 750 U.S.-based Gen Zers — illustrates how this generation’s use and view of payments has evolved since Billtrust’s last analysis in 2019. Perhaps not surprisingly, it appears that the pandemic’s impact and increased expectations for speed and convenience have given way to the rapid adoption of payments technologies favoring contactless experiences and instant gratification.”

Galileo Launches Customizable Buy Now, Pay Later (BNPL) Solution for Banks and Fintechs

Businesswire

“Galileo Financial Technologies, LLC, a leading financial technology company owned and operated independently by SoFi Technologies, Inc., announced a buy now, pay later (BNPL) solution with issuance of single-use virtual cards and complete loan servicing. Banks and fintechs will have access to the customizable Galileo Buy Now, Pay Later solution, offering them easy entry into the in-demand BNPL market and enabling greater spending power for their customers. The BNPL industry is forecasted to surpass 900 million global users by 2027 and offers a flexible way to shop and pay. However, non-bank BNPL providers offer the service based on very limited customer data, putting both the provider and the consumer at higher risk. With Galileo, clients and banks that provide Buy Now, Pay Later to their consumers will be offered financing through their bank or a sponsoring bank partner that considers the consumers’ financial health and ability for repayment. A real-time personalized offer is displayed in the bank’s or fintech’s mobile application. If the consumer accepts the loan offer, a prefunded, single-use virtual card will be added to their mobile wallet and presented in-store or online at most retailers.”

November 28, 2022

On the wires

Australian Buy-Now, Pay-Later Sector Faces Fresh Hurdle: Regulation

Reuters

“When Melbourne barista Melinda Elliott had to cut back on casual work shifts this year, she asked her buy-now, pay-later (BNPL) provider, Afterpay, to lower her credit limit. She did not want debt she could not afford to repay. The Australian company, owned by Twitter founder Jack Dorsey’s Block Inc, cut her limit to A$2,000 ($1,300) from A$3,000, but a few months later she added up the debts in her account and saw the limit had returned to A$3,000, the maximum available. “There was no email to say, ‘your credit limit’s gone up again’; it was out of nowhere,” said Elliott by phone. “I don’t want to spend more than what I actually make from working.” Elliott’s experience highlights a core feature of a startup business model that has disrupted consumer finance around the world. But that feature and others may soon be banned in Australia under a proposal to regulate BNPL with the same law that covers credit card and mortgage providers.  Whereas credit card issuers collect both interest payments and vendor fees, BNPL companies attract users by charging nothing for credit, instead relying almost entirely on revenue from retailers. By monitoring users’ repayment performance on generally small balances to control risk, they require no background checks, so signing up is easy and the companies’ costs are low.”

November 18, 2022

On the web

US Subscription Fatigue is Real, With Consumers Managing an Average of 5 Accounts

The Drum

Far from happy at the wealth of choice, 72% of US consumers say there are ‘too many’ subscription services, with the average subscriber now shelling out for five different subscriptions every month.

Conducted by mobile payments platform Bango, the survey of 2,500 Americans found that 78% dream of a single app to manage the multiplying tendrils of their expanding digital footprint, delivering a one-stop-shop for TV, music, gaming and fitness.

The shifting sands of consumer sentiment has already seen Disney+ and Netflix roll out ad-supported tiers at a lower cost, but they may be barking up the wrong tree according to Bango. So coveted was such a mythical ‘super bundle’ that 63% said they would pay more to avoid micro-managing every service.

November 9, 2022

On the web

Some Central Banks Have Dropped Out of the Digital Currency Race

Cointelegraph

“As countries around the world race to launch a central bank digital currency (CBDC), some jurisdictions have slowed down or dropped out of the race altogether. While many observers were pushing a narrative of urgency around CBDCs, some countries have decided that launching a CBDC isn’t currently necessary, while others have tested CBDCs only to dismiss them. Each country had its own reasons, with global central banks providing very different insights on why their CBDC-related project didn’t go well or didn’t need to launch in the first place. Cointelegraph has picked up four countries that have either stopped or paused their CBDC or CBDC-like initiatives based on publicly available data.”

October 28, 2022

On the web

The World Has Changed For Cross-Border Payments, But What’s Next?

Forbes

“This week, the world of payments met for the biggest event of the year, Money20/20 in Las Vegas, providing a unique opportunity to get the temperature of a space that has seen significant upheaval over the last few years. And while there were many trends showcased at the event, for cross-border payments there was an overall sense of an industry in transition.    With growing austerity and a more risk adverse climate, faddish technologies such as crypto are being deprioritized in favor of practical solutions that can easily be turned into profitable product lines.   Meanwhile, the very nature of the industry has changed over the past few years, creating changing opportunities for cross-border payment providers. With this in mind, where is the industry heading next?”

October 26, 2022

On the web

Real-Time Payment Networks Grow, But Banks Still Search for Uses

SP Global

“The future success of real-time payments platforms owned by the Federal Reserve and the largest U.S. banks hinges on whether financial institutions and fintechs can find real-world uses for the technology. Real-time payments are still in their infancy in the U.S.: The Clearing House, a company owned by Bank of America Corp.; JPMorgan Chase & Co.; Citigroup Inc.; Wells Fargo & Co.; and other large banks launched the nation’s first real-time payment platform, or RTP, in 2017, while the Fed has scheduled a production rollout of its own planned platform, the FedNow Service, for May to July 2023. RTP has shown steady growth since its launch, but its $19.7 billion of processed payments during the third quarter were a tiny portion of the trillion-dollar U.S. payment market. The planned launch of FedNow has rekindled banks’ discussions about faster payment offerings, but many banks, especially smaller ones with limited resources, are unsure about the operational setup and the potential for monetization, Mark Majeske, senior vice president at payments company Alacriti Inc., said in an interview.”

October 6, 2022

On the web

Immediate Cross-Border Payments (IXB) Pilot Set to Revolutionize International Payments

The Clearing House

“EBA CLEARING, The Clearing House (TCH) and SWIFT announced today that the delivery of the Immediate Cross-Border Payments (IXB) pilot service is on track and is set to revolutionize cross-border payments. The IXB pilot service will leverage the existing real-time payment systems RTP® in the United States, run by TCH, and RT1 in Europe, run by EBA CLEARING. IXB will begin processing the first live transactions in the euro and U.S. dollar currency corridor in the coming months. Developed with the support of 25 financial institutions from both sides of the Atlantic, the IXB pilot has been progressing during the past six months, resulting in the timely delivery of the IXB solution processing the technical messaging between the pilot institutions engaged in the testing and the respective payment systems. End-to-end testing between RTP, the IXB app and RT1 is ongoing with user integration and testing following shortly thereafter.”

October 5, 2022

On the web

Green Payments Announces Partnership with OVE Touch & Go®, Expands Point of Sale System with Novel Fingerprint Solution for Digital Payments

GlobeNewswire News Room

“Green Payments, a credit card processing and point of sale disrupter, today announces its partnership with OVE Touch & Go®, a novel fingerprint payment system that makes digital transactions secure, quick and easy with a simple touch. Green Payments CEO, Cliff Green, recently onboarded as an advisor to the company to help with the launch of its point of sale (POS) solution that allows customers to pay with their fingertips, and businesses to accept fingertip payments. First founded in 2014, Green Payments has helped nearly 5,000 businesses build their financial stability while generating more than $1 billion in consumer payments each year. Known for its mission to eliminate businesses’ 2-3% processing fee through customized programs, Green Payments plans to utilize emergent technologies like OVE’s fingerprint authentication system to further customize payment options for merchants and customers alike.”

October 4, 2022

On the web

Tassat® Successfully Completes Launch of The Digital Interbank Network™

Businesswire

“Tassat Group Inc., the leading provider of private blockchain-based business-to-business (B2B) real-time payments and financial services solutions to banks, announced that The Digital Interbank Network completed over $500 million in real-time transactions among three banks using Tassat-controlled accounts on Saturday, October 1. The groundbreaking launch saw over 400 transactions conducted without failure during an 8-hour period, an average of $1.25 million per transaction, using Tassat-controlled accounts at Cogent Bank, Customers Bank (NYSE: CUBI) and Western Alliance Bank (NYSE: WAL). Tassat’s goal is to establish The Network as a viable platform for participating banks’ B2B customers to execute real-time payments between businesses at different banks.”

Survey: Check Use Drops to All-Time Low for B2B Payments

PR Newswire

“Check usage continues to decline for business-to-business (B2B) payments in U.S. and Canada (North America), falling to an all-time low of 33% since AFP began tracking this data in 2004, according to the 2022 AFP Digital Payments Survey, underwritten by J.P. Morgan. B2B check payments have dropped 9 percentage points in North America since 2019. This is consistent with the steady deadline in check usage reported by organizations over the past two decades. Since 2004, check usage has fallen by over 40 percentage points. Within North America, when paying major suppliers, the gap between paper and digital payments has widened to 13 percentage points, with 39 percent of organizations using ACH credits while 26 percent continue to use checks. This gap has increased by 11 percentage points since 2019, when the gap between ACH and checks was only two percentage points.”

September 8, 2022

On the web

IntelliPay Announces Patent for Government Point of Sale Processing

businesswire

“Today, IntelliPay a leader in no-cost payment processing and a premier provider of customized solutions for local and state governments, announced the issuance of U.S. Patent # 16,409,359 by the USPTO entitled “System and Method for Processing Chip-Card Transactions from a Host Computer.” IntelliPay’s patented technology allows government customers to make a single payment. Behind the scenes, the payment is split into two payments, one for the government invoice amount and a second for the service fee that covers the processing cost of the transaction. This single payment card insertion into the card reader eliminates the need for two insertions typically required. The new technology is the easiest and fastest way for government customers to make secure chip-card in-office payments. Government offices using the new technology report shorter lines, reduced wait times, and higher customer satisfaction overall.”

More Americans Tapping Buy Now, Pay Later Services for Groceries ‘Shows the Height of Personal Desperation,’ Harvard Researcher Says

CNBC

“As prices rise, Americans are increasingly finding new ways to make ends meet. But with some necessary purchases, such as groceries, there are fewer options that don’t involve taking on debt.   That makes the option to pay later — through companies such as Klarna, Zip, Zilch, Affirm and Afterpay — look increasingly attractive. About two-thirds of consumers have worried in the past month about affording groceries due to the rise of inflation, a recent LendingTree survey found. At the same time, Zip said it notched 95% growth in U.S. grocery purchases, according to The New York Times. Klarna reported that more than half of the top 100 items its app users are now buying are grocery or household items.”

September 2, 2022

On the web

Buy Now, Pay Later for Groceries, Eating Out Is in Demand

NACS

“With grocery and food costs at historic highs, more consumers are turning to buy, now, pay later (BNPL) options to pay for their weekly food bill, reports the New York Times. They’re even using these options for smaller purchases such as a coffee or sandwich. One BNPL user told the Times she doesn’t hesitate to use the service for her everyday food purchases. “If I wanted to pick up a coffee on the way home from somewhere and I didn’t have any money in my coffee or eat-out budget, I would push it to next month’s budget,” she said. Philip Belamant, the founder of Zilch, a BNPL company, told the Times that consumers don’t balk at swiping a credit card to buy lunch or coffee. So why shouldn’t they use a pay-later plan, with no interest, for those purchases?”

September 1, 2022

On the web

The P2P Fraud Conundrum

The Regulatory Review

“Have you ever received an automated message from your bank warning you about an unauthorized payment? If so, you may want to think twice before acting on it. According to a recent report in The New York Times, some individuals have received instructions to send payments through peer-to-peer (P2P) payment apps such as Zelle or Venmo to reverse supposedly fraudulent transactions, only to have scammers steal those payments. And even if victims report the fraud, banks may refuse to return the credit. This increasingly common scenario reveals a critical distinction in what consumer protection law considers to be an “unauthorized transaction.” When thieves hack consumers’ accounts or steal their phones and transfer money, the Electronic Fund Transfer Act (EFTA) considers the resulting transactions to be unauthorized and requires banks or payment services to refund them. But in instances where scammers trick individuals into authorizing payments themselves, Regulation E, which implements the EFTA, does not protect the payments. This subtle distinction marks the difference between an easy refund and the loss of thousands of dollars for victims of fraud. Currently, Regulation E requires financial institutions to credit customers for unauthorized transfers from their accounts made by third parties. In most cases of unauthorized transactions, the financial institution itself has liability. But in some cases where a third-party service gives a customer access to transfers from the customer’s bank account, the regulation holds the service provider liable for unauthorized transactions.”

August 19, 2022

On the web

Buy Now, Pay Later Firms in UK Warned Over Influencer Ads on Social Media

The Guardian

“The city watchdog has informed buy now, pay later firms such as Klarna and Clearpay that it has seen online ads and posts by social media influencers that break rules by not warning of risks such as taking on unaffordable debt. The Financial Conduct Authority (FCA) has written to companies in the multibillion-pound buy now, pay later (BNPL) sector promising to take action over unfair and misleading promotions, with more consumers looking into using such services as the cost of living soars.”

August 5, 2022

On the web

TymeBank Boosts Business Banking

Gadget

“Small business owners will benefit from access to turnover-based finance provided by SME funder Retail Capital, along with new offerings like a mobile POS app and a financial community platform, as TymeBank bolsters business banking offering…Business customers will have access to a new offering called TymePOS, a mobile point-of-sale app that turns an NFC-enabled cellphone into a tap-and-go payment device. As a softpos solution, says the bank, TymePOS offers the best pricing in the market for merchants of this size. It also has market-leading next-day settlements for merchants (the industry standard is seven days). The app is available for download on the Google Play Store, and it will take a TymeBank Business Banking customer two minutes for app onboarding. Customers will then receive a merchant ID to start processing card payments within 24 hours.”

August 3, 2022

On the web

‘Buy Now, Pay Later’ is Finding a New Avenue for Growth

Protocol

“The tumbling valuations of consumer-facing “buy now, pay later” companies in public and private markets suggest investors are losing confidence in the sector. Who can blame them, in a tottering economy? But some investors are still bullish on pay-later — if the customers are other businesses. Business-to-business “buy now, pay later” startups are on the rise, and it’s clear why. Statista estimates that the global business payments market is $125 trillion, while the global consumer payments market is only $52 trillion. The average ticket size is significantly higher among businesses than consumers, allowing payments companies to command larger fees. Proponents say breaking up business payments over time promises more growth potential, a quicker path to profitability and less risk than catering to retail consumers.”

August 2, 2022

On the web

Major Change to Buy Now, Pay Later From TODAY – How it Could Affect Your Finances (UK)

The Sun

“BUY now, pay later purchases are appearing on peoples’ credit reports with a major agency from today. TransUnion, one of the UK’s three major credit reference agencies, said lenders will be able to see how many buy now, pay later accounts somebody has and how they manage their payments… TransUnion said that the inclusion of BNPL payments on credit reports will have no “immediate effect” on credit scores. But the transactions will now appear on your credit history, meaning lenders can see when you use BNPL, how often and any missed repayments. A spokesperson that while credit scores aren’t currently affected, they could be in the future.”

August 1, 2022

On the web

Frictionless Shopping Is Here. YouTube and Instagram Join TikTok With New Social Commerce Tools

Inc.com

“This month, both Instagram and YouTube unveiled new tools that aim to help users make sales directly on their social media platforms — removing the need to shop at a brand’s own website or retailer’s online store. With the more seamless check-out options, presumably consumers will have fewer barriers to buy, and that can lead to more sales.  On Instagram, customers can now place and track orders in direct messages, and sellers can request and receive payment in the same thread using Meta Pay…Through a new partnership with Shopify, YouTube creators can now directly link their products across their channels and content, including in livestream videos. U.S.-based users of the feature can enable onsite checkout, which can allow shoppers to make purchases directly on YouTube. To use the new shopping feature, YouTube creators must have more than 1,000 subscribers and must have their channel approved for monetization.”

July 21, 2022

On the web

The IRS Wants to Know How Much You Use Venmo, Cash App, Zelle & Other Third-Party Apps

WFMYNews2.com

“Cash, credit card, check. A lot of folks are replacing these with a third-party apps like Venmo, Pay Pal, Cash App, Zelle, Apple Pay, and Google Pay. If you have a side business, it’s an instant way to get paid cash. Now, the IRS  wants to know who is giving you how much, and why. “Those apps are going to be required to report anything over $600 to the IRS and you will get a 1099-K form and you’ll have to report it on your taxes and pay taxes on your income,” said JW DeGance, Jackson Hewitt.”

July 20, 2022

On the web

Why Buy Now, Pay Later Can Cost Much More Than a Credit Card

The New Daily

“Buy now, pay later is often touted as a cheaper alternative to credit cards, but new research shows these platforms can actually end up costing more. BNPL platforms such as Afterpay, Humm and Zip Pay have quickly become a mainstream product in recent years, helping Australians pay for everything from groceries to child care. With the rising cost of living, these services may be more tempting than ever. But they don’t provide money for free.   Curtin University research commissioned by Financial Counselling Australia and released on Thursday shows BNPL fees are effectively a “quasi-interest rate that can be more costly than credit card interest rates”.”

July 19, 2022

On the web

July 18, 2022

On the web

BNPL Service Set to Change in Australia – All You Need to Know

Kalkine Media

“Buy-now-pay-later companies have had a rollercoaster ride since they rose to power during the early days of the pandemic. After quickly garnering public attention, BNPL firms came under the scanner for the lack of regulation seen in the sector…Minister Jones highlighted that BNPL services should be considered a part of the credit ecosystem as they serve the same purpose as other products in the segment. Additionally, the BNPL sector continues to dominate the market, with a large share of consumers showing interest in BNPL services. This further intensifies the need for regulatory oversight in the segment.”

July 12, 2022

On the web

Central Banks Face Key Decisions on Digital Currency, Says BIS

Reuters

“Central banks will have to make “fundamental” decisions on cross-border access for a digital version of their currency to serve as a means of payment effectively, a committee at the Bank for International Settlements said on Monday. “Central banks must make critical choices on the access of non-residents and foreign financial institutions to central bank digital currencies (CBDCs), as well as ensuring multinational interoperability, to fully harness the potential for CBDCs to enhance cross-border payments,” the BIS committee said in a statement.”

July 8, 2022

On the web

Paxos Leads Digital Asset Industry by Becoming First Issuer to Disclose Full Monthly Reserve Holdings Backing USDP and BUSD Regulated Stablecoins

PR Newswire

“Paxos, the leading regulated blockchain infrastructure platform, has disclosed the specific financial instruments backing its regulated stablecoins USDP and BUSD. Moving forward, Paxos will provide these detailed disclosures on a monthly basis in addition to its attestations. These reports provide the CUSIP of all instruments backing USDP and BUSD, showing that Paxos only backs its stablecoins with cash, overnight loans secured only by US Treasuries, and US Treasuries with a less than 90 day maturity. The monthly reserve reports are available on the Paxos website.”

The Pros and Cons of Using Buy Now, Pay Later for Travel Expenses

MarketWatch

“Buy now, pay later services are an increasingly popular way to purchase products online. These services often target young shoppers through social networks and promote the ability to purchase products like clothing or makeup via a small down payment followed by installment payments to cover the difference. But it’s not just physical stuff that you can click to buy and pay in full later. Travel providers have jumped on the trend by partnering with these services, which include Affirm  and Uplift, to let you fund your vacation in small payments — sometimes even after you’ve finished the trip.”

July 7, 2022

On the web

Subscription Economy Growth Steadies as Consumers Moderate Spending (UK)

Internet Retailing

“The subscription economy, which saw huge growth during the pandemic, has started to slow, falling victim to the impact on consumer spending habits of the cost of living crisis. Research by Barclaycard Payments finds that, on average, businesses offering subscriptions estimate nearly two fifths (36%) of their revenue has been generated from these sales over the past 12 months, an 11% year-on-year uplift. However, with footfall on high streets returning to pre-pandemic levels as consumers’ lives get back to ‘normal’, the growth of the subscription economy has begun to decline, with Barclaycard proprietary data showing a 5.7% fall in subscription spending in May 2022 when compared to May 2021….On average, UK consumers have cancelled two agreements each, with entertainment platforms (17%) and beauty and grooming kits (nine%) among the categories most likely to have been cut back on. The number of households signed up to subscriptions has dipped by 14% points in a year, from 81% to 67%.”

July 6, 2022

On the web

Buy Now, Pay Later Services May Be Getting Some Americans Deep Into Debt

CNN

“Buy Now, Pay Later installment plans have become popular among consumers seeking to spread out the cost of big-ticket purchases. But now, rising prices have some cash-strapped shoppers reaching for these alternative payment methods for everyday purchases, such as their daily coffee, gas station fill-up or grocery run, as well. That’s a concern for economists and consumer advocates, who say the surge in the use of these services, coupled with a lack of transparency and little regulatory oversight, leaves them wondering just how much debt Americans are actually getting into.”

July 1, 2022

On the web

Klarna Eival UK-Based Zilch Secures €48M for its BNPL Platform, Eyes US Expansion

Silicon Canals

“Zilch, a London-based Buy Now, Pay Later (BNPL) platform, announced on Thursday that it has secured an additional $50M (approximately €48M) in an Series C extended round of funding… The UK company will use the funds to accelerate business growth, particularly in the US, where it has opened a new office in Miami and has 150,000 pre-registered customers.  The funding announcement follows the recent news that BNPL firms are set to face regulation in the UK as HM Treasury sets out a framework for the Financial Conduct Authority (FCA) to review the sector. Zilch was an integral part of the Sandbox programme from inception, during which it worked closely with the Financial Conduct Authority (FCA) and was one of the UK’s first BNPL providers to be granted an FCA licence to perform regulated Consumer Credit activities.”