The Monday Roundup: what we are watching this week | Jan 17th

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.

Some (needed) BNPL updates

️ Embedded finance experience platform Railsbank has launched its own, white-label BNPL credit solution that enables retailers to offer their branded, fully-integrated payment solutions in instalments. The product offers retailers in the company’s network the chance to develop their own customisable, branded BNPL option, helping them disintermediate third parties and build long-lasting relationships with their customers. Does this mean we have a new UK player in the BNPL game?

Klarna has quietly acquired a subsidiary of Swedish savings company Dreams, Dreams Securities, which offers investments in investment funds. Klarna has not commented on the transaction yet and it is not clear when the BNPL company plans to launch their own funds in Sweden, but it really looks like savers of the platform will use Dreams Securities to put their money directly into different stock funds.

CBDCs getting real

Swiss financial services firm SIX, the Bank for International Settlements (BIS) and the Swiss National Bank (SNB) have successfully conducted an experiment to test how CBDCs can integrate with existing core banking systems. Project Helvetia, the name of the experiment by the Swiss institutions, was launched in preparation for a perceived future of tokenised financial assets and distributed ledger-based infrastructures. The “second phase” of Project Helvetia also involved 5 commercial banks: Citi, Credit Suisse, Goldman Sachs, Hypothekarbank Lenzburg and UBS.

This week also saw a consortium of five US banks, the USDF Consortium, launch a bank-minted alternative to non-bank-issued stablecoins. The USDF will be minted exclusively by US banks and will be redeemable on a 1:1 basis for cash from a consortium member bank.

Where’s the buzz

E-commerce giant Amazon has deferred its plan to no longer accept UK-issued Visa credit card payments due to the high fees charged to process these transactions. Considering the millions of customers being prevented from purchasing goods on Amazon UK due to its dispute with the payments company, the retailer is currently working on a “potential solution” with Visa, a statement revealed.

“That Amazon has halted its ban on UK-issued Visa credit cards comes as no surprise. Amazon is a retail giant so it has some leverage, but there’s no way it won’t accept Visa cards.,” commented David Ritter, Financial Services Strategist at software company CI&T. “Cards issued by Visa and Mastercard are ubiquitous and many of these cards also sit behind digital wallets like Apple Pay and PayPal.”

For others, no matter what happens now, the damage has already been done. “Retailers everywhere are challenging the duopoly of the card networks with AllSaints, Superdry, and Levi’s just some of the other brands now tackling high fees, this time through legal action,” commented Siamac Rezaiezadeh, Director of Product Marketing at payments company GoCardless. “It’s not just Amazon’s announcement that has emboldened these merchants. The fact is, businesses, no longer have to rely on cards because so many alternative payment options are now available, and readily embraced by consumers. These methods, many of which move money directly from one account to another without the intermediaries that drive up the cost of card transactions, will put an end to ‘card on file’ and give rise to ‘account on file’ instead.”