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Two telltale signs this week from an American payments scene that is steadily being transformed by smartphone ubiquity and modernising infrastructures: in the first, bank-supported P2P service Zelle reported transaction volumes up by over a quarter last year to reach an aggregate of $629 billion across 2.3bn transactions: the steeper value rise of 28 percent indicates that the average amount being transacted is climbing, revealing growing trust in the app that belies fraud-incident headlines. With preparations for refund mechanisms currently underway, the direction of travel seems assured – although smaller participants may struggle to fund the new arrangements. Currently used for less than one percent of transactions in the United States, FedNow's launch this year is set to further boost real-time payments in the country.
In the other sign-of-the-times story, pay-later champion Affirm, under the funding pressure now familiar to its sector, is leveraging its relationships with merchants to nudge up loan-interest rates in the light of the Fed's steadily rising benchmark. Last week the company announced that almost a fifth of its employees would be let go, as would some of its initiatives (including, unsurprisingly, Affirm Crypto). Competitor Klarna has now reached 34 million users in the much-coveted American market, more than eight million of whom actively use its app each month.
Though of vastly different sizes, India andSingapore have much to offer each other financially: now the pair have agreed to link their real-time payments networks, allowing a sender in India to transfer up a thousand Singaporean dollars ($746) a day to the Lion City. Both banks and non-banks – including Liquid Bank, SBI and Axis Bank – are among the institutions participating.
Also involved is Singapore's DBS, which has long had commercial interests in India and whose chief executive launched an internet business there early in his career. As noted in Argus Advisory Research's cards and digital payments research report on Singapore, the bank has been deeply committed to digitalisation for almost a decade now and has been involved in cross-border expansion via neobanking. The city's biggest bank, DBS is representative of a digitalising financial-services culture in its home base: the Financial Times this week examines the new breed of neobanks there, including Grab's GXS, Trust and Ant's Anext bank.
Alongside its cooperation with India, Singapore is in the midst of a process that will see its PayNow service interconnected with counterparts in Indonesia, Thailand, Malaysia and the Philippines by the end of this year, disintermediating a high-tariff business built on slower rails that has long been the only recourse for SMEs and migrant workers needing to move money around the region.
In other cross-border news from the Asia-Pacific region, e-wallet facilitator Alipay+ has inked a deal with Euronet subsidiary epay Australia to open up 8,000 retailers in the country to the over one billion users that can now avail of its services: Alipay+ offers international acceptance for users of GCash (Philippines), Kakao Pay (South Korea), TrueMoney (Thailand), Touch 'n Go (Malaysia) as well as Alipay itself.
The Chinese payments giant has been steadily commercialising the opportunity presented by diverse national wallets in Southeast Asia as its original core business faces narrowing revenue streams domestically on government intervention and the central bank's digital-yuan rollout.
Other stories of interest this week...
Australia: Zip Co BNPL to shut down overseas operations to stem cash burn
Ireland: Revolut moves into credit-cards market
UK: Barclays records 2022 surge in contactless transactions
UK: Lloyds Bank quarterly profits double as borrowing costs rise
UK: Tesco mulls sale of banking unit
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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.
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.