New use cases for generative AI continue to surface, and as financial institutions explore the technology, they must consider compliance. Uses for generative AI in the finance industry include linking institutions quickly, working as a personal wealth management tool and teaching financial literacy, according to Mastercard’s “Commerce in the age of generative AI” report, released […]
Whitney McDonald
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Card issuers have approached the RBI seeking relaxation for certain products from the revised guidelines on card network portability, due to the high costs involved.
Card issuers, majority of which are banks, have sought that the central bank impose the mandate for network portability for each product category or segment but not each product, given the higher cost and operational burden involved and the impact on existing card partnerships.
“Issuers are saying just leave network options at the core product level that is, credit, debit, and prepaid. There are diversified cards within core products like co-brands, premium cards, etc. Management of sub-products will definitely become a challenge because each bank has hundreds of sub-products based on the customer segment,” said Mohit Bedi, Co-founder and Chief Business Officer, Kiwi- India’s First Credit Card on UPI Platform.
The revised draft framework on network portability mandates issuers to offer every card on at least two networks and not to enter into bilateral arrangements with card networks, effective October 2023. Five networks currently operate in India, namely Visa, Mastercard, NPCI-backed RuPay, American Express and Diner’s Club.
“The differentiating factors for networks are pricing, extent of their acceptability and the rewards that they offer. Fundamentally if another network is better across any of these, people should have the choice to opt for it but today that option does not exist,” said Abhishek Kothari, CEO, Pepper Money India.
As such, most issuers have also been offering cards across more than one network after the data localisation framework asked some networks to temporarily pause new sourcing. Subsequently, YES Bank, which was entirely dependent on Mastercard, was forced to tie-up with other networks.
Exemptions have been sought in certain cases where service providers have exclusive tie-ups with networks such as Visa with the JetMiles programme or Amazon, or RuPay network for FASTag.
For example, the ICICI-Amazon credit card is issued on the Visa network because Visa worldwide categorises e-commerce platform Amazon as a separate Merchant Category Code (MCC), thus levying a lower interchange of about 1.65 per cent compared with other merchant categories.
“It becomes tricky in some situations, for example, Diners Club, which works exclusively with HDFC Bank. The Diner’s card is not available with other banks because Diner’s Club has much better product features as a network too. Similarly, NCMC (National Common Mobility Cards) are on Rupay only, it’s a prepaid card. How will that work? So, it becomes a new challenge for other sub-product categories as well,” Bedi said.
There is also the issue of proprietary cards such as American Express, which is both an issuer and a network and its ability to then issue cards on other networks.
Issuers then prefer a certain network because their cost expense is lower, industry players said, adding that even on an overall basis, while the interchange on Visa and Mastercard is almost four times that on RuPay, the global networks reimburse issuers for marketing costs which is a big line of fee income for banks. However, RuPay offers the additional benefit of linking credit cards to UPI.
“In India, where cards are expected to grow significantly, this will ensure fair competition for networks to exist. Amidst this, RuPay being a new network should likely benefit as there are legacy contractual arrangements in place,” Kothari said, adding that while for card issuers this could translate to onboarding new network partners and higher operational costs, it would also mean more features and offers for consumers.
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Mastercard has told financial institutions to stop allowing marijuana transactions on its debit cards, dealing a blow to an industry already on the fringes of the financial system in the United States.
Most banks in the country do not service cannabis companies as marijuana remains illegal at the federal level despite several states legalizing its medicinal and recreational use.
“As we were made aware of this matter, we quickly investigated it. In accordance with our policies, we instructed the financial institutions that offer payment services to cannabis merchants and connects them to Mastercard to terminate the activity,” a spokesperson for the company said on Wednesday.
“The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems,” the spokesperson added.
The move, which would rob cannabis buyers of another easy-to-use mode of payment, was first reported by Bloomberg News.
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Air Travel Is Booming. 2 Stocks to Buy That Aren’t Airlines.
Citi is partnering with retail giant Walmart to offer digital lending platform Bridge, that will connect the retailer’s 10,000 U.S.-based small business suppliers with lenders. The $1.7 trillion bank will give suppliers access to a single loan request form that will connect them with 70 lenders that could provide loans up to $10 million, a […]
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New York
CNN
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President Joe Biden has announced that he’s nominating Ajay Banga, a former MasterCard executive, to serve as president of the World Bank.
In a statement, Biden said that Banga is “uniquely equipped to lead the World Bank at this critical moment in history” and that he has a “proven track record managing people and systems, and partnering with global leaders around the world to deliver results.”
Banga has been the vice chairman at General Atlantic, a New York-based investment firm, since 2022. Prior to that, the 63-year-old was the CEO of MasterCard from 2010 to 2021.
“Raised in India, Ajay has a unique perspective on the opportunities and challenges facing developing countries and how the World Bank can deliver on its ambitious agenda to reduce poverty and expand prosperity,’ Biden said in the statement. Notably, the White House highlighted Banga’s “extensive experience” in creating partnerships to address climate change and financial inclusion,” something Biden pledged would be an important qualification for the next World Bank President.
Banga would replace previous president David Malpass, who announced last week that he’s stepping down a year early — serving four years of a five-year term.
Although Malpass had been praised by the World Bank and administration officials for his handling of the global challenges posed by Russia’s invasion of Ukraine and the Covid-19 pandemic, his tenure faced controversy following comments he made last September about climate change. During a panel, herefused to confirm during a climate panel whether he accepted the scientific consensus that burning fossil fuels were dangerously warming the planet.
After an outpouring of criticism, many opponents called for his resignation. However, he recently told CNN’s Julia Chatterley that he has “no regrets” over his four-year tenure.
“We’ve achieved many of the things I wanted to…I think it’s really important that institutions have energy, new energy, and this is a good time for the World Bank to do that,” he said.
US Treasury Secretary Janet Yellen praised the decision to name Banga in a statement.
“He has the right leadership and management skills, experience living and working in emerging markets, and financial expertise to lead the World Bank at a critical moment in its history, deliver on its core development goals, and evolve the Bank to meet global challenges like climate change,” she said.
US climate envoy John Kerry said Banga is the “right choice” because of his climate change credentials.
Banga “has proven his ability as a manager of large institutions and understands investment and the mobilization of capital to power the green transition,” Kerry said in a statement.
The World Bank, a group of 187 nations, lends money to developing countries to help reduce poverty. Former US President Donald Trump appointed Malpass as World Bank chief in 2019 for a five-year period. As the largest shareholder, the United States traditionally appoints its president.
— CNN’s Sam Fossum contributed to this report.
Mastercard and Binance have announced the launch of a bitcoin and crypto backed prepaid card in Brazil, Latin America’s largest economy.
According to a blog post, the Binance Card is currently in beta testing and is expected to be widely available in the country in the next few weeks. The Binance Card is currently already available in many European countries.
The Brazilian version will “allow all new and existing Binance users in Brazil with a valid national ID to make purchases and pay bills with cryptocurrencies.” It will charge a 0.9% fee per transaction involving bitcoin, according to the blog, and there will be an offered 8% in cashback on select purchases, while allowing ATM withdrawals without fees.
Brazil is one of the company’s top 10 markets, according to Binance, and the card will allow new and existing users in the country to pay bills and shop with cryptocurrencies at Mastercard merchants. The launch of the prepaid card is part of Binance’s effort to “broaden the connection between traditional finance and crypto.” The card has already been launched in Argentina and is being rolled out in Brazil next.
Brazil is one of the largest potential markets in the world, simply by the numbers alone. According to estimates, over 10 million of the country’s population of approximately 214 million utilize cryptocurrency. Brazil has also experienced high inflation rates since the start of the pandemic similar to the United States, leaving citizens with an appetite for sound money.
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Payments fintech Marqeta is eliminating manual authorization in its payments process through an extended partnership with Mastercard. The credit card giant’s Track Instant Pay is a business-to-business virtual card payment solution that uses machine learning to analyze invoices and generate a virtual credit card to pay suppliers in real time, according to a release. The […]
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Press Release
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Nov 30, 2022 08:45 EST
NEW YORK, November 30, 2022 (Newswire.com)
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Today, Unbanked Inc. has opened its cryptocurrency card program to eligible residents in the U.K. and parts of Europe. Unbanked Inc., a global fintech company connecting traditional banking products with blockchain, has partnered with Moorwand to provide card services allowing consumers to spend their digital assets through this approved program. Residents of the United Kingdom and other European countries can register their interest for a user account at Unbanked.com, deposit their cryptocurrency and, subject to approval, get a card for spending their digital assets.
Unbanked card holders can use 15 different cryptocurrencies to fund their user account, including BTC, ETH, UNI, XLM, and UNBNK. Cryptocurrency funds are linked to a crypto-backed card, issued by Moorwand, so users can convert cryptocurrency to fiat in real-time at merchants where cards are accepted. The card provides a unique set of financial, payment and crypto services that improve the accessibility and utilization of digital currencies for cardholders.
“We have worked for over two years on building this exciting solution to make the Unbanked Card available to interested users in Europe,” said Daniel Gouldman, Co-Founder and Co-CEO of Unbanked. “It’s great to know with this launch, we will be able to provide residents in the U.K. and parts of Europe access to one of the most innovative crypto-powered cards in market.”
Founded in 2018, Unbanked serves hundreds of thousands of customers and is backed financially by a community of investors who are also users of the product. Unbanked prides itself on security, privacy and compliance, and is designed to accelerate the global adoption of cryptocurrencies through its platform.
Unbanked’s infrastructure is used by Web3 brands like Litecoin Foundation, Nexo, StormX, Stacks, and other leading companies in the crypto space. With this expansion, all Unbanked partners will have the opportunity to open their card programs to residents in the U.K. and parts of Europe.
About Unbanked:
Unbanked is a global fintech solution built on blockchain. Predicated on the ethos that financial access and control is a fundamental human right, Unbanked connects traditional enterprise, fintech, and banking systems with blockchain infrastructure, expanding the utility of cryptocurrency for investing and everyday purchases. The company has a suite of highly bespoke financial products which enable both the banked, unbanked, and underbanked to create a financial experience as unique as the life they live.
You can learn more about Unbanked at Unbanked.com or by following them on social media (https://linktr.ee/UnbankedHQ)
About Moorwand:
Moorwand is a regulated electronic money institution authorized and licensed to issue electronic money and provide payment services throughout the U.K. and, via Agency agreement, in the EEA.
Source: Unbanked
Digital banking fintech Amount is now offering financial services solutions through the Mastercard Engage global partner network as the credit card giant enters the open banking space. Through an extended partnership that started nearly a year ago between the fintech and Mastercard Installments, a buy-now-pay-later consumer program, Amount is now supporting Mastercard customers by building […]
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Caesar Sengupta, former vice president and general manager of payments and Next Billion Users initiative at Google, has raised $90 million for his fintech start-up Arta Finance which aims to open up advanced financial opportunities, the kind that family offices offer to the ultra-rich, to the masses.
Besides venture capital giants Sequoia Capital India, Ribbit, and Coatue, 140 angel investors including well-known technologists and finance professionals such as former Google CEO Eric Schmidt; FinTech V Chairman Betsy Cohen; Mastercard CEO Michael Miebach; and Jeff Dean, SVP, Google Research and Health have participated in the round.
Like family offices that help the ultra-wealthy craft their visions of the future, Arta will break down barriers to sophisticated finance with technology to help people aggregate all their assets, build a personal collection of investments and access expert services to shape their financial future, the company wrote in a blog post.
“We got rid of the admin overheads, salesy calls, clunky UIs, and eye-watering fees. And we’ve harnessed AI to enable intelligent investing in public markets and opened access to alternative assets such as private equity, venture capital, and real estate funds. And we plug you into our ecosystem of financial and lifestyle professionals who can help you protect and enjoy your wealth,” the blog post read.
The company will help its customers invest in asset classes such as private equity, venture capital, private debt, and real estate funds. Users can start with $10,000 for certain funds and choose to pay based on performance. Arta’s proprietary AI-Managed Portfolios (AMPs) will enable members to create personalized, automated portfolios using stocks, bonds, options, and leverage. It also offers verified and private spaces where members can discover new financial opportunities, benchmark themselves and learn from what their peers are doing.
The service is currently open to accredited investors in the US and the company said it will expand to other countries after obtaining the necessary approvals.
Mastercard is set to announce plans today for a program to help institutions offer bitcoin and cryptocurrency trading, CNBC reported.
Mastercard will work with Paxos to “bridge” the gap between banks and will manage the security and regulatory compliance, two big reasons many banks have stated for avoiding bitcoin and cryptocurrency.
“There’s a lot of consumers out there that are really interested in this, and intrigued by crypto, but would feel a lot more confident if those services were offered by their financial institutions,” said Jorn Lambert, Mastercard’s chief digital officer.
Lambert told CNBC that despite the bear market, there is still a lot of demand for the asset class. “It would be shortsighted to think that a little bit of a crypto winter heralds the end of it — we don’t see that,” he said. Also, 60% of respondents to a recent poll said that they would prefer to get exposure to bitcoin and cryptocurrency through their bank. “It’s a little scary to some people still,” he stated.
Mastercard said that its role in this is to ‘keep banks on the right side of regulation by following crypto compliance rules, verifying transactions and providing anti-money-laundering and identity monitoring services.’
Mastercard’s chief digital officer stated “It’s hard to believe that the crypto industry will truly go mainstream without embracing the financial industry as we know it.”
Mastercard is expected to pilot this product during Q1, 2023, and then will proceed to “crank the handle” to grow into more geographies. Lambert did not comment on which banks have already signed up for the program.
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