Payment News

Fees Halted for Barbados Electronic Transactions

A Barbadian bank announced that it will introduce fees from 1 February. The Central Bank of Barbados (CBB) has responded by informing banks that ‘any fees which are presently charged for electronic transactions through the ACH shall be immediately discontinued.’ It is investigating a plan by the Bank of Nova Scotia to make it more costly for residents to do business with it through interbank transfer.

The CBB has written to all banks reminding them that ‘in the execution of its duties for oversight and administration of the National Payment System, the bank shall consider the interest of consumers.’ 

It also pointed out that Section 32 of the NPS provides that it is empowered to establish rules to ensure transparency of conditions including fees and information requirements for payments services’.

EPI Looks Forward to 2024

The European Payments Initiative (EPI) has had problems. Launched in July 2020, it was meant to offer a payment solution to cater and correspond to European needs. After a number of banks left the scheme, it has refocused on instant payments, completed two acquisitions, the Dutch payment solution iDeal and the Luxembourg technology provider Payconiq International, and had a number of new members join it.

EPI seeks to end the fragmentation of Europe’s payments market by introducing a new standard in payments covering retail transactions from in-store to online to person-to-person. It is building stringent consent management protocols based on the European Payments Council’s SEPA Instant Credit Transfer scheme (SCT Inst). A key part of this is an innovative digital wallet solution to be known as Wero.

EPI’s approach facilitates true real-time account-to-account payments without any intermediaries, giving the user more control, visibility and choice over their preferred payment method. It can also provide the user with key information about their account, including their overall balance, before making a payment. This means that for both personal and business accounts, users can feel confident in their transactions thanks to enhanced transparency.

Another advantage of EPI is its enhanced protection and provisions for both customers and merchants. In the event of a payment dispute, the customer can contact the merchant, supported by data provided by EPI. If the issue is not resolved, a straightforward pre-dispute or chargeback process can be initiated, giving both the customer and merchant the opportunity to justify their claim and challenge that of the other side. Existing payment rails for digital payments do not provide the same support.

X Inches Towards Payments

Elon Musk has said that he expects the ability to make peer-to-peer payments on X, formerly known as Twitter, to be available mid-2024. X is waiting for state officials in San Francisco to approve the licences needed for the launch. Musk said that X has received licences for the majority of US states, although its website says it has 15 state licences. California and New York have yet to give licences, and these are important for the success of any launch.

Musk was co-founder of X.com that became part of PayPal, so he has direct experience of payments and licencing.

Slight Decline in Kenya’s Mobile Money Transactions

For the first time in 17 years, mobile money transactions have declined in Kenya. Mobile money agents are reported to handle approximately 60% of Kenya’s GDP, so this drop may show up on official data in due course.

The Central Bank of Kenya (CBK) data shows that in the 11 months up to November 2023, the cash transacted by agents fell by 0.5% compared with the comparative period a year earlier to KES7.165 trillion ($45.4 billion).

Subscriptions to the M-Pesa service were 38.1 million, the equivalent of a penetration rate of 75.2%.

Crypto Inefficient as a Payment Method

The Governor of the Bank of England spoke to the UK Parliament’s Treasury Committee and said that cryptocurrency is not taking off as a core financial service. Bitcoin, for example, is inefficient as a payment method.

UK crypto exchanges have had to implement risk assessments and finance tests to comply with new regulations. Fiat-backed stablecoins are being made the responsibility of the Bank of England, Financial Conduct Authority and Payment Systems Regulator to mitigate the conduct, prudential, and financial stability risks arising from stablecoins, particularly when used for payments.

Vietnam Goes Digital

The World Bank has reported that the percentage of adults with payment accounts has risen from 31% in 2015-2017 to 77% today. The Deputy Governor of the State Bank of Vietnam (SBV) has said that digital transactions made through the clearing house system rose from 700 million in 2019 to 7 billion in 2023.

All banks now provide mobile payment services. 85% of payment service suppliers provide internet payment services and 52% mobile payment services. The numbers of internet and mobile payment transactions have increased 46.48% and 90.12% annually on average respectively. QR code payments have increased by an annual average of 471.13% since 2018.

Sri Lanka to Implement UPI

In July 2023 the President of Sri Lanka signed an agreement to accept India’s Unified Payments Interface (UPI) in Sri Lanka. Talks are now underway to accelerate the implement of the UPI payment system and linking it to Lanka Pay.

Payment Habits Changing in Switzerland

A new working paper issued by the Swiss National Bank (SNB) ¹ has reported on payment change in Switzerland since 2019.

The value limit for contactless cardholder verification (‘tap-and-go’ limit) was doubled to CHF 80 at the onset of the COVID-19 pandemic. The research draws on analysis of anonymized, transaction-level data for more than 400,000 payment cards and almost 18,000 merchants in Switzerland between 2019 and 2021.

The paper identified that the rules set by card schemes and card-issuing banks for cashless payments between consumers and merchants have a strong causal impact on the use of digital payment technology.

The increase in the ‘tap-and-go’ limit caused a significant increase in the consumer use of contactless payments but only a minor increase in first-time adoption of this payment technology. The report advises policymakers to consider the role of intermediaries and verification rules when evaluating payment innovations, such as instant payment systems or central bank digital currencies (CBDCs).

1 - Consumer adoption and use of financial technology: “tap and go” payments (snb.ch)