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December 26, 2022

On the web

China Digital Currency: e-CNY Wallet Borrows Alipay and WeChat Pay’s Electronic Red Packet Feature to Woo Users

South China Morning Post

“The official wallet app of China’s digital currency has launched a red packet feature, a function made popular over the years by the country’s dominant payments app Alipay and WeChat Pay, in a fresh move to lure new users. The e-CNY app’s latest update, released over the weekend, allows users to send each other digital yuan-filled red packets – known as hongbao in mainland China. This comes just a month ahead of the Lunar New Year, when the Chinese traditionally give out red envelopes filled with cash to family and friends as a symbol of well wishes.”

On the wires

Cashfree Payments Now Offers India’s Widest ‘Buy Now Pay Later’ Suite

PR Newswire

“Leading payments and API banking solutions company, Cashfree Payments is now offering India’s widest ‘Buy Now Pay Later’ (BNPL) suite. Cashfree Payments’ BNPL suite will enable online businesses to provide customers with over 30 flexible financing options during checkout. The company has launched its BNPL suite in time for the upcoming holiday season to help online businesses offer their customers easy and instant access to credit, thereby increasing sales.”

December 23, 2022

On the web

Brazil Legalizes Crypto Payments, ‘Setting the Stage for Greater Bitcoin Adoption’

Cryptonews

“The President of Brazil Jair Bolsonaro signed a bill making bitcoin (BTC) and other cryptoassets a legal and regulated payment option in the country – and this move, an expert says, “sets the stage for greater bitcoin adoption.” Bolsonaro signed a bill into law that established the country’s official and complete framework for the trading and use of “virtual currencies” in Brazil, per the federal government’s official journal. The bill, previously approved by Congress, was signed on Wednesday and published on Thursday.”

December 22, 2022

On the web

‘Cryptocurrency has Huge Inherent Risks for Our Macroeconomic, Financial Stability’, Says Shaktikanta Das

The New Indian Express

“Expressing concerns about cryptocurrencies, Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday said these virtual assets could cause the next financial crisis and should be prohibited. “Our view is it should be prohibited because if it is allowed to grow… the next financial crisis will come from private cryptocurrencies,” said the Governor speaking at an event held in Mumbai. Highlighting the volatility and uncertainty in cryptocurrencies, he said the value of virtual currencies has come down to $140 billion and $40 billion was wiped out.”

December 21, 2022

On the web

Why the Fed Needs to Take the Digital Yuan Seriously

Bloomberg

“If the Federal Reserve still wants proof of China’s intention to challenge the dollar’s hegemony, it should look no further than a small experiment currently under way in Hong Kong. Last week, Bank of China (Hong Kong), one of the city’s big deposit-taking institutions, had its offer of 500 trial accounts tied to the e-CNY, the electronic version of official Chinese money, snapped up in two days. The customers are each being gifted 100 yuan in digital form, which they can spend at mainland stores, the JD.com website or a supermarket chain in Hong Kong.  (Subscription required)”

Japan Pushes Apple to Support Digital ID Card Function on iPhone

Biometric Update

“Japan wants its My Number cards on the iPhone and Tim Cook is hearing about it, according to Yahoo Japan. In a meeting with the Apple CEO, Fumido Kishida, the Prime Minister of Japan, pushed to have his country’s digital ID card installed on the iPhone. Android should accommodate My Number by May. But the best Cook would promise Kishida was that he would work on it. The Prime Minister’s request follows new services accessible via the 12-digit My Number digital ID card.”

The Future Of Cross-Border Payments In Asia Is Atomic

Forbes

“Atomic settlement refers to exchanging assets between two parties in a single transaction, typically instantaneously and often without intermediaries. This can be particularly useful in cross-border payments, as it allows for faster and cheaper transactions compared to traditional methods that rely on a more comprehensive network of correspondent banks or other financial institutions to facilitate the transfer. In the future, atomic settlement will likely become more widely adopted in cross-border payments, as it offers several benefits over traditional methods.”

As China Pushes Its Digital Currency Plans, the US Falls Behind

Computerworld

“China’s digital Yuan project, a blockchain-based cryptocurrency for consumer and commercial finance, can no longer be considered a pilot. That’s the assessment by economic and cryptocurrency experts. Those experts have been monitoring efforts in China and other countries developing and piloting central bank digital currencies (CBDCs) with the aim of establishing a blockchain-based virtual cash that is cheaper to use and faster to exchange, both at home and across international borders. To date, the People’s Bank of China has distributed the digital yuan, called e-CNY, to 15 of China’s 23 provinces, and it has been used in more than 360 million transactions totaling north of 100 billion yuan, or $13.9 billion.”

On the wires

Italy Aims to Cut Retailers’ Digital Payment Costs Via Levy on Banks, Lawmakers Say

Reuters

“Italy’s parliament has approved a measure in the 2023 budget paving the way for a levy or “solidarity contribution” from banks and payment processing firms in order to cut fees on digital payments for shopkeepers, two lawmakers said. The move follows a decision to drop a provision that would have relaxed sanctions for retailers who refuse card payments, following criticism by the European Commission.”

December 20, 2022

On the web

RBI Asks Cashfree, Razorpay and Stripe To Pause Merchant On-Boarding: Report

Moneylife News & Views

“The Reserve Bank of India (RBI) has ordered Cashfree, Razorpay and Stripe to pause merchant on-boarding until the central bank issues them the payment aggregator (PA) licence it has tentatively approved for them, says a report from Entrackr. Last month, RBI asked Paytm Payments Services (Paytm) Ltd to re-submit the application to operate as a PA and not to on-board new online merchants until approvals remain pending.”

Cash Remains the Most Frequently Used Means of Payment in Stores but Electronic Payments Grow Further, ECB Study Shows

European Central Bank

“Cash is still the most frequently used means of payment at the point of sale, but its share is declining according to the latest study on the payment attitudes of consumers in the euro area, published today by the European Central Bank (ECB). Cash was used for 59% of point-of-sale transactions in 2022, down from 72% in 2019. It is the means of payment most often used for small-value payments in stores and for person-to-person transactions.”

Paytm, HDFC ERGO Introduce Insurance Policy to Protect Mobile Transactions

Firstpost

“One97 Communications (OCL), parent company of Paytm, has rolled out “Paytm Payment Protect”. The group insurance plan has been launched in association with HDFC ERGO General Insurance. The plan has been introduced to insure transactions made via Unified Payments Interface (UPI) across all apps and wallets. This plan intends to enhance the experience of digital payments and increase the adoption of the same in India. The insurance offering comes at a price of as low as Rs 30 per year.”

December 19, 2022

On the wires

GLN and KB Join Forces to Establish Global Payment Network

PR Newswire

“GLN International (GLN), the global payment network company established by Hana Financial Group, signed MOU with KB Kookmin Bank to join the global payment network. One of the largest Korean bank which has fiercely competed in a global market, decided to cooperate with GLN to expand the network together.”

December 16, 2022

On the wires

Billhop & UnionPay International Announce New Partnership

PR Newswire

“Billhop, the smart online bill payment platform, announces a new partnership with UnionPay International (UPI), the global network servicing the world’s largest cardholder base, enabling support for UnionPay card products across its digital payment solutions. The agreement highlights Billhop’s and UPI’s commitment to prioritising accessibility and adoption within the card payments sphere. UnionPay cardholders across the EEA and the UK will be able to access Billhop’s unique card payment solutions, developed to simplify payments and unlock better cash flow control by bridging the gaps around card acceptance rates. The partnership enables UnionPay credit cardholders to pay almost any bill or supplier invoice accepted by Billhop, even when their end beneficiary does not accept card payments.”

Meet Mercuryo`s Banking-as-a-Service Payment Solution With The New Partner – Advcash

PR Newswire

“More and more companies are realising the need to introduce innovative products that solve pain points of the current market. Meet Advcash, another company that has integrated a breakthrough solution from Mercuryo – Banking-as-a-Service (BaaS). Advcash is an electronic payment and digital currency platform offering services for individuals and online businesses. It has partnered with Mercuryo, a cryptopowered global payments infrastructure provider, to equip its users with virtual IBANs, becoming the second company in less than three months to have implemented this solution.”

December 15, 2022

On the web

Safaricom Slashes Bank to M-Pesa Fees

Global Banking & Finance Review

“Safaricom will drastically cut charges on M-Pesa to bank transactions by a range of between 23 per cent and 100 per cent at the start of next year as the Central Bank of Kenya pushes forward with its goal of making financial services more affordable. Banks and Safaricom have not been charging their customers for these transfers since the outbreak of the Covid-19 pandemic, with the waivers part of emergency measures aimed at increasing the uptake of cashless transactions besides offering relief to households. The CBK has been allowing regulated entities to resume charges on their services but at lower rates than before, with the transfers between mobile wallets and banks being the latest to implement the price reforms. While the charges have been cut substantially, their reinstatement will still boost the revenues of banks and Safaricom by billions of shillings.”

Alpha Bank Launches the First Card Tokenization Option in the Local Market (Romania)

Business Review

“Alpha Bank Romania, a financial institution recognized for introducing innovations in the local market in the field of payment services (Tap-To-Phone, Instant Money Back, Instant Disbursement, etc.), announces the launch of the card tokenization functionality, integrated in the card scheme systems (Mastercard MDES, VISA VTS). Compared to other tokenization solutions, the solution integrated into the eCommerce Alpha Bank platform improves transaction security by replacing sensitive card data with an EMVCo token. Being the first platform with this functionality introduced in the local market, Alpha Bank will allow merchants and payment integrators to instantly update client cards, enrolled at account level, when they are renewed. Thus, the payment process is simplified, and the impact on optimizing transaction approval rates is immediate. In addition, the option allows the visual capture of the card in order to facilitate quick identification by the holder, especially when they have several cards enrolled in the merchant’s account.”

Bank of Canada Plans 2023 CBDC Consultation as It Moves to Development

Ledger Insights - blockchain for enterprise

“Bank of Canada Governor Tiff Macklem spoke yesterday about a potential Canadian central bank digital currency (CBDC). Next year the bank plans to consult the public on a potential CBDC. Particularly they want to find out what the public’s expectations of a digital currency and what features would be important to them. As part of the central bank’s R&D into digital currency, it is moving from the research phase into the development phase to be prepared if the need arises to issue a CBDC. However, the Governor made clear that a decision on whether to issue a CBDC is up to parliament….Meanwhile, the MIT Media Lab Digital Currency Initiative (DCI) is working with the Bank of Canada as part of its research work. The DCI is also working with the Federal Reserve Bank of Boston on Project Hamilton and the Bank of England.”

Australia’s Central Bank Highlights Payments Goals and Areas of Improvement

Insider Intelligence

“Reserve Bank of Australia (RBA) Gov. Philip Lowe outlined four goals and initiatives to improve Australia’s payments system in a Wednesday speech. 1. Lowering payment costs for merchants.   A big part of this initiative involves expanding least-cost routing (LCR), which lets merchants route debit payments through the most affordable network. Merchants can choose from Visa, Mastercard, or home-grown payments network eftpos. Australia’s Payments System Board wants to make LCR available for mobile wallet payments—which has strong penetration in the market. 2. Supporting the development of Australia’s faster payments system. Australia offers account-to-account push payments through its New Payments Platform (NPP), which has processed over 1 billion transactions worth more than $1 trillion in the past year. But it wants to enable the same faster payments functionality for direct debit payments. Since NPP was designed for push payments, the government created PayTo to enable faster direct debit payments. But Lowe is frustrated with Australia’s major banks, which he says have been slow to implement PayTo. The banks have agreed to make PayTo fully operational by April 2023…”

December 14, 2022

On the web

Dubai-Based NOW Money Selects ThetaRay AI Tech to Prevent Financial Crime on the Inclusive Banking App

Reuters

“NOW Money, the GCC’s first mobile banking solution focused on financial inclusion, and ThetaRay, a leading provider of AI-powered transaction monitoring technology, today announced a collaboration to implement ThetaRay’s cloud-based AML solution to monitor cross-border payments and support in the prevention of financial crimes and money laundering on the fintech’s payments platform. NOW Money selected ThetaRay’s advanced SONAR anti-money laundering solution with combined transaction monitoring and sanctions list screening to stay a step ahead of financial crime by uncovering both known and unknown money-laundering crimes, as well as preventing attempts to violate sanctions in real time. The new partnership is essential as the number of overbroad money transfers continues to grow, with the value of remittances from the UAE being Dh 2.88 trillion* (780 billion USD) in Q1 2022.”

RBA Calls On Apple, Google, Samsung To Cut Retailer Fees

channelnews

“Reserve Bank governor Philip Lowe has called on global tech giants to reduce payment costs for retailers accepting payments made through smartphones. At his keynote at today’s AusPayNet event in Sydney, Lowe said the RBA has consulted with Apple, Google, and Samsung, as well as the banks and POS providers, in order to implement “least cost routing” for merchants. LCR will route payments through the bank-owned eftpos network, rather than via Visa and Mastercard, which charge retailers more. Apple Pay, Google Pay and Samsung Pay “is growing very quickly, and they are often more expensive for merchants to accept,” Lowe said. “It would be both feasible and desirable for the industry to deliver LCR functionality for mobile wallet transactions by the end of 2024.”

Bluestone Signs Bahamian Digital ID Agreement with Biometric Payment Option

Biometric Update

“Bahamas-based digital ID firm Bluestone Labs has entered a six-year contract with the country’s Unified Public Transportation Co. (UPTC) to implement a new payment system utilizing digital ID for public transportation. The system will work with the nation’s central bank digital currency (CBDC) and biometric payments support. It will debut on the island of New Providence and is expected to be installed on 220 buses running 40 routes and transporting 60,000 to 90,000 passengers per day. The UPTC jitney pass will be available to travelers via a new transit feature within Bluestone’s mobile app, available on both Android and iOS devices.”

On the wires

Cash Use Slips to Just 15% of British Purchases in 2021

Reuters

“ritish shoppers used cash in only 15% of transactions in 2021, half the level of the year before and down from nearly 40% before the COVID-19 pandemic, retailers said on Friday. The British Retail Consortium said government advice to go contactless during the pandemic, as well as a surge in online shopping, had accelerated an existing shift away from cash. Debit cards accounted for 67% of transactions last year, up from 54% in 2020, while credit cards made up 15%, up from 14%, said the BRC, which represents major stores who accounted for almost 40% of British retail sales last year.”

Brazil Central Bank to Launch its Digital Currency in 2024

Reuters

“Brazil’s central bank aims to launch its digital currency in 2024 after a closed pilot program next year with financial institutions, bank president Roberto Campos Neto said on Tuesday, adding that the project had received international attention. Speaking at an event hosted by the news website Poder 360, Campos Neto said the design of the central bank’s digital currency would encourage banks to tokenize their assets, with considerable efficiency gains.”

December 13, 2022

On the web

Alipay Gives e-CNY a Lift by Offering it as Express Payment Option on Alibaba’s e-Commerce Platforms

South China Morning Post

“China’s sovereign digital currency has been embedded into Alipay, the popular digital wallet run by Ant Group, to facilitate “express payments” on the Taobao and Tmall e-commerce sites operated by Alibaba Group Holding, according to Li Chen, Ant’s chief compliance officer. The digital currency, known as e-CNY, is only available for users in about two dozen cities in China as part of a trial programme, as the central bank struggles to convince consumers to use it. After enabling the feature via the official e-CNY app, users can pay for orders on Taobao, Tmall and other Alibaba Group platforms like food delivery site Ele.me and grocery store Freshippo, with Alipay using the digital yuan.”

December 9, 2022

On the web

A New Messaging Standard for UK Payments: ISO 20022

Bank of England

“Payments data in the UK is changing.  The UK payments industry is moving to ISO 20022, the emerging global standard for payments messaging. This standard creates a common language for payments data across the globe. This change includes our sterling high value payment system CHAPS, which will migrate to ISO 20022 messaging on 19 June 2023. Better data in payments promises to deliver significant long-term benefits for the economy. To adapt to the new messaging standard and accompanying data requirements, your organisation might have to make process and technology changes.”

RBA Fears an Australian CBDC Could Sideline Banks and Displace the Dollar

Kitco News

“The Reserve Bank of Australia (RBA) published a speech by Assistant Governor Brad Jones which outlines some of the worrisome impacts that a central bank digital currency (CBDC) could have on the country’s financial system. Jones focused his remarks on the potential risks of a retail CBDC. “This recognizes that a wholesale CBDC would entail less change to the status quo, as financial institutions already hold digital claims issued by the Bank.” Jones reviewed some of the key arguments in favor of CBDC adoption, including strengthening financial inclusion where banks are few or distant, supporting universal access to public money where banknotes are hard to access or sparingly used, and safeguarding monetary sovereignty in societies with weaker rule of law and monetary systems. According to Jones, these situations do not apply to Australia…“The first of these concerns relates to the potential for a CBDC to become the preferred source of liquidity holdings for households in normal times, at the expense of commercial bank deposits,” Jones said.”

December 8, 2022

On the web

EU Agrees on Digital ID and Wallet Vision, Likely to Implement in 2 Years

Tokenist

“The EU is very close to agreeing on what it means to own digital assets. The Council of the EU is laying the groundwork for European digital identity (eID), which will serve as the EU’s digital wallet. What does that fusion look like? Consisting of 27 countries, the EU accounts for 447 million people. Although its nominal GDP has fallen in 2022 when the EU sanctioned Russia, it is still trailing behind the US at $18 trillion vs. $24 trillion, making it the third largest market behind China. It is, therefore, important when this economic juggernaut sets the rules of engagement on digital assets. The Council of the European Union is the EU’s governing body. As of Tuesday, the Council revised the regulation on the European digital identity (eID). This would be a personal digital wallet hosted on people’s smartphones like other apps. Across EU nations, the eID would follow common technical standards and compulsory certification. This would avoid standard/update fragmentation and security holes. However, this “Union toolbox” is yet to be developed. What would the eID wallet look like?”

On the wires

Brazil Central Bank Grants Google Pay Payment Institution Status

Reuters

“Alphabet’s Google Pay has received approval to operate as a payment institution in Brazil, Latin America’s largest economy, the country’s official gazette showed on Thursday, allowing it to initiate payment transactions. Payment initiators, according to Brazil’s central bank, initiate a transaction ordered by the final user but never manage the payment account, nor hold the funds of the transactions. A press spokesperson for Google confirmed the central bank’s authorization and said the move offered “more payment options to users through our platforms in Brazil.” Google Pay currently operates an app serving as a virtual wallet, which allows the user to include their credit and debit cards, vaccination cards and concert tickets, for example. The approval comes days after Brazil’s National Monetary Council also authorized fintechs to initiate payment transactions in the country.”

ACI Worldwide to Accelerate Indonesia’s Real-Time Revolution with New BI-FAST Payment Services and Expanded Bank Participation

Businesswire

“BI-FAST, Indonesia’s domestic real-time payments scheme — provided by Bank Indonesia and powered by ACI Worldwide, a global leader in mission-critical, real-time payments software — has announced plans to launch a wide range of new real-time payment services as the scheme celebrates its first anniversary. Since its launch in December 2021, BI-FAST has successfully onboarded a total of 106 participants, 19 of which through multi-tenant aggregators are using ACI Worldwide’s multi-tenant Real-Time Payments Solution to connect to BI-FAST. The participants represent 87% of the national retail payments market, responding to rapidly increasing demands for a fast, easy, secure, and affordable national payments system. Powered by ACI Worldwide, BI-FAST payment services will be extended to include bulk credit, direct debit and Request for Pay services. BI-FAST also expects the number of participants to continue expanding including additional multi-tenant aggregators, from the leading national switches of Indonesia. One of the multi-tenant aggregators, PT Rintis Sejahtera, has already gone live with the solution.”