Daily Dash: Mastercard Gets Certified As UK Digital ID Provider

March 17, 2023
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Mastercard has been certified through the UK government’s digital identity regime, Apple Pay has become available for users in Mexico, and India and the UAE sign cross-border fintech pact.

Mastercard Certified As eID Provider In UK

The payments giant has been certified under the UK’s Digital Identity and Attributes Trust Framework (DIATF) as an identity provider.

This sets out the requirements for organisations to follow if they want to provide secure and trustworthy digital identity and/or attribute solutions. Other platforms that have been certified under this regime include Experian and Deloitte. 

Mastercard’s ID app, which is available at the major mobile app stores, gives consumers more choice in how they prove their identity in scenarios such as beginning a new job, making a purchase, renting a flat or applying to university.

“By receiving certification in the UK, Mastercard can collaborate with the private and public sector to offer ID,” said Sarah Clark, senior vice president for digital identity at Mastercard.

Apple Pay Launches in Mexico

Apple Pay has become available for users in Mexico as a result of a partnership between global issuer-processor Paymentology and Mexican financial service provider Fondeadora, the companies announced on March 14.

According to the press release, Fondeadora has become one of the first financial institutions in Mexico to bring Apple Pay to its customers.

“The digital economy in Mexico has flourished post COVID-19, and with it has come newfound consumer demands around digital ways to pay,” Alejandro Del Rio, regional director, Latam, at Paymentology, said.

Mexico’s payments market is projected to grow by a compound annual growth rate of 16 percent over the next five years, according to the press release.

Customers can now make payments via Apple Pay across several Latin American countries, including Argentina, Colombia, Costa Rica, Brazil and Peru.

India, UAE Sign MoU On Cross-Border CBDC Collaboration

The Reserve Bank of India (RBI) and the Central Bank of the United Arab Emirates (CBUAE) have signed a new memorandum of understanding (MoU) on cross-border fintech collaboration using central bank digital currency (CBDC).

Under the MoU, the two central banks will explore interoperability between their respective CBDCs, and will conduct a joint proof-of-concept (PoC) of a bilateral CBDC bridge to facilitate trade and remittance payments. 

“This bilateral engagement of testing cross-border use cases of CBDCs is expected to reduce costs, increase efficiency of cross-border transactions and further the economic ties between India and UAE,” said the RBI. 

The MoU also provides for technical collaboration and knowledge sharing on matters related to fintech and financial products and services.

US Probes Silicon Valley Bank

The United States Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are reportedly investigating the collapse of Silicon Valley Bank (SVB) and the stock sales made by two of its officers.

Citing unnamed sources, the Wall Street Journal reported that SVB Financial Group CEO Greg Becker and chief financial officer Daniel Beck are under scrutiny over the respective sale of their $2.3m shares and $575,000 shares days ahead of the fallout.

Following the report, SEC chair Gary Gensler issued a statement saying that his staff “is particularly focused on identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly”.

“Without speaking to any individual entity or person, we will investigate and bring enforcement actions if we find violations of the federal securities laws,” Gensler added.

National Australia Bank Completes World-First Cross-Border Stablecoin Transaction

National Australia Bank (NAB) has completed an intra-bank cross-border transaction using a stablecoin that was issued by the bank.

This represents a world-first by a major financial institution on a layer-one public blockchain, according to NAB.

This pilot transaction was the public and permissionless Ethereum blockchain platform and involved deployment of stablecoin smart contracts for seven major global currencies, with NAB stating that the pilot’s success demonstrates the potential to cut cross-border transactions from days to minutes

“We are committed to pursuing the right digital asset opportunities with clear customer benefits,” said Drew Bradford, NAB executive general manager. “Bringing multi-currency stablecoins to market demonstrates NAB’s focus on simplifying international banking protocols to increase speed and transparency while lowering costs and reducing complexity for customers.”

SEC Charges Exiled Hong Kong Dissident With Crypto Securities Fraud 

The US Securities and Exchange Commission (SEC) has charged Miles Guo, an exiled Hong dissident and businessmen, with a range of fraud violations, including crypto securities fraud.

Since October 2021, Guo allegedly raised at least $500m through the offer and sale of Himalaya Coin (H-Coin), a crypto-asset security that was used to fund Guo’s GTV Media Group.

“Guo allegedly has made material misrepresentations to prospective investors in H-Coin, falsely stating that 20 percent of H-Coin’s value was backed by gold and that he would personally compensate investors for any potential losses,” the SEC said in its complaint.

One other defendant, William Je, has been charged with related fraud violations. Je is a dual Hong Kong-UK citizen who owns the Himalaya Exchange, through which H-Coin was offered to investors.

Bank Of Lithuania Appoint ‘Temporary Representative’ For Railsr-Owned Payrnet

Lithuania’s financial watchdog has placed a "temporary representative" from legal firm Grant Thornton at troubled Railsr subsidiary Payrnet, following its decision to restrict the company’s activities last month. 

The regime will last until June 30, and Bank of Lithuania said that this measure aims to strengthen the institution's management and more promptly and efficiently address the deficiencies identified in its activities.

The temporary representative does not take over the management of the institution, and the institution will be able to carry on day-to-day operations, but every decision related to the institution's board or manager can only be made with the consent of the temporary representative.

South Africa’s Instant Payment System Launches

The South African Reserve Bank (SARB) has announced  that PayShap, the country’s new instant payment system, launched on March 13.

PayShap will process low-value, real-time digital payments and is intended to increase financial inclusion in the African country.

“The arrival of PayShap marks another milestone in the SARB’s ongoing efforts, in collaboration with the industry, to advance South Africa’s payment ecosystem,” the bank said in the release.

The new payment system will enable users to make payments up to SAR3,000 ($165) using their bank account information or a unique identifier, such as their phone number.

Initially four banks will participate in the payment system but the central bank said it expects more to join in the second phase of rollout. Eventually they plan to expand service provision to non-banks “as soon as it is practically possible”.

PayShap is an industry-led initiative built by BankservAfrica, South Africa’s private automated clearing house (ACH). It was designed to mirror the success of recent instant payment services in India, Thailand and Singapore, as reported by VIXIO.

Mir Card Payments Go Live In Cuba As Russia Expands Global Linkages

Several Cuban banks in Havana have now started accepting Mir card payments, as Russia’s state-backed card network continues to expand its global footprint.

According to Russian news agency RIA Novosti, Russian tourists can now make payments to merchants in Cuba using the Mir card, and can also make Cuban peso withdrawals from ATMs bearing the Mir card logo.

Russia Briefing, a news site from Dezan Shira & Associates law firm, added that in December last year Russia opened up a direct flight route to Cuba for tourism and business travel.  

The new ties between the two countries have also led to the opening of a Russian trading house in Havana, and a proposal to form a Special Economic Zone in Cuba in partnership with the Eurasian Economic Union (EEU).

SWIFT Completes Cross-Border CBDC Sandbox With 18 Banking Partners

SWIFT, the global interbank messaging network, has announced the completion of an interoperable, cross-border central bank digital currency (CBDC) sandbox in partnership with 18 central and commercial banks.

During the 12-week study, the participants processed almost 5,000 CBDC transactions between the Quorum and Corda blockchain networks, and between Corda and a fiat currency.

The participating 18 banks include Banque de France, Deutsche Bundesbank, Monetary Authority of Singapore, BNP Paribas, HSBC, NatWest, UBS and Standard Chartered.

Over the coming months, SWIFT said it will develop a beta version of the solution for payments that can be tested further by central banks.

A second phase of sandbox testing will also follow, allowing SWIFT network participants to collaborate further and focus on new use cases, such as securities settlement, trade finance and conditional payments.

Central Bank of Egypt Increases Instant Payment Limit

The Central Bank of Egypt (CBE) has amended daily and monthly withdrawal limits for instant payments.

According to the CBE, the maximum daily transaction limit will be increased from 60,000 Egyptian pounds ($2,000) to 120,000 Egyptian pounds starting March 15.

The maximum monthly limit, meanwhile, will be raised to 400,000 Egyptian pounds (about $13,000), an increase from 200,000.

Scramble For Stability Following Silicon Valley Bank Failure

Silicon Valley Bank (SVB) collapsed on Friday (March 10), exiting the US market where it had previously been the sixth largest commercial bank. 

It is the second largest bank failure in US history, which was triggered after a bank-run on its deposits, leading its regulator, the California Department of Financial Protection and Innovation, to transfer the firm into receivership. 

Janet Yellen, the Treasury Secretary, initially said over the weekend that a bank bailout is out of the question, while the UK’s chancellor, Jeremy Hunt, cautioned that the collapse poses a “serious risk” to the tech sector.

However, on Sunday (March 12), the Treasury, Federal Reserve and Federal Deposit Insurance Corporation (FDIC) confirmed that additional funding will be made available for SVB and other distressed lending institutions.  

Following various bids, it was announced on Monday (March 13) that HSBC had acquired the UK subsidiary of SVB in a rescue deal. 

The Bank of England said it had taken the decision to sell to HSBC following consultation with the Prudential Regulation Authority, HM Treasury and the Financial Conduct Authority.

In Canada, where SVB also has offices, the Office of the Superintendent of Financial Institutions (OSFI) has taken control of the unit’s assets.

OSFI has also said that it is asking the attorney general of Canada to petition for a winding-up order.

Railsr Rescued From Collapse By Investors

London-headquartered fintech Railsr has been rescued from collapse after an emergency sale.

"We are absolutely delighted that Railsr is now able to rebuild momentum and return to growth. It is a business that deserved to be recapitalised,” said company chair Rick Haythornthwaite.

Formerly known as Railsbank, the company has been acquired by a consortium of investors that were led by venture capital firm D Squared Capital and has also been approved by the UK’s Financial Conduct Authority.

“A huge number of people across the financial ecosystem believe in Railr's potential and have worked very hard to make this transaction a reality,” said Haythornthwaite. “We will now get back to basics and manage the business methodically and constructively. We have secured a new chapter for Railsr and are excited about what the future holds."

Last week, VIXIO reported on the company’s attempts to find a pre-pack administration deal. 

Russian Banks Ordered To Offer Instant Payments Via Mobile, Online Banking

The Central Bank of Russia (CBR) has ordered large banks that have joined the Faster Payments System (FPS) to integrate the service into both their mobile and online banking apps by October this year.

Where banks lack the technical capacity to make the FPS accessible via mobile app, these banks are asked to launch the service via online banking before the deadline at a minimum.

In addition, by April 2024, banks should enable money transfers via the FPS between legal entities.

In 2022, the total number of transactions made via the FPS tripled to more than 3bn, and the total number of merchants connected to the platform tripled to over 500,000. Total users increased about 10 percent to 65m.

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