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PayPal saw another rise in the volume of payments in its latest round of results: helped by a Venmo contribution of $63.6 billion, the total rose by almost a tenth, compared to the previous quarter, to a total of $337bn. In its commentary, the payments-tech giant noted that households in the middle- and lower-income brackets were showing signs of belt-tightening when it came to consumption of non-essentials. Reduced growth, even with the seasonal boost to come, is now expected by the executive team.
The company has also been making progress on the acceptance front, having just announced a deal with Apple for both firms to add the other's payments options at their checkouts. Readers will recall that Apple launched its Tap to Pay solution earlier this year: that is now being equipped for the needs of customers wishing to pay via Venmo or PayPal. The deal also allows, as of next January, the upload of PayPal and Venmo payment cards to the Apple Wallet, an important foothold given the growing dominance of the latter's smartphones in this market, especially among young people.
This week's launch of new service Pay-By-Bank by J.P. Morgan Payments and Mastercard offers an extra checkout option for billpayers wanting to fund their payments directly from their bank accounts: the method leverages permissioned datasharing in a way that maximises security while also sparing customers the nuisance of continuously entering account numbers and routing codes.
Currently in a pilot phase with a limited set of billers and merchants, Pay-By-Bank should be rolled out for wider usage in 2023.
Cheques are slowly but surely leaving the American scene. As Argus Advisory Research's upcoming market report records, the value of consumer cheques shrank by over a tenth per annum in the six years from 2016. With the inexorable rise of digital, there is increasing energy around Open Banking. That excitement is shared by regulators, who see API interaction as a way to catalyse competition in consumer finance: the CFPB is currently working towards a requirement that institutions must share data upon appropriate request.
Australia's government has signalled that an overhaul in its approach to the Buy now, pay later sector is imminent. Among other reforms to an industry now responsible for almost six million accounts, borrowers will be subject to more stringent credit safeguards. Meanwhile, on the commercial side, forces are also gathering to make conditions tougher for BNPL lenders. The financial year of 2021, for example, saw losses at Klarna's Australian unit balloon according to an audit of its accounts carried out by Ernst and Young.
In neighbouring New Zealand, historically dominated by Australia's financial industry, pay-later lenders will soon be required to investigate affordability for loans of 600 NZ dollars ($347) or more, with BNPL players required to share more information with credit agencies. Elsewhere in the region, Singapore has just launched its own code of conduct for the sector: among other requirements, lenders must run additional credit checks for loans or accumulated loans above 2,000 Singaporean dollars ($1407).
To end, here are links to some other stories of interest this week...
Global: Twitter files paperwork to enter payments business
Italy: Worldline to buy Banco Desio's merchant acquiring operations
UK: FCA threatens BNPL firms with jail time
UK: Nigerian money app Kuda launches in tie-up with Modulr and TellMoney
US: Affirm delinquencies inch higher as active consumers rise by 69 percent
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The Weekly News Digest from Argus Advisory Research highlights significant developments in payment cards, digital payments, acquiring, processing, retail banking and consumer credit. Our writers and researchers frame these items in contexts such as historical, sectoral and regional trends, adding a layer of value often missing from the rolling news cycle.
About Argus Advisory Research The market-leading online, interactive database and data dashboards covering the global cards and payments industry in detail, plus a range of data-packed country and regional reports. Leveraging financial cards data going back to 2010 – and forecasts up to 2025 – our unique datasets cover countries around the world and feature more than 250 metrics per market.