Daily Dash: Kuwait Publishes New Rules For E-Money Firms

May 19, 2023
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<span style="font-size:11pt; font-variant:normal; white-space:pre-wrap"><span style="font-family:Arial"><span style="color:#000000"><span style="font-weight:700"><span style="font-style:normal"><span style="text-decoration:none">The Central Bank of Kuwait has issued new requirements for e-money services, including BPNL, Australia’s Westpac bank has introduced Apple’s new Tap To Pay service, and Airbnb has begun offering bank payments through Stripe.</span></span></span></span></span></span>

Kuwait Issues New Regulations For E-Money Firms

The Central Bank of Kuwait has released new regulations outlining requirements that existing and new financial institutions must meet to provide electronic payments or e-money services in the country. 

The regulations, which update the 2018 framework, introduce five types of licences depending on the size of the company and the nature of the activity provided.

It also brings buy now, pay later (BNPL) services into scope, setting up a supervisory and regulatory framework that “defines the necessary measures to protect customers' rights”, the central bank said.

Westpac Brings iPhone Tap To Pay To Customers

Westpac, one of Australia’s largest banks, has enabled Apple’s Tap to Pay on iPhone contactless payment technology.

This will allow customers to accept in-person contactless payments with their compatible iPhone. 

“Our business customers can be onboarded and start accepting quick and secure payments on-the-go within minutes, using only an iPhone and the Westpac EFTPOS Air iOS app,” said Chris de Bruin, Westpac’s consumer chief.

“This new capability is particularly beneficial for any business that takes payments on the road or needs their staff to be more mobile on the shop floor,” he said. “It’s a game changer for tradies, delivery drivers and businesses like hairdressers, mechanics or florists, and many more.”

Using Tap to Pay on iPhone in the EFTPOS Air app at checkout means merchants will simply prompt the customer to hold their contactless payment near the merchant’s iPhone, and the payment will be securely completed using NFC technology. 

Meanwhile, the functionality also supports PIN entry, which includes accessibility options.

Stripe To Provide Bank Payments For Airbnb Bookings

US fintech Stripe has launched a new partnership with Airbnb that will allow guests to pay for bookings directly from their bank accounts.

Using an integration of Stripe Financial Connections, guests will have the option to pay using a linked US bank account.

Once the bank details are saved, guests can then use Link, Stripe’s native one-click checkout service, to make payments from the same account for future bookings.

According to Stripe, paying for goods and services by bank transfer is growing in popularity. In the US, the number of person-to-merchant bank transfers using the ACH Network has grown consistently every year since 2013.

Additionally, in its 2023 Insights Report, Stripe found that almost two-thirds of businesses are pursuing bank debits as an alternative payment method.

Services 'Return To Normal' After Major Ransomware Attack On Indonesian Bank

Bank Syariah Indonesia (BSI) has confirmed that its branch, ATM and mobile banking services have returned to normal following a major outage earlier this month.

In a statement, BSI president director Hery Gunardi said there are indications that the bank was hit by a cyberattack, and added that BSI is working closely with technicians from Bank Mandiri to conduct system audits and forensics.

However, as early as May 8, a Russian ransomware gang known as Lockbit had already claimed responsibility for the attack.

In a post shared by cybercrime intelligence platform Dark Tracer, Lockbit claimed to have stolen 15m customer records, employee data and about 1.5 terabytes of internal data.

In a second post purporting to show a direct communication between Lockbit and BSI, the gang demanded a ransom of $20m.

Days later, when the ransom was not paid, Lockbit claimed to have published the stolen data online.

Qatar Central Bank Unveils First 'Interoperable Switch' For Mobile Payment Service

Qatar Central Bank (QCB) has launched Qatar Mobile Payments (QMP), the country’s first interoperable switch to support instant mobile payments.

QMP is a digital wallet that is registered to the user’s mobile phone number, and allows users to make person-to-person transfers and payments via QR code.

In a statement, the central bank said that QMP will connect all licensed mobile payment service providers in the country and will facilitate 24/7 instant payments.

Qatari citizens can register for multiple QMP wallet accounts and visitors from abroad can register one account per person. The central bank said that QMP will reduce dependence on cash and will help reduce the cost of digital payments.

CFPB Reins In ‘Fake’ Account Creation

The US Consumer Financial Protection Bureau (CFPB) has released a new circular stating that a bank may violate federal law if it unilaterally reopens a deposit account to process transactions after a consumer has closed it.

The guidance was prompted by complaints that showed that some banks reopened already closed accounts to assess overdraft and non-sufficient funds fees (NSF).

“When a bank unilaterally chooses to open an account in someone’s name after they have already closed it, this is a fake account,” said CFPB director Rohit Chopra. 

“The CFPB is acting on all fronts to halt the harvesting of illegal junk fees,” he added.

ZestMoney Founders Resign After Sale Fail

The founders of ZestMoney, a buy now, pay later (BNPL) firm, have resigned weeks after a planned acquisition by the Walmart-backed mobile payments giant PhonePe fell through. 

“Whilst it has been very hard for us to arrive at this conclusion, we have decided that we will step back from our day-to-day operating roles with ZestMoney,” said former chief executive Lizzie Chapman in a post on LinkedIn. 

“We Founders will continue to be significant shareholders in the company and will continue to be the biggest cheerleaders and supporters in every way.”

According to reports, the acquisition failed due to due diligence concerns at the BNPL firm. 

The Economic Times reported that PhonePe was concerned about ZestMoney's business model and debt liability, as well as Indian regulator’s increased scrutiny towards digital lenders.

For example, last year, the Reserve Bank of India launched an investigation into BNPL complaints. 

Meanwhile, the government tasked the central bank with preparing a list of approved digital lenders, according to Reuters. 

Samsung To Study Offline CBDC Payments Following Bank Of Korea MoU

Samsung Electronics has signed a memorandum of understanding (MoU) with the Bank of Korea to conduct joint research on offline payments using central bank digital currency (CBDC).

The two parties plan to use Samsung Galaxy smartphones and watches to study security threats related to offline CBDC payments, and will also study offline CBDC payments in emergency scenarios such as natural disasters.

The research, which will be conducted at Samsung’s 390-acre Suwon Digital City, builds on previous collaborations between the Korean tech giant and the central bank.

Last year, Samsung conducted a CBDC simulation study with the Bank of Korea, developing a technology for sending CBDC payments from one device to another when both devices are offline.

Similar to China’s experiments with offline CBDC payments, covered by VIXIO in January, the technique uses near-field communication (NFC) technology within the secure elements of the sending and receiving devices.

Basic Payment Account For Business Being Considered, Confirm Dutch Banks

Banks in the Netherlands are exploring the possibility of basic payments accounts for businesses, a new release by the Dutch Banking Association has said.

With such an account, banks want to help bona fide business customers that, due to the nature of their activities, have difficulty opening a regular bank account. 

With a basic payment account, entrepreneurs would then be able to participate in social interaction and make essential payments to run their business. 

At the beginning of July, the Dutch Banking Association said it plans to have worked out a first proposal for such a basic business payment account, in collaboration with the Dutch Payments Association.

Standard Chartered Signs MoU On Digital Asset Custody In Dubai

Standard Chartered Bank has signed a memorandum of understanding (MoU) with the Dubai International Financial Centre (DFIC) on providing digital asset custody services in Dubai.

In a statement, Standard Chartered subsidiary Zodia Custody said it will be powering the custody services provided by the bank in Dubai.

“As the global digital asset industry continues to evolve, we at Zodia Custody are honoured to be at the forefront of this expansion to drive institutional adoption and mature the ecosystem,” the company said.

Last September, VIXIO spoke with Zodia Custody’s sister company, Zodia Markets, after it became the first bank-owned crypto exchange and brokerage to be listed on the Financial Services Register by the Financial Conduct Authority (FCA).

Businesses Can Test ISO 20022 Readiness On NPA For First Time

Pay.UK, the standards body tasked with developing the UK’s New Payments Architecture (NPA), has announced that businesses can now test their ISO 20022 readiness.

The new self-validation testing (SVT), launched in late April, allows customers to autonomously validate their ISO 20022 messages against the NPA message standards and solution design, and ensures that they can submit and respond to different types of payment and non-payment messages.

“The SVT allows customers to connect to a technical representation of the NPA for the very first time and test those ISO 20022 messages, both as a sending and receiving organisation,” David Morris, chief technology officer at Pay.UK, said.

“It represents a ‘launch moment’ for the programme as customers begin their transformation from the existing Faster Payment System to the data-rich NPA product types,” he added.

‘I’ll Be Waiting For You With My Shotgun’, Former Revolut UK Boss Told Customer

Revolut’s former UK boss reportedly taunted a customer by texting him saying that he would be waiting for him "in the garden with my shotgun".

James Radford served as chief executive of Revolut’s UK base from February 2020 until March 2023. 

According to the Daily Telegraph, which broke the story, he had handed in his notice before the incident took place. 

Last week, Revolut group chief financial officer Mikko Salovaarahis also announced they were leaving their job “for personal reasons” after a two-year stint in the role. 

'Very Difficult' Regulatory Environment Irks Binance 

Patrick Hillmann, Binance's chief strategy officer, has criticised the US approach to crypto, stating that it is "very difficult" for crypto firms to do business there.

Hillmann also told the audience at the Financial Times summit that the US Security and Exchange Commission's action against its competitor, Coinbase, is an example of how "the US right now is in this weird place".

Meanwhile, Hillmann was flattering towards the EU, stating that the passage of the Markets in Crypto Assets (MiCA) regulation last month was a "huge step forward", adding that the US is likely to want to "play catch up".

ASEAN Leaders Adopt Joint Declarations On Regional Payments Connectivity

At the 42nd ASEAN Summit in Indonesia last week, leaders adopted joint declarations on advancing regional payments connectivity and promoting local currency transactions.

Led by current chair Joko Widodo, President of Indonesia, the bloc agreed for both areas to come under its Priory Economic Deliverables (PEDs) for 2023.

As noted by Bank Indonesia, the agreement will help facilitate payments linkages in additional jurisdictions in ASEAN, and will help reduce costs and shorten processing chains. 

Indonesia already has QR code payments linkages with Thailand and Malaysia, and expects to launch a QR code linkage with Singapore in 2023.

ASEAN will also expand the use of its Local Currency Settlement Framework (LCSF) beyond its current members, namely Thailand, Malaysia and Indonesia from within ASEAN, plus China and Japan.

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