With implementation of PSD2 just a few months away, financial services businesses such as Stripe and Worldpay are warning of a world of pain ahead — though both businesses are also offering their own solutions to new problems that will arise under the new rules. "Industry executives are concerned that not enough consumers have installed their bank's app or provided their mobile phone numbers to facilitate authentication, or that the new techniques have not yet been tested at scale," writes the FT. "The result could be large-scale abandonment of transactions at the checkout, with smaller retailers seen as particularly vulnerable. "It's going to require basically every European merchant to fundamentally restructure their checkout flow," Mr Collison said. "It's almost certainly the largest migration that European online retailers have ever had to do." Stripe has recently launched a chargeback protection service, where Stripe covers the cost of the disputed amount and waives the dispute fees, for a charge of 0.4 percent per approved transaction.
Tribe Payments, led by former GPS chief executive Suresh Vaghiani, will process UnionPay International cards in Europe and the Chinese card company looks to expand its offerings. "This agreement shows UnionPay's intent to compete with the major card schemes in Europe," said Mr Vaghjiani. "This is the first time European institutions will be able to put UnionPay cards into the hands of people on the street." He said "there are two unnamed clients looking to issue UnionPay's cards — one for a virtual card in Europe and another for a debit card in the UK." Read the full story here on Finextra.
As Kenyan central bank governor Patrick Njoroge finishes his four-year tenure, observer expect him to be re-appointed by Kenyan president Uhuru Kenyatta. With a relatively stable currency and moves to extend more credit to small businesses, Mr Njoroge is seen as a steady hand. "Last month, the regulator said banks will start offering loans to small businesses for as little as 9%," reports MSN. "This after the High Court in March annulled a law that limits what lenders can charge for credit at no more than 4 percentage points above the prevailing benchmark rate. Njoroge opposed the cap, saying it complicated monetary policy formulation. 'Increasing loans to small businesses will be one of Njoroge's key assignments in his second term,' said Habil Olaka, chief executive officer of the Kenya Bankers Association, a lobby of lenders."
Michael Jordaan, chief executive of South Africa's Bank Zero, expects big tech to remain the big threat to banking in the next decade. In particular, he is keeping an eye on Facebook, which he thinks is now trying to replicate the success of superapp WeChat. "The best example of what awaits banks is probably China, where AliPay and WeChatPay process far more transactions than the local banks and payments are virtually all done using QR codes without touching the payments system set up by banks", he told the Daily Maverick. "On a recent visit to Shanghai, our local host told me that in China they saw modern Hong Kong as 'quaint' in that they still used cash and needed to rely on ATMs and cards when mobile payments were just so much more convenient and free." Mr Jordaan expects that Facebook and Google "can leverage their well-known brands, capital, software development skills and large customer base into finance." Admittedly, he added, "regulatory barriers such as the requirement to own a banking licence will inhibit large tech players from rapidly taking over the world, particularly as each country has its own set of regulations. But that won't stop them in large markets such as the USA or the EU, where scale can be achieved due to the large market."
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