The Monday Roundup: what we are watching this week | Oct 11th

By Gaia Lamperti

The Monday Roundup sets the scene for the week’s biggest news stories, industry deals, and upcoming events. For Prime subscribers only.

Big Tech vs FinTech

Facebook’s longest outage since 2008 wreaked havoc last week. Not only has it created difficulties for millions of users who, especially in emerging countries, use its platforms as their primary form of daily communication, but it also showed the fault and limitations of social media platforms at a time when Big Tech giants enter the financial services battleground. In fact, Facebook is also a huge player in the Payments sector with its Facebook Pay service, which claims millions of users and was also down during the outage. These events, on top of the bad publicity coming from the latest FTC antitrust lawsuit and a whistle-blower’s heavy accusations of last week, make the platform’s ambitions of building its own currency/stablecoin and the e-wallet Novi seem increasingly unlikely.
The View: “The outage was caused by changes made to the Facebook network infrastructure. Many of the recent high-profile outages have been caused by similar network-level events. Notably, many organisations now define their physical infrastructure as code, but most do not apply the same level of testing rigour when they change that code, as they would when changing their core business logic.” – Adam Leon Smith, Chair of BCS’ Software Testing.

Google Pay is scrapping its plan to offer bank accounts to users via Plex, its enhancement to the digital wallet that included improved features for checking accounts as well as debit cards with partner banks. Google had partnered up with Citigroup and a handful of small banks for the rollout of the product but Bill Ready, Head of Google Pay, raised concerns that the Plex bank account could lead to issues with other established banks, who might think Google was trying to directly compete with them.
The View: “We’re updating our approach to focus primarily on delivering digital enablement for banks and other financial services providers rather than us serving as the provider of these services.” – Google’s spokesperson.

The latest in Payments

Banco Santander has announced its plan to shut down its international money transfer app PagoFX, part of the group’s FinTech business PagoNxt, and to later integrate the technology into its trade services business. PagoFX provides cross-border payments services for individuals and it was launched just last year in the UK, Belgium, and Spain. The firm also plans to offer its payments technology to Santander banks and third parties through API access, allowing banking entities and other financial institutions to tap into its payment rails for international trade.
The View: “This shutdown should come as a jolt to Santander which would need to do some serious introspection on what went wrong in a business that was supposed to grow well and for which there is ample demand. While competitors like Wise continued to grow, PagoFX never really found its footing and that is going to be something that Santander would look into seriously before launching any new products in the future.” – Karthik Subramanian on Finance Feeds.

EBA Clearing, SWIFT, and The Clearing House (TCH) partnered up to complete a proof of concept as part of a new initiative to make cross-border payments as seamless as the fastest domestic payment options, named Immediate Cross-Border Payments (IXB). Eleven banks contributed to the design of the platform and, according to SWIFT, the concept could be expanded to additional currencies and is also replicable for more liquidity-efficient high-value payments.
The View: “IXB demonstrates how the current ecosystem of cross-border payments may be enhanced and made suitable for new high-volume 24/7 business. In combination with an international request to pay, its potential applications would be limitless.” – Erwin Kulk, Head of Service Development and Management at EBA Clearing.

Where’s the buzz

This week, all the eyes are on Sibos, the global financial services networking event organised by SWIFT, taking place online on Oct 11th-14th and will debate the theme of “Recharging Global Finance”, addressing how the financial ecosystem can reassess to meet client, regulatory, and societal demands of the future. IBS Intelligence is proud to announce that is joining the event as a Media Partner and during the week will closely follow discussions and announcements on the future of Financial Technology.