Payments News Digest 5 May 2023

Global: Stripe ties up with marquee partners for lucrative positioning

The gap between lockdown-era growth expectations and subsequent trends has led to pressure on digital companies large and small, leading them now to look for new opportunities via commercial partnerships. High-profile processor Stripe, whose valuations have come down from empyrean heights in recent times, is the latest example, inking two important deals this week that could spell a significant rise in the value of its processed volumes.

In the first of these, the payments company announced a deal that will see it responsible for porting bank-account details into the Uber app across all the big English-speaking markets as well as in  Brazil,   Mexico  and  France. With passengers using the ride-hailing service currently spending not far off $100 billion every year, this new involvement for Stripe will be welcome: the Irish-American company handled $817 billion in 2022 but will be keen to quickly hit a trillion-dollar mark that would be sure to reassure investors.

In the other deal, Stripe has agreed with Microsoft to take care of the necessary facilities on the latter's Teams platform to allow its 300m+ business users to accept cards payments in real time for online services delivered to payees through the collaborative-tools solution.

UK: Lenders prepare for choppy waters later in year

As the last of the big-four banks in the  United Kingdom, Lloyds, reported its latest quarterly results this week, it is clear that a deposit-outflow pattern is being seen across the board by major lenders in the country. The reasons are not hard to find: customers, well aware of the interest-rate environment, are looking for better returns elsewhere or turning to their savings to cope with the higher cost of living. Lloyds, which leads the pack for mortgage lending in Britain, says that signs of some stress are being seen in the market – leading it to set aside higher provisions for bad loans.

Among challengers, Virgin Money too has seen its net performance undercut by preparations for potential future losses: for the financial half-year ending in March its results recorded pretax profits down by a quarter. The bank's chief executive, David Duffy, noted that financial distress was at a low level currently but that arrears, particularly on credit-card accounts, were expected to climb.

Brazil: Revolut launches in market brimming with digital opportunities

Revolut continued its ambitious programme of global expansion this week with a launch in Brazil, a move that has been a long time coming as mobile-phone ownership in the country has soared in recent years while the central-bank's Pix system has been nothing short of a roaring success for P2P payments.

As Argus Advisory Research's latest market report for Brazil points out, "the largest and most innovative market in  Latin America  has, relatively swiftly, assembled both a regulatory/infrastructural framework and a critical mass of users. As a fintech boom that has produced over a thousand startups matures, innovation and digitalisation are changing all areas of payments, including the issuer hierarchy. There remains, however a significant segment that is underserved in terms of financial services." That cohort will be tightly targeted by Revolut, as will tourists from Brazil in need of cheap foreign-exchange and overseas-spend solutions.

Other stories of interest this week...

Global: Retail CBDCs bring unknown 'consequences' to financial system says IMF
Kenya: QR Code Standard unveiled
Singapore: Alipay transactions by Chinese tourists almost double over previous quarter
US: Chase and Amazon introduce new Amazon Visa card options

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