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| When Payments meets Innovation | |
Payment developments are like the watching of the ebb and flow of the waters, between innovation and regulations – constantly moving. The most recent example of this was Australia Buy Now Pay Later (BNPL) firm Afterpay being bought by Square for a not insignificant $39bn price tag.
The BNPL trend is an example of technology development which is moving faster than regulation – a fact that has hindered the incumbent firms to compete.
Talking about trends in this months Regulatory Working Group a number of members spent time scanning the global regulatory trends to get updates on existing regulations and also looking at where the regulatory trend is heading. The Corlytics Payments Tracker which is being beta tested by the regulatory group provided some updates and statistics around the trends.
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It is encouraging to see that the top 4 trends are where EPA Asia is driving on policy and activities in the coming months.
While on the subject of Digital currencies, it is a good opportunity to mention the upcoming Payments meets Blockchain webinar with a strong international panel of experts. This event is Sep-1 and open to all to register here.
On the subject of innovation Zennon Kapron one the leading EPA Asia payment Ambassadors from Singapore takes a look at digital payments, and CBDCs – a topic that is changing the face of payments and digital identity and asset management across Asia.
In this edition we also look back across another busy month of events, and the one of note was the inaugural APAC Fintech Payments Forum which brought together the leading fintech associations to look at payments in APAC.
As we look forward in our schedule for the coming months we are delighted to welcome SWIFT to speak to members about the latest initiative of SWIFTGo, and how that will impact SMEs across domestic and cross-border payments. | |
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The Dawn of True Payment Interoperability in Asia
Asia Pacific’s payments industry has been one of the fastest-growing financial industry segments as traditional players consolidate their positions, MTOs serve the underserved, and new FinTechs seek to disrupt them both.
However, the industry is on the cusp of a critical inflection point: ‘true payment interoperability.’
In traditional domestic POS or online transactions, the industry has reached a point where payment messages vary slightly by payment network (e.g., Visa, Mastercard) but are standardized insofar that a physical POS terminal or online gateway can handle pretty much any card or e-wallet transaction. One might describe these as ‘semi-interoperable.’ You can use any card in a payment terminal or a gateway, and as long as the payment scheme acquires that merchant, the payment will be processed – e.g., using a Visa card online with a merchant that accepts Visa. Or in the case of QR codes, you can scan a standardized QR with any app, and the payment would route to the appropriate network.
We are starting to see the rise of what we at Kapronasia call ‘true-interoperability.’ Driven primarily by the rise of e-wallets, true-interoperability deconstructs the traditional three or four-party payment model such that a user can use any brand of e-wallet with any merchant acquirer. For example, in China, a consumer could use a WeChat Pay wallet to pay a China UnionPay (only) merchant.
This may not seem like much of a change when you first consider it, but we have never seen this before in the traditional payments industry. It would be the equivalent of a consumer using a Visa card at a Mastercard (only) merchant. The implications are potentially stark. We already see a ‘race to zero’ in payment fees across the region as competitive pressure and regulatory interventions push payment margins lower. In addition, historically, payment providers and e-wallets would have had a reasonable expectation that they would be able to capture some or all of the scheme and interchange fees, we could now see the scenario where the fees are either split amongst a few providers or disappear altogether.
The situation becomes even more complicated when we consider the rise of Central Bank Digital Currencies (CBDCs). In the future, the e-Yuan, China’s CBDC, will be the settlement currency and platform for any physical or online transaction, which will essentially force interoperability between payment networks. This could be one reason that the Chinese government has recently opened up the market to Amex and Mastercard because, in a few years, they may well be irrelevant for domestic transactions.
Other CBDC initiatives across Asia are still too nascent to fully understand the implications, but one could see things moving in a similar direction. Likewise, although we haven’t touched on cross-border payments, bilateral arrangements, such as that between Singapore’s PayNow and Thailand’s PromptPay, will likely further impact the market.
This push towards payment interoperability is starting in Malaysia, Indonesia, and China, but its spread across Asia is inevitable. Existing payment providers will need to re-think revenue models as business models change and pressure on payment fee margin increases. This concept of ‘true-interoperability may be one of the most significant changes our industry has seen in decades.
Well, that and CBDCs, and faster payments, and fintechs… Zennon Kapron Director, Kapronasia | |
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Project Meet-Her She Knows Payments has launched on Instagram.
Most likely, 90% of you are now saying - I don't use Instagram - and neither did we - but the thought leaders of tomorrow do.
More than one billion people use Instagram every month, and roughly 90% of them follow at least one business.
Follow us on Instagram to see how we are creating a new channel to educate the thought leaders of tomorrow on payments. Share the channel with your staff who are new entrants to the industry or whom inspire to lean in to be thought leaders of tomorrow.
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Register to get yourself more involved in payments. | |
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Global Payments Forum - Central Bank Digital Currencies and Cross Border Payments | | | |
EPA Fuse - Fresh Information Fast | | | |
Meet Her She Knows Payments - Cyber Security | | | |
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Quote of the Month with Simone Joyce, Paypa Plane
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What is a Hot Topic Briefing? | |
Hot Topic Briefings (HTB) are presented as a panel discussion, hosted by EPAA, that brings together international thought leadership around emerging issues. These webinars bring together market experts to debate on a topic lead by an EPAA moderator.
Before (10 min) and after (20 min) each session is the opportunity to virtually network on our virtual platform.
The virtual platform has a visual top-down view, 2-D map comprising interactive roundtables. The platform uses video, audio, and chat functions to allow guests within the space to interact naturally in real-time, from anywhere in the world. You will be able to hop from table to table and meet new payments professionals or say hello to the ones you already know.
There will be an opportunity to have those all-important one-to-one conversations on dedicated floors of the virtual space. You will also be able to see who is there and send them a private message.
Hot Topic Briefings are available for sponsorship. These sessions are open to the industry. Capacity: 100+ attendees | |
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Press "Read More" to check our past event recordings, articles and related materials. | |
Is Payments Bigger Than Banking | | | |
Meet-Her She Knows Payments - Financial Inclusion | | | |
IFF - EPA Global Payments Forum | | | |
FSB: Cross-Border Payments | | | |
APAC Fintech Payments Forum | | | |
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In a world where online and digital collaboration is increasingly the norm EPA Asia projects are continuing to align more with the trends. Monthly working meetings are being held on the 3 operational projects, as follows : - Project Cross-Border APAC : second Wednesday every month
- Project Digital Identity APAC : third Wednesday every month
- Project Regulations APAC: fourth Wednesday every month
- Special project - Meet-Her: This is arranged around the workshop events and is run on selected dates each month.
To join the EPAA Project Working Group projects@emergingpaymentsasia.org
PROJECT REGULATIONS SPONSORED BY CORLYTICS - Natalie Fleming (Senior Director - Banking and Regulatory Relations Asia Pacific) Payoneer presented at our Regulatory Working Group on July 28 as a Guest Speaker. Key theme was the progress of Japanese Payments Regulations and the challenges and opportunities in the Japanese ecosystem.
- The Payments Tracker is now live and EPAA members are being provided access to review.
- Corlytics Regulation Tracker Demo video
 (email projects@emergingpaymentsasia.org for login access) - Regulatory reachout program connected with RBA (Cross-Border Forum) and APEC finance and economic ministers (Open Banking POC)
Working Group Members are:- Dr Brad Pragnell (EPAA Ambassador)
- Zennon Kapron (EPAA Ambassador)
- Antony Morris (EPAA Ambassador)
- John Byrne (Corlytics)
- Mike O’Keefe (Corlytics)
- Sean Peterson (AMEX)
- Simone Joyce (FinTech Australia)
- Steven Chan (PayPal)
- Amrita Nair (PayPal)
- Anurag Vasisth (ABP Australia)
- Thomas Hind (DXC Technology)
- Sarah Wood (AMEX)
- Desmond Lim Ching Hau (Ebay)
- Laura Hu (eBay)
- Mailu Mizumoto (eBay)
- Holly Dorber (PayPal)
- Abraham Teo (AxiomSL)
- Dom Braun (E6)
- David Brown (Finastra)
- John Ryan (Director General, EPAA)
PROJECT CROSS-BORDER PAYMENTS SPONSORED BY PAYPAL Project Cross-Border Update Three key focus areas: - Dr Brad Pragnell (EPAA Ambassador), working with Fannette Hsin (Project Director), led the EPAA submission to the FSB Cross Border Payments Targets Submission.
- IIF-EPA Global Payments Forum Workshop was held on 7 July 2021. "From competition to collaboration, how incumbents and fintechs can work together to solve customer expectations” - A case study investigating Wise and Shinhan Bank. (Read here)
- The next IIF-EPA Global Payments Forum will be held on 8 September. A glance into the future: Central Bank Digital Currencies and Cross Border Payments. Will the development of CBDC infrastructure support the next wave of improvements in cross border payments or will it crowd out private innovation? Join this 60 minute workshop with Morten Bech for a short presentation on the work of the BIS Innovation Hub globally on CBDCs, followed by a round table discussion. (Register here)
- Asian Bank Leaders meeting is WIP
- The APAC Fintech Payments Forum was held on 4 August. Nigel Lee moderated a robust opening session, followed by breakout rooms where a number of relevant topics were discussed. A short report is being developed.
Working Group Members are: - Fannette Hsin (EPAA Ambassador/Project Director)
- Amrita V Nair (PayPal – Project Sponsor)
- Dr. Brad Pragnell (EPAA Ambassador)
- Melissa Keir (Marqeta)
- Kenneth Leung (SWIFT)
- Laura Hu (EBAY)
- Mishal Ruparel (Banking Circle)
- Thomas Hind (DXC Technology)
- Steven Chan (PayPal)
- Tom Alaerts (Swift)
- Stephen Peters (FIS)
- Katie Mitchell (Nium)
- Todd Latham (CurrencyCloud)
- Mailu Mizumoto(EBAY)
- David Brown (Finastra)
- John Ryan (Director General, EPAA)
PROJECT MEET HER - SHE KNOWS PAYMENT The final event in the series will be on Cybersecurity where Michelle Chance, Global Head of Cyber Security for PayPal, will be presenting. For more information regarding EPAA Project Meet Her - She Knows Payments To join the EPAA Project Meet Her - She Knows Payments
PROJECT OPEN BANKING SPONSORED BY PAYPAL SUPPORTING SPONSORS: SPLIT PAYMENTS, TRUELAYER, DXC TECHNOLOGY, REFINITIV, SWIFT, EQUINIX - A number of bilateral and group discussions have been held in the recent months, and alongside with regional regulators the Project Open Banking will be conducting monthly meetings - first meeting Sep 8. All members who are interested to attend, please contact Danelle.Denny@emergingpaymentsasia.org
PROJECT DIGITAL IDENTITY SPONSORED BY CITI & FICO - A series of events are now planned for the launch of the DI White Paper in September. More details to follow.
- EPAA is looking for case studies showcasing interoperability in digital identity. If you would like to be considered please contact camilla.bullock@emergingpaymentsasia.org
Working Group Members are: - Rajiv Madane (Project Director, Covr Security)
- Victoria Richardson (Project Mentor, AusPayNet)
- Richard Lomas (Citi)
- CK Leo (FICO)
- Ian Sorbello (Transmit Security)
- Rob Allen(eftpos Payments Australia)
- Desmond Lim Ching Hau (Ebay)
- Mailu Mizumoto (EBay)
- John Ryan (Director General, EPAA)
To join the EPAA Project Working Group projects@emergingpaymentsasia.org
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Kompasbank taps Mambu to lead Danish SME lending | | | |
The future of Islamic finance is wide open and ripe for disruption as clearly shown in this third edition of Mambu's Disruption Diaries | | | |
Marqeta's earnings shows a massive jump in revenue, driven by customer growth
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eftpos and Beyond Blue partner to support mental health, including young Australians and small business | | | |
PayPal Launches the Ability to Buy, Hold and Sell Cryptocurrency in the UK | | | |
Ask Farnoosh – All Things Credit | | | |
New Data on Digital Account Opening from FICO | | | |
GC PARTNERS WORKS WITH NIUM TO STRENGTHEN ITS PAYMENT SERVICES OFFERING IN MAJOR ASIAN MARKETS | | | |
Anna Money to offer international banking with Currencycloud | | | |
Chris Jewell Discusses PayTo | | | |
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Equinix and AFIN Partner to Offer Enhanced Infrastructure Services for Financial Institutions and FinTechs’ Collaboration | | | |
What Is a Standard Data Evaluation? | | | |
Everything you need to know about our pre-dispute management services: Ethoca & Verifi | | | |
Cloud Solution Provider ViBiCloud Hedges FX Risk and Maximizes Growth with Wallex | | | |
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