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A fast-changing world would seem to require a new kind of consumer credit vehicle. That sense has led to the creation of the new X1 Card, which harnesses 'smart tech' to deliver a Visa-branded product with features tailored to a contemporary environment where cardholders may be making a living through gig work but remain keen to accumulate rewards and take advantage of payments-related deals. Backed by Silicon Valley veterans such as Adam Bain, the ex-chief financial officer of Twitter, and PayPal co-founder Max Levchin, the card will let users automatically expire free trials, generate virtual cards for single-use instances, shop online anonymously and earn points while paying no annual fees. Credit limits are determined by current as well as future income, according to the company's press release.
The digital reshaping of payments is also in evidence in the expanded partnership between Synchrony and Fiserv, which will see the issuer's app join the line-up on the latter's Clover system, boosting acceptance of private-label cards issued by Synchrony and, crucially, opening up the possibility of Buy now, pay later options at the POS. In another BNPL story, European market leader Klarna is reportedly set to leverage a brand enjoying strong recognition among younger consumers by offering a 'pay now' option to British shoppers.
From London, the chief executive of Open Banking payments platform Token.io is reporting healthy account-to-account (A2A) transaction volumes, with one use case standing out as the fastest-growing: debt repayments. In an opinion piece for Finextra, Todd Clyde wrote this week that "one in four credit cards can now be paid off using an A2A payment. At Token, A2A payments doubled every month between March and December last year, and transaction volumes this year are growing 20 percent month-on-month. " Interest in A2A is undoubtedly growing: two months ago, leading bank NatWest extended the Mastercard-owned Pay by Bank app [PbBa] which promises to let mobile banking customers of participating banks, through their bank's own app, click a PbBa button rather than the customary card scheme image when checking out at an e-commerce site.
In Canada meanwhile, the leading PSP Clik2pay has brought the merchant-pleasing QR Code to bear on its own A2A ambitions, which also allows for BNPL payments through the format. According to the press release, "this new feature enables new uses of the Clik2pay QR Code, such as variable charitable donation amounts or partial payments towards an amount due. The QR code link to initiate payments allows for completely contactless payments in face-to-face settings or from a kiosk screen or display."
In the Southeast Asian countries of Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam a battle royale is underway as new tech heavyweights such as GoTo and Grab pair up with establishment lenders to capitalise on the historic opportunity afforded by an enormous unbanked population newly empowered by widespread smartphone adoption. Singapore's neobank licences are certainly influential but, in its less developed neighbours, commercial conditions are the overwhelmingly decisive factor. However, the authorities in Jakarta, responsible for the biggest of these markets, have been making key changes in recent years concerning e-money and credit card arrangements in particular: see Argus Advisory Research's payments market report for Indonesia for details.
Japan may not have an unbanked population, but a legislative overhaul means that establishment banks which have long enjoyed a dominant position are losing their grip on remittances and digital payments: new laws that take effect by the end of the year, for example, should liberate fintechs to offer a wider variety of financial services. Across the East China Sea, the authorities in Beijing are keen to see McDonald's, which has been heavily involved in a Shanghai-based pilot of the e-yuan CBDC (Central bank digital currency), open up the payment method across all of its restaurants in the country. However, there are geopolitical considerations, as detailed in this piece in the Financial Times.
Other stories of interest this week...
Germany: Watchdog imposes a strict cap on N26's client growth
Nordics: Handelsbanken exits Finland and Denmark
UK: Average withdrawal climbs to £80 [$110] as ATM usage plummets
US: Britain's SumUp enters the market through the acquisition of Fivestars
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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.
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