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 /  News  /  17 May 2019

Weekly News Digest 17 May 2019

Credit cards stack 2
Weekly News Digest 8th November 2019
US loan standards tighten | Spain mulls revolving credit regulations | Australian bank results | Wirecard buys AllScore
Glass buildings
Weekly News Digest 1st November 2019
Mastercard transactions soar | Quarterly results from banks worldwide | Uber Money launch | Raisin plans for US
results chart image
Weekly News Digest 25 October 2019
Quarterly results from cards networks | RBS results reveal cards growth | Handelsbanken narrows focus
Chart 4
Weekly News Digest 18 October 2019
Shining Q3 for US consumer banking | Libra board elected | Machine Learning keeps a banker in the loop and more...
Credit cards – abstract
Weekly News Digest 11 October 2019
Small US issuers struggle with delinquency | PayPal quits Libra | Deutsche IT push | Europe's banks cope with low rates
Diverging rails
Weekly News Digest 4 October 2019
Revolut picks Visa for global expansion | US schemes cool on Libra | Eurozone cards thrive | tough month for UK challengers | PayPal gets Chinese payments licence
Exloding pie chart
Weekly News Digest 27 September 2019
US banking revolution | schemes beyond rails | UK branches close | depositors pay in Denmark | Rome mulls cash-use penalty
Federal Reserve 3
Weekly News Digest 20 September 2019
Fed rates cut | data-led revenues beckon, |UK payments transforming | Hong Kong neobanks on ice | TransferWise profits
Bank sign
Weekly News Digest 13 September 2019
UK banks' PPI hit | Stripe doubles down on lending | Netherlands instant payments launch | Aus neobanks are go | UK regulator considers industry data
Weekly News Digest 6 September 2019
Pay-by-hand at Whole Foods | facial payments in China | changes at the ECB | UK challenger bank growth
Credit cards
Weekly News Digest 30 August 2019
US credit cards market reaches $900bn | Buy Now Pay Later market booms | China plans state-backed cryptocurrency | India's banking robots | QR code disruption
Goldman Sachs office
Weekly News Digest 23 August 2019
Goldman issuing | Volcker reform | low-rate dominoes | ANZ challenges | DBS plans credit card for India

India's Paytm Payments Bank is a step closer to its founder's long-cherished ambition to become a "full-stack payments player" with news that the firm, prevented by law from lending directly, is partnering with Citibank to launch the Visa-branded Paytm First Credit Card. As it is already numbered among the top five largest credit card issuers in the country, Citi's strategy turns on opening up a neglected customer base. Considerably sweetening the deal for customers mulling the offer is a one percent cashback at the end of each month. Those who spend over 50,000 rupees ($714) using the card in a year will have their annual fees waived. Reportedly, the payments bank has over 40 million debit cards in use and over 150 million active users of its wallet, while the e-commerce company (Paytm.com) that gave birth to the payments bank is the country's largest m-commerce platform.

Two globally familiar names are among the backers of Paytm: Warren Buffett and Jack Ma, with the latter's firm, Alibaba, holding a majority stake in Paytm's holding company, One97 Communications. As Beijing and Washington joust over trading arrangements, businesses from both countries are clearly finding profitable ways to cooperate in burgeoning new markets such as India. In other news from the subcontinent, the QR code is set for an official boost as the authorities consider mandating a QR code-based option for payments using the country's Unified Payments Interface (UPI) at all retail points-of-sale.

Time was when banks in different regions faced strikingly different challenges. Now, the boardrooms of Toronto, Madrid or Sydney generally echo to the sounds of similar concerns, from BIS capital ratios to digitalisation. This week, one of the big Japanese banks, Mitsubishi UFJ Financial Group (MUFG), provided a striking example of the challenges faced by incumbents in an increasingly mobile-first world. The financial services giant reported a fall in annual net profit of 12 percent, with an almost $900m write-down for its credit card operations cited as a leading culprit: the bank has had to suspend an overhaul intended to consolidate management of its three separate card brands. Cashless challengers have been exploiting new payment modes such as QR, which reportedly confounded the abandoned MUFG system. The firm can hardly be accused of not making an effort however: later this year it plans to issue its own virtual currency. In other banking results, Crédit Agricole's retail banking operations reported a climb in loan outstandings and improved origination in vehicle loans; Russia's Tinkoff Bank meanwhile saw a 72.5 percent growth, compared to the same period last year, in its net loan portfolio.

In Europe, the established banks are preoccupied with how best to manage the decline of their branch networks and the changing nature of staff roles. For Spain's Banco Santander, the latest plan is to cut over a tenth of its workforce and close one in four branches; making money in Europe is becoming increasingly difficult and so the bank is looking to Latin America to improve profitability. Meanwhile, as a costly integration with Postbank continues, Germany's Deutsche Bank has closed over 400 branches and is now accelerating steps to reduce staff at headquarters and consolidate consumer finance operations to a single centre in Bonn. "Having never really recovered from the Global Financial Crisis, Deutsche continues to be the sick man of European banking," said Patrick Houlihan of Verisk Financial Lafferty Research. "Santander, on the other hand, has established itself as a major player in the relatively underdeveloped markets of Latin America, which opens up the opportunity to grow revenue and profits from the region over the next decade or two. In the meantime, margins will continue to be squeezed in Europe due to a combination of low interest rates, tightened regulation and increased competition from the neo-banks."

To end, links to some other stories of interest this week...

The Weekly News Digest from Verisk Financial Research highlights significant developments that have recently occurred in payment cards, digital payments, acquiring, processing, retail banking and consumer credit. Our writers and researchers frame these items in contexts such as historical, sectoral and regional trends, adding a layer of value that is often missing from the rolling news cycle.

About Verisk Financial Research

The market-leading online, interactive database and data dashboards covering the global cards and payments industry in detail, plus a range of data-packed country and regional reports. Leveraging Lafferty Research data going back to 2010 – and forecasts up to 2020 – our unique datasets cover 72 countries around the world and feature more than 250 metrics per market.

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