Merchant Payments Digest - 32nd Edition

The Merchant Payments Digest is a regular update from Oliver Wyman to keep merchants apprised of developments in the rapidly shifting payments space.


Transformational payments solutions:

Galileo is partnering with Mastercard to launch Galileo Instant Issuing, which will allow FinTechs, eCommerce marketplaces and merchants with gig employees, among others, to quickly open bank accounts and issue debit cards. By reducing the cost of entry and time to market, the new platform hopes to expand the sizes and types of organizations that can seamlessly offer digital payments. Some of the targeted use cases include instant payments for employees and seamless purchases using virtual cards for customers.

Source: PR Newswire


Rules and regulations:

Apple, Google and other tech companies that operate in the payments and financial services industry should operate under a similar regulatory framework as banks, according to Germany’s Deputy Finance Minister Joerg Kukies. As part of anti-money laundering legislation scheduled to go into effect in early 2020, a German parliamentary committee voted to approve a law forcing tech companies to open up their payment services infrastructure to other providers such as banks. Regulators hope that levelling the playing field in terms of regulatory requirements will lead to fair innovation opportunities for both bank incumbents and tech giants operating in the payments space, while also ensuring the safety of consumers via appropriate know your customer (KYC), anti-money laundering (AML), and other relevant regulations.

Source: Markets Insider


Customers’ evolving expectations:

PayPal and Venmo plan to launch in-store mobile payments in 2020, utilizing NFC and QR code technology. These new payment capabilities may include features such as using rewards points at the POS, splitting a purchase between payment methods, and mobile pre-ordering. Both PayPal and Venmo currently have limited in-store payments capabilities and expect the move to boost their volume of consumer payments, while staying relevant to consumers’ payment habits across both online and physical channels. In-store payments is also expected to help Venmo bring in additional revenue by adding a fee-for-service component to these new capabilities.

Source: Business Insider


Data:PayPal plans to acquire Honey, a rewards platform for $4 BN. This marks PayPal’s largest acquisition to date. Following the acquisition, PayPal will be able to integrate Honey’s data on shoppers with its network of merchant accounts, allowing PayPal’s merchants to target consumers in a more personalized and efficient manner.

Source: Fortune


New providers:

Facebook launched Facebook Pay, a new payment method for all of its applications, including Facebook, Messenger, Instagram, and WhatsApp. By entering their payments credentials once, customers can then use Facebook Pay to make payments and purchases across all four Facebook applications. The new system is part of Facebook’s effort to tie its social media applications together. Facebook Pay will immediately begin rolling out on Facebook and Messenger in the US, with Instagram and WhatsApp to follow in the coming months. In the initial roll out, users will be able to use Facebook Pay for fundraisers, in-game purchases, event tickets, person-to-person payments on Messenger, and purchases at certain merchants on Facebook Marketplace.

Source: CNN, Facebook


  • Alipay and WeChat Pay are planning to open their platforms to international travelers visiting mainland China by partnering with banks and card networks. Alipay plans to partner with Bank of Shanghai, allowing customers to use a prepaid card service provided by Bank of Shanghai, which they will have to periodically refill. In contrast, WeChat Pay plans to partner with Visa to allow users to connect their existing cards to the app. With this partnership, visitors will be able to use their Visa card everywhere WeChat Pay is accepted, rather than relying on cash. In addition to Visa, WeChat Pay’s parent company, Tencent, has been discussing potential partnerships with Mastercard, American Express, Discover, and JCB.

    Source: Bloomberg

  • Elavon, a subsidiary of US Bank, announced plans to acquire Sage Pay, a payment processor in the UK and Ireland for £232 million ($300 million). The acquisition will expand Elavon’s market presence in the UK and Ireland, where Sage Pay is already an established payments gateway. The acquisition will help Sage compete with larger competitors, such as Stripe, Adyen, and PayPal.

    Source: TechCrunch, Business Wire



  • Uber announced the formation of a new division called Uber Money to house its digital wallet and debit and credit card capabilities. The initial effort will be focused on providing its over 4 million drivers with a mobile bank account which they can use to receive payment immediately following each ride. In addition to the initial real-time earnings feature, Uber plans to release the Uber Debit Card to eligible drivers in the U.S., which can then be used to operate the Uber Debit Account. These debit platforms will be integrated into the Uber Driver App and will provide drivers with cash back on gas. On top of these offerings, Uber also plans to launch Uber Wallet, which will allow drivers and users to track their earnings and spending history, manage their money, and learn about new Uber financial products. Under the Uber Money umbrella, Uber also plans to relaunch its Uber Credit Card, which will now offer users 5% back in Uber Cash from spending across all Uber platforms.

    Source: CNBC, Uber

  • Google plans to launch a checking-account service with initial partners Citigroup and Stanford Federal Credit Union. Beginning early next year, customers will be able to access their bank accounts at these two financial institutions through the Google Pay app. The partnership with Google will allow customers of these financial institutions to use Google’s insights and budgeting tools. In conjunction with existing payments capabilities, including P2P payments and online and in-store checkout, the new capability will allow users to receive their paychecks and perform related transactions within the Google ecosystem. This move is in line with other merchants looking to expand into the payments and financial services realm to drive value.

    Source: Bloomberg, Business Insider

Oliver Wyman is a global leader in management consulting with offices in 60 cities across 29 countries. Our Payments practice works with constituents across the payments value chain to deliver insights with real impact, combining deep industry expertise with powerful consulting capabilities.

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Note that Oliver Wyman believes the curated content to be reliable, but it has not been verified.  As such, Oliver Wyman gives no warranty as to the accuracy of such information.  Oliver Wyman’s curation of such content should not be interpreted as an endorsement of the organizations that published the content.