Payments News Digest 14 April 2023

Global: Cards schemes rolling out hassle-busting tools for digital payments

When it comes to reducing friction for consumers, the global card networks have no peer: now Visa is stepping in to reduce headaches for platform-divided users wanting to send money to friends or family. A new service being piloted, called Visa+, should in time be compatible with Western Union, TabaPay, i2C, DailyPay, PayPal and Venmo. Although the latter pair have common ownership, they are not in fact interoperable as things stand. Beyond personal transfers, the solution should be helpful to freelancers and marketplace merchants, among others. It remains to be seen if the likes of Cash App, Google Pay and Apple Pay will come on board in future, but that is surely the hope.

Mastercard meanwhile is capitalising on its international reach and opening up a niche version of its Cross-Border Services that can be easily deployed by smaller financial institutions. "With a simple, turn-key integration, Cross-Border Services Express levels the playing field and provides small and mid-tier banks, including credit unions and community banks, with the same international payments features regardless of their size and scale," said Alan Marquard, Executive Vice President, Transfer Solutions at Mastercard. Fable FinTech and Payall Payment Systems are collaborating with the New York-headquartered scheme to deliver the service, which allows access to over 60 currencies and more than 90 percent of the world's population.

UK: Pay-later regulations proving a knotty problem for ministers

Britain's long-awaited legislative push around BNPL was certainly not helped by four changes of finance minister last year, but the delay can also be attributed to the difficulty of the problem: on the one hand, innovative financial tools should be supported by the authorities where they are helping hard-pressed consumers while, on the other, regulators and providers must be vigilant for instances in which consumers are losing control. Executives from leading players Klarna and Zilch voiced concerns this week that the government may be overlooking the latter possibility as they finalise the broad legislation to be then adapted by regulator FCA to match actual market conditions. Zilch chief executive Philip Belamant told the press that 'loan stacking', whereby borrowers move around debt reactively without due regard to the different interest rates involved, represented a risky loophole that must be closed off.

Meanwhile a survey by the Bank of England showed that, during the quarter ending with February, 14 percent of lenders had experienced more borrowers, including businesses, missing repayments on secured loans : although actual numbers were not revealed, the Financial Times noted that the findings showed the "highest level of defaults since the financial crisis".

Asia-Pacific: Cash heydays numbered in Vietnam and Thailand as apps flourish

Digital-wallet payments in Southeast Asia have made blistering progress in recent years, but massive potential remains, particularly in  Thailand  and  Vietnam, where shares of cash remain stubbornly high at 56 and 47 percent respectively according to FIS estimates. The mobile phone remains the key disruptor, facilitating P2P and remote payments via the region's plentiful brigade of superapps in tandem with a rapidly proliferating QR-Code infrastructure.

As noted in Argus Advisory Research's market report for Thailand published this week, the country's new PromptPay instant-payment system recorded over 50 million registrations and close to 15 billion transactions last year. Officials in Bangkok have been busy working on interoperability opportunities with its neighbours and reaching out as far as  Japan, another cash-loyal redoubt, though one far less likely to jump to cashless methods in the near future.

Other stories of interest this week...

Brazil: WhatsApp users can now pay merchants through chat dialogue
US: Plaid launches real-time payments feature
US: Union Credit partners with TransUnion in embedded e-commerce
US: Walmart sues Capital One to end credit card partnership early

The Payments News Digest from Argus Advisory Research is also distributed by email: sign up for your newsletter here.