Daily Dash: UK FCA Cancels Licence Of Payment Firm Global 4X

June 21, 2024
Global 4X has lost its UK licence after four years of inactivity, while DNA Payments has launched a POS solution that allows merchants to accept open banking payments via consumer mobile banking apps.

UK FCA Cancels Licence Of Payment Firm Global 4X

The UK Financial Conduct Authority (FCA) has cancelled the authorised payment institution (API) licence of Global 4X due to inactivity and inappropriate safeguarding of funds.

In its reports to the FCA for 2020, 2021 and 2022, Global 4X said it had undertaken no payments services and had no appropriate safeguarding arrangements in place.

In August 2023, the FCA wrote to Global 4X warning that, due to inactivity over the previous 12 months, its licence was at risk of being cancelled. The firm responded with a confirmation that it was not trading, but did not initiate the process of cancelling its own licence.

“The Authority has concluded that, on the basis of the facts and matters described above, the Firm is no longer meeting the conditions for authorisation as an API,” said the FCA. “Its authorisation as an API should be cancelled in order to protect the interests of consumers.”

DNA Payments Launches Open Banking POS Solution In UK

DNA Payments has announced the launch of an open banking solution that will allow merchants that use its axept® PRO payment terminals to accept payments via mobile banking apps.

Jan-Pieter Lips, CEO of DNA Payments, said open banking payments are cost-effective for merchants, such as wholesalers and car dealerships, who take large-ticket transactions.

“Our role as DNA Payments is to make this as easy as possible," he said. "We enable open banking payments by showing a QR code on the payment terminal so the consumer can scan and pay quickly and securely, with settlement and reconciliation easily tracked in our Merchant Portal.

“These payments don't attract chargebacks, and because consumers validate their payment in their bank app, they are very secure.”

The introduction of POS open banking transactions builds on DNA’s launch of Open Banking for Ecommerce in April 2021.

Riksbank Plans To Adopt European T2 Platform For Payment Settlement

Sweden's Riksbank has confirmed that it plans to advance the integration of its RIX-RTGS payment settlement service with the European technical platform T2. 

This move fulfils the central bank's 2021 policy decision, aiming to enhance the efficiency and security of payment settlements in Swedish kronor.

“RIX-RTGS is a cornerstone of the financial system in Sweden and for the general public to be able to make payments,” said Erik Thedéen, governor of the Riksbank.

“By connecting it to the European T2 platform for settling payments in Swedish kronor, we can, together with other central banks, ensure that RIX-RTGS becomes an even safer and more efficient payment system in the long run, both in everyday life and in a crisis.”

Contract negotiations with the European Central Bank (ECB) are slated to begin in 2024, with the complete transition to T2 expected to take approximately five years. Throughout this period, RIX participants will be consulted to establish a detailed timetable for the transition. 

The Executive Board of the Riksbank also reaffirmed its commitment to eventually migrate securities settlement to the European TARGET2-Securities (T2S) platform. 

However, they emphasised that the transition to the T2 platform will be prioritised and completed before initiating any shift to T2S.

Singapore, Cambodia Financial Transparency Corridor Goes Live

The central banks of Singapore and Cambodia have announced the launch of a new Financial Transparency Corridor (FTC) initiative between the two countries.

The FTC is a consent-based digital infrastructure and network between financial institutions (FIs) that aims to catalyse increased trade and cross-border financial services between small and medium-sized enterprises (SMEs).

The ease of data accessibility will enable participating FIs to make better credit risk assessments and facilitate greater availability of financing for SME trade between Singapore and Cambodia.

Subsequent phases of the FTC initiative will increase the deal flow, number of financial institutions involved, and will explore green finance and trade finance to bolster the capabilities of each country.

The two central banks signed a memorandum of understanding (MoU) in July 2023 to collaborate on the FTC initiative.

India Aims To Fight Fraud Through Central Bank 'Payments Intelligence Platform'

The Reserve Bank of India (RBI) has proposed the creation of a Digital Payments Intelligence Platform to “harness advanced technologies to mitigate payment fraud risks”.

“Growing instances of digital payment frauds highlight the need for a system-wide approach to prevent and mitigate such frauds,” said RBI governor Shaktikanta Das.

“It is, therefore, proposed to establish a Digital Payments Intelligence Platform for network level intelligence and real-time data sharing across the digital payments’ ecosystem.”

To develop the proposal, the RBI has constituted a committee to examine the various requirements of the digital public infrastructure build.

The committee, which is expected to give its recommendations within two months, is chaired by Abhaya Hota, former managing director and CEO of the National Payments Corporation (NPCI).

FCA Imposes Restrictions On Larstal Limited (AstroPay)

Larstal Limited, an e-money firm which trades as AstroPay, has entered a “voluntary undertaking” following a compliance dispute with the UK Financial Conduct Authority (FCA).

With immediate effect, AstroPay has agreed to refrain from accepting any new customer funds and from providing payment services or issuing or redeeming e-money without prior consent from the FCA.

The firm must also “ensure that all relevant funds are appropriately ringfenced in a designated safeguarding account(s)”.

In a statement posted on its website, ‍AstroPay said the measures are “temporary” and the firm is “working to resume normal operations soon”.

It is unclear why the restrictions have been imposed; however, a report from Bloomberg this week suggested the firm is struggling to pay back its creditors.

EU Extends Sanctions On Russia Over Crimea Annexation Until June 2025

The Council of the European Union has extended its sanctions against Russia, which were imposed in response to the annexation of Crimea, until June 23, 2025. 

These sanctions, which were initially introduced a decade ago in June 2014, are a part of the EU's ongoing efforts to respond to Russia's actions in Ukraine.

The measures include a ban on the import of products originating from Crimea into the EU, and a ban on EU-based companies from making infrastructural or financial investments in the region or offering tourism services there.

The sanctions also cover the export of certain goods and technologies to Crimean companies.

These restrictions specifically target goods and technologies intended for use in the transport, telecommunications and energy sectors, as well as for the prospection, exploration and production of oil, gas and mineral resources in Crimea.

Hungarian Central Bank Reports Q1 Digital Payments Surge 

In Q1 2024, 35 percent of Hungarian household accounts used mobile banking apps for transfers, with digital channels handling 78.1 percent of all transfers, according to the latest data from Magyar Nemzeti Bank, Hungary's central bank.

In good news for the country's payments and e-money sector, payment service providers' revenues grew by 7.3 percent year-on-year.

The Hungarian regulator's data also reveals that the card acceptance network expanded with 2,500 new internet acceptance points, leading to an 11.5 percent increase in payment card purchases and a 10.7 percent rise in their value.

Cash withdrawals, meanwhile, dropped by 6.2 percent.

International card transactions by Hungarians surged more than 20 percent in number and value, and mobile wallet usage also grew, with a 1.2 percent increase in registered cards.

However, at the same time, non-card fraud attempts among consumers rose by 5.4 percent, and payment card fraud increased by 15.8 percent, with phishing and psychological manipulation being common fraud methods.

US Treasury Expands Secondary Sanctions Against Russia

The US Treasury has announced new measures that will “ratchet up” the risk of secondary sanctions for foreign financial institutions (FIs) that deal with Russia’s war economy.

In December 2023, President Joe Biden expanded the Treasury’s tools to “disrupt and degrade” Russia’s war effort by authorising it to impose sanctions on foreign FIs for aiding Russia’s military-industrial base.

Last week, the Treasury broadened the definition of Russia’s military-industrial base to include all persons blocked pursuant to Executive Order (EO) 14024.

This means that foreign FIs risk being sanctioned for facilitating transactions or services to designated Russian banks such as Sberbank and VTB Bank.

“This expanded definition reflects Treasury’s assessment that Russia has re-oriented its economy and marshalled all parts of its government toward supporting its reprehensible war effort,” the Treasury said.

“Financial institutions should review OFAC’s updated sanctions advisory for practical guidance on how to identify sanctions risks and implement corresponding controls."

EBA Publishes New Prudential Standards For Stablecoins, E-Money Tokens

The European Banking Authority (EBA) has unveiled a comprehensive package of technical standards and guidelines under the Markets in Crypto-Assets (MICA) regulation, focusing on prudential matters such as own funds, liquidity requirements and recovery plans.

This includes final draft regulatory technical standards for adjusting own funds requirements and stress-testing programmes for issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs).

These standards outline criteria for assessing higher degrees of risk, procedures for authorities to determine compliance periods, and minimum requirements for issuers' stress-testing programmes.

The guidelines, meanwhile, focus on recovery plans, specifying the format and content that issuers must develop and maintain.

Based on consultation feedback, these guidelines also detail communication and disclosure plans, and targeted amendments have been made for clarity. These include new definitions and a paragraph clarifying that certain reserve asset requirements do not apply to EMT issuers not required to hold a reserve under MiCA.

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