Payments News Digest 20 May 2022

Global: Mastercard pilots gesture-based POS method with worldwide ambitions

Five supermarkets in Brazil are at the forefront of a potentially game-changing new move by Mastercard as it trials a point-of-sale payment method that bypasses both traditional plastic and the new breed of virtual cards to leverage live, biometric interactions for transaction completion: a camera-scanned smile or wave of the hand is all that is required of shoppers availing of Mastercard's network for their grocery shopping. All going well, the biometric technology could be rolled out worldwide, with more tests to come in Asia and the Middle East before the year is out. There is no indication yet when cardholders in Europe or North America will be able to avail of the service, but privacy advocates are already watching these developments closely. Partners in the current phase include Brazilian fintech Payface and California's PopID, both specialists in facial recognition. "It's important that we make sure that data is handled properly and the transaction is safe," Ajay Bhalla, Mastercard's president of cyber and intelligence, told the press, noting that customer consent was always obtained before use.

Global: Meta Pay enters the real world, with plans to dominate the virtual version in future

Another name is lining up in the tech-driven 'Pays' stable of Google Pay, Apple Pay and so on: Mark Zuckerberg's group of companies led by Facebook are now pooling their commerce and fintech solutions into a new product called Meta Pay, which can be used for P2P payments and bill splitting, with a unified identity-credentials and payment-methods wallet in the works that will work equally in the metaverse as well as the world in which all of us are currently living. At the same time, Meta has added a simple 'Pay' button to WhatsApp's contact menu in two emerging markets with massive demonstrated potential: India and Brazil. There are no fees to use the service.

Ireland: Regulator pulls BNPL into central bank's orbit

In common with their colleagues across the world, regulators in Ireland are playing catch-up with the rise of digital instalment-based lending: however, according to an official announcement in Dublin this week, this and other forms of indirect credit are now to come under the authorisation umbrella of the country's central bank. The new regime also brings with it a cap on the interest rates set in connection with credit agreements: APRs for companies extending credit facilities to private borrowers cannot exceed a 23 percent threshold. "This move is squarely centred on consumer protection", commented David Hickey of Argus Advisory Research. "It extends existing protections to reach newer forms including BNPL. The regulator is telling market participants that they have to be responsible for what they do, whatever their business model and however much they feel they are reinventing consumer finance."

With financial apps making a strong impression here even as high-street retail banks dramatically shrink their presence thanks to cost-cutting and market exits, Klarna (currently on the hunt for fresh funding as its valuation dips) is now adding financial-management tools to its app in Ireland, leveraging the well-advanced Open Banking infrastructure in a way that incumbent banks have so far proved incapable of. This week too MultiPay and Mastercard have teamed up to bring a pay-later option for Mastercard-branded credit cardholders to retail outlets in the Republic. As noted in AAR's forthcoming cards and digital payments report for Ireland, issuers will need to bolster incentives such as rewards and cashback if they want Irish consumers to reach for their credit rather than debit card or BNPL solution.

In other BNPL news this week, London-headquartered Zilch is launching its tech-powered pay-later offering in the United States : 150,000 Mastercard users pre-registered in advance of the launch.

Other stories of interest this week...

Europe: Digital euro could be launched within four years
Global: Shopify merchants now accept instant crypto payments
India: Apple stops card payments ahead of card-on-file deletion deadline
UK: FCA to ensure banks provide access to cash across the country

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