Mar 22, 2023

Latest global payments news Here's what's happening around the world. Chris Ratcliffe/Bloomberg U.K. threatens to shut payment companies over insufficient controls The Financial Conduct Authority has sent letters to more than 290 payment companies saying that these firms are not adequately protecting consumers from financial risks, thus potentially harming the integrity of the entire financial system. The letter says common failings include not safeguarding consumers' money if the firm becomes insolvent, inadequate reconciliation and a lack of a procedure to identify which funds must be safeguarded to protect customers. The FCA added that there's a general lack of liquidity risk management for most of the country's digital payment companies. Other risks include money laundering and fraud. The letter is more of a warning than a direct act, though the FCA did say it would take "more assertive action" soon, including sanctions or "removal" of firms that do not meet standards. The FCA did not provide a backdrop for its letter, though it comes amid the crisis at Silicon Valley Bank , Signature Bank, Silvergate Bank, Credit Suisse and others. This context has drawn attention to payment issues such as payroll and supply chain billing, which could expose payment companies that cannot process transactions due to exposure to the troubled banks. —John Adams Joko Widodo, Indonesia's president. Indonesia’s president discourages use of Visa, Mastercard The Bank of Indonesia plans to discourage the use of international payment card networks like Visa and Mastercard, urging local businesses to rely instead on debit and credit cards issued by domestic payment platforms, Republic World reports. The move comes after Indonesia's president, Joko Widodo's recent warning to banking officials about risks from geopolitical conflicts like Moscow's war against Ukraine. After Russia's invasion last year, the U.S. imposed sanctions on the use of Visa and Mastercard in Russia, causing disruptions in payment processes, Widodo reportedly said. Indonesia's central bank vowed to push for greater reliance on domestic payment cards, in hopes of promoting stability and lower card-processing costs, according to the report. —Kate Fitzgerald Bloomberg News Walmart pumps $200 million into India's PhonePe Walmart has invested $200 million in PhonePe, valuing the Indian mobile payments firm at about $6 billion and bringing its total funds raised to date to about $650 million. PhonePe will use the funding to dig deeper into financial diversification, adding insurance, wealth management, stock trading, lending and account aggregation. Walmart is the majority owner of PhonePe, and plans to use PhonePe's payments technology to inform strategy in other countries where Walmart is trying to build its financial services profile. Walmart is also a majority owner of the Mexican payments app Cashi, and has located members of Cashi's management in PhonePe's offices in India. —John Adams Scott Eells/Bloomberg Goldman Sachs provides funding for Saudi fintech Saudi Arabian fintech Tamara has received a $150 million debt facility from Goldman Sachs, which will enable Tamara to build and market a buy now/pay later lending service. Tamara has signed up more than 6 million consumers on a waitlist, and plans to use BNPL as an entry point to offer other financial products. Goldman Sachs is among the American financial services firms that have boosted their investments in BNPL over the past two years as installment lending has become more popular. The banks have made partnerships and investments in fintechs in local markets as part of the strategy. While BNPL has come under pressure during recent economic volatility, the product has continued to draw attention from consumers and merchants as an alternative to credit cards. —John Adams Adobe Stock Mastercard buys Swedish cybersecurity firm Mastercard has acquired Baffin Bay Network, a cloud-based firm based in Stockholm, Sweden, that uses AI to detect the risk of cyber attacks to organizations, according to a press release. The firm, launched in 2017, uses machine learning and other technology to predict external threats, such as distributed denial of service attacks. Mastercard plans to combine its existing RiskRecon data-analytics service with Baffin Bay's technology, offering a single cyber-protection service. Financial terms of the deal, which closed this month, were not disclosed. —Kate Fitzgerald Jason Alden/Bloomberg NatWest using open banking to upgrade digital ID NatWest has signed a deal with digital security firm OneID to speed up authentication and improve the customer experience when shopping online. The collaboration uses open banking, which allows an enrolled banking credential and data sharing to be used to access products from other companies, often outside of financial services. In this case, Natwest's customer attribution service and One ID's identity technology will be made available to businesses via the bank's application programming interface. This will eliminate the need for new consumers to fill out forms and upload documents when enrolling in a merchant's e-commerce service. This will enable the merchant to offer additional services to the consumer with minimal authentication beyond what the consumer's bank provides. —John Adams Adobe Stock Australian startup tries to speed stablecoin payments Stables, an Australian stablecoin firm and digital wallet, has partnered with Mastercard and Marqeta to support a card that converts USDC stablecoins to traditional currency at checkout. Stables will enable consumers to save and spend USDC on Mastercard's merchant network after conversion. Marqeta will contribute its "just in time" funding feature. That will remove the requirement that consumers preload balances to the digital wallet, which could make it faster for consumers to convert the stablecoin to make payments. That's a key step since most cryptocurrency payment flows require a conversion to traditional currency before the transaction reaches the merchant's point of sale system. —John Adams Adobe Stock PXP, Payall partner for Mastercard-powered cross-border payments PXP Financial, a U.K.-based payment provider, has teamed with cross-border payments fintech Payall to enable international payments on Mastercard's platform, according to a press release. Miami Beach, Florida-based Payall will provide the payments infrastructure enabling PXP Financial's customers to send funds across borders to partners, employees and suppliers via Mastercard's network. PXP later plans to add the capabilities for pushing funds to cards and mobile wallets through the collaboration. —Kate Fitzgerald Bloomberg News Wirex, i2c extend crypto card’s reach to Australia London-based digital payments platform Wirex has launched a multi-currency Visa debit card in Australia through its partnership with i2c. Wirex already offers similar products in the U.S., Europe and parts of Asia, enabling users to manage up to 130 different cryptocurrencies and 12 traditional currencies, with the ability to earn 8% in crypto rewards on all purchases. Wirex, launched in 2014, leverages blockchain technology to enable streamlined purchases in any currency locally and across borders. –Kate Fitzgerald 1h ago