TransUnion Completes Acquisition of Verisk Financial Services
TransUnion completed its acquisition of Verisk Financial Services. Together, our combined capabilities will help us better serve customers through enhanced insights into customer behaviour. Read More.
JPMorgan Chase chief executive Jamie Dimon has revealed that credit and debit card spending was 45 percent higher in the second quarter compared to last year and 22 percent above the second quarter of 2019. This data supports Dimon's assertion that the economy is in a healthier place than predicted and that consumer balance sheets are robust. In another positive sign, profits in the industry were boosted by the release of loan loss reserves which banks had set aside during the height of the pandemic. With those losses not materialising, JP Morgan Chase released $3 billion in loss reserves, while Citigroup's bottom line benefitted to the tune of $1.1 billion.
The optimism is tempered somewhat by the low interest rate environment which is squeezing margins and lower revolving credit card balances. Issuers will be hoping to convert the spending boom into higher balances in the coming months, but it remains to be seen if changed consumer habits around spending and borrowing are permanent.
Few companies have the power to shake markets like Apple does with a simple product announcement. Shares in Buy now, pay later (BNPL) specialists including Affirm and Afterpay were down after news emerged of Apple's latest partnership with Goldman Sachs. Apple Pay Later will enable users to convert Apple Pay purchases into either four interest-free instalments over eight weeks or longer instalment plans which incur interest. Goldman Sachs, which also issues the Apple Card, will act as the lender in the arrangement with the move marking another step in the bank's expansion into consumer lending.
Apple brings a loyal customer base and a reputation for secure, user-friendly services which could see Apple Pay Later quickly gain market share in a fragmented market which has yet to mature. The service also sits on the consumer side of a transaction: Apple do not have to sign up merchants to the service which should simplify the rollout.
The central bank of the United Arab Emirates (CBUAE) is to join the ever growing cohort of central banks that intend to issue its own central bank digital currency (CBDC), which is one of the objectives of the CBUAE's 2023-2026 roadmap. The UAE's CBDC builds on two recent projects in this sphere. The CBUAE joined with China's central bank in the m-CBDC Bridge initiative, a central bank digital currency project for cross-border foreign currency payments, which is led by the BIS Innovation Hub, the Hong Kong Monetary Authority and the Bank of Thailand. The second was a joint pilot project involving the CBUAE and the Saudi central bank, as well as several commercial banks from both countries – known as Project Aber – which investigated whether distributed ledger technology could be used to settle cross-border payments between the two nations.
Meanwhile, Europe moved a step closer to a digital euro with the ECB approving, which will last two years and could lead to a digital currency being issued by the middle of the decade. The ECB's motivation is partly defensive with concerns that foreign technology players will fill the void if a native digital currency is not implemented.
To end, links to some other stories of interest this week...
India: RBI bans Mastercard from adding new customers
Japan: Google looks to expand Pay reach with Pring acquisition
UK: Revolut fundraising boosts valuation to $33bn
US: Banks close more than 250 branches in bet on digital future
US: Discover invests $30m in BNPL firm Sezzle
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.