Although the tech world is slowing down a little in December, prior to the holidays, there are still several big stories that made the headlines during the past week. A new study shows the majority of shoppers find crypto payments acceptance crucial. HMRC will introduce an API to check all of its outbound payments. UK Tech had the best year in history. BNPL surges as much as people’s inability to repay their debts. France’s Central Bank completes its first series of CBDC experiments. AML penalties grow significantly. Nuvei launches its crypto-friendly debit card across Europe. Singtel faces up to $216 million penalties. Four big telecoms will pay a $6 million settlement over 911 failures. FDA gives clearance to the AI algorithm that detects atrial fibrillation.
The abundance or the lack of payment options has become a “make it or break it” for customers shopping online. If the website does not offer enough payment options, it can quickly switch to a competitor. The payment network, Mercuryo, has recently released a new study in which almost ⅔ of business owners surveyed claimed a broader innovation in payments is crucial. This was later confirmed by a similar question asked to customers. Mercuryo’s study found that 58% of clients shopping online want cryptocurrency as a potential payment form.
“SMEs are a driving force for the UK economy, but if they fail to innovate, they are in danger of being left behind,” comments Mercuryo Co-Founder and CBDO Petr Kozyokov. “We’re seeing increased levels of demand from customers, looking for providers who can offer them both fiat and crypto services. In just a short few years, I predict crypto and fiat payments will reach an equilibrium, with consumers able to easily pay via whichever payment type they choose.”
The same survey also explored what customers see as a prime advantage of using crypto. 24% of the surveyed believed it increases innovation, confidentiality, and security, with an additional 23% reporting the speed of transactions. With the increased demand, it does not come as a surprise more than half of the businesses included in the research see cryptocurrency as the future of payment, with 57% claiming accepting crypto payments would grant them a competitive advantage.
HM Revenue and Customs (HMRC) in the UK that is responsible for tax collection, some state support payment, and administering various regulations decided to start conducting bulk checks of all its outbound payments. Due to its role, the fraud prevention of HMRC is crucial. That is why NatWest Group and SurePay joined forces to create Confirmation to Payee (CoP) to HMRC. Because of it, HMRC will be able to quickly check large amounts of outbound payments using the Application Programming Interface (API).
Bridget Meijer, Business Development Manager Global SurePay said, “We are tremendously proud of our best in class Confirmation of Payee solution. Unlike conventional name matching algorithms, the SurePay algorithm is specifically designed for Confirmation of Payee from scratch and it fully operates in line with Pay.UK requirements. Our algorithm and gateway combine cutting-edge data science techniques with profound knowledge of transactions and payer’s behavior to help prevent fraud and mistakes whilst facilitating Straight Through Processing.
“This collaboration with HMRC and NatWest is testament to the quality of our CoP solution and services. Our technology is tried and tested in the Dutch market, which allowed us to improve our algorithm so that now we can offer by far the best solution on the market.”
James Hodgson, Head of Commercial Payments, NatWest Group said, “We are delighted to collaborate with SurePay to provide the first-to-market solution to HMRC that will help them reduce fraud and losses using the Confirmation of Payee service. NatWest is committed to combating fraud at all levels for our customers and is confident that this new technology will vastly reduce the cost of fraudulent and misdirected payments for this customer.
“NatWest is committed to investing in the development of new and innovative services which are API enabled to allow customers to embed them into their own business. Our work with HMRC and SurePay is an example of our commitment in this space.”
Digital Economy Council researchers consider 2021 to be the best year for UK tech in terms of several different metrics. The VC investment, tech jobs, and a number of unicorns all hit their record high during this year. There was £26bn in VC in 2021, 29 unicorns with over ⅓ being outside of London,a and plenty of new jobs created. The UK startup sector accounted for over 35% of the total European tech ecosystem.
Digital Minister Chris Philp commented: “It has been another record-breaking year for UK tech, with innovative British start-ups helping solve some of the world’s biggest challenges. Capitalizing on this fantastic investment across the country is a crucial part of our mission to level up, so we are supporting businesses with pro-innovation policies and helping people to get the skills they need to thrive in this dynamic industry.”
The financial advice service OpenMoney claims in their new study that over half of the Europeans between 18 and 50 have used the buy now pay later services (BNPL). However, as the hype for BNPL is growing, so is the fear of people struggling to repay their debts. Currently, 43% of those who use BNPL have struggled to repay the debts, with 29% turning to others for help in repayments. Those numbers are also substantial increases from the levels last year.
Hayley Millhouse, managing director of OpenMoney, comments: “While from a budgeting perspective, spreading the cost of expensive items could make financial sense, it is worrying to see that two-fifths of users struggle to pay off the resulting debt, with many turning to friends and family or other forms of borrowing to make repayments.”
As the development is concerning, the Financial Conduct Authorities in the UK decided to introduce new regulations for BNPL providers.
Millhouse explains: “Many more people will be using BNPL to finance their Christmas purchases, without necessarily considering how they will make the repayments or fully understanding the consequences if they don’t. One in six of our respondents didn’t even class BNPL as debt. The sooner these schemes are regulated and brought in line with the consumer protections required for other forms of unsecured debt, the better.”
Since March 2020, the French central bank, Banque de France, has been in a program trying out the possibilities of a digital euro. The trial started with the interbank settlement experiments and in the past week, the last one has been completed. The program was conducted in cooperation with HSBC and IBM, with the latter issuing digital bond on a blockchain.
Mark Williamson, managing director GFX eRisk, partnerships & propositions at HSBC, says: “Our collaboration with IBM on this initiative has resulted in this milestone of streamlining front-to-back securities and foreign exchange DVP and PVP settlement processes. Interoperability across different DLT’s and technologies was key is demonstrating how to save time, reduce market risk and improve security for transactions between central banks, commercial banks, and in time our clients around the world.”
Nathalie Aufauvre, director general of financial stability and operations at the Banque de France, says: “Interoperability across platforms is a key element to maximize the benefits of the distributed ledger technology applied to financial markets. By achieving the transfer of data and assets, as well as the exchange of assets across different blockchains in an atomic way, the Banque de France and HSBC have demonstrated the possibility of such interoperability, essential to ensure that the multiple environments, on which the efficient functioning of markets rely, can coexist.”
The central bank will continue with CBDC trials and will now focus on cross-border transactions.
Anti-Money Laundering (AML) fines started growing back in 2020. In 2020 alone, the penalties were five times higher than in 2019, with $2.2 billion total. Kroll’s annual Global Enforcement Review 2021 shows that while the number of fines for AML failures did not change, the fees that had to be paid rose significantly.
Claire Simm, managing director, financial services compliance and regulation at Kroll, comments: “The figures show that investigations were not paused for Covid-19. While the number of fines remained constant, the value of fines surged as regulators imposed tougher penalties, continuing to send the message that despite any obstacles, enforcement remains a top priority for non-compliant behavior.
“These fines show that across the world, regulators continue to put high importance on financial crime enforcement. We can expect to see mega-fines and criminal enforcement continue through 2021 and beyond.”
Canadian fintech Nuvei will launch crypto-friendly debit cards across Europe, using its subsidiary Simplex. SimpIex was acquired by the Canadian fintech company back in May in a $250 million cash deal. The company’s infrastructure allows customers to buy and sell crypto using debit cards. Nuvei will leverage its Visa Principal Membership to allow its clients to spend the funds from crypto sales in any place accepting Visa cards
Nuvei’s Chair and CEO, Philip Fayer, comments: “The branded Visa debit card is a huge asset to our partners and their users, enabling the immediate and seamless spending of crypto earnings. With this program, Visa has played a vital role in expanding the crypto ecosystem by closing the gap between traditional finance and crypto.”
Reuters reported today that Singapore Telecommunications (Singtel) faces $216 million in tax exposure, interest, and penalties, after its defeat in court. An Australian court decided to dismiss Singapore telecom’s appeal that was raised after an assessment by the Australian taxation office.
Singtel commented on the verdict on Sunday, describing it as an “unfavorable judgment” from the Federal Court of Australia.”The Singtel Group will consider the details of the judgment, explore available options, and determine the next steps. If the above tax exposures are assessed to be probable, provisions shall be made in the accounts,” Singtel said in the statement.
On Friday, the Federal Communications Commission (FCC) decided that four telecoms will have to pay a $6 million settlement in regards to the investigation into 911 rules compliance. The investigation started after an outage that occurred back in June 2020 and lasted for over 12 hours. The outage led to more than 20 thousand 911 calls that did not go through.
Lumen will pay the biggest chunk of the settlement, $3.8 million, with Intrado paying $1.75 million, AT&T $460,000, and Verizon $274,000
“The most important phone call you ever make may be a call to 911,” said FCC Chairwoman Jessica Rosenworcel. “It’s vital that phone companies prevent these outages wherever possible and provide prompt and sufficient notification to 911 call centers when they do occur.”
French startup Implicity that also has a headquarters in the US has just been granted FDA approval for its AI software. The algorithm was designed by Implicity analysis ECG data, aiming to spot signs of atrial fibrillation or other anomalies with very high accuracy. Moreover, based on an October study, the company’s algorithm is significantly more effective than other ICMs. It analyzed over 2800 arrhythmia alerts from 370 devices and ended up classifying over half of those instances as false positives. At the same time, the algorithm has 99% sensitivity in spotting true positive cases.
“The true promise of remote monitoring is that we can see patients who need to be seen earlier. Even if the patient is not experiencing a symptom, we can detect their condition and let them know they need to be seen,” said Niraj Varma, M.D., Ph.D., one of the study’s authors and a consultant electrophysiologist at the Cleveland Clinic. “Implicity’s innovative solutions will enable us to direct our attention to clinically actionable data better so we can do just that.