Every Monday we will highlight tasty 'bites' covering topics/trends across the payments industry. Click the social icons above to follow along for quick-hits!
The hype train for buy now, pay later (BNPL) continues to pick up steam as consumers seek shopping alternatives during the pandemic - could this emerging payment option be a credit card killer?
While flexible payments are something that all generations can get behind, younger consumers in particular are drawn toward simple payment processes and behavioral shifts away from traditional credit cards.
As a way to better understand usage, experiences, and trust surrounding BNPL, TSG surveyed over 1,500 U.S. consumers in February. Check out some highlights and download the infographic to understand why consumers are choosing BNPL.
Square, Inc., the financial services company founded by Twitter CEO Jack Dorsey, is acquiring a majority stake in Tidal, the high-fidelity audio and video streaming service led by Jay-Z. Square is paying $297 million in cash and stock for a “significant majority ownership stake” and says Tidal will operate independently alongside Square’s other ventures. Asking the obvious question in a thread on Twitter, Dorsey said: “Why would a music streaming company and a financial services company join forces?!” His answer: to find “new ways for artists to support their work.”
Square, the financial payments firm run by Jack Dorsey, launched an in-house bank that it says will allow it to "operate more nimbly" in an increasingly crowded fintech market. The firm announced Monday that the bank has begun operations after completing the charter approval process with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions. It will operate as an independently governed subsidiary of Square Inc (SQ). The Salt Lake City, Utah-based Square Financial Services will provide business loans and deposit products to sellers who use its card reader and other point-of-sale services.
Cash purchases fell to historic lows in 2020 as consumers shifted their payment preferences to contactless technologies such as mobile wallets, according to the 2021 Global Payments Report by Worldpay from FIS Inc. Cash transactions represented just 20.5% of global point-of-sale volume in 2020, down from 30.2% 2019, according to the FIS report. In North America, cash transactions totaled 11.4% of transactions at the point of sale in 2020, down from 14.6% in 2019. The decline in the use of cash is expected to continue. By 2024, cash transactions at the point-of-sale in North America are expected total just 8.7%, according to the report.
A person who's in the park walking a dog probably isn't only walking a dog. That person is planning their day, checking finances and checking out sales. It's important for merchants to recognize that even when shopping, consumers are multitasking, and the checkout experience must be accessible to a shopper whose attention is divided. "Someone may be ordering a pizza or shopping on Amazon while they're out," said Bradley Riss, chief commercial officer at Checkout.com, a London-based firm that acts as a payment gateway, acquirer and processor. "And they could be doing all of these things using an [internet of things] device."
Card issuing and processing platform Marqeta is on a mission to make it easy for businesses of all sizes to roll out cards simply and quickly. The company has made a name for itself helping large tech companies, including DoorDash, Uber and Instacart build debit card capabilities. And last month, it rolled out plans to expand into credit cards. It is also finding a client base among incumbent banks: In January, the company announced a tie-up with Goldman Sachs to issue debit cards for the soon-to-launch Marcus checking account offering, embedding such capabilities as real-time access to spending data.
May require account to read. Technology giants Facebook Inc., Amazon.com Inc. and Google and credit-card providers Visa Inc. and Mastercard Inc. are among those vying for unprecedented access to India’s burgeoning digital retail payments market. The companies are part of four consortia preparing to apply for licenses to operate retail payments and settlement systems in the country, people familiar with the matter said. More companies could band together before a March 31 application deadline.
Klarna, the Swedish buy now, pay later behemoth and upstart bank, has raised $1 billion in new funding at a post-money valuation of $31 billion. That sees the company retain the crown as the highest-valued private fintech in Europe. Backers of this round are said to be a combination of new and existing investors, while Klarna claims it was four times oversubscribed. That’s likely prompted by reports the company is eyeing up a direct public listing and the current appetite for public tech stocks in general.
The digital wallet that allows contactless payment is rapidly becoming the payment method of choice thanks to its greater convenience. No self-respecting Millennial or GenZ consumer would be without one. But it’s not just younger consumers. Everybody is leaning into the contactless payment lifestyle due to pandemic-induced heighten awareness of touching dirty surfaces. For years, germaphobes have known how dirty money is but a recent study found the average credit card is dirtier than the urinal handle in the Penn Station bathroom.
Samsung is collaborating with Mastercard on a biometric scanning payment card with a built-in fingerprint reader, Samsung has announced. The technology appears to be similar to Mastercard's biometric payment cards unveiled in 2017 that let you authenticate purchases with without ever touching a keypad. However, Samsung said the cards "will adopt a new security chipset from Samsung’s System LSI Business that integrates several key discrete chips," rather than using Mastercard's current tech. The aim is to increase security while reducing physical contact points, as your fingerprint is scanned directly from your own card and not an external point-of-sale (POS) device.
In another sign that dogecoin may be moving beyond its roots as a meme token, the Dallas Mavericks are set to begin accepting the cryptocurrency as payment for tickets and merchandise. Owner Mark Cuban told DealBook Thursday that he and his basketball team decided on this, "because we can!" The billionaire entrepreneur added: "Sometimes in business, you have to do things that are fun." This isn't the first time the team is accepting cryptocurrency as payment. In May 2019, the team began accepting bitcoin "to offer the Dallas Mavs' global fans a seamless experience to purchase merchandise.
Twitter confirmed it’s testing a new way to display tweets that link out to e-commerce product pages — like products on a Shopify store, for example. With a new Twitter card format, the company is experimenting with tweets that include a big “Shop” button and integrate product details directly into the tweet itself, including the product name, shop name and product pricing. The experiment was spotted by social media consultant Matt Navarra who tweeted out screenshots of the new experience. The original poster, based in Qatar, had seen the experiment on an Android device, he tells TechCrunch.
Codat, the API-based platform for business data, has received strategic investments from PayPal Ventures and AmEx Ventures. The FS giants join a Series A round that was led by Index Ventures last year for London-based Codat, which is now set to target the US market. Codat uses a single API to directly ‘plug in’ to the software used by small businesses - allowing banks, fintechs and other FS players to access everything from the company’s accounting software to payment terminals recording real-time transactions.
Amazon launched its first checkout-free store in Britain Thursday. Called Amazon Fresh, the store is located in Ealing, London, and will let customers walk in, pick up what they want and walk out again without having to pay at a cash register. The items appear on a virtual receipt linked to customers’ Amazon accounts moments later.
Following a victory in CardX, LLC v. Derek Schmidt, Chicago-based payments technology company CardX announced that they are now serving businesses in Kansas. With this result, Kansas becomes the 47th state open to CardX's surcharging model, following Oklahoma, California, and Florida as other recent states to overturn legacy "no surcharge" laws. "The result in Kansas comes at a key moment for the payments industry," said CardX CEO and Harvard Law graduate Jonathan Razi.
May require account to read. Jack Ma’s Ant Group has undercut, undermined and insulted China’s big state-owned banks for years. Regulators have now turned the tables on the financial technology group after forcing the company to pull its record $37bn initial public offering in November. Beijing is targeting the symbiotic relationship that has transformed China’s financial system by matching loans from small regional banks with 500m borrowers via Ant’s Alipay app, the country’s biggest payments platform.
Feedzai, the world’s leading cloud-based risk management platform, has announced its Financial Crime Report Q1, 2021. Feedzai’s data from financial transactions across the world shows a stark difference in consumer behavior and financial crime in the Asia-Pacific (APAC) region as compared to Europe (EU) and North America (NA). A clear image appears - a hyper-digital world where east and west are in different recovery stages, reflecting different regional financial crime trends.
The U.S. economy added back the most jobs in four months in February, as easing COVID-19 case counts and a ramping vaccine rollout allowed distancing restrictions to begin to moderate. The unemployment rate also unexpectedly improved during the month. The February jobs report also included a notable upward revision to payrolls gains in January, but a downward revision to losses in December. January's payroll gain was revised to 166,000, up from the tepid rise of 49,000 previously reported. However, December's payroll losses – the first since April — were revised to 306,000, from the drop of 227,000 reported earlier.
The U.S. economic recovery continued at a modest pace over the first weeks of this year, with businesses optimistic about the months to come and demand for housing “robust,” but the job market showing only slow improvement, the Federal Reserve reported on Wednesday. “Economic activity expanded modestly from January to mid-February for most” of the Fed’s 12 regional districts, the U.S. central bank said in its latest “Beige Book” compendium of anecdotes about the economy. “Most businesses remain optimistic regarding the next 6-12 months as COVID-19 vaccines become more widely distributed.”
Federal Reserve Chairman Jerome Powell said Thursday that he expects some inflationary pressures in the time ahead but they likely won’t be enough to spur the central bank to hike interest rates. “We expect that as the economy reopens and hopefully picks up, we will see inflation move up through base effects,” Powell said during a Wall Street Journal conference. “That could create some upward pressure on prices.” Markets reacted negatively to Powell’s comments, with stocks sliding and Treasury yields jumping.
Shift4 Payments, a leading provider of integrated payment processing solutions, announced the acquisition of VenueNext, a leader in next-generation mobile commerce, point-of-sale, and loyalty solutions for venues. This acquisition enhances Shift4’s presence and capabilities in a number of large and growing verticals such as stadiums and arenas, while significantly expanding the company’s total addressable market with entry into entertainment, universities, theme parks, airports, and other verticals.
Mastercard completed its acquisition of the majority of the Corporate Services business of Nets, a leading European PayTech company, having met the conditions set out by the European Commission in its approval in August 2020. The additions to Mastercard will support a broader set of account-to-account capabilities, including clearing and settlement instant payment infrastructure, bill payment and E-invoicing applications. “Today is a significant milestone as we continue to build out our multi-rail payment solutions beyond cards,” said Paul Stoddart, president of New Payment Platforms, Mastercard.
Atlassian, a leading provider of team collaboration and productivity software, is partnering with Stripe to simplify and scale its global payments and billing systems for its $1.6 billion in software revenue. Since 2015, Atlassian has acquired several companies to expand its suite of offerings to plan projects, resolve incidents and deploy products. But while Atlassian wanted to build their own billing solution to create a unified purchasing experience across all of their products, they hit a common stumbling block: the project would require allocating engineering resources away from Atlassian’s core products.
Atlanta digital advertising platform Cardlytics said it plans to buy a cash-back platform to expand its technological capabilities, according to a March 1 release. Cardlytics is set to acquire Dosh for $275 million in cash and stock. Dosh, an Austin-based startup founded in 2016, allows people to link their payment information into the Dosh app in order to get automatic cash back at partnering companies. This year, Dosh added capabilities to work with neo-banks and financial technology companies, such as Venmo or Betterment.
India-based Paytm said it reached 1.2 billion monthly transactions in February as eCommerce continued its boom in that country. India’s Economic Times reported that Paytm is also joining up with Ola and private lender IndusInd Bank to seek a new umbrella entity (NUE) license from the Reserve Bank of India and set up its own national payment network. The company said the volume of transactions was consistent with January, but did not disclose that month’s numbers. Paytm takes credit for processing digital payments across 500,000 villages and providing training to more than 2 million merchants.
Paysafe, a leading integrated payments platform, announced its expanded partnership with RentMoola, the North American online rent payment platform. Building on its long-standing payment processing partnership with Paysafe, RentMoola has now added the company’s Paysafecash™ eCash alternative payment method to better serve U.S. tenants whose payment preference is cash. Paysafecash™ will allow the RentMoola platform, which has leveraged Paysafe’s payment gateway to process card payments since 2012, to cater to the significant proportion of renters favoring cash.
Payment Alliance International, the U.S. leader in ATM portfolio management tools and services, announced that it is changing its brand to PAI and revitalizing the company’s visual brand identity. The change showcases the company’s leadership in the ATM industry. Along with the new brand and logo, PAI launched an updated corporate website focused on technology to aid and simplify the process of managing ATMs. “We are a different company than we were two years ago — bolder in our thinking, more disruptive in our actions, and more contemporary in our approach to running a business,” said David Dove, CEO of PAI.
Visa announced more than 100 partners across Europe have joined the Where You Shop Matters initiative to help small business owners build digital capabilities and continue serving their communities. More than two million small firms across Europe have received support since the launch of the program in summer 2020. The announcement marks a major milestone in Visa’s commitment to help eight million small and medium sized businesses (SMBs) in Europe – and 50 million globally - to get online, adapt and future proof their business.
ACI Worldwide, a leading global provider of real-time digital payment software and solutions, today announced that the Internal Revenue Service (IRS) will allow taxpayers to make cash transactions through a new digital barcode feature using ACI Payments, Inc. Once taxpayers are validated by the IRS, they can obtain a barcode – made possible through ACI and InComm Payments’ VanillaDirect Pay. Taxpayers can then take the barcode payment token to over 60,000 participating retail agents (including Dollar General and Family Dollar stores) with the appropriate amount of cash to cover their tax debt and any associated service fees.
IRIS CRM announced a new integration with USAePay by NMI to streamline gateway merchant onboarding. USAePay by NMI is a popular merchant gateway provider that has been in business since 1998. The company’s solutions include Mobile, Ecommerce, Retail, MOTO, Vertical Market, and Merchant Console, and USAePay supports all major credit card platforms and shopping carts. IRIS CRM’s direct boarding to USAePay provides ISOs and ISVs onboarding merchants to USAePay with unparalleled convenience and accuracy.
Toast, the fastest-growing restaurant management platform, announced the appointment of Anisha Vaswani to the newly created position of Chief Information Officer, effective immediately. Reporting directly to Aman Narang, president and co-founder of Toast, Vaswani will be tasked with leading Toast’s information technology organization and will be responsible for supporting Toast’s operations through the delivery of innovative technology capabilities, systems, and tools that align with Toast’s corporate strategy.
PPRO – the leading provider of local payments infrastructure – has launched its integration of popular European mobile payment method Satispay and rounded out its coverage of the Italian market. The news comes just weeks after PPRO announced new funding and a milestone valuation of US $1 billion. The integration of Satispay solidifies PPRO’s payments portfolio in Italy as one of the most comprehensive in the industry.
The OLB Group, Inc., a provider of cloud-based omnicommerce and payment acceptance solutions for small and mid-size merchants, announced its SecurePay payment gateway is now optimized to support the processing of cryptocurrency purchases and settlement of merchant funds. This speeds all aspects of the transaction process, keeping crypto payments on par with credit and debit processes.
PNC Bank has joined the CHIPS network from The Clearing House to clear and settle high-value and cross-border payments. PNC Bank, one of the largest diversified financial services institutions in the United States, will now send payments via CHIPS, taking advantage of the CHIPS unique settlement algorithm, which helps clear a high percentage of volume earlier in the day. This not only reduces operational risk for PNC and for the payment system, it also enhances the customer experience by allowing PNC’s clients to receive payments and access funds sooner.
Cryptocurrency exchange company Bitfinex is launching Bitfinex Pay, a cryptocurrency payment gateway. With this new product, online merchants can accept payments in various cryptocurrencies. It should make cross-border transactions easier in particular. While there are a few crypto payment gateways already, Bitfinex Pay has the advantage of working seamlessly with the company’s exchange. Merchants can create a widget and start accepting payments in Ethereum and bitcoin. Payments are deposited on your exchange wallet.
