Daily Dash: UK Chancellor Addresses Bigtech Monopolies In Budget

November 18, 2022
UK Chancellor warns of increased bigtech scrutiny, the Clearing House (TCH) has published its US real-time payments transactions data for the first time, and the European Central Bank joins new EU cloud network initiative.

UK ‘Will Challenge’ Bigtech Monopolies, Says Chancellor

Jeremy Hunt, the UK’s chancellor, has unveiled his plans for bigtech in the Autumn Budget

Referencing the so-called “big bang” for UK financial services in the 1980s, Hunt said that “the most important driver of global success is not tax subsidies but competition.”

“So we will legislate to give the Digital Markets Unit new powers to challenge monopolies and increase the competitive pressure to innovate,” he said.

The Digital Markets Unit (DMU) was set up in April 2021. It sits within the UK’s Competition and Markets Authority (CMA) to oversee bigtech players and competitiveness in the digital markets. 

Among his priorities, the chancellor said he wanted to “turn the United Kingdom into the world’s next Silicon Valley.”

Hunt also touted that the Conservative government’s work internationally had ensured that big tech players are more accountable to pay tax. 

Real Time Payments Not Taken Off, Reveals TCH Stats

The Clearing House (TCH), the US private-sector clearing house, has for the first time published data on the use of its real-time payment system, revealing that the RTP network handled 45m transactions valued at $19.7bn in Q3 2022.

The RTP was launched in 2017, offering real-time interbank payments. Its initial goal was to achieve ubiquity in the US by 2020, but data released yesterday (November 17), on the fifth anniversary of the system, shows it reaches only 62 percent of the bank accounts.

By comparison, the national Automated Clearing House (ACH) says there were 7.6bn total ACH digital payments in the same quarter, valued at $19.2trn, meaning RTP represents less than 1 percent of credit transfers. Meanwhile, India’s Unified Payments Interface (UPI), which is the largest instant payments system by volume, processed 19.6bn transactions in Q3.

TCH says currently there are 285 banks and credit unions providing services using RTP and 85 percent of banks have technical access to the network.

ECB Joins EU Data And Cloud Initiative

The European Central Bank (ECB) has become a member of Gaia-X, a non-profit association advocating digital sovereignty for Europe.

Gaia-X develops common standards for digital services like cloud services. This allows data to be collected and shared in an environment of trust. 

According to the ECB, this will support the digital transformation of the economy and is in line with the European Commission’s digital strategy.

The common standards crafted by Gaia-X are intended to make services interoperable, meaning that users can combine different digital services in the way that best meets their specific needs. 

For example, they will be able to store their data with one service provider and analyse the data with the services offered by another.

Members so far include the consultancy firm Accenture, as well as Siemens and the mobile provider, Orange. 

Italy’s Largest Bank Sells Off Entire Holding Of Nexi Shares

Intesa Sanpaolo, Italy’s largest bank by total asset value, has sold off its entire holding of shares in its retail payments partner, Nexi.

In an investor statement, Intesa said it sold 67m shares in Nexi for a total price of €584m. Intesa also said this amounts to about 5.1 percent of total Nexi stock.

Intesa took advantage of a 10 percent rally in Nexi stock over the past week, following better than expected quarterly results from the payment firm.

Nexi has risen to become one of Europe’s largest fintech ventures since it emerged from a rebrand in 2017 and a subsequent merger with fellow Italian payments company SIA and Nordic acquirer Nets.

In July, it was announced that Nexi was chosen as the platform and service provider for Ireland’s first instant mobile payment service, Synch Payments. In February this year, Nexi also won a contract to build and operate an instant payments platform in UAE over the next five years, alongside Accenture and G42.

ACI Worldwide Relieves CEO 'Without Cause'

ACI Worldwide, a US payments software firm, has announced that Odilon Almeida has been terminated as company president and CEO “without cause”.

Thomas Warsop, formerly non-executive chair of the ACI Board of Directors, has been appointed as interim president and CEO, effective immediately. 

Mary Harman, chair of ACI’s nominating and corporate governance committee, said: “As ACI advances its vision to lead the real-time payments revolution, the Board determined that now is the right time to transition to a new leader focused on accelerating our technology transformation and delivering operational excellence across our business.”

Warsop, 56, joined the board in June 2015 and became non-executive chair in June 2022. From 2007 to 2012, he served as group president at Fiserv.

For his role as interim president and CEO, Warsop will be paid $325,000 per month. 

Bahrain Triples Its Digital Wallet Transaction Volume In One Year

The Central Bank of Bahrain (CBB) has released new data showing a spectacular rise in the use of digital wallets during the COVID-19 pandemic.

In 2021, according to the central bank’s Digital Payment Landscape Report, digital wallet transaction volume increased 196 percent compared with the previous year.

Digital wallet transaction value also doubled during the same period, rising 111 percent above the previous year’s total.

In contrast, point of sale (POS) card transaction volume increased 50 percent in 2021, and POS card transaction value increased 35 percent.

“Consumers were more comfortable with digital payments, contactless shopping, remote delivery of products and services and having a wider choice available at their fingertips,” said the CBB. 

“For such a demographic, the digital payment landscape provided a fertile ground for growth.”

Recurring UPI Payments Enabled On Google’s Indian Play Store

Google has announced that UPI Autopay is now live on Google Play in India, allowing users to make recurring payments using any UPI application that supports the feature. 

Introduced under UPI 2.0 by the National Payments Corporation of India (NPCI), UPI Autopay is designed to service recurring payments for mobile bills, utility bills, insurance, entertainment and other subscription products.

When selecting a subscription plan for any app on Google Play that supports UPI Autopay, users can now tap "Pay with UPI" at checkout to set up a recurring payment.

Unified Payments Interface (UPI) acceptance was first introduced to the Google Play Store in India in 2019.

India's UPI To Connect With Singapore's PayNow Within 'Months', Says Diplomat

India’s UPI instant payments system is expected to be linked to PayNow, its equivalent in Singapore, within the “next few months”.

Speaking at the ASEAN Cambodia 2022 summit in Phnom Penh last week, P. Kumaran, India’s High Commissioner to Singapore, said the linkage will be announced by Prime Minister Narendra Modi once completed.

The tie-up will mean that Indians in Singapore, or vice versa, can send money to each other almost instantly using a simple identifier such as a mobile number and for a fraction of the cost.

"For us, the practical implications sitting here is that any worker who wants to send small amounts can do so at a fraction of the money they are being charged by the standard money transfer companies,” said Kumaran, as quoted by NDTV. 

“So it is going to be a big benefit to those who instead of sending money in one go can do so in small pieces, and it will still cost less.”

Russia Is Moving Towards A SWIFT Unlock For Rosselkhozbank

A top Russian diplomat has said that Rosselkhozbank, a state-owned agricultural bank, could soon be reconnected to SWIFT so that payments for grain and fertiliser exports can be received.

Sergey Vershinin, Russia’s deputy foreign minister, said over the weekend that he discussed the matter with United Nations (UN) representatives in Geneva, Switzerland, and they are sympathetic to Russia’s proposal.

“This is not the first time we are discussing this,” said Vershinin, as quoted by Russia’s TASS news agency. “From my point of view, reconnection of the Rosselkhozbank, which provides the majority of agricultural transactions, is a key issue.

“We talked about this very substantively and for a long time and we again received assurances from the UN representatives that they also consider this issue to be vital. We are working on it, and we will achieve it.”

Alternatively, Vershinin also proposed that Rosselkhozbank could open correspondent accounts with foreign banks such as Citi or J.P. Morgan as a temporary option.

Zimbabwean Central Bank Launches CBDC Consumer Survey

The Reserve Bank of Zimbabwe is exploring the possibility of introducing a central bank digital currency (CBDC) and has begun conducting a CBDC consumer survey.

It is hoped that this will solicit opinions on the design and nature of a CBDC for the country, which currently uses the Zimbabwe dollar, and its overall acceptance by the public. 

Stakeholders have until December 7 to respond to the central bank. 

Participants are asked to explain the differences between a CBDC and the regular Zimbabwe dollar in the survey, and are also asked to rate their chances of using digital currencies or to state why they are willing or unwilling to use the digital Zimbabwe dollar.

In addition to asking participants to rate the importance of several features like privacy, transparency and transaction speed, the central bank also wants them to pick between the CBDC and using crypto-assets.

New Italian Prime Minister Eyes Up New Cash Limit

Italy is set to raise the cash payments cap from €1,000 to €5,000, a draft decree has revealed. 

As it stands, the new cap would be introduced next year. 

Raising the cap was one of the campaign pledges of Giorgia Meloni, Italy’s Prime Minister, and the right-wing coalition that make up her government. 

Campaigners in Italy are unhappy with Meloni’s proposal, warning that it could aid money launderers and tax evaders in the country. 

Although controversial in Italy, the new cap would fit within planned EU rules for a €10,000 cap.

Google Rolls Out User Choice Billing with Spotify

Spotify and Google have begun testing user choice billing (UCB).

The new tool would give Spotify users the freedom to subscribe and make purchases using the payment option of their choice, the companies said in their announcement. 

“Spotify has been publicly advocating for platform fairness and expanded payment options for years,” the company said.

“We believe that fair and open platforms enable better, frictionless consumer experiences that also empower developers to imagine, innovate, and thrive.”

First announced in March, the latest details come after Google began piloting the first of its kind UCB in jurisdictions including the EU, Japan and India to allow developers of non-gaming Android apps to test payment alternatives.

Danske, NatWest, Nationwide Breached Retail Banking Order, CMA Says

In three separate letters sent to Danske, NatWest and Nationwide, the Competition and Markets Authority (CMA) has said the banks breached its Retail Banking Market Investigation Order 2017.

According to the competition agency, Danske and Nationwide failed to keep information shared through open banking APIs accurate and up to date, while NatWest failed to display the correct annual percentage rate for an SME lending product.

Each of the three banks notified the agency of the breaches and took steps to end them, the letters state.

Since the publication of the retail banking market investigation order in 2017, the CMA has written to banks more times 25 times, most recently in July.

German Government Set To Back Cash Cap

Interior minister Nancy Faeser has told local press that she wants a cash cap of €10,000 in the country. 

“A 30,000-euro cash purchase of jewellery or watches should soon be a thing of the past,” she said, adding that she felt a cap would reduce the risk of criminal assets being concealed. 

Many countries in the EU already have cash payment ceilings in place and the EU proposed a similar cap in 2021. However, Germany is a cash-heavy country and, as a result, the proposal is likely to be more contentious. 

When the EU proposal was made last year, for example, a politician from the far-right Alternative for Germany party, Beatrix von Storch, said that “if the EU is now talking about wanting to ban cash payments of 10,000 euros or more, that is the start of a total cash ban for everyone”.

Climate Coalition Launches Best Practices Guidebook

Every Action Counts (EAC) has published a guidance document, which is aimed at supporting firms to engage with consumers on climate change issues. 

EAC was launched last year and includes members such as Mastercard, Ant Group and banks such as BBVA and Rabobank. 

The guidebook provides a first overview of the approaches chosen by EAC members for empowering their customers with impact transparency and with options to make greener choices. 

According to EAC, this includes a focus on specific design principles, landscaping of initiatives and deep-dive case studies too. 

It shares lessons learned in the process of developing digital solutions and engagement models to enable the adoption of carbon-light and nature-positive lifestyles. 

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