Financial technology in India and China is far ahead of the rest of the world, says a report in Quartz — and much of this acceleration in fintech is due to the widespread adoption of the smartphone. "The big players in China — Alipay and WeChat, which together have more than a billion users — enabled $2.9 trillion in digital payments last year, according to a UN study. That's a 20-fold increase in the past four years. India's Paytm has some 200 million registered users for its wallet service. By comparison, US-based PayPal, which includes the person-to-person Venmo service, has about 200 million active account holders and recorded $354 billion in payment volume last year." If you click through to the Quartz article, you'll see that it is accompanied by a picture of four men staring down into their iPads and smartphones. On the radio this morning, doctors were discussing a new ailment, called 'Text Neck', and noting that children are spending up to four hours a day with their heads hanging down over a smartphone. Evolution, eh?
Catering to Chinese visitors to Taiwan, acceptance of Alipay and WeChat Pay has grown rapidly since last year, and now Visa is launching its own QR-based mobile payments system for the country. "The company said that it is using QR codes in the hope that the universal platform will attract larger numbers of users than more limited platforms offered by Android Pay, Apple Pay and Samsung Pay," says MobilePaymentsToday.com. "All three of those systems debuted in Taiwan this year, but Visa claims its cardholders in the country are not signing up for those services."
Open Banking, the private body tasked with delivering the specifications enabling third parties to access bank customer data in Britain, has delivered the specifications for Accounts and Transaction Information and Payments Initiation APIs. Do read on — the UK may be getting there early, but these technical standards will likely go worldwide in some form or shape. According to Open Banking, "Using these standardised API specifications, banks and authorised third parties are now able to begin developing new, innovative propositions and to tailor their products and solutions to the individual needs of consumers and businesses." The changes were mandated by the Competition and Markets Authority in the UK after it found that the main banks do not "compete hard enough" for customers' business: "Open Banking should deliver a new, secure option for customers to be able to compare the deal they are getting from their bank." In a statement issued on the website, Imran Gulamhuseinwala, trustee of the Open Banking Implementation Entity, said: "This is the next step in the transformation and opening up of the banking industry to the benefit of consumers and businesses. In March, we delivered on the first of the CMA Remedies with Version 1 of the branch, ATM and product data APIs from the nine largest business and personal current account providers in the UK. The specifications we are releasing today, which will be live from January next year, provide the platform for developers from banks, fintechs and other organisations to build new web and mobile applications that will deliver a safer, more personalised and easier banking experience for consumers wishing to search, select and switch financial products in a secure environment."
JPMorgan Chase chief executive Jamie Dimon was in Dublin yesterday meeting Irish prime minister Leo Varadkar, having recently acquired a large office building capable of holding a thousand staff. "The bank in May said it plans to hire a significant number of people in Dublin in its expanding custody and funds services businesses over the next three years, as it focuses its European Union operations in Dublin, Frankfurt and Luxembourg after Brexit leaves its largest European office, in London, outside of the bloc," reports Reuters. Mr Dimon said that he met with Prime Minister Varadkar today to discuss plans to grow JPMorgan's business over the next several years. "Ireland is at the forefront of training its workforce to keep up with the latest developments in technology and business innovation, and the country has a global, open environment that will keep it economically competitive," he added. Mr Varadkar's office offered no comment. Although glad of the jobs, the new Irish leader won't want to be seen welcoming global investment banks to Dublin with open arms: austerity is still official policy in Ireland ten years after the GFC.
In the United Kingdom, austerity also remains in effect, but here's a new word for banks as they consider their futures in the UK: Brexodus. Banks watching Theresa May's government box itself into a corner with unprecedented political alliances and a thin parliamentary majority are losing faith in her administration's ability to negotiate a useful Brexit, and Deutsche Bank is headed East, reports Bloomberg, citing unnamed sources familiar with the matter. "Germany's largest lender would relocate most of the business reported in London to a so-called booking center in Frankfurt under the plan, said the people. The strategy, which is still being finalized and would be reviewed if the Brexit scenario changes, will probably be implemented over the next 18 months, the people said. 'It's another milestone in what we call the Brexodus,' said Gildas Surry of Axiom Alternative Investments, whose holdings include Deutsche's bonds and shares. 'Every single continental European bank is working on plans to repatriate their trading and plumbing in their home cities'."
Finally, South Africa's Capitec Bank said yesterday that it reached nine million customers, putting it now in striking distance of Absa. If it continues its current rate of growth — adding upwards of 100,000 new customers a month — it's on track to overtake Absa by year end, and to overtake Standard Bank (which has 11.6 million customers) within two years.
Quotes of the Week
A selection of quotes that have caught our eye of late at Lafferty News.
- "Regulators should create 'white lists' of reputable charities, which banks can serve without fear."
"Swingeing fines have made banks too risk-averse", The Economist
- "If Amazon Go is successful as a shopping experience, it will become part of the Whole Foods Experience and be copied by retailers around the world. In the process, checkout will migrate from the point-of-sale to the cloud, a development that threatens to circumvent the traditional payments ecosystem and the not-yet-in-place NFC ecosystem."
Richard Oglesby and Brad Margol, Payments Source
- "We need to develop mechanisms that will allow the population to directly benefit from the co-ownership of infrastructural technologies in order to hedge against displacement."
John Egan, "AI is corrupting the social contract between rich and poor", LinkedIn
- "Every time you assume that others will be swayed by your logical argument, you've most likely made a significant, irrational mistake.."
"The rationality paradox", SethGodin.com
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