Payments & digital market news

Payment market - November 2023 - Hervé SITRUK

The international payments market was marked by reports and summaries from the last SIBOS in Toronto, which highlighted Instant payment, adopted worldwide, and interoperability scenarios between international payment systems, to meet the expectations of the G20, but also market fragmentations such as in Europe.

It is also marked by the gradual regularization of cryptoassets as payment transaction media, as seen in the United States in particular, following the SEC's failure in the Grayscale case concerning Bitcoin ETFs, and the gradual entry of not only major financial players but also GAFAs and other ICSs into this market, which immediately offers global interoperability, and for the American market, reinforces the supremacy of the dollar. However, this will not happen without the intervention of the American public authorities, as Paypal has just experienced, when it received a summons from the SEC for its Stablecoin project, Paypal coin.

At the same time, tokenization is expanding worldwide, with Visa International, HSBC and many other players, including in Europe. And the pilot experiment launched by Deutsche Bank and Standard Chartered to set up an exchange network for both stablecoins and CBDCs.

On the GAFAS side , we note a new initiative in payments, with Elon Musk's sensational announcement of the transformation of X (formerly Twitter) into a payment account management system, with the aim of replacing banks. A sort of revenge on Paypal... And it's worth noting the cooperation between GAFAs and ICS, as between Paypal and Apple, and the continuing debate on interchanges, still not definitively settled.

There were also a number of operational difficulties with payment systems, such as in Japan, where over 1.4 million transactions could not be processed due to a breakdown in the interbank system, or in Europe and France, where several computer breakdowns, including that of Worldline, disrupted European payments. Resilience and operational efficiency remain major challenges everywhere, including in Europe, and especially in the future with a possible digital euro.

The other major issue is the fight against fraud, particularly with regard to instant payments, as in Brazil and the UK, where major losses for consumers have been reported (half a billion pounds sterling), and where some people are beginning to say that " instant payment is an opportunity for instant fraud ", and the many cases of fraud in the United States, based on psycho-social behaviors, which have made the fight against fraud a top priority at international level. The EBA Clearing, for example, is experimenting with ways of strengthening the fight against fraud among its members. This subject, ed la lutet conter al farude, will soon warrant a major qualitative leap forward.

In Europe, in addition to the developments at EPI, with the launch of Wiro, and the acquisition of iDEAL and Payconiq International, which mark a major step forward towards the forthcoming launch of its activities, it is worth noting the continued action of the EPC, under the impetus of its new Managing Director, Giorgio Andreoli, in particular to strengthen the new payments working groups. Also noteworthy is the postponement of the migration date to the 2019 version of the ISO 20022 standard, to next spring, notably due to numerous delays by key European players, a migration on which the RED WG of FRANCE PAYMENTS FORUM, has drawn up a position paper, which will be circulated shortly. We should also note the procrastination on the subject of electronic invoicing, and the lack of short-term success of the EPC's RTP Scheme, which currently has just a handful of members.

Last but not least, the Belgian platform ITSME, with its millions of users on the Belgian market, has decided to go international. This provides an opportunity for in-depth reflection in France, with a view to forging closer ties with the Belgian market.

The payments market in France is marked firstly by the CB Summit, and by the forthcoming publication of the Report of the Banking and Financial Services Commission of the Fondation Concorde, and finally by the launch of discussions on the French payments strategy at the CNMP and on the application of the new European projects.

On the first point, this new Groupement des Cartes Bancaires event is part of its strategy to win back market share in France, and aims, as the press noted, to remobilize its "eco-system", in particular all its solution providers and service suppliers. As everyone could see, the event was a great success, providing a wealth of information as well as an opportunity for the various players in the CB electronic payment sector to renew contacts, in anticipation of the next CB Forum to be held at the Maison de la Chimie on November 28.

On the latter, we are eagerly awaiting the publication of the report entitled "Relocating the payments industry: an imperative for European sovereignty" by the Fondation Concorde, which will serve as the backdrop to the 6th Assises des Technologies Financières on November 16, whose theme will be the "Economic and monetary sovereignty" of the financial industry.

On the last one, Cf. editorial, the stakes are very high and we'll have the opportunity to come back to them in future letters.

Press review

Swift

(19) Interoperability: The answer to instant cross-border payments? | LinkedIn

Sibos TV | Sibos (echoes of Sibos)

EPC

Call for candidates for the Scheme End-User Multi-Stakeholder Group and for the Scheme Technical Player Multi-Stakeholder Group | European Payments Council

SEPA Request to Pay has just 3 registered adherents, the EPC isn't worried (finextra.com)

EPC245-23 Press release on ISO migration postponement_0_0.pdf (europeanpaymentscouncil.eu)

Other banking, industrial and commercial players

Cash, contactless payment... "Rather than being mutually exclusive, payment methods complement each other" (lsa-conso.fr)

Payments : BNP Paribas to raise its revenue targets | Les Echos

(11) The Ingenico Newsletter #2 - New Digital Support, 2024 Payments Trends & Business Apps Catalogue | LinkedIn

International markets

Japan's interbank payments network goes down, hitting 1.4 million money transfers (finextra.com)

JP Morgan's Pay-by-Bank product goes live (finextra.com)

Deutsche Bank and Standard Chartered pilot network for stablecoins and CBDCs (finextra.com)

Elon Musk wants X to replace users' bank accounts within a year (finextra.com)

Cards, European electronic payments and mobile payments

Europe and France

CB Summit on October 10

Payment: for its fortieth anniversary, the CB logo will be blue-white-red | Les Echos

Bank payments: innovative and "made in France", the advantages of the CB network (latribune.fr)

Groupement CB acts as a catalyst for the French payments industry - L'Agefi

French banks take on Mastercard and Visa (lefigaro.fr)

Other

Computer failure disrupts card payments at Carrefour, Auchan, Ikea and McDonald's (lemonde.fr)

Worldline shares halve on bleak outloook (finextra.com)

Viva.com launches real-time offline settlement to simplify payments in Europe (ecommercemag.fr)

International

PayPal integrates with Apple Pay (finextra.com)

American Express to pilot biometrics at the online checkout (finextra.com)

Goldman Sachs seeks to exit its partnership with Apple Card (usine-digitale.fr)

UAE to launch national domestic card scheme (finextra.com)

Federal Reserve Board - Federal Reserve Board requests comment on a proposal to lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction

Fed confirms plan to slash debit card fees (finextra.com)

Perspectives, Innovation and Fintech relations

Digital identity

Lloyds Bank rolls out proof of identity app (finextra.com)

National Assembly in favor of digital identity, without lifting anonymity (lefigaro.fr)

We are launching the itsme® app internationally (itsme-id.com)

Cryptopayments

Ferrari to accept cryptocurrency payments

Ferrari will accept cryptocurrency payments for its luxury sports cars in the US, in response to customer demand.

Grayscale wins against SEC over Bitcoin ETFs

The U.S. Securities and Exchange Commission (SEC) has decided not to appeal the District of Columbia Court of Appeals' recent decision in favor of Grayscale Investments regarding its application for a Bitcoin ETF. This decision requires the SEC to review Grayscale's application, but does not guarantee approval of Grayscale's application. If the application is denied, Grayscale could appeal the decision, prolonging the process.

The U.S. government is one of the largest holders of Bitcoin

The US government holds over $5 billion in Bitcoin (BTC), mainly from large seizures linked to cases such as Silk Road and Bitfinex. However, possession of the seized assets will only revert to the government after a final forfeiture judgment, and the government could sell these assets, as it occasionally does, via auctions, particularly on cryptocurrency platforms.

First Abu Dhabi Bank (FAB) has successfully completed a pilot project for cross-border cryptopayments.

First Abu Dhabi Bank (FAB) has successfully completed a blockchain-based cross-border payments pilot project with JPMorgan's Onyx Coin Systems.

Market trends

The Chainalysis 2023 Geography of Cryptocurrency Report

Bitcoin jumps to 18-month high on prospect of ETF authorizations - L'Agefi

France

Adan responds to IOSCO consultation on DeFi - Adan

2023-10-31-Opening-Speeches-Faustine-Fleuret-Fintech-3.0.pdf (adan.eu)

International

Israel

Crypto: Israel hits Hamas in the wallet | Les Echos

United States