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 /  News  /  17 May 2019

Weekly News Digest 17 May 2019

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
US credit cards
Weekly News Digest 16 August 2019
US consumer credit delinquency grows | Venmo boosts instant payments | NatWest trials voice banking | TransferWise launches in Australia and New Zealand
Weekly News Digest 9 August 2019
Mastercard buys Nets' RTP | Heidelpay to KKR | Klarna soars while GreenSky dips | Apple Card launches | European bankers chafe at ECB rate
Fork in the road
Weekly News Digest 2 August 2019
BofA exits First Data JV | Citi at crossroads | Mastercard soars | European banks' 2Q | Indian cashless MSCs
Federal Reserve 2
Weekly News Digest 26 July 2019
Competition in US real-time payments | Deutsche Bank losses | Nationwide hikes overdaft charges | RuPay launch to boost credit cards in India?
Wall Street image
Weekly News Digest 19 July 2019
Consumer banking drives profits | Big Tech in payments | WhatsApp ready to join India's crowded payments market? | Challenger banks in Australia
Shopping bags
Weekly News Digest 12 July 2019
Revolving credit reaches YTD high in US | Volcker Rule 2.0 | Britain eyes future of payments | Australia bank capital buffers | Push mobile payments in Japan
Weekly News Digest 5 July 2019
POS-financing draws global schemes | Spanish banks prepare domestic card | Australian Open Banking era begins
Beacon light
Weekly News Digest 28 June 2019
Regulators scrutinise Libra white paper | Bank of England mulls liquidity for fintechs | Citi trims perks on credit cards

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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