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Home » Daily Briefing » Daily briefing - 28 May 2019

Daily briefing - 28 May 2019

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After suffering a few brutal months of reputational damage, banks in Nordic countries are getting back to basics. A new project called P27 will help Nordic banks move money around the region of 27 million people. Led by banks, the group hopes to acquire 60-year-old Swedish clearing bank BankGirot. "In order to create the infrastructure, P27 wants to buy Bankgirot, the 60-year-old Swedish player which handles more than six million transactions a day," writes Finextra. "The acquisition would strengthen operational stability during the envisaged migration from Bankgirot to the new P27 platform, says a statement, and also bring in valuable knowledge of complex payments and compliance issues." The P27 group includes the major banks of the region including Danske Bank, Handelsbanken, Nordea, OP Financial Group, SEB and Swedbank. It's part of a major trend towards regional real-time payments systems and the Nordic countries continue to lead in this regard. "Banks are eager to provide infrastructure that locks customers in," Bloomberg noted about the P27 project last summer. "And with branch visits going the way of cash, digital payments are one of the few points at which banks and their clients meet up."

Alibaba continues to be a fascinating company to watch, with unconfirmed reports that it will seek a secondary listing in Hong Kong. "The deal would mark a major victory for the Asian financial hub, which rewrote its stock-market rules after failing to attract Alibaba in 2014," writes Yahoo Finance. "The city is engaged in an increasingly crowded battle for technology listings as exchanges from Shanghai to Singapore ease their rules to attract fast-growing companies with dual-share classes and, in some cases, unproven business models. Hong Kong's move to allow dual-class shares has already had an impact, helping the city lure two of last year's hottest tech IPOs. Xiaomi Corp. and Meituan Dianping, the third- and seventh-largest debut offerings worldwide in 2018, both went public in Hong Kong to much fanfare, though their shares have since tumbled." An Alibaba subsidiary called Ant SME Services has just gained one of the new digital banking licences in Hong Kong.

Indeed, it's the growth of companies such as Alipay that is frightening the wits out of legacy payments players in the West, which are consolidating hard and fast. The latest news suggests that Altanta-based Global Payments is about to swoop on Total Systems Services in a $20 billion deal. Driven by deal-makers and backed by big wedges of private equity, the payments sector has drawn investment as digital payments grow globally. "Already this year, US payments processor Fiserv has agreed to buy rival First Data in an all-stock deal worth about $39bn including debt," notes the FT. "That deal was followed by Fidelity National Information Services' agreement to buy Worldpay for $45bn including debt. Columbus-based Total System processes credit card payments and acts as a bank card issuer, while Global Payments allows merchants to accept various payment types and operate their businesses across a variety of distribution channels. Combined, the two companies would employ about 24,000 people and generate more than $8bn in revenue."

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