Visa has reportedly decided to pause until April some of its planned changes to credit card-present rates for certain categories of in-store merchants in the United States. Bloomberg broke the news, citing a Visa document, though the scheme itself has declined to comment. The article includes an interesting note: "While those rates are still set to go into effect in April, the network said it will offer a lower rate for merchants who elect to tokenize those transactions using a Visa EMV payment token, starting in October." Needless to say, the effects of the pandemic on the country's economy generally and bricks-and-mortar retail specifically are responsible for the delayed implementation. As reported in this newsletter in February, card-not-present purchase interchange rises on the shift, while rate tables also expand to embrace merchant categories such as vending machines. Not all fees go up in the new structure: healthcare, education and real estate categories head in the other direction, for example.
Good news for popular payment app users in the United States: CVS Pharmacy, a familiar sight on American streets with over eight thousand locations, has announced that Venmo QR codes and PayPal will both be acceptable at its point of sale. This will be a further boost to the fintechs, whose profile has soared this year with consumer wariness of cash and deepening reliance on digital platforms. As reported in the press, "PayPal users are able to use their stored debit or credit cards, bank accounts, account balance or PayPal Credit. Venmo customers can pay using their stored debit or credit cards, bank account, Venmo balance or Venmo Credit Card". Meanwhile, PayPal co-founder Max Levchin has led his new company, Affirm, to file the necessary paperwork for its initial public offering. The company, which offers instalment-based loans at the POS or checkout, reported that year-on-year revenue growth in the quarter ending in September came close to doubling.
Venmo's ongoing success has not escaped the attention of Silicon Valley, keen to gain any margin in its slow but inexorable push into retail banking. Among Big Tech's exploits in this regard, Google's Plex service, set to be launched next year, will see the company team up with Citibank and ten other financial institutions to allow users of the Google Pay app to both open and manage a bank account on their smartphone. In a retail banking market that is notable for the disparity between consumer appetite and product availability, Plex, which comes with no minimum balance requirement, penalties for overdrafts or monthly fees, could quickly gain traction. Reportedly, Mastercard is set to partner on a debit card, should customers want to use a physical card instead of transferring funds directly from their bank account. Citibank and a small credit union near Google's main campus in California were the original partners in Plex, originally dubbed Google Cache.
Last week we reported on the ambitious plans of Italian acquirer Nexi; now it is the turn of another Mediterranean player, Santander, to make a bold move in the payments processing space. The company plans to make a new, autonomous business called PagoNxt a global player in merchant acquiring, building on its success through Getnet in Brazil, Argentina and Mexico. It is also going to work with cross-currency specialist Ebury to address the needs of SMEs and, as a third operational focus, provide digital products and services to underbanked individuals, rooted in its experience with financial inclusion solution Superdigital. One big boost to the first of these ambitions took place through the purchase of Wirecard's merchant tech apparatus in Europe this week. "The acquired assets include payment solutions for merchants for acquiring and issuance services.", noted Santander in its statement on the news. Another European banking giant, Deutsche Bank, dropped out of the bidding for the Wirecard assets, but is keen to get back into merchant solutions too, according to the Financial Times.
To end, links to some other stories of interest this week...
Europe: How the private equity industry stole a march in payments
France: Pandemic gives domestic fintechs the chance to prove worth
Spain: BBVA and Sabadell halt merger talks
US/India: Google Pay to charge transfer fee in America but not India
US: Banks ask lawmakers to continue CECL opt-out
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 financial cards data going back to 2010 – and forecasts up to 2022 – our unique datasets cover 72 countries around the world and feature more than 250 metrics per market.