Matthew Brennan's China Channel serves as a gateway to the world of WeChat, and Brennan serves up stories of WeChat and its innovators. This week he writes about fashion blogger Becky Li, who has a big following on WeChat. On July 22, through her WeChat microblog, Becky Li offered 100 turquoise blue Minis, priced at just over $42,000, and sold all of them. Buyers were required to pay a deposit of about $300 and then were contacted by the dealer to complete the purchase as WeChat Pay transactions are limited. For Brennan though it illuminates the power of WeChat: "This is a fashion blogger selling cars through a messaging platform!" And, for every breathless story about Amazon Go!, there's a Chinese equivalent involving WeChat.
"The founder of Amazon, Jeff Bezos briefly overtook Microsoft's Bill Gates to become the world's richest person," writes the Guardian, referring to Mr Bezos's 24-hour reign as richest man in the world — until Amazon's earnings results came in lower than expected. With all of that power though comes responsibilities: Amazon is unpopular with President Donald Trump, who has little affection for the Washington Post, which he calls the Amazon Washington Post. So, one must read the news sceptically when it's owned by the world's biggest retailer — and we're not talking about Jeff anymore. The South China Morning Post — now owned by Jack Ma's Alibaba — reports on an odd study showing that Chinese consumers were unsure about their ability to use their favoured payments apps when travelling abroad. (That's unsurprising, considering that most Chinese people have yet to travel abroad.) The story picks up on the growing popularity of WeChat, which seems to be precisely because of its online nature. "WeChat pay is now available in 15 countries and regions for payments in 12 currencies, while Alipay is accepted in more than 100,000 stores in 26 countries across Europe, North America, East Asia, and Southeast Asia. However, their strategies are very different. Alipay was originally created by Alibaba to support its successful e-commerce platforms Taobao and Tmall, whereas Tencent's WeChat Pay is an extension of a social ecosystem which counts 800 million people in its userbase." The upshot? "While Alipay is diligently locking into local partnerships to promote itself as a commercial solution, WeChat Pay's expansion is user-driven and emphasises non-commercial functionalities for merchants to engage their clients via the platform."
Union Bank of Nigeria is launching a new set of digital banking propositions, following a long consultation process to find out what its customer want from online and mobile platforms. Head of Retail Carlos Wanderley has been exploring how best to help small businesses. "Borrowing from the UBER innovation concept, Union Bank introduced a 'Locate An Agent' feature on its banking app, designed to bring its mobile banking services directly to its customers," writes ThisDayLive.com. "The 'Locate an Agent' feature was developed to provide a much desired convenience for small businesses and sole entrepreneurs," said Mr Wanderley. "This is an on-demand service which allows them conclude basic banking transactions at a time and location most convenient to them. It saves them time and provides one-on-one VIP service they would likely not get at the branches."
Lloyds Bank is back in the news. "Shareholders have had to endure news of a further £1.1bn provision for PPI mis-selling in Lloyds' half-year results — plus another £540m for mishandling mortgage arrears and pushing 'packaged' bank accounts. Refunding arrears charges to 590,000 borrowers will cost £284m," writes the FT. PPI mis-selling truly does seem to be the UK's answer to the kind of cross-selling that now sticks like glue to Wells Fargo's reputation. Barclays also took a further hit on PPI, costing the bank £700 million. Combined with a 6.3 percent fall in revenues, that led to a loss of £285m. In a statement, Barclays boss Jes Staley said that restructuring at the bank is now complete, and "we are working to put conduct issues behind us." That's overstating the matter somewhat. Barclays is waiting on the imminent results of the investigation into Jes Staley's pursuit of a whistleblower. Observers put his chances of survival at 50-50. Even that figure may be overoptimistic.
Interoperability is one of those words that makes people switch off, and yet — especially in Africa and other places where mobile money is well-established — it's key to making the financial system work smoothly, and potentially even more important for financial inclusion. Ghana is a case in point: the population is largely unbanked but mobile phone penetration is widespread. In early 2017, in a controversial move, the Bank of Ghana announced a tender for a 15-year contract to be awarded to a new business to develop an interoperable system for mobile money and banks — giving the appearance that it did not have full faith in its own wholly-owned subsidiary GiPHSS. Three businesses tended for the new switch, which was to be known as the Ghana Retail Payment System. Vals Intel Ltd quoted GH¢14 million, Mericom Solutions Limited quoted GH¢ 5.5 million and Sibton Switch quoted GH¢ 4.6 billion (equivalent to around one billion dollars). Sibton Switch emerged as the winner of the bid. Ghanaian journalists however were minded to enquire why Sibton's solution was so much more expensive than the other companies. When they looked into the background of Sibton Switch, they found that it appeared to be a 14-month old company set up for the express purpose of building an interoperable switch for Ghana. Questions raised about Sibton's ultimate ownership failed to elicit much information from the company itself. The story illustrates the potential stakes in linking the various aspects of a country's banking and payment systems. Read the full story today in Lafferty Global Intelligence.
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