Payment News

Consumer Card Fees Limited by Law in New Jersey

New Jersey, in the US, has made a law limiting surcharges applied by merchants on consumers who prefer to pay by card rather than by cash. Surcharges cannot be more than the payment processing cost, and merchants have to disclose what the surcharge is.

BI Extends Reach of Digital Payments

Bank Indonesia (BI) launched QRIS, its QR code-based digital payment system, in January 2020. It was intended to offer an alternative to Indonesia’s highly popular e-wallet players such as GoPay, Ovo and Dana. QRIS and BI’s BI Fast are also levelling the playing field for traditional banks and helps reach those without bank accounts.

By the end of November BI will have added QRIS Tuntas, which gives people the ability to make fund transfers, withdrawals and deposits using QRIS. It also allows people to withdraw or deposit cash through ATMs, QRIS merchants and agents, assuming they support the feature.

QRIS Tuntas will work on both bank and non-bank e-wallets, so long as the recipient has a QRIS code. The cost, 2,500 rupiah ($0.16), is the same as using BI Fast, which moves funds between bank accounts.

People Don’t Like Digital Only

Author and fintech expert Chris Skinner has written about the need for digital and analogue to exist side by side. He points to groups in society who just don’t want a fully digital experience, citing a supermarket in the Netherlands, Jumbo, that has opened a checkout till specifically for people who want to chat as they pay, largely the elderly.

In fact, he goes further and says people don’t like digital only. He cites a YouGov poll carried out across 18 international markets that found that a quarter of global customers are uncomfortable using online banking. Within that data there was significant variation between countries and age groups. In the US younger people were more uncomfortable with online banking than older people.

Perhaps this is an area that the cash community should explore and talk about when arguing for cash.

Seizing the Mobile Money Opportunity

Chris Skinner has also written an interesting article about the growth of mobile money, challenging banks and payment service providers to think about how they reach the 1.4 billion who don’t have access to financial services and how to do more with those who are connected. The same challenge applies, of course, to central banks and those in the cash industry.

There is evidence that there are nearly four billion more mobile connections than people in the world today, and most phones are now smart. Much of this is likely to be because people have multiple connected devices, but mobile connections are widespread.

GMSA has reported that there are 1.6 billion registered mobile money accounts, of which 400 million were added during the pandemic. 401 million accounts were used in the last 30 days and 586 million were active in the last 90 days. The year-on-year growth rate is 13%. The value of transactions made was $1.26 trillion, with a 22% year-on-year growth rate.

On the other hand there are 1.4 billion people who don’t have access to financial services. The World Bank reports that seven countries account for half of people without access to formal banking, and that India is one of those seven.

Consumers Lose, Merchants Lose: Mastercard Rebuttal

In the same week that ATM Marketplace reported that fees in the US for using an ATM which is not part of your bank’s network reached a record high of $4.73 per transaction, the Wall Street Journal reported that Visa and Mastercard are said to be planning to increase their US merchant fees charged on credit cards starting in October and then again in April. Network fees are said to make up just over half of the increase, with interchange fees responsible for the rest.

Mastercard has published a rebuttal to this story. It says the story was based on a report by an advisory firm that is seeking to get support for legislation currently being looked at in Congress. Mastercard states it is not raising interchange rates or network fees in the US this autumn.

Mastercard makes the argument that the legislation under consideration could potentially lower merchant costs but points out that those costs pay for the consumer security and reward programmes and could lead to higher prices.

Indian Card-less ATM Option Links to UPI

Hitachi Payment Services is India’s leading payments and commerce solutions provider. It has launched India’s first UPI-ATM in association with the National Payments Association of India (NCPI). This allows people to withdraw cash without using a card. The Hitachi Money Spot UPI ATM can also provide cash deposit facilities. Currently 3,000 machines are in service offering cash deposits.

The solution is a ‘white label’ one, which means ATM operators can brand the devices and run them independently of Hitachi Payment Services.

In addition to making cash available, the machines can also provide easy access to banking services in areas where traditional banking infrastructure and card penetration is limited. A QR solution linked to UPI enables the transaction.

UK Banks Focus Spread Technology Investment

The Metaverse, a product of Meta (Facebook), appears to have lost its attraction to the UK’s financial services sector. A new survey of banking executives by Censuswide found that their investment in virtual and augmented reality dropped by a third over the last year. A year ago, half of banks were investing in this area; today that figure is 38%.

41% of banks are developing data visualisation tools to improve stakeholder engagement. 37% are investing in machine learning and AI to identify and track ESG risks and opportunities. 13% of banks are investing in generative AI, such as Chat GPT, lagging the global figure of 19%.

The priority for technology investment was cybersecurity (25% of banks), cloud computing (22%) and open banking APIs (21%).