Payment News

Monopoly Goes Cashless

A new version of the famous Monopoly board game has been created, ‘Monopoly Voice Banking’, that has replaced paper cash with a voice-activated banker. This sits in the middle of the board and keeps track of player transactions, including paying rent and buying properties. It isn’t clear how banking ‘privacy’ is maintained!

Payment Habits Going Digital in Switzerland

Twint is a digital payment app that is accepted as a payment method by 77% of physical and 76% of online shops in Switzerland. It has over five million active users. In 2017 there were four million Twint transactions, in 2023 there were 590 million, up 50% on the year before. 72% of Twint payments were retail payments while the rest were person-to-person payments. Use in high street shops rose 84% compared with 2022.

Overall, it appears that the Swiss are on the move to pay with smartphones or smart watches. About 37% of Swiss used these compared with 25% two years ago.

Twint now allows customers to put their customer loyalty cards on the app as well to be able to earn points when paying.

BSP Wants a Fee Waiver on Low Value Transactions

The Bangko Sentral ng Pilipinas (BSP) has ambitious goals to increase the use of digital payments. As part of this it is talking to banks about the permanent removal of fees for small-value transactions, those under P1,000, but is getting push back from banks concerned about their operating costs.

To date BSP has been employing moral suasion to influence the banking industry. Some lenders have temporarily waived charges for InstaPay transactions.

The BSP has been encouraging banks since February last year to formalise the removal of these fees to help boost digital payments; for example, the Bank of the Philippine Islands (BPI), which has waived fees until 1 March and Metrobank until 30 June.

The President and CEO of BPI has pointed out that transfers incur costs related to technology, cybersecurity, and charges from the switch and the provider. If transfers are from BPI to BPI, there are no costs, but outside the bank there are.

The President and CEO of UnionBank has made a different point, that if customers only transact digitally, the bank’s costs are low. If some customers are digital and branch-based, then the costs are hard to recover and eat into the resources of the bank. Metrobank also commented that losses associated with digital payments are also part of the mix. UnionBank has about nine million transactions a month made through the BSP’s automated clearing house InstaPay.

Metrobank reports that there was a small increase in online transactions once it waived fees. Rizal Commercial Banking Corp, meanwhile, is not convinced that fees are the key to increasing digital payment. Rather, incentives and bundling digital payments with other banknote products may offer a better option.

BSP data showed the value of transactions carried out through InstaPay rising 41.8% in 2023.

Apple Offers NFC Payment Access to Third Parties in the EEA

In 2023 the European Commission (EC) won its battle to force all mobile phones to share a common charger, which forced Apple to change its devices. Apple has now pre-empted the EC’s latest initiative that was bringing an antitrust case related to offering third-party providers access to the NFC chip technology that enables iPhones to make contactless payments.

Apple is offering a free of charge solution to allow payments without having to use Apple Pay or Apple Wallet, defaulting of preferred payment apps, access to authentication features such as FaceID, and a suppression mechanism. This would apply in the European Economic Area (EEA) and outside of the EEA.

Apple is also facing legal and regulatory action in the US.

Glory Invests in the Retail Space

Glory Global Solutions is continuing is expansion into software solutions, buying Flooid. Flooid provides cloud-based unified commercial software to the retail industry. Glory is buying Flooid from Inflexion Private Equity Partners.

Flooid’s software links point-of-sale (POS), self-checkout, mobile POS, self-order and pay kiosks and convertible lane equipment using one, hardware-agnostic solution. The software is designed to meet every part of the retailer’s requirements from pricing through payments, loyalty and discount programmes to ordering and deliveries. Flooid has customers in Europe, North America and South Africa, many of which are household names and major retail brands.

Glory has been investing outside its traditional core business for some time. It sees this investment as adding to what it offers existing retail customers but consistent with its work to increase customer operational efficiency while reducing their costs.

New Payment Authentication Framework Promised by RBI

The Reserve Bank of India (RBI) is looking to increase the security of digital payments.

Currently, SMS-based One Time passwords are the primary method used for authentication. The RBI is looking to adopt a new principle-base ‘Framework for authentication of digital payment transactions’. It says this will allow the use of the latest technology, but it has not yet provided details.

Payments and Privacy at Risk

There is often talk about the importance of payment privacy. It is put forward as a strength of cash and it is much debated in the context of Central Bank Digital Currencies. It is interesting, therefore, to note an example of a government in a liberal democracy seeking new powers to track and investigate financial transactions and accounts.

In the UK a Data Protection and Digital Information Bill is working its way through the legislative process. Recently, the government introduced new powers into the bill that would allow the Secretary of State to require banks and other financial service providers to monitor and to provide information from accounts into which benefits are paid to help identify fraud.

The proposed new powers stem would enable the Secretary of State to give an ‘Account Information Notice’ requiring a bank or other provider of financial services to provide information about accounts into which a wide range of ‘benefits’ are paid and in relation to other ‘linked’ accounts. For example, if benefits were paid into a recipient’s current account, then the bank would be required to provide information about any savings or other accounts held by that recipient (whether alone or jointly with others).

The proposals apply to an extremely wide range of benefits including state pensions, universal credit, working tax credit, child tax credit, child benefit, pension credit, jobseeker’s allowance, and personal independence payments. Some legislators suggested that the list might cover up to 40% of the UK’s population, while others put the figure at up to 22.6 million.

While this is not yet law and while this is both specific and with safeguards, perhaps those who champion for digital payments and are careless about their implications for cash might wish to pause and reflect.