Payments News Digest 13 May 2022

Global: Vetted BNPL solutions added to Visa Ready platform

Buy now, pay later (BNPL) continues to draw in major banking and payments players, keen to extend their offerings while also moving with the times and consumers' evolving preferences. In recent quarters, the sector has been experiencing an increasingly bumpier ride, with providers beginning to face stiffer competition and more exacting funding pressures (Exhibit A: Affirm, whose difficulties were examined in detail by the Financial Times this week). However, stability is in the offing with Visa's announcement that it is adding the format to its Visa Ready platform, ushering 20 partners into its pool of potential pay-later partners for issuers seeking to extend their range at the POS and online.

Visa has been thinking big about this sector for several years now, most noticeably rolling out Visa Installments pilots and launches in partnership with issuers around the world from Malaysia to North America. Visa Installments, argues the network, is perfectly placed to benefit all sides of the four-party scheme: consumers enjoy the flexibility of an additional payment option, while merchants can increase their sales and conversion rates. Lenders, for their part, gain a new source of revenue and enjoy a deepened relationship with cardholders, as do acquirers with their customers: merchants. Now, with BNPL taking its place in the Visa Ready stable, a new chapter seems set to begin.

UK: Chase referral bonus marks seriousness of mass-market ambitions

There's nothing like having deep pockets when breaking into a new market: a perfect example this week comes from the United Kingdom, where Chase UK is launching a referral-bonus scheme to promote its new digital current account offering. Participating customers will receive £20 ($24.50) for each recommendation that results in a new current account being opened. The offer can be availed of up to 20 times, which amounts to £400: a handy bonus at any time but especially so in a country which has seen energy costs soar amid several developments that have hit British household accounts hard this year. This is not the first eyecatching incentive from the bank: in late March it unveiled a savings account that boasted a 1.5 percent interest rate, orders of magnitude more generous than the rates on offer from leading high-street banks, which have been charting a course closer to zero for several years now.

Europe: Cross-border infrastructures, boosted by security layers, driving new launches

One of Europe's top processors, Milan-headquartered Nexi, has just reported a seven percent revenue bump for the first quarter, boosted by tourism's return to life. Nexi has featured in this newsletter several times in the past year as it expands across its home continent, picking the fruits of the continent's single market. A key benefit of the Single Euro Payments Area (SEPA), for example, is that a financial services provider can launch in 36 countries simultaneously. This month in fact, Citi was able to do just that with the arrival of its SEPA Instant Payments service, running on real-time infrastructure for businesses serving European customers.

Another launch made possible through Europe's transcontinental rails comes from TrueLayer, which is bringing a closed-loop payments solution to France, Germany and Spain as well as smaller EU markets including Ireland and the Netherlands. The product includes instant deposits, refunds and withdrawals and shows how a British company, post Brexit, can still break into neighbouring markets to provide Open Banking services, in this case via its European headquarters in Dublin. As we noted last week, Open Banking is high on the agenda at the CFPB (Consumer Financial Protection Bureau) in Washington, with thoughts turning amongst regulators there towards how Americans can maximise the advantages of API-connected payments initiation while minimising fraud risk. Those regulators would do well to look at Europe, where Strong Customer Authentication (SCA) mandates have proven vital for encouraging take-up.

Global: Google returns to standalone Wallet while virtual cards come to Autofill

Sometimes a product hits the market before its time: that may well have been the case with Google Wallet, which landed in app stores over a decade ago but was retired as standalone software when Google Pay subsequently took a central role in its parent's payments strategy. Now Wallet is back and being detached from Google Pay to become once more a downloadable application in its own right. It is easy to see the 2022 rationale as digital cards and credentials become an increasing part of life for individuals and companies alike for such everyday activities as admittance to buildings, attending ticketed events and proving one's vaccination status. This week the company also announced the arrival of virtual card numbers as an extra security layer for cardholders using the autofill functions in its browsers and apps: the upgrade applies to eligible cards badged by Visa, Mastercard and American Express as well as those issued by Capital One.

Other stories of interest this week...

Australia: Woolworths rolls out QR code payments system
Global: Adyen expands partnership with BNPL group Afterpay
Global: Nine in ten central banks eyeing CBDCs, says BIS
UK: Rising cost of living puts brakes on consumer spending

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