Newly released data from the United States is giving us a better picture of how behaviour has been changing during the pandemic. To start with, retail sales on e-commerce platforms rose by 44.5 percent year on year in the second quarter: figures from the Commerce Department now suggest that over a seventh of the country's retail sales can be attributed to e-commerce. Also from Washington comes news that, although unemployment fell to 7.9 percent, the country's labour force has shrunk by some 700,000 people, taking the participation rate down to a level not seen in over forty years. Meanwhile, preliminary consumer credit data for August from the Federal Reserve surprised forecasters with news that, seasonally adjusted, revolving credit outstanding decreased at an annual rate of 11.3 percent.
PayPal-owned Venmo has launched the Visa-branded Venmo Credit Card, offering three percent cashback for eligible transactions, finance tracking/management tools and personalised rewards. The card is issued by Synchrony Bank, a private-label specialist that already issues cards for eBay and PayPal. In line with newer digital offerings in the marketplace, holders can use the Venmo app to track spending as it happens and slice-and-dice as desired to reveal, for example, cashback or rewards analysis. As noted in the latest US market update published by Verisk Financial Research, the Venmo app, which allows users to transfer funds between individuals using their phone numbers or email addresses, "had over 50 million active accounts at the end of 2019 and processed over $102 billion in transactions during the year". A credit card seems a natural step, given popularity at a scale that has seen the brand's name enter American English as a verb in everyday use.
Across the Atlantic, things are heating up again in European payments. Nexi, the leading player in Italian merchant acquiring, is set to merge with largely state-owned processor SIA to give the resulting formation a 70 percent share of the market. Earlier in the week, talks became exclusive to renew (until 2036) UniCredit's longstanding card processing contract with SIA, which also involves services in Austria and Germany. The year before last, SIA acquired First Data's Central and Southeastern Europe card processing businesses, which should also now be making their way into the larger Nexi group. In April, Nexi purchased Intesa Sanpaolo's acquiring business. The Milan-headquartered firm, also a card issuer, makes no bones about its growing ambition: "This company will be much more international three years from now", said its chief, Paolo Bertoluzzo, with Denmark's Nets next in its sights for a merger, according to Bloomberg.
To the north, another pan-European payments giant is emerging, this time with a consumer-facing aspect. In early 2018, a group of Nordic banks, including Danske, Handelsbanken, Nordea and Swedbank, conceived P27 with the idea of creating a real-time cross-currency service spanning their four countries. Numerically referencing in its name the number of millions resident in the region, P27 is a regional payments platform, something hitherto lacking anywhere else around the world, even in Europe or Southeast Asia, for example (to take two regions with notably cooperative nations). Just over a year ago, P27 picked Mastercard as its partner in building the underlying real-time and batch multi-currency platform infrastructure. Now the entity, subject to regulatory approval, has taken a further significant step with the acquisition of Bankgirot, the payment clearing house behind Swish : a payments app that has enjoyed extraordinary success in Sweden, a country well on its way to becoming the world's first virtually cashless society. Launched in 2012, Swish dominates Sweden's mobile payments landscape, in a country where, unusually for the West, mobile payments are now widespread. Over two thirds of the population use the service, which can also serve as a method for online payments.
To end, links to some other stories of interest this week...
China: Ant's huge lending business powers $30bn IPO
Global: Credit Union membership grew 59 percent in decade
India: New payment card rules from central bank
US: Macy's takes stake in Klarna as part of payment partnership
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.