Transformational payments solutions:IBM has launched a blockchain-based financial rail which provides simultaneous settlement and clearing for near-real-time cross-border payments. The new payments system bridges two fiat currencies by deploying digital assets, including central bank digital currencies and stores the transaction data on an immutable blockchain for clearing. IBM expects this process to substitute the banking intermediaries, thereby reducing cost and complexity for both consumers and merchants.
Regulatory landscape:Visa and Mastercard have committed to cut the average interchange rate in Canada by 10 basis points to 1.4% on Canadian credit cards, effective 2020 for a period of five years. American Express, while not participating in the rate cut since its fee structure is different from the typical interchange model, has also made a commitment to support the Canadian Government’s objectives of “greater fairness and transparency” in the credit card market. Canada’s Department of Finance expects that these commitments will make card acceptance easier for small and medium-sized businesses which have less negotiating power for lowering rates.
Customers’ evolving expectations:A growing number of consumers are testing biometric payments although security concerns still remain, a survey by Transaction Network Services (TNS) reveals. A recent survey of consumers in the U.S., U.K., and Australia shows that ~15% of consumers overall and ~25% of consumers aged between 18 and 24 years have made at least one biometric payment in the past year. 68% believe that biometric payments will become more commonplace over the next 2 to 5 years. However, 61% of respondents still expressed concerns about sharing their fingerprints and other biometric information with companies.
Source: Transaction Network Services
Data:Global fraud attacks via mobile devices and bots have risen sharply in the first half of 2018, according to the Q2 Cybercrime Report by ThreatMetrix, a LexisNexis Risk Solutions Company. Mobile attacks have increased by 24% globally compared to the same period last year to reach 150 million. The increase in attacks was particularly steep in the U.S. at 44% year-over-year. Bot attacks worldwide totaled 2.6 billion in the first six months of 2018. The report noted that large retailers are the main targets of bot attacks which attempt to infiltrate good user accounts and pilfer personal data and saved credit card information.
New providers:Mastercard has introduced Mastercard Track, a digital B2B platform to streamline global trade using cloud computing. The platform, powered by Microsoft Azure cloud service, provides Track Trade Directory, a central repository of company records and other data feeds. It currently represents approximately 150 million company registrations globally from the partnerships with nine B2B networks and procure-to-pay solution providers, and also integrates roughly 4,500 compliance lists. Suppliers and buyers can maintain, retrieve, and exchange key information about themselves and their trading partners on the cloud, which would simplify the process across supplier discovery, vetting, onboarding, and payment management.
- Google and Mastercard have reportedly entered into a partnership that gives select Google advertisers access to Mastercard purchase data to be able to track whether an online ad resulted in an in-store purchase
After announcing the “Store Sales Measurement” service last May, Google has been testing the ads tool with certain U.S. retailers, which can link online ads to actual store purchases by anonymously matching existing user profiles who click the search or shopping ads to in-store transactions
Google provides near real-time reporting to advertisers once the relevant offline transaction is made with Mastercard, if the user is logged into a Google account and made the purchase within 30 days of clicking the ad
While this raises potential privacy concerns, Google has clarified that their newly built double-blind encryption technology ensures that neither Google nor its partners have access to personally identifiable information
Starbucks announced its participation in the formation of a new cryptocurrency platform – Bakkt – led by Intercontinental Exchange (ICE), which aims to help cryptocurrency holders spend their digital assets
Starbucks is partnering with ICE, a leading operator of global exchanges and clearing houses, and Microsoft to form a new company which would use Microsoft cloud solutions to create a global digital asset ecosystem where consumers and merchants can buy, sell, store, and spend digital assets
Starbucks plans to leverage its position as a large retailer and a leading mobile payments provider to develop applications that expand payment options for customers
The platform’s first use case is expected to be bitcoin-to-fiat currency conversion and trading, with a test launch planned in November 2018
- In a bid to adapt shopping experiences to attract millennial shoppers, Costco, one of the largest warehouse retailers in the U.S., began accepting mobile wallets including Apple Pay, Google Pay, and Samsung Pay
Costco has rolled out mobile wallets across its 520-odd U.S. locations and is also planning to expand the support to gas stations; however, non-Visa credit cards will still not be accepted due to their exclusive acceptance deal with Citigroup and Visa
- Dunkin’ Donuts (DD) has enabled voice-ordering via Alexa, with ordering and payments taking place within the mobile platform
- ~8 MM members of the DD Perks Rewards program can now link their DD Perks account and Amazon account in the Alexa app, Amazon’s voice-activated virtual assistant, and place a mobile order on Alexa-enabled devices by simply saying “Alexa, order from Dunkin’ Donuts”
- Guests can either provide a desired store location and pick-up time after submitting the order or order directly based on their favorite options stored within the Dunkin’ mobile app
Source: Dunkin' Donuts
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