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Divide and Rule As Mexico and the US Face Off, Can Payments Take the Strain?

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Divide and Rule As Mexico and the US Face Off, Can Payments Take the Strain? April 2017 Issue 358 www.electronicpaymentsinternational.com Divide and rule As Mexico and the US face off, can payments take the strain? •Airwallex looks to China •First Data looks to the future •New UK pound coin- is it worth it? •Country Surveys: The Philippines, Cambodia, Estonia EPI 358.indd 1 11/04/2017 11:45:13 Simple, secure and effortless digital solutions for fi nancial services organisations To fi nd out more please visit: www.intelligentenvironments.com @IntelEnviro Intelligent Environments is an international provider of innovative mobile and online solutions for fi nancial services providers. Our mission is to enable our clients to deliver a simple, secure and effortless digital experience to their own customers. We do this through Interact®, our single software platform, which enables secure customer acquisition, engagement, transactions and servicing across any mobile and online channel and device. Today these are predominantly focused on smartphones, PCs and tablets. However Interact® will support other devices, if and when they become mainstream. We provide a more viable option to internally developed technology, enabling our clients with a fast route to market whilst providing the expertise to manage the complexity of multiple channels, devices and operating systems. Interact® is a continuously evolving technology that ensures our clients keep pace with the fast moving digital landscape. We are immensely proud of our achievements, in relation to our innovation, our thought leadership, our industrywide recognition, our demonstrable product differentiation, the diversity of our client base, and the calibre of our partners. For many years we have been the digital heart of a diverse range of fi nancial services providers including Atom Bank, Generali Wealth Management, HRG, Ikano Retail Finance, Lloyds Banking Group, MotoNovo Finance, Think Money Group and Toyota Financial Services. IE Adverts - 2017.indd 1 21/12/2016 11:53:12 EDITOR’S LETTER NEWS CONTENTS UK payments regulators take a NEWS grilling at annual plan launch event 2: NEWS ANALYSIS 3: NEWS DIGEST he UK’s Payment Systems Regula - in accessing banking accounts, not necessar- FEATURE tor (PSR) lined itself up for quite ily indirect access. Banks are averse to pro- the bashing as it set out its reviewed viding accounts to APIs and institutions.” 6: AIRWALLEX objectives for the year ahead. To its But that’s fair enough. Everyone loves to Melbourne-based Airwallex plans to be the T harangue a regulator, yet they all turn very credit, it took it on the chin, putting itself first e-commerce gateway into China. Anna Milne caught up with its global head of very much in the firing line with an open much to the regulator for support during partnerships to talk about cracking China, Q&A, graciously fielding the ensuing anxious times. disrupting SWIFT, and leveraging WeChat onslaught that came from the audience. It was pretty clear, given the questions 8: FIRST DATA Stoic? Not much. Most of the difficult asked by attendees, that payment industry What are the main concerns for merchants questions were deferred to the FCA (not in stakeholders want the PSR to become more and issuers these days? Security, digital attendance) or deflected using the conveni- of a spokesperson for their concerns in the strategy and e-commerce. Anna Milne speaks to Glenn Fodor from international ent buffer of collective regulatory responsi- next couple of years, around Brexit and processor and acquirer First Data bility – that is to say that to address many around incoming European regulation, Pay- 10: MEXICAN of the concerns raised, collaboration among ment Services Directive, mark 2 (PSD2). Latin America’s third-largest economy could the different regulatory bodies is required, And within that, the main concern, speak- slip into recession if US President Donald namely the FCA and international regula- ing to stakeholders, is around data protec- Trump’s toxic cocktail of threats come true. However, Mexican banks are – at least for tors. Collective responsibility, collective tion. Incoming GDPR regulation is very now – unconcerned, writes Ivan Castano blame. much at the forefront of business strategy. Dominic Thorncroft, chair of the Asso- While they are not worried about commer- SURVEY ciation of UK Payment Institutions (AUKPI) cial opportunities, or indeed being phased said a large amount of the 1,000-plus firms out, they are to a certain extent floundering 13: THE PHILIPPINES regulated by the FCA are not able to access as to how to reconfigure their operations. 14: CAMBODIA payment systems. “We heard yesterday that New regulation stipulates what they cannot Raphaels Bank, which was meant to come in do; it’s up to them to figure out what they 15: ESTONIA and provide some service, will not actually can. And how. COMMENT be doing that. The complaints, however, were put over “As things stand there are no banks allow- with the decorum befitting a parliamentary 12: THE NEW POUND COIN ing access to these many payments firms, so select committee- exasperation aside, cor- 16: GLOBALDATA FINANCIAL SERVICES your aspirations to deliver competition in diality, deferentiality and diplomacy holds the market will come to nothing unless this sway. can be addressed properly, and I’m afraid at And it must be said, the good grace with the moment we are not making any progress which the PSR endeavours to maintain the at all.” Scathing stuff. dialogue, does illustrate a certain commit- Another disgruntled punter argued: “Basic ment to the cause. Payments industry people, access to bank accounts are not being pro- hats off to you all. < vided to institutions that provide payments across the country. It is a case of inclusivity ANNA MILNE, [email protected] Editor: Anna Milne Director of Events: Ray Giddings For more information on Verdict, visit our Tel: +44 (0)20 7406 6701 Tel: +44 (0)20 3096 2585 website at www.verdict.co.uk. Email: [email protected] Email: [email protected] As a subscriber you are automatically entitled to online access to Electronic Payments Financial News Publishing, 2012 Group Editor: Douglas Blakey Head of Subscriptions: Alex Aubrey International. For more information, please Registered in the UK No 6931627 Tel: +44 (0)20 7406 6523 Tel: +44 (0)20 3096 2602 telephone +44 (0)20 7406 6536 or email Email: [email protected] ISSN 0956-5558 Email: [email protected] [email protected]. Unauthorised photocopying is illegal. The Reporter: Patrick Brusnahan London Office contents of this publication, either in whole or Sales Executive: Harry Hooker Tel: +44 (0)20 7406 6526 71-73 Carter Lane part, may not be reproduced, stored in a data Tel: +44 (0)20 3096 2622 Email: [email protected] London Email: [email protected] retrieval system or transmitted by any form or EC4V 5EQ means, electronic, mechanical, photocopying, Group Publisher: Ameet Phadnis recording or otherwise, without the prior Tel: +44 (0)20 7406 6561 Customer Services: Asia Office permission of the publishers Email: [email protected] Tel: +44 (0)20 3096 2636 1 Finlayson Green, #09-01 or +44 (0)20 3096 2622 Singapore 049246 Sub-editor: Nick Midgley Email: [email protected] Tel: +65 6383 4688 Fax: +65 6383 5433 Email: [email protected] www.electronicpaymentsinternational.com April 2017 y 1 EPI 358.indd 1 11/04/2017 11:45:16 Electronic Payments International NEWS ANALYSIS Paypal targets bill payments and the underserved through the acquisition of TIO Payments giant PayPal is to acquire Canada-based bill-payment company TIO, aiming to develop its customer value proposition and extend its market reach through accessing the global underserved segment. GlobalData Financial Services analyses the deal ccessing the underserved segment both TIO’s presence and partnerships in the could significantly extend Pay - North American market. It will also attract Pal’s customer reach while also a new segment of customers by offering bill providing an efficient tool to com- payments to current PayPal customers. A While bill payments increasingly become pete with banks for serving this increas - ing global population. digitalised, the acquisition can also help PayPal has announced it will acquire TIO PayPal extend its value proposition by pro- Networks for C$304m ($233mn) and on viding TIO’s service to PayPal’s customers closure of the acquisition, TIO will operate within its online and mobile product port- as an integrated service within PayPal. folio. Speaking about the expected strategic over $7bn in customer bill payments in fis- Since many of TIO’s services target the benefits of the acquisition, Hamed Shahbazi, cal year 2016 and serves 14m customer bill underserved segment, the acquisition can be Chairman and CEO of TIO said the compa- pay accounts. The company has more than an even larger market opportunity for PayPal ny’s mission harmonises with PayPal’s vision 10,000 biller partners, including some of the to serve more than 33 million US households, to democratise money by giving consumers largest telecoms, wireless, cable and utility and two billion people globally. more convenient and affordable ways to pay companies, enabling it to efficiently process This is a segment that has been tradi - their bills. bill payments for its customers. tionally difficult for PayPal to access, since As a leading multi-channel North Ameri- The acquisition will help PayPal enter the its accounts are largely funded by bank can bill payment processor, TIO processed bill payments market and gain scale due to accounts or payment cards. < High interest rates on credit cards continue to drive revenues for issuers in Brazil According to GlobalData’s Payment Cards Analytics, Brazil reported the second-largest level of balances outstanding on credit cards in the Americas in 2015, largely due to the size of the market and the trend among local retailers and issuers to offer repayments in instalments to spend beyond their means and, therefore, Given the substantial revenue that can be accumulate more debt.
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