Category Archives: Payments, Transfers, Rewards

October 2, 2020   FinTech and Alternative Finance, Fintech International, Innovation and Resources, Payments, Transfers, Rewards, Research, Stories   No comments

Accelerating winds of change in global payments

McKinsey & Company | By Philip Bruno, Olivier Denecker, and Marc Niederkorn | Oct 1, 2020

changing the worldThe COVID-19 crisis is having a significant and widespread effect on global payments across sectors. The most striking and potentially lasting impact is an accelerating pace of change in the industry.

For the global payments sector, the events of 2020 have reset expectations and significantly accelerated several existing trends. The COVID-19 public- health crisis and its many repercussions—among them, government measures to protect citizens and rapid changes in consumer behavior—changed the operating environment for businesses, large and small, around the world. For the payments sector, global revenues declined by an estimated 22 percent in the first six months of the year compared with the same period in 2019. We expect revenues to recover (only to a degree) in the second half of 2020, ending 7 percent lower than full-year 2019. Over the past several years, payments revenues had grown by roughly 7 percent annually, which means this crisis leaves revenues 11 to 13 percent below our prepandemic revenue projection for 2020.

See:

UK government open banking tender puts focus on payments

Google and Gates Foundation to help spread digital payments in developing countries

BNY Mellon Report: Global Payments 2020: Transformation and Convergence

A half decade of change in a few months

Cross-border payments flows also have been severely affected by the pandemic, as well as by geopolitical dynamics. In 2019, cross-border payments totaled $130 trillion, generating payments revenues of $224 billion (up 4 percent from the previous year). In the first half of 2020, many cross-border fundamentals radically changed:

  • International travel all but ground to a halt, with more than 90 percent of countries imposing restrictions. Transaction-fee margins on remaining volume also declined, because of waivers offered to stimulate demand to offset the impact of a reduction in leisure and business travel flows, which fell by more than 70 percent.
  • During the pandemic, interregional trade saw greater impact than intraregional. Drops in interregional flows for Asia (−13 percent), Europe (−20 percent), and the United States (−23 percent) directly cut into cross-border payments volumes, while the prices of oil and other commodities fell sharply.
  • Business-to-consumer payouts (often salary disbursements) and remittance payments slowed, because of restrictions on the movement of cross-country workers and growing unemployment.
  • Cross-border e-commerce volumes provided a notable exception to the gloomy news: the second quarter of 2020 brought double-digit growth as initial logistic challenges were resolved. UPS and PayPal, for example, reported double-digit growth on cross-border shipment volumes and the value of merchandise sold.
  • Increased volatility and uncertainty have enabled growth in foreign-exchange-related revenues and pushed up treasury-related transactions as companies scramble to mobilize surplus cash.

McKinsey 2020 global payments report

See:

Evolving to Work Better Together: Public-Private Partnerships for Digital Payments

How payments can adjust to the coronavirus pandemic—and help the world adapt

Bank of Canada Speech: Money and Payments in the Digital Age

As we indicated, not all players, countries, and products will arrive at the same end state (see sidebar “A regional overview of the year in payments”). At a regional level, the following differences are notable:

  • Asia–Pacific (excluding China) could suffer larger declines, as its revenue model is more affected by NIM contraction, faces increasing government pressures on mass-market transaction fees, and has greater exposure to long-term affected industries, such as travel, tourism, and international remittance payments.
  • Europe may be poised for a swifter rebound, for two reasons. First, NIMs were already so compressed before the COVID-19 crisis that there was little room for further squeezing. Second, volume growth is being fueled by the acceleration of digital migration in Southern and Eastern Europe, and by government stimulus measures.
  • In North America, the revenue benefit from an accelerated shift to digital channels has been more than offset by credit-card economics—outstanding balances are down roughly 29 percent from 2019 levels, and increased delinquencies are a possibility. Considering credit cards are the largest source of the region’s payments revenue, at roughly 44 percent, the decline in outstanding balances alone will outweigh the benefits of increased use of digital channels.
  • In Latin America, which is characterized by a significant unbanked population, cash usage will likely remain resilient. Among the banked, Visa-supported mobile wallets such as PLIN and Yape have gained more than a million users since December 2019, with the pandemic accelerating this trend.
  • Overall, the greatest recovery opportunities reside in countries with low electronic penetration (such as Brazil, India, Indonesia, and Thailand), as the next normal provides impetus for electronification. However, countries starting from a high level of digitization (such as France, Germany, and the United Kingdom) are also seeing pandemic-induced behavior push cash usage to the minimum—fueling payments-revenue growth.

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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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September 29, 2020   Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Stablecoins, Metaverse, NFTs, Enterprise, Scaleup, Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Fundraising, Investing, Trading, Innovation and Resources, Online Funding / Investing Campaigns, Payments, Transfers, Rewards, Stories, Venture Funding and Building   No comments

Nuvei closes $833-million IPO, making history as TSX’s largest tech sector IPO

Nuvei | Press Release | Sep 23, 2020

Philip Feyer NuveiPhilip Fayer took little time to celebrate after his Montreal payments company Nuvei Corp. closed its $833-million initial public offering, the largest the Toronto Stock Exchange has ever seen in the technology sector.

"People will find this crazy, but I was online the next morning at 6 a.m. like I am every day," he said.  "I always like to live forward, not backward … I am more excited about what's coming than what happened."

The company he founded 17 years ago when looking for payment options for another business he was involved in raised aggregate gross proceeds of US$805 million — US$730 million for Nuvei and US$75 million for shareholder Novacap Management Inc. — from offering up more than 30 million subordinate voting shares at US$26 per share last week.

Along with the IPO, Nuvei closed a direct private placement of more than 1 million subordinate voting shares, generating an additional US$28.4 million in gross proceeds.

See:  Ant Plans $17.5 Billion Hong Kong IPO, No Cornerstones

Nuvei first hoped to raise US$600 million, but the IPO was oversubscribed by 20 per cent and then its 14 underwriters bought more than four million shares through stock options they had.

Nuvei's goals for the offering continued to creep up as interest in the company grew, but Fayer said the company "didn't set out to be record-breaking."

He just wanted to use the IPO to reward his 800 employees with $100,000 in stock options for their hard work and build capital for future mergers and acquisitions, which have been a cornerstone of Nuvei's strategy.

Nuvei completed its $889 million purchase of U.K.-based payments company last August and is in the process of buying Smart2Pay, a Dutch payments business.

The company has racked up 50,000 customers, processed $35 billion in payments annually and reported $245.8 million in revenues last year.

Nuvei is showing no signs of slowing down, said Fayer.

"We feel really bullish, but we still feel that we're very much on the ground floor," he said.

Novacap senior partner David Lewin said he's pleased with Nuvei's IPO and wants its current strategy to stick around.

"What I hope for is just more of the same because we have so much opportunity ahead of us … if we just continue pushing," he said.

See:  Silicon Valley VCs Are Planning to Get Bankers Out of the IPO Business

Lewin is keeping a careful eye on the company because of the COVID-19 pandemic, which has accelerated the shift toward e-commerce and created a buzz around tech stocks.

The pandemic has seen Shopify Inc. overtake the country’s most valuable company, Royal Bank of Canada, on the TSX.

Montreal cloud technology business Lightspeed POS Inc. has also recently managed to raise US$305 million after trying its luck on the New York Stock Exchange.

As of Aug. 31, there were 211 technology companies listed on both TSX and TSX Venture Exchange with a combined market capitalization of $289 billion.

Original release:  here

NCFA Sign up for our newsletter - US Federal Reserve Actively Working on Digital Dollar

Global News Wire | Sep 29, 2020

esports and paymentsNuvei expands sports betting payment processing into Colorado

DENVER, Sept. 29, 2020 (GLOBE NEWSWIRE) -- Nuvei Corporation (“Nuvei” or the “Company”) (TSX: NVEI and NVEI.U), the global payment technology partner of thriving brands, announced today that it has received its sports betting vendor license from Colorado’s Division of Gaming. This permits the Company to process payments within the state’s boundaries on regulated sports betting sites and apps.

After winning approval to do business in the state of Indiana last month, Nuvei will now be able to offer its full-service payment solutions, including Cashier – its innovative and customizable pay-in and pay-out platform – to the iGaming and sports betting industries in Colorado. This approval is part of the Company’s ongoing strategic plan to support the growing U.S. sports betting industry.

Sports betting was legalized in Colorado as of May 1 of this year after approval by state voters in November 2019. Legal bets must be placed with authorized sportsbooks and operators.

Fintech Fridays Podcast EP27:

Blockchain Gaming and Esports with Shidan Gouran

What Attracts Investors to Blockchain Gaming?

 

Nuvei can now provide gaming operators and companies with seamless payment services for customers over the age of 21 who place legal wagers on games in the National Football League (NFL), Major League Baseball (MLB), the National Basketball Association (NBA), the National Hockey League (NHL), and any other professional and amateur sports betting transactions across the State.

“This approval will continue to fuel our expansion as we look to grow our iGaming footprint in the U.S.,” said Philip Fayer, Nuvei’s chairman and CEO. “We are extremely honored to be able to support Colorado gaming operators as they look to process their customers’ sports betting payments securely and with ease.”

The U.S. Supreme Court ended the federal ban on sports betting in May of 2018. Today, approximately 75 percent of all U.S. states have legalized sports wagering or are in the process of doing so.

Original release:  here

 

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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September 25, 2020   Enterprise, Scaleup, FinTech and Alternative Finance, Fintech International, Fintech Services, Fundraising, Investing, Trading, Innovation and Resources, Payments, Transfers, Rewards, Stories   No comments

Ant Plans $17.5 Billion Hong Kong IPO, No Cornerstones

Bloomberg | Lulu Yilun Chen | Sep 23, 2020

Ant IPO review

Jack Ma’s Ant Group Co. is seeking to raise $17.5 billion in its Hong Kong share sale and won’t seek to lock in cornerstone investors, confident there will be plenty of demand for one of the largest equity deals in the financial hub, according to people familiar with the matter.

The fintech giant has assessed investor interest, betting it can pull off the Hong Kong portion of the initial public offering without cornerstone investors that are often needed for large deals, according to the people. Ant is leaning toward inviting these big investors for the Shanghai sale to mitigate price fluctuations, the people said, asking not to be identified because the matter is private.

The Hangzhou-based firm is planning to issue new stock equal to about 11% to 15% of the shares outstanding and split the float evenly between Hong Kong and Shanghai, the people added. Ant is mulling what could be the world’s largest IPO, seeking to raise about $35 billion in the dual listing at a valuation of about $250 billion, people familiar have said.

See:  Exclusive: Ant Financial shifts focus from finance to tech services: sources

Plans are still under discussion and could change. Ant declined to comment in an emailed statement.

Cornerstone investors, more common in Hong Kong than in other markets, are usually large institutions that agree to hold the shares for about six months in exchange for a sizable allocation. While the investments boost confidence in the listing company, they’ve been criticized for draining liquidity from the market. Companies that chose to break with the tradition have been burned in the past, including Budweiser Brewing Co. APAC Ltd.

Ant currently has about 27 billion shares outstanding. It’s also planning to issue about 6% of its shares, on top of the new float, to help redeem stock for early C-round international investors that couldn’t invest directly in the onshore entity, according to its prospectus.

For Ant’s Shanghai sale, five companies have agreed to subscribe to the listing via new mutual funds, Ant said in a filing Tuesday. The funds will seek to raise $1.8 billion each, capping Ant’s shares to 10% of the underlying fund assets.

Ant group image

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MarketWatch | Emily Bary | Sep 24, 2020

Ant Group IPO: Five things to know about the Alibaba affiliate aiming for the largest offering in history

Chinese financial-technology juggernaut, known for its Alipay ‘ ubiquitous super app,’ handles payments, insurance, investments and more

Ant Group could be headed for the largest initial public offering in history, as the Chinese financial-technology juggernaut chases a valuation that would rival the biggest payments companies in the world.

See:  Exclusive: China’s Ant aims for $200 billion price tag in private share sales – sources

The Alibaba Group Holding Ltd.–affiliated company controlled by Jack Ma has filed paperwork to list its shares concurrently on the Hong Kong and Shanghai exchanges. Ant, which runs China’s immensely popular Alipay mobile wallet, is reportedly looking to rake in at least $35 billion through an offering that could value the company at $250 billion, according to Bloomberg.

That would make Ant’s offering larger than that of Saudi Aramco, which brought in more than $25 billion in the biggest IPO to date. A valuation of $250 billion would mean Ant is worth more than Bank of America Corp. BAC ($207 billion) and PayPal Holdings Inc. ($213 billion) but less than JPMorgan Chase & Co. ($287 billion), Mastercard Inc. ($336 billion) and Visa Inc. ($427 billion).

The company is best known for its mobile-payments offering, but it aims to be a one-stop financial hub that also provides access to wealth management, investing and insurance services. Analysts view the payments portion of the business as a gateway that brings users in to Ant’s more complex offerings.

Here are five things to know about Ant as it prepares for a public debut.

A sprawling financial empire

Unlike Western mobile wallets, Ant’s platform touches on nearly all aspects of one’s financial life. Ant goes beyond what PayPal and Apple Inc.’s.   Apple Pay do, offering services for everything from payments to credit to insurance to investments within Alipay, which the company calls a “ubiquitous super app.” Ant counts more than a billion annual active users for the Alipay app and 711 million monthly active users.

See:  Global News Radio Interview with Michelle Beyo: Alipay – Moving Money Between Countries

The Alipay app is “synonymous with digital payments in China,” Ant said in its filing. Bernstein analyst Kevin Kwek sees the payments component as a “hook product” for the company that may have limited profit potential but helps the company bring in new users who can then try out more lucrative services.

Tightly linked

Alibaba previously had a profit-sharing arrangement with Ant in which Alibaba received 37.5% of the company’s pretax profits, but Alibaba announced in early 2018 that it would be switching to an equity structure. Now, Alibaba has a 33% stake in Ant through its subsidiaries, a move that analysts thought would help the Chinese e-commerce giant benefit from a potential Ant IPO down the line.

Money machine

Ant generated RMB 120.6 billion ($17.7 billion) in revenue over the course of 2019, up from RMB 85.7 billion a year earlier. The company’s latest annual total consisted of RMB 51.9 billion in digital-payments revenue and RMB 41.9 billion in credit-technology revenue. Ant added RMB 8.9 billion in revenue from insurance technology and RMB 17 billion from investment technology.

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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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September 4, 2020   Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Stablecoins, Metaverse, NFTs, Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Fintech Services, Fundraising, Investing, Trading, Innovation and Resources, NCFA Blog, Payments, Transfers, Rewards   No comments

FFCON20 Week 8 Fintech Draft Finals: Congratulations to the Winners! SolidBlock and DivDot

FFCON20 Week 8 Pitch and Demo Winners_resize

FFCON20 Week 8 Wrap-Up: Fintech Draft

On August 27, the final week of FFCON20, a total of 8 pitching and demo finalists competed with each other to win the title of 2020 Fintech Draft champion.  Each presenting company delivered a short pitch (max 7mins) followed by answering 5mins of Q&A from prominent investor judges and a crowdvote.  Learn more about the finalists here: https://fintechandfunding.com/fintech-draft-finalists/

Pitching Competition Finalists:             

  • WALO App
  • Trust Anchor Group
  • Sneso.ai
  • SolidBlock
  • FundMore.ai

Demo Competition Finalists:

  • Corl Financial Technologies Inc
  • DivDot
  • CycleBit

 

Congratulations to the Pitching Competition Winner!  SolidBlock

About SolidBlock

While most other markets have been digitized through modern technological platforms, the real estate market is undergoing a massive transformation. Currently, it lacks the advantage of liquidity and remained tedious, complex, slow-moving and costly. SolidBlock aims to build a new asset class based on real estate, combining the stability of the property market growth and efficiency of blockchain-based financial products.

SolidBlock offers a new platform that allows anybody to invest and benefit in the asset class of real estate and to enable them to protect and grow their wealth. As mentioned in her pitch for SolidBlock, CMO and Co-Founder Yael Tamar believes:

"A big part of why real estate is largely inaccessible to most people is that the field is closed by design.  The nature of the investments are highly illiquid and intensive capital is required that individuals don’t have."

SolidBlock enables investors to buy and sell any property at any time anywhere and aims to function like a NASDAQ for real estate.

Their ideal scenario is to transform real estate into a tradeable financial product that gives asset owners and investors opportunities through a securitized token offering platform. The SolidBlock platform is fully operational with deals worth over $100 million and extensive pipeline of over $1 billion worth of projects. By using blockchain technology and global network, they've been able to offer a model that lowers capital requirement, attain global reach, and facilitate tradeability and liquidity.

On taxation from transactions, SolidBlock mentions that it is very similar to that of other financial products in which participating investors should expect a similar amount of taxation as typical financial portfolios in real estate. Taxation through the sale of real estate assets would most likely be categorized as capital gains tax, while receiving a dividend on an asset class would most likely be categorized as income tax.

SolidBlock differentiates themselves from competitors by focusing on providing financial solutions and a bridge into the world of DeFi. SolidBlock believes that now is the time to invest in tokenization with blockchain-based securitization providing infrastructure for trade as well as increased demand for liquid products as a result of COVID-19.

Congratulations to the Demo Competition Winner!  DivDot

About DivDot

Despite a clear transition in the North American payments environment towards electronic payments in the consumer realm, businesses are still heavily reliant on manual, paper-based processes. DivDot is a payment platform that aims to aid in the transition that enables businesses to send and receive no limit payments for a flat fee. It simplifies and automates businesses’ entire payment cycle from payment initiation to reconciliation.

DivDot CEO and Co-Founder Matthew Smith provided data showing that 668 million cheques were processed in Canada and 14.5 billion were processed in the US for 2018, which he believes is crazy in today’s modern digital age. The aim of DivDot is to help digitize business payments by providing a software to power a business’s payment operations. Users would be able to send payment to suppliers, receive payments from customers, move money between accountants, and set-up recurring payments.

The DivDot product demo showed how a transaction would work, both for walking through how a customer would send their payment to a business on the platform as well as how a business would pay suppliers. Both of these functions take place in a very straightforward and efficient process. The goal is to provide a simple and secure payment network for businesses to exchange funds while integrating with a large array of financial institutions to draw funds from.

Smith mentions that 70% of businesses today still use checks, partly due to a focus on how accounts want to solve problems rather than the businesses themselves.

Taking feedback from business owners, DivDot believes that business owners have different ideas and want to get paid efficiently and as soon as possible. DivDot is the perfect alternative for its target audience’s needs.

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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September 4, 2020   Digital, NEO, Open Banking, Open Finance, FinTech and Alternative Finance, Fintech International, Fintech Services, Innovation and Resources, Payments, Transfers, Rewards   No comments

UK government open banking tender puts focus on payments

Global Government Forum | Ian Hall | Sep 3, 2020

HMRC open banking tenderThe UK’s journey towards implementing open banking to deliver citizen services has taken a significant step forward with the opening of what is believed to be the country’s first government tender specifically for open banking.

In a move that will be greeted by open banking’s advocates as a breakthrough statement of intent, HM Revenue & Customs (HMRC) is running a £3m (US$3.92m) tender for ‘Payment Initiation and Account Information Services’.

HMRC has been working alongside the Open Banking Implementation Entity (OBIE) – a company set up by non-ministerial government department the Competition and Markets Authority (CMA), and  funded by the UK’s nine largest banks and building societies – on devising the procurement exercise.

The technology behind open banking, application programming interfaces (APIs), enables bank account holders to share information with third parties.

See:  Open Banking – North American Style

HMRC’s tender focuses on ‘Payment Initiation Services’ (PIS), which – its proponents believe – should mean a simpler and more secure payment process for citizens who wish to pay HMRC via bank transfer.

The aim is that citizens making payments will not need to manually input as many details as would have been required through traditional methods. For example, there would be no need to enter details such as a reference number, payment amount and card number when paying a bill. Instead, customers would need to check and authorise a ‘pre-populated’ payment. Any increased use of bank transfer over card payments should mean cost savings for government.

Aiming to reduce payment costs

“Currently, our bank transfer journey is non-automated which can result in a high volume of customer errors that are resource-intensive to rectify,” according to technical details that relate to the HMRC tender notice. “By providing an innovative, well-designed journey that can be populated with our numerous reference formats and HMRC bank accounts, with little effort from our customers, we believe we can encourage card-payers to move to this more cost-effective method and subsequently reduce our payment associated costs significantly.”

The technical note also demands that the appointed service provider needs to be able to cope with HMRC workflow peaks “throughout the year” and “increased volumes during the contract period”.

FFCON20 Video:  Transformation of Digital Banking to Open Finance

The tender also includes ‘Account Information Services’ (AIS), which enable third parties to access customers’ transactional data to deliver tailored financial services. Use cases for AIS in HMRC are understood to be in the development stage but HMRC included AIS in the tender to avoid the cost of a further procurement.

The HMRC contract would start in February 2021 and run initially for two years.

Cross-government exploration

Open banking, which aims to boost competition and promote transparency and innovation in financial services, is being explored – albeit cautiously – by a growing number of governments worldwide. Though examples of it being used by governments remain limited, it is seen to have significant potential in public service delivery.

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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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September 2, 2020   Enterprise, Scaleup, FinTech and Alternative Finance, Fintech International, Fintech Services, Payments, Transfers, Rewards, Research, Stories   No comments

New correspondent banking data – the decline continues at a slower pace*

BIS | CPMI publication | Aug 31, 2020

global digital world

  • The number of active correspondent banks worldwide fell by about 3% in 2019 and about 22% between 2011 and 2019.

  • The volume and value of cross-border payments continued to grow over the last eight years, suggesting a higher concentration in payment flows.

Cross-border payments are vital for economic growth, international trade, global development and financial inclusion. Yet they are generally slower, more expensive, less transparent and less accessible than domestic payments. These long-standing issues have been thrown into sharp relief by improvements in domestic payments and by developers of proposals for new payment arrangements. The G20 has made enhancing cross-border payments a priority during the 2020 Saudi Arabian Presidency and has asked the Financial Stability Board (FSB) to coordinate the development of a roadmap to tackle the system's multidimensional problems. To address these issues, in response to a remit from the G20, the Committee on Payments and Market Infrastructures (CPMI) has developed the building blocks of a global roadmap with the aim of making durable improvements in cross-border payments.

Corresponding banking relationships declining

Correspondent banking is a crucial part of any solution that enhances cross-border payments. To settle cross-border payments, most payment service providers rely on the so-called correspondent banking network - a network that is shrinking and becoming more concentrated. Thus, monitoring these trends is of first-order importance for the international community.

See: 

Google and Gates Foundation to help spread digital payments in developing countries

BNY Mellon Report: Global Payments 2020: Transformation and Convergence

How payments can adjust to the coronavirus pandemic—and help the world adapt

Bank of Canada Speech: Money and Payments in the Digital Age

 

To help do so, the CPMI will, for the next three years, publish an annual quantitative review based on payment message data that SWIFT has agreed to provide. The review includes (i) this commentary, highlighting key trends; (ii) a chartpack; and (iii) the underlying data. It builds on similar analyses by the CPMI and FSB.

2019 CPMI quantitative review of correspondent banking data

The 2019 data confirm that correspondent banking relationships continue to contract in number. Despite the worldwide decline, they continue to play a pivotal role for cross-border payments. The statistics cover monthly payment message data for more than 200 countries and jurisdictions from 2011 to 2019. The data set lays out a network of bilateral relationships (either bank-to-bank or country-to-country). From these payment messages, the following measures can be calculated: (i) a cross-border payment message from one country to another identifies a corridor; (ii) a cross-border payment message from one bank to another identifies a correspondent banking relationship; and (iii) the count of active correspondents measures, corridor by corridor, the number of banks abroad that have received messages sent by banks in a given country.

Continue to the full article --> here

 

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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August 19, 2020   FinTech and Alternative Finance, NCFA Blog, NCFA In The News, Payments, Transfers, Rewards, Podcasts, Voices   No comments

Global News Radio Interview with Michelle Beyo: Alipay – Moving Money Between Countries

NCFA Canada | Michele Beyo | Aug 19, 2020

Michele Beyo interview on the Shift – Alipay Moving Money Between Countries

Checkout NCFA Advisor - Payments, Michelle Beyo's interview on Global News Radio

 

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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