Hogan Lovells

Key developments of interest over the last month include:

  • Spain: The Spanish Council of Ministers has approved a draft Bill for the Digital Transformation of the Financial System, which will create a Spanish regulatory "sandbox" to test FinTech initiatives.
  • United Kingdom: The government has set out its Spring 2020 Budget, which includes plans for a call for evidence on a review of the UK payments landscape, as well as a review of the FinTech sector.
  • Europe: The European Commission has announced that it will launch a public consultation from March to May 2020 to help formulate a new EU Digital Finance Strategy. The Strategy is due to be presented in Q3 2020.

In this Newsletter:

  • Regulatory Developments
  • Payment Market Developments
  • Surveys and Reports

For previous editions of the Global Payments Newsletter, please visit our Financial Services practice page.

Regulatory Developments

Spain: Council of Ministers approves draft Bill creating FinTech sandbox

On 18 February 2020 the Spanish Council of Ministers approved the draft Bill for the Digital Transformation of the Financial System, which will create a Spanish "sandbox" to test FinTech initiatives.

The "sandbox" will create a legal framework designed to ensure that innovation in the financial sector is initiated and developed in an efficient and secure way for consumers. For example, projects may be exempted from certain regulations during the testing period. The "sandbox" also allows the testing of unregulated activities so that new regulatory frameworks can be formulated following the testing period.

Any entity which meets the eligibility requirements can seek access to the "sandbox" by applying to the General Secretariat of the Treasury and International Finance (SGTFI) with a memorandum explaining their proposed project. The SGTFI will maintain a list of admitted projects on its website.

The draft Bill is now with the Spanish Parliament for final approval.

See further information here.


United Kingdom: Government sets out Spring 2020 Budget

On 11 March 2020 Rishi Sunak, Chancellor of the Exchequer, delivered the Spring 2020 Budget. Points of interest include:

  • On the government's review of the UK payments landscape, HM Treasury will shortly publish a call for evidence asking what actions the government, industry and regulators can take to support a more innovative and resilient payments system.
  • On FinTech, Ron Kalifa OBE will lead a review of the UK FinTech sector to identify what more industry and government can do to support sector growth and competitiveness. The government will also extend funding for the FinTech delivery panel and will travel around the UK showcasing its wide range of FinTech firms.
  • On digital identity, the government will create a digital identity market to enable people to prove information about themselves without the need to present paper documents. The aim is to make actions such as opening a bank account simpler, safer and quicker.
  • The awaited publication of the Bank of England's discussion paper on a possible UK central bank digital currency is referred to, and the paper was then published on 12 March (see the separate item on this below).
  • On cryptoassets, the government is planning a consultation on bringing certain cryptoassets within the scope of financial promotion regulation. It also intends to consult later in 2020 on the broader regulatory approach to cryptoassets, including new challenges from stablecoins.
  • HM Treasury has published a response to its July 2019 call for evidence on the government's Financial Services Future Regulatory Framework Review alongside the Budget, setting out the next steps in its review (see the separate item on this below).
  • Firms subject to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692) will be required to pay a new levy to help fund new government action to tackle money laundering and to ensure it delivers the reforms in the Economic Crime Plan. A government consultation on the levy will be launched later in spring 2020.
  • The government has launched a consultation on its Reforming Regulation Initiative, looking at ways to ensure that regulation is sensible and proportionate. The consultation closes on 11 June 2020.


Europe: European Commission to launch consultation on new EU Digital Finance Strategy

On 26 February 2020 the European Commission announced that it would launch a public consultation from March to May 2020 to help it to formulate a new EU Digital Finance Strategy, which will be presented in Q3 2020.

The Commission set out some questions that it would like to ask:

  • What benefits can digital finance bring?
  • How can consumers and businesses be protected?
  • How can innovative technologies be regulated without being stifled?
  • How can a level playing field between banks, FinTechs and BigTechs be ensured?
    Alongside this consultation, the European Commission plans to organise a hackathon to bring together engineers and policymakers to create digital solutions. Outreach events will also be held in key FinTech cities around Europe so that the Commission can hear the views of FinTech stakeholders.

On 3 March 2020 the European Banking Authority (EBA) published a speech which encourages the Commission to establish supervisory frameworks for third party service providers, and to implement higher standards regarding security, data protection and crypto-assets in particular. To assist with this, the EBA will look into how regulators can use technology to help monitor and supervise market participants.


United Kingdom: Bank of England (BoE) discussion paper on central bank digital currency

On 12 March 2020 the BoE published a discussion paper on central bank digital currency (CBDC). As the use of cash falls and the digital economy grows, the BoE is interested in exploring how CBDC could improve the usability of central bank money and assist the BoE to maintain monetary stability.

The paper sets out what the BoE considers to be the opportunities and risks of CBDC, and how it could be designed and implemented. It also provides a CBDC model under which the BoE would provide a core ledger to record CBDC and process payments, and regulated private sector 'Payment Interface Providers' would interact with end-users and provide additional payments functions.

The BoE would like to receive input from a variety of stakeholders, including the public, the payments industry, technology providers and other central banks. Questions that the discussion paper asks include:

  • How could CBDC be designed to improve the speed and efficiency of payments, while facilitating competition and innovation?
  • Does CBDC pose any further opportunities or challenges beyond those set out in the discussion paper?
  • What factors would affect the level of adoption of CBDC as a payment method?
  • Could the potential benefits of CBDC be alternatively achieved through policy measures and/or enabling new private sector arrangements, e.g. stablecoins?
  • What other technological innovations should the BoE be factoring into the potential design of CBDC?

The deadline for responses is 12 June 2020.


Europe: Council of the EU finalises the EU's negotiating directives for Brexit

On 25 February 2020 the Council of the EU adopted a Decision which finalised the EU's negotiating directives in preparation for the negotiations between the UK and the EU regarding their future relationship.

Though largely based on the draft directives which were published on 3 February 2020, the finalised directives include an additional statement regarding financial services to say that "equivalence mechanisms and decisions remain defined and implemented on a unilateral basis" by the EU and that the EU will preserve its regulatory and supervisory autonomy.

On 26 February 2020 the European Commission published a speech given by the EU's chief negotiator, Michel Barnier, which supports this aim to maintain equivalence as a unilateral, impermanent decision by the EU which is "not subject to joint management with the UK".

This approach is at odds with the UK's objective for "structured processes for the withdrawal of equivalence findings" as set out in the government's policy paper.


India: Supreme Court overturns central bank's ban on cryptocurrency-related services

On 4 March 2020 the Indian Supreme Court passed a judgment to overrule the Reserve Bank of India's decision in April 2018 to prohibit financial institutions from providing services related to cryptocurrency trading.

The Reserve Bank of India implemented this ban out of concern for "consumer protection, market integrity and money laundering" and had given the entities it regulated three months to terminate any services they provided that facilitated dealing with or settling of virtual currencies.

Several cryptocurrency exchanges challenged this ban in court on the basis that there was no evidence of any damage to regulated financial institutions as a result of cryptocurrency trading prior to the ban, and so the ban was a disproportionate reaction by the central bank. The Supreme Court agreed with these arguments.


Europe: EPC updates SEPA Proxy Lookup Scheme rulebook

On 5 March 2020 the European Payments Council (EPC) published an updated version of its Single European Payments Area (SEPA) Proxy Lookup (SPL) Scheme rulebook. It also published a related press release and webpage.

The main changes to the rulebook include:

  • The email address and reachability check as optional features in the Scheme.
  • The specification of a maximum liability amount equal to the fee paid to the responding registry provider for the provision of the data.
  • The possibility for an SPL Scheme participant in its role of RRP to charge a fee in exchange for services received by the initiating registry provider.

The EPC has also published:

  • A change proposal submission document setting out the feedback received to its May 2019 consultation on changes to the rulebook and the policy decisions taken by it.
  • A zip file relating to the SPL Scheme Adherence Pack, with a related webpage stating that it contains template versions of the adherence agreement and the schedule information document that must be completed and signed for adherence to the SPL Scheme.

The updated version of the rulebook comes into effect on 1 June 2020.


United Kingdom: HM Treasury responds to Call for Evidence on regulatory coordination in financial services

On 11 March 2020 HM Treasury published its response to the Call for Evidence on regulatory coordination in the financial services sector, which ran from July to October 2019.

The response summarises the views that the government received and the key themes that were raised, including:

  • The need for the volume and timing of regulatory initiatives to be coordinated by public bodies so as to avoid having significant cumulative impact on firms.
  • The need to avoid issuing multiple consultations in a short period of time as providing responses can be resource-intensive for firms.
  • The concern that requests for data may not be targeted or proportionate.

In response to these concerns, the government will launch the Regulatory Initiatives Grid over the summer. This will be a two-year forecast of major upcoming regulatory initiatives in the financial services sector and will be a biannual publication. It will be managed by the Financial Services Regulatory Initiatives Forum, with the Bank of England, PRA, FCA, PSR, Competition and Markets Authority and HM Treasury as its members.


United Kingdom: Payment Systems Regulator (PSR) publishes new versions of General and Specific Directions

On 5 March 2020 the PSR published new versions of General Directions 1 to 5 and Specific Direction 1 following its consultation in 2019.

The PSR also published a paper explaining the changes made to these Directions, and setting out its responses to the feedback it received during the consultation. The key changes to the Directions include:

  • General Direction 1: the Explanatory Notes have been amended to clarify the reporting obligations of regulated entities. The PSR will provide information on its website on how to notify the PSR.
  • General Direction 4: the recurring deadline of 31 October for Payment System Operators to publish their annual reports on service-user engagement is now a backstop date rather than a fixed date.
  • Specific Direction 1: the Direction's scope has been clarified to ensure coverage over all entities within a ring-fenced group and all indirect access services. There is also clarification of when Indirect Access Providers offering sponsor bank services need to provide a timeline to applicants.

As the changes to the General Directions were minor, the PSR is providing a one-month transition period so that the changes will take effect from 5 April 2020.

A longer transition period is being provided for the updated Specific Direction, which will take effect from 5 May 2020.


Europe: European Payments Council updates Single Euro Payments Area (SEPA) payment scheme rulebooks

On 5 March 2020 the European Payments Council published updated versions of the rulebooks for the SEPA Credit Transfer scheme, the SEPA Instant Credit Transfer scheme, the SEPA Direct Debit Core scheme and the SDD Business-to-Business scheme.

These rulebooks now include an updated version of the SEPA Payment Scheme Management Rules, which reflect the creation of an Appeals Committee and a Dispute Resolution Committee, which replaces the Compliance and Adherence Committee.

The updates did not make any changes to the business and operational rules contained in these rulebooks.

The updated versions of the SEPA scheme rulebooks are in force from 1 April 2020 to 21 November 2021.


United Kingdom: FCA publishes findings following review of basic bank accounts (BBAs)

On 11 February 2020 the FCA published its findings following a review of how retail banks provide information about BBAs, which are fee-free accounts designed to be inclusive products and help vulnerable customers.

The FCA found that there was room for improvement in several areas. For example, frontline staff need further training to identify customers who are potentially eligible for BBAs, and to conduct the non-standard identity checks correctly.

In terms of next steps, the FCA encourages firms to create a customer journey that is inclusive of all customers, and to review the FCA's guidance on vulnerable customers which is expected to be published by the end of the year.


United Kingdom: Interim funding for compensation of victims of APP scams extended to 31 December 2020

On 27 February 2020 UK Finance announced an extension to the interim funding arrangement to pay compensation to victims of authorised push payment (APP) scams in the "no blame" scenario under the APP scams voluntary industry code which launched in May 2019. The interim funding has been extended to 31 December 2020. This is to allow more time to deliver a long-term sustainable funding arrangement.


France: Prudential Supervision and Resolution Authority (ACPR) updates Position on controls to be applied by financial institutions

On 20 February 2020 the ACPR published a revised version of Position 2013-P-01 on internal control measures to be applied by financial institutions relying on banking and payment services intermediaries (IOBSPs) to distribute their products.

The update provides clarification to financial institutions in relation to the following:

  • The qualification of IOBSPs from an outsourcing perspective.
  • How financial institutions' internal control procedures should take into account an IOBSP's activities.


Spain: National Securities Market Commission publishes guide on FinTech

On 13 January 2020, the Spanish National Securities Market Commission published a brief guide to FinTech, which is defined to include all activities "that involve the use of innovation and technological developments for the design, offer and provision of financial products and services".

The guide gives a basic explanation of the sector, including the different types of FinTechs that exist in the market, depending on the type of product or service provided and their business model, and a list of considerations for consumers to bear in mind when dealing with FinTechs.

See further information here.


Global: Bank for International Settlements (BIS) publishes paper on the economic drivers of FinTech adoption

On 4 February 2020 BIS published a working paper on the economic forces driving FinTech adoption across countries worldwide.

The key forces behind FinTech adoption analysed by the paper are:

  • Unmet demand: the growth of mobile payments in emerging markets and developing economies has been driven by the lack of access to basic banking and payment services.
  • Cost of finance and competition: FinTech has been more popular in markets where financial services are relatively more expensive or where there is less competition among providers.
  • Regulation: countries with a stronger rule of law, greater quality of regulation and better control of corruption have seen greater levels of investment in FinTech.
  • Changing demographics: countries with a younger population have generally displayed a greater level of FinTech adoption.

See further information here.


Global: FATF publishes guidance on digital identity

On 6 March 2020 the Financial Action Task Force (FATF) published guidance on digital identity (digital ID).

The aim of the guidance is to clarify how digital ID systems, such as biometric technology, the use of smart phones and distributed ledger technology (DLT) can be used for customer due diligence (CDD) for the purposes of FATF recommendation 10. It looks at the main FATF requirements on digital ID and the benefits and risks of using digital ID for CDD purposes.

According to FATF, financial institutions, authorities and other stakeholders should:

  • Understand the assurance levels of a digital ID system's main components, including its technology, architecture and governance, to establish whether it is a reliable, independent source of information.
  • Make a broader, risk-based determination of whether, given its assurance levels, a particular digital ID system provides an appropriate level of reliability and independence in light of the potential money laundering, terrorist financing, fraud, and other illicit financing risks at stake.


Global: G20 urges countries to adopt FATF standards on virtual assets

During a summit which took place on 22 – 23 February 2020 in Riyadh, Saudi Arabia, (see the communiqué) the G20's Finance Ministers and Central Bank Governors reiterated their support for the Financial Action Task Force's (FATF) AML and CTF recommendations.

In particular, the G20 urges countries to implement the standards relating to virtual assets and virtual asset services providers (VASPs). This includes the controversial "travel rule" where VASPs should obtain sender and recipient information in relation to virtual asset transfers, and submit this information to the recipient's VASP or financial institution immediately and securely.

Other requirements include the need to conduct risk assessments with regard to virtual asset activities and VASPs, and monitor VASPs to ensure compliance with their AML and CTF obligations.

See further information here.


United Kingdom: HM Treasury updates advisory notice on high-risk jurisdictions in relation to AML and CTF controls

On 24 February 2020 HM Treasury updated its advisory notice regarding what jurisdictions are considered to be high-risk due to unsatisfactory AML and CTF controls.

This update brings the notice in line with recent FATF statements which identified high-risk jurisdictions, including the Democratic People's Republic of Korea and Iran. As a result, firms regulated in the UK should apply counter measures and enhanced due diligence measures in relation to these jurisdictions. The advisory notice also includes jurisdictions that were identified by FATF as being potentially high-risk, so firms should take appropriate actions to minimise the associated risks.


Europe: European Banking Federation (EBF) presents AML recommendations

On 10 March 2020 the EBF published a report detailing its recommendations for the EU's AML policy.

The report sets out 20 policy recommendations in total, which include the following:

  • Increase harmonisation by converting the current AML/CTF Directives into directly applicable Regulations.
  • Minimise the discretionary powers given to Member States.
  • Strengthen the AML framework's risk-based approach.
  • Reinforce the AML/CTF role of financial supervisory authorities.
  • Set up a central European Financial Intelligence Unit function.
  • Adopt EU-wide AML/CTF Guidance on information sharing which complies with the GDPR.
  • Facilitate bank-to-bank information sharing.
  • Improve ultimate beneficial owners' registers.


United Kingdom: FCA and BoE statements on Covid-19

On 4 March 2020 the FCA published a statement on its expectations of firms in relation to Covid-19. The FCA states that, working alongside the BoE and HM Treasury, it is working closely with the financial services sector to ensure it is responding effectively to the Covid-19 outbreak.

The FCA states that all firms should have contingency plans in place to deal with major events and, alongside the BoE, it is reviewing the contingency plans of a wide range of firms. This includes assessing operational risks, firms' ability to continue to operate effectively and the steps firms are taking to serve and support their customers.

The FCA expects firms to take all reasonable steps to meet their regulatory obligations. It has no objection to firms undertaking necessary activities from backup sites or with staff working from home.

Separately, on 3 March 2020 the BoE published a Governor statement to the Treasury Select Committee relating to Covid-19. Among other things, the Prudential Regulation Committee is reviewing the contingency plans of banks, insurers and financial market infrastructure.


Europe: ECB letter to banks on Covid-19

On 6 March 2020 the ECB published a letter sent to banks classified as significant institutions for the purposes of the single supervisory mechanism on its expectations in relation to Covid-19.

The ECB expects banks to review their business continuity plans and consider what actions can be taken to enhance preparedness to minimise the potential adverse effects of the spread of Covid-19. It also expects banks to take appropriate actions for preparing and responding to a potential pandemic.

Banks should contact their joint supervisory team (JST) immediately if they identify significant shortfalls after performing the checks outlined in the letter or if there are any significant developments. The ECB also expects banks to provide to their JST contact details of the team and key person responsible for business continuity in the context of a pandemic.


Europe: ECB consults on amendments to ECB Regulation on Payment Statistics

On 27 February 2020 the ECB published for consultation a draft Regulation amending the ECB Regulation on Payment Statistics (ECB/2013/43).

The amending Regulation introduces new data collection requirements as follows:

  • Updated data requirements to include new payment initiation services and account information services, instant payments, contactless card payments, mobile payment solutions and developments in e-commerce.
  • The data collection on payment cards will be more detailed because of the introduction of reporting of Merchant Category Codes which classify a business by the types of goods or services it provides, and a breakdown by card scheme.
  • Data on fraudulent payments, including data on fraudulent payment transactions and on the origin of fraud, will be collected.

The data only covers payment instruments that are regulated under PSD2.

In making the amendments, the ECB and the EBA have tried to align the Regulation with the EBA Guidelines on fraud reporting under PSD2. In its FAQs on the amending Regulation, the ECB explains that while the Guidelines relate to supervisory needs, the Regulation entails some complementary details on payment fraud relevant for oversight purposes.

The consultation closes on 9 April 2020. The ECB will be holding a public hearing on the draft amending Regulation on 23 March 2020. The updated Regulation will enter into force 20 days after its publication in the Official Journal of the EU. The ECB states that first reporting should not apply for a period of 12 months from the date of adoption of the updated Regulation. The reporting is scheduled to start with the reporting of quarterly data for Q3 2021 and semi-annual data for the second half-year of 2021.


United Kingdom: Bank of England and Pay.UK outline plans for guidance on enhanced data ISO messages

On 17 February 2020 the Bank of England (BoE) published minutes of a December 2019 meeting of its Standards Advisory Panel (SAP).

At the meeting, the BoE and Pay.UK set out their approach to producing thematic market guidance on the use of enhanced messages by the end of 2020. The guidance will explain how to populate enhanced data ISO messages, dependent on the payment purpose. The BoE and Pay.UK envisage the guidance being created and owned by the industry, as industry participants are better placed to understand sector needs, and also when amendments may be required.

The BoE has identified a number of high-level transaction types for CHAPS that will form the core of the market guidance. It will aim to issue guidance for priority transaction types by late 2020, giving participants enough time for implementation before March 2022, when all direct participants in CHAPS must be able to receive ISO 20022 enhanced messages.


United Kingdom: FCA publishes its Sector Views 2020

On 18 February 2020 the FCA published its Sector Views 2020. The report explores some key cross-sectoral themes impacting the current financial environment, such as the UK's withdrawal from the EU, the US-China trade tensions and developments in technology.

The FCA also highlights potential harms concerning the various sectors it regulates. In relation to retail banking and the payments sector, the report pinpoints issues such as the growth of financial crime, consumers and SMEs receiving poor value from overdrafts and saving accounts, and inadequate consumer protection.

See further information here.


United Kingdom: LSB publishes summary report on application of the Access to Banking Standard

On 24 February 2020 the Lending Standards Board (LSB) published its second summary report on the application of the Access to Banking Standard.

The Standard, which came into effect in May 2017, requires high street banks to inform customers about branch closures and advise them of their options for continuing to access banking services.

The report recommends that firms:

  • Develop robust internal oversight programmes to ensure that the Standard is being met.
  • Ensure that branch staff receive appropriate and timely training.
  • Adopt a more proactive strategy for engaging with vulnerable customers.
  • Enhance the level of information available post-announcement and post-closure to ensure continued assistance.
    The LSB will develop industry guidance on the basis of the report and expects to publish this in spring 2020.

Following the report, firms will also notify LINK, the UK's largest cash machine network, of any decision to close a branch which entails the removal of an ATM, so that LINK can consider the impact and protect access to cash.


Payment Market Developments

Sweden: Central bank to test central digital currency

On 20 February 2020 Sweden's central bank, the Riksbank, announced that it would be working with Accenture to develop and test a digital currency, e-krona.

The purpose of the project is to determine whether the bank can create a user-friendly and secure digital krona, based on blockchain technology, to serve as a complement to cash. The bank envisages a system where individuals can hold e-krona in a digital wallet and make payments, deposits and withdrawals through a mobile app.

The project will run until the end of February 2021 with a possibility for extension.


UAE: WeChat Pay to be widely available after agreement between Tencent Holdings Limited and Network International

On 24 February 2020 Network International announced that it had entered into an agreement with Tencent Holdings Limited, developer of WeChat Pay, to make the mobile payment service widely available across the UAE.

WeChat Pay is a function embedded in the popular Chinese app, WeChat, which has more than a billion users worldwide. The agreement with Network International will allow WeChat users to pay for products and services, both in person and online, in the UAE with their WeChat mobile wallet.


China: UnionPay partnering with PPRO to facilitate access to the Chinese e-commerce market

On 27 February 2020 London-based payments platform, PPRO, announced that it had become an acquirer for UnionPay International.

This partnership will allow PPRO's European PSPs and merchants to accept e-commerce payments from customers based in China and Asia Pacific.

According to PPRO, "the Chinese e-commerce market is growing at a rate of 19% a year on average", which signals the significance of its partnership with UnionPay.


Europe: Banking Circle receives banking licence in Luxembourg

On 27 February 2020 Banking Circle announced that it had received a banking licence from the Commission de Surveillance du Secteur Financier in Luxembourg.

Banking Circle provides financial infrastructure for payments and banking to financial institutions, so that its clients do not have to invest in their own infrastructure and compliance.

With its Luxembourg banking licence, Banking Circle can provide services to its clients throughout Europe.


Europe: Mastercard partners with myPOS to promote card payment technology to SMEs

On 27 February 2020 Mastercard announced its partnership with myPOS to promote card payment technology to SMEs across Europe.

The aim of the partnership is to raise awareness of the card payment solutions available, and enhance myPOS' capabilities with Mastercard's network and technology. For example, myPOS has developed products and services to aid SMEs such as its mobile app, business debit cards and its ability to facilitate multi-currency and cross-border payments. These can help merchants manage their payments and cashflow in innovative and more efficient ways.


Global: ECOMMPAY is the first PSP to join the PayPal Commerce Platform

On 2 March 2020 ECOMMPAY announced its partnership with PayPal as the PayPal Commerce Platform's first PSP.

The PayPal Commerce Platform is designed to meet the needs of businesses and marketplaces by enabling them to accept payment from all PayPal users globally and assist with compliance with different local regulations.

By partnering with PayPal, ECOMMPAY can offer its clients additional payment options through a single API.


Nigeria: Visa partners with Paga to develop mobile payments

On 9 March 2020 Paga announced its partnership with Visa so that Paga account holders can enter into transactions anywhere where Visa is accepted, regardless of location.

Paga is a mobile payment company which is currently developing several payment solutions, including QR codes and NFC payments for in-store transactions, online payments and remittance.

With this partnership, Visa adds one more company to its Visa Fintech Fast-Track Program which supports start-ups in an effort to accelerate the growth of digital payments.


France: Taxes can be paid at tobacconists due to partnership with French tax authority

On 24 February 2020 the French Tax Administration, in partnership with the network of French tobacconists, began testing a new payment service which allows French taxpayers to pay taxes, fines and public service bills at their local tobacconist.

This payment service is available in all tobacco shops that are equipped with a "La Française des Jeux" payment terminal, for payments not exceeding €300.

The payment system is being tested in 10 departments initially, and will be rolled out nationally on 1 July 2020.


Surveys and Reports

United States: Deloitte survey finds younger generations prefer debit cards to credit cards

On 26 February 2020 Deloitte US published its findings following a survey of 2,520 consumers who own both credit and debit cards. Some of the key findings include:

  • Just under 80% of those surveyed have used a digital payments app.
  • 52% of Generation Z and 41% of millennials surveyed said they prefer debit cards over credit cards.
  • Two-thirds of those surveyed said they would switch to debit cards if they offered rewards like credit cards do.

Following these findings, Deloitte recommends that credit card providers:

  • Give consumers more personalisation and flexibility. For example, as rewards are considered one of the key selling points of credit cards, providers should allow consumers to choose their rewards, since different generations have different reward preferences.
  • Ensure that consumer complaints are dealt with swiftly, ideally within a day.
  • Consider providing platform services (e.g. applying for financial products, budgeting functions, requesting financial advice) through a single app.


Global: Digital wallets predicted to be the online payment method of choice by 2021 according to FIS

On 27 February 2020 FIS, an international provider of financial services technology, published its 2020 Global Payments Report. The report can be downloaded through the press release. It estimates that global ecommerce will amount to $5.9 trillion by 2023, and that digital wallets will represent half of these sales.

The report also highlights the growing popularity of "Buy Now, Pay Later" payment services, which allow consumers to pay by instalments or delay payment. FIS predicts that the global use of this online payment method will increase annually by 28% over the next five years.


Global: BIS publishes quarterly review on payments

On 1 March 2020 the Bank for International Settlements (BIS) published its quarterly review which provides an in-depth overview of developments in payments.

Among other topics, the review looks at how the Covid-19 outbreak has affected the market; how technological innovation has changed payments; and the feasibility of central bank digital currencies. The review also highlights the room for improvement in relation to cross-border payments in particular.

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