Daily Dash: Saudi CBDC Plans Advance

January 27, 2023
Saudi Arabia has progressed to a new stage in its digital currency project, while Commerzbank has confirmed it is suing EY over losses related to the Wirecard scandal.

Saudi Central Bank Consults Industry On Domestic CBDC

The Saudi Central Bank (SAMA) has said that it is continuing to experiment on central bank digital currencies (CBDCs). 

It is now working on a phase of its CBDC project that focuses on domestic, wholesale use cases in collaboration with local banks and fintechs.

During this phase of the project, SAMA wants to explore the CBDC’s potential economic impact, market readiness, as well as the speediness of CBDC-based payment solutions. 

In addition, SAMA has said that it seeks to review policy, legal and regulatory considerations before moving to the next phases of the CBDC journey.

Commerzbank Sues EY Over Wirecard

The fallout from the Wirecard scandal continues for Germany as Commerzbank sues EY over its losses. 

The German lender is suing the accounting giant for more than €200m in losses as a result of the accounting mismanagement, it has confirmed this week in local trade publication Manager Magazin.

EY was the auditor of the now insolvent payments processor even as the Financial Times and others began to raise concerns over Wirecard’s irregularities. 

EY has since issued a statement to the press arguing that “claims against EY for damages do not hold up”. 

The case will be heard by a Frankfurt court.

Klarna Launches New Spending Habits Product

Klarna has launched Money Story, which is intended to provide users of the buy now, pay later (BNPL) app with spending insights that they can convert into financial goals for 2023.

Echoing Spotify’s Wrapped feature, Money Story reveals spending habits to consumers in an engaging and familiar way. 

By visualising spending patterns, the Money Story feature aims to make it easier for consumers to understand their spending throughout the year. 

With animated quiz questions that prompt users to reflect on where they think they spent their money in 2022, Money Story aims to make financial management more fun and engaging. 

Next to total 2022 spending, consumers also receive insights segmented by month, retailer and category. Money Story includes data from all spending made through Klarna, including purchases using the Klarna App, the Klarna Card and at partnered retailers' checkouts.

“Our goal with Money Story is to make financial wellness more approachable for millions of consumers," said Felix Würtenberger, head of card and banking at Klarna. 

"For Klarna's consumers, this will be the first time they ever receive a comprehensive overview of their yearly Klarna spending. By gamifying the often dull and daunting chore of money management, we hope to inspire users to take control of their finances and make the most of their hard-earned money in 2023 and beyond."

ECB Publishes First Set Of Climate-Related Statistical Indicators 

The European Central Bank (ECB) has issued its first set of indicators to help analyse climate-related risks in the financial sector and monitor the green transition.

As they are in an experimental phase, the ECB has said that the indicators should be considered as a “work in progress”.

This is to better assess the impact of climate-related risks on the financial sector and to monitor the development of sustainable and green finance, fulfilling another of the commitments of its climate action plan.

“We need a better understanding of how climate change will affect the financial sector, and vice versa. For this, the development of high-quality data is key,” said executive board member Isabel Schnabel. “The indicators are a first step to help narrow the climate data gap, which is crucial to make further progress towards a climate-neutral economy.”

The indicators are, so far, split into three areas: experimental indicators on sustainable finance; analytical indicators on carbon emissions financed by financial institutions; and analytical indicators on climate-related physical risks.

OBIE Appoints Payments Maverick

The Open Banking Implementation Entity (OBIE) has announced that Marion King has been appointed as its new chair and trustee and will commence work at the start of next month.

King is well known in the payments industry. Prior to this role, King was director of payments at NatWest Group and Mastercard’s UK and Ireland president.

She has also served as chief executive of VocaLink, a specialist payments partner to banks, corporate partners and government departments.

“Open banking is a UK success story and exemplifies the very best of UK innovation and entrepreneurship, providing benefits to over 6.5 million consumers and small businesses,” said King in a statement. “I am looking forward to seeing even more users adopt and take advantage of products that will help them better manage, move, and make more of their money.”

King’s priorities will apparently include the protection of the Competition and Markets Authority Order, which puts certain requirements on the UK’s nine largest banks, and working with stakeholders and the Joint Regulatory Oversight Committee, following their decisions on the future long-term regulatory framework for open banking in the UK.

Credit Karma Pays $3m Over Dark Patterns

US credit and financial management platform Credit Karma has settled a case with the Federal Trade Commission (FTC) over dark patterns.

The FTC alleged that Credit Karma told consumers that they were pre-approved and had “90% odds” for credit card offers, while in most cases they did not qualify for the offers.

The FTC’s complaint was first announced last September and finalised on January 23.

Last week, the Consumer Financial Protection Bureau warned subscription-based companies against using dark patterns that mislead consumers or make it difficult for them to cancel subscriptions.

BaFin Looking For Views On Retail Banking

BaFin, Germany’s financial watchdog, has started a consultation on product oversight and governance arrangements for retail banking products. 

The consultation covers different types of banking products including payment services, as well as consumer loans and deposits. 

Feedback needs to the submitted to the regulator by February 28. 

Sheeva.AI Secures $9.25m Series A Funding Round For In-Car Payments

Sheeva.AI, a US-based in-car payments solutions provider, has closed a $9.25m Series A funding round led by Reynolds and Reynolds Company alongside Pegasus Tech Ventures.

Using patented geolocation technology, Sheeva.AI allows drivers to pay for services such as fuelling, EV charging, parking, curbside pickup and drive-through without leaving their vehicle.

Sheeva.AI’s technology automatically detects the vehicle at the specific gas pump, parking spot, electric vehicle charging space, or drive-through lane, and enables payments using the in-car infotainment screen or an original equipment manufacturer (OEM) app.

Sheeva.AI said it will use the new funding to build out its production team, increase its automotive partners and add new service partners across the fuelling, EV charging, parking,  tolling, curbside retail and drive-through verticals in the US, India, Europe and Japan.

Monaco Criticised Over AML Record

Monaco needs to “step up” efforts to investigate and prosecute money laundering, MONEYVAL has said in its latest assessment

In a report published January 23, the Council of Europe’s anti-money laundering (AML) body said that the city-state needs to further strengthen measures to combat money laundering and the financing of terrorism. 

This is particularly the case when it comes to investigating and prosecuting money laundering, confiscating and recovering proceeds of crime, as well as strengthening its supervisory system, according to MONEYVAL.

The report also expresses concern regarding the very low number of convictions achieved, and the even lower number of confiscation measures ordered, none of which covers property of equivalent value or property held by third parties. 

According to the AML watchdog, Monaco must enhance its efforts to identify and prioritise such cases, as well as seizing, confiscating and recovering the proceeds of money laundering and predicate offences.

MONEYVAL also warned that the implications for failing to comply with AML rules are lacking, as well as deficiencies in beneficial ownership checks.

Brussels Launches Late Payments Consultation

The European Commission has launched a public consultation to collect information on late or unfair payment practices and payment behaviour in commercial transactions. 

The input from the consultation will inform the upcoming revision of the Late Payment Directive, which is happening in conjunction with the EU’s “SME Relief Package”.

Stakeholders have until March 17 to respond. 

The directive was last updated in 2011 and requires debtors to pay interest and the reasonable recovery costs of the creditor if they fail to pay for goods or services on time. 

The limits are within 60 days for businesses and within 30 days for public authorities.

Lithuania Punishes EMI For Shortcomings

The Bank of Lithuania has restricted e-money provider Transactive Systems from taking on new clients and told it that it cannot provide services to existing clients who provide financial services, including money transfers and the issuance of e-money.

On its website, the company has confirmed: “For some customers, the provision of our services is temporarily suspended until further notice.

“The funds held in your account opened with us are safe. The funds are (sic) safeguarded as required by the law and are not affected in any way.” 

The decision comes after an onsite inspection of the EMI, which identified significant compliance failures. 

These are related to the identification of the client representatives and beneficiary, the application of money laundering and terrorist financing risk management measures to high-risk clients, business relations and monitoring of operations and implementation of international sanction rules. 

Spain Joins Race To Host New EU AML Authority

Spain’s anti-money laundering (AML) agency announced on January 20 that the Spanish government will put Madrid forward as the home to the EU’s Anti-Money Laundering Agency (AMLA)

The proposal outlines that Spain has a strong commitment to the prevention of money laundering and European values with worldwide recognition.

Spain has got the highest Financial Action Task Force (FATF) ratings and is the only country in the world that has “substantial” or “high” level of compliance with ten out of the 11 recommendations. Additionally, the proposal stresses it has high standards of compliance, particularly in the banking sector.

“The designation of Madrid as the headquarters of AMLA would make it possible to establish collaboration with other organisations and entities, as well as to recruit specialised and highly qualified personnel, while maintaining the necessary independence of the agency,” the proposal says.

Apart from Spain, Germany has expressed desire to make Frankfurt the home to the new authority. The Hague was also suggested by the Netherlands, but the country has since withdrawn its bid.

Russia’s VTB Bank Launches New Telegram-Based Banking Service

VTB, Russia’s second-largest bank, has launched a new banking-as-a-service feature that will be hosted on Telegram, the instant messaging platform.

In the first phase of the launch, customers will be able to check balances of their VTB cards and accounts, pay for mobile services and send money using Russia’s Faster Payments System (SBP).

In the future, VTB plans to launch QR payments, QR generation, transaction monitoring, money transfers and other features that will be accessible from within the Telegram app.

By the end of 2023, VTB said customers should be able to access all routine banking services and new digital products via Telegram.

Touch 'n Go eWallet Launches Malaysia's First CRS-Linked Visa Card

Touch 'n Go eWallet, Malaysia’s largest e-wallet by number of users, has partnered with Visa to launch the country’s first prepaid corporate social responsibility (CSR)-linked card.

In a statement, Touch 'n Go said the card is also the first numberless card to be launched in Malaysia, a feature that will offer stronger privacy and security controls. 

As an additional payment channel linked to the Touch 'n Go eWallet, the card will allow users to make payments at merchants who do not have a Duitnow QR code, which is necessary for contactless Touch 'n Go eWallet payments.

The card also allows users to withdraw cash at ATMs and make online and offline payments internationally. 

For every card issued, RM2 ($0.47) will be donated to United Voice, a charity focused on training, upskilling and creating employment opportunities for people with learning disabilities.

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