Judging by the number of remittance businesses continuing to scale up, there must be plenty of fat still to be trimmed from the Western Unions of this world. The latest is eight-year-old Seattle-based Remitly which raised $155 million to give it a near one billion dollar valuation, despite fears that Facebook's new Libra project will cut across its bows. Remitly's early backers include Jeff Bezos. "There's not a huge amount of detail on how Facebook's product will really work in the real world," said Remitly chief executive Matt Oppenheimer, adding that it could end up focusing on payments for goods and services, rather than remittances. He said Remitly would track the Libra project closely and would not rule out joining its 28 backers, a group that already includes Uber, Spotify and Visa. Meanwhile, financial analysts are trying to come to grips with Calibra, the wallet that Facebook will offer users and which will hold digital tokens for sending on the Facebook network. Any white-label wallet worth its salt will hold more than one value, so it's likely that Calibra users will also be able to trade everything from bitcoin to bonus points. Don't get hung up on Libra itself, and the regulatory battle around Libra, because that system can operate without Libra once the wallet is up and running. It's the wallet everyone should be keeping their eyes on.
We've commented recently that banks don't want to have anything to do with money anymore, and now Nigeria's central bankers have ordered that banks will no longer receive interest payments on deposits in excess of 2 billion naira ($5.5 million). "That compares with a previous limit set in 2014 of 7.5 billion naira through the central bank's standing deposit facility. The move comes less than a week after the Abuja-based central bank ordered lenders to use at least 60% of their deposits for loans by the end of September, or have their cash-reserve requirements increased, meaning they'll be forced to leave more of their cash with the central bank. 'The rule is geared at making banks lend,' Kunle Ezun, an analyst at Ecobank Transnational Inc in Lagos, said by phone," reports Bloomberg. Lafferty's Digital Lending report suggests that previous incentives to accelerate lending have not worked, but that people have shown a large appetite for digital credit, which may be another major option for Nigeria.
We've long flagged digital identity and self-sovereign identities as areas that banks and citizens alike are going to be grappling with for the next decade. As PSD2 looms in the UK, big banks such as Lloyds are penning deals to bring its customers smoothly through the strong authentication rules which require a two-stage log in for most customers. Lloyds is working with UK start up Callsign, which can identify users from their smartphone behaviour. "Callsign already has deals with banks and other institutions to identify staff online without the need for time-consuming two-factor authentication," writes the FT. "But having Lloyds use it for customers is a big breakthrough. [Chief executive Zia] Hayat, 37, is a former Lloyds employee who also designed encrypted information systems for BAE Systems, the defence company. London-based Callsign was valued at more than $100m in a 2017 fundraising led by Accel, the US private equity firm. It now has 112 staff and is seeking fresh investment."
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