Transformational payments solutions: Walmart has filed for a cryptocurrency patent. Unlike Facebook’s Libra coin, Walmart’s coin will be pegged to the U.S dollar and will resemble a stored value. Walmart anticipates that this coin will initially have limited acceptance. As adoption grows for Walmart, its interchange fees could decline by using the coin as a substitute for card transactions, with additional benefits for cross-border payments.
Regulatory landscape:The European Union’s Strong Customer Authentication (SCA) requirement which was scheduled to go live on 14 September 2019 has now been delayed. The European Banking Authority (EBA) in June 2019 allowed national regulators to offer extensions for SCA enforcement to select banks and payment providers. Based on this guidance, several regulators are now planning to facilitate a phase-wise implementation over the next several months for their respective markets. While this is likely to benefit merchants, payments providers and banks by allowing for more time to prepare, it may also lead to a fragmented implementation by virtue of timing differences across markets.
Customers’ evolving expectations:According to a survey conducted by PaymentSense and YouGov, 11% of Londoners indicated a willingness to implant a microchip on themselves to further speed up contactless payments. Additionally, over 25% of them were open to using fingerprints for payments authentication. These evolving preferences may be an outcome of contactless payments gaining further traction in the UK, growing by 31% to 7.4 BN transactions in 2018.
Data:Visa is launching a suite of new technologies to better manage payment fraud. One of the new capabilities called Visa Account Attack Intelligence will apply deep learning to Visa's card-not-present transactions data to unlock new insights. Visa expects this to help identify financial institutions and merchants that hackers may be using to guess sensitive account information through automated testing. The machine learning technology is designed to alert impacted merchants and financial institutions before the fraudulent activity occurs.
New providers:Apple, in partnership with Goldman Sachs, debuted its first credit card. The credit card offers 1% cash back for payments made through the physical credit card and 2% cash back for payments made through Apple Pay. Apple anticipates that this will further drive Apple Pay adoption as customers may look to maximize rewards. Apple leverages tokenization to authenticate physical card transactions, without revealing PAN information to the merchant. The credit card number associated with the card is also semi-permanent. In case the credit card number gets lost or stolen, customers can seamlessly generate a new number with a few clicks in the Apple wallet. The card also offers some functionalities that resemble other payments products such as debit and P2P payments (e.g., cash rewards are credited almost immediately and are available to use for online purchases using the wallet or to pay friends).
- Travel technology firm Amadeus and Visa’s CyberSource have joined forces to tackle fraud in the travel industry. The partnership will combine CyberSource’s payment, authentication and fraud management capabilities with Amadeus’ travel industry expertise. The partnership originated as a result of the EU’s PSD2 and Regulatory Technical Standards Requirement called “Strong Customer Authentication” (SCA). Amadeus will enable businesses to become SCA ready by ensuring that travel merchants and banks can enhance risk controls through better data management.
- Mastercard announced that it will acquire the Corporate Services businesses of Nets, a payments platform focused on the Nordics, for ~$3.2 BN. The acquisition covers the electronic billing and instant clearing and payment services offerings of Nets. This partnership furthers Mastercard’s strategy to move beyond cards and deepen its capabilities in account-to-account transfers, by complementing its existing offerings such as Vocalink, Send and Transfast.
- In response to customers’ needs for an easier and enhanced checkout experience, 7-Eleven has launched a mobile self-checkout payment option for its stores in New York. Customers will need to update or download the latest version of the 7-Eleven app, scan the product barcodes to add items to their basket, and then checkout through the app. After the payment is complete, customers will be provided with a QR code that they can scan at the confirmation station before exiting the store. A tone will alert the cashiers that the customer has completed the payment through the app.
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