We are back with the weekly tech update, providing you with the most important fintech, telecom, and biotech news from the past week. This week, we will be looking at the BNPL providers refunding charges to users, Open Banking passing a user milestone in the UK, Amazon, and Visa reaching an agreement on the fees, crypto payrolls, account-to-account payments by Bank of America, IMF speaking out about CBDC regulation, Ericsson investing into energy-efficient 5G, cellular IoT market growth, Moderna’s mRNA vaccine portfolio, and Eli Lilly’s Covid-19 treatment approval by the FDA.
Before the BNPL regulations are ready around the world, the regulators are trying to find ways to semi-regulate the market. In the UK, the Financial Conduct Authority (FCA) decided to crack down on what they consider as unfair and unclear contract terms of the BNPL providers. FCA believes that the current terms could potentially harm consumers and hence, decided to use the Consumer Rights Act to assess how transparent the terms are. Now, the BNPL providers will have to be much more clear on several contract terms such as payment fees and contract cancellations. Moreover, several BNPL providers agreed to refund users that have been charged with late payments fees in certain circumstances.
Sheldon Mills, executive director of consumers and competition at the FCA, says: “We do not yet have powers to regulate these firms, but we do have powers to review the terms and conditions of consumer contracts for fairness and have acted proactively to ensure that the BNPL industry adopts high standards in their terms and conditions.”
“The four BNPL firms we have worked with have all voluntarily agreed to change their approach. We welcome this and hope that the rest of the industry will now follow,” he added.
In the UK, the open banking sector has just reached another milestone. There are officially more than five million active users of the offerings. We see accelerated and healthy growth in the sector. It took 10 months for the number of users to increase from one million and two million (the milestone was passed in 2020), and yet only four months to increase the number of customers from four million to over five million. When comparing December 2021 with January 2022, over 620 000 additional payments were made using open banking.
David Beardmore, ecosystem development director at the OBIE, explained the numbers show that open banking is here to stay.
“This is positive news for all involved in open banking – for those entrepreneurs who have built fintech businesses based on the foundations of open banking, for the investment community funding the continued expansion of products and services, and for the government as it continues to examine how best to extend open banking functionality into other areas of the economy,” he said.
We have been reporting earlier in the year that Amazon was going back and forth on accepting Visa cards across its operations worldwide. Now, the two giants have reached an agreement.
“We’ve recently reached a global agreement with Visa that allows all customers to continue using their Visa credit cards in our stores,” Amazon said in a statement. “Amazon remains committed to offering customers a payment experience that is convenient and offers choice.”
Visa added that the agreement reached with Amazon will result in the two companies collaborating on “new product and technology initiatives to ensure innovative payment experiences for our customers in the future.”
Siamac Rezaiezadeh, director of product marketing at GoCardless believes that while the Visa ban has never been introduced, it demonstrated a warning to the global card schemes that set aggressive payment terms.
“As this chapter of the Amazon and Visa feud closes, it’s important to keep one eye on the bigger picture: businesses are now pushing back against unfavourable terms, ones they historically had little choice but to accept,” he says. “The landscape has now changed dramatically with the rise of BNPL and open banking-enabled payments, both of which are increasingly popular with consumers. This gives businesses a genuine alternative to the card schemes.”
New data shows that the possibility to receive paychecks in crypto is growing bigger and bigger. Deehl, an American payroll and compliance provider, shows that employers are quick to adopt payment alternatives. In Europe, the employers seem to be a bit more reserved about the idea of crypto paychecks. Showing the example of the UK, Deel’s research shows that 28% of employers surveyed said they do not know enough about cryptocurrencies to be able to consider crypto salaries.
“With a surge in salaries being withdrawn in cryptocurrencies, it’s becoming increasingly evident that benefits such as instant crypto payments are becoming ways to attract global talent,” comment Deel CEO and co-founder Alex Bouaziz. “For many businesses, all that’s missing is having the right infrastructure in place.”
Bank of America is getting ready to launch its newest payment solution Pay by Bank, developed together with Banked Ltd. The offering allows e-commerce customers to make transactions directly from their bank accounts, in real-time without credit card details. This speeds up the whole process and makes online checkout more efficient. The solution is also less costly as no card processing fees are involved.
“The launch of Pay by Bank is part of our continuous cycle of technology investment that helps us to keep clients at the cutting edge,” said Matthew Davies, co-head of Global Corporate GTS Sales and head of GTS EMEA at Bank of America. “The solution will support clients with creating a better experience for their own customers and help set them apart from their competitors.”
By selecting the Pay by Bank option at the checkout page, a customer would only need to validate the payment using their online banking platform. Once the payment is authenticated by the customer, the payment will be sent directly to the company from a customer’s personal bank account.
“The breadth and scale of our technology development come from sustained strategic investment. We are proud to launch Pay by Bank and continue supporting clients with tools that can have a positive impact on their business,” added Andrew McKibben, International head of Technology and Operations at Bank of America.
The head of the International Monetary Fund spoke out about the CBDC regulation, saying that the first data from CBDC pilots across the globe shows that there will be no one-size-fits-all approach regarding the future regulations. IMF estimates that close to 100 countries are exploring CBDC, with six nations being at an advanced stage in their research or having launched the digital money already.
“First, no one size fits all,” IMF Managing Director Kristalina Georgieva said. “These are still early days for CBDCs and we don’t quite know how far and how fast they will go,” Georgieva added.
Donald Gillies, Head of PassFort, a Moody’s Analytics company responded to Georgieva’s comments, claiming that “Rarely does one size fit all for anything. As central banks look to ensure their own resilience methods with digital currencies, and with roughly 100 countries now exploring the viability of CBDC’s, the scope for variations in compliance processes from location to location is even greater. To fully capitalize on the benefits that CBDC’s can offer, central banks and financial institutions will need tools to help navigate these variations and automate the high levels of compliance procedures that will ensue.”
Another key concern that was mentioned in the report was “digital dollarisation”. The IMF officials concluded that for poorer countries, in particular, introducing a CBDC could mean adopting a foreign one from one of the major central banks.
“Dollarisation has always been the struggle for countries that are viewed as being unstable,” an IMF official who worked on the report, Tobias Adrian said during an Atlantic Council webinar. “But of course, once you go to a fully digital world, that kind of dollarisation, or cryptoisation, or CBDCisation could be that much quicker and more dangerous”.
Ericsson Will Invest Less Energy In 5G With an Update to Its RAN Portfolio
Ericsson announced an update of its 5G RAN portfolio that hugely focuses on energy efficiency. Its dual-band FDD Radio 4490 is believed to use 25% less power than its predecessor.
“We continue to evolve our RAN portfolio with more solutions for smart, slim, and sustainable 5G networks,” said Per Narvinger, Head of Product Area Networks at Ericsson. “Our latest innovations will further optimize 5G sites for both purpose-built and Cloud RAN deployments.“
During the same product announcement, the Swedish telecom giant has also showcased an IoT Accelerator Connect that is meant to simplify IoT. The company claims it is “a unifying layer of packaged services to minimize complexity” for companies and “‘instant access to connectivity best suited to their specific use case, coverage and service level needs” for developers.
“We’re proud to make it easier than ever before for enterprises of any size to instantly engage with, and benefit from, the world of IoT connectivity,” said Kyle Okamoto, General Manager of IoT at Ericsson. “By offering plug-and-play simplicity, Ericsson IoT Accelerator Connect marks a major leap in transforming access to IoT connectivity. This solution covers connectivity of devices, networks, and clouds, while removing hurdles for enterprises, communications service providers, hyperscale cloud providers, resellers, and module vendors, to accelerate the growth of their IoT businesses.”
In its newest research, Juniper Research predicts that due to Low-power wide-area (LPWA) networking, the cellular IoT market will double in value by 2026, increasing its worth to more than $61 billion. At the beginning of this year, this sector was valued at $31 billion.
NB-IoT and LTE-M are expected to be the biggest factors behind the growth, accelerating the adoption and connectivity in sectors such as smart cities, agriculture, and manufacturing.
The research points out that 5G will amount to $9 billion of the total $61 billion in the next five years, as compared to only $800 million last year.
“This represents growth of 1,000 percent over the next five years as 5G coverage expands and operators benefit from the increased number of 5G IoT connections,” said Juniper Research, in a research note. “To capitalize on this growth, it [is] recommended [that] operators offer value-added services, such as network slicing and edge computing, to IoT users to maximize the value of 5G adoption.”
FDA has given a green light to bebtelovimab, an antibody treatment by Eli Lilly that has shown neutralization of symptoms against the Omicron variant of Covid-19. The treatment will be used against mild-to-moderate Covid-19 cases and can be given to patients over 12 years of age. The dose of 175mg will be given as an intravenous injection,
“As a global pharmaceutical company, Lilly has worked hard to fight this pandemic. Early in 2021, prior to the identification of the Omicron variant, Lilly scientists were already working to develop bebtelovimab as a broadly neutralizing antibody that could be used to fight a highly mutated variant, should one emerge,” said Daniel Skovronsky, M.D., Ph.D., Lilly’s chief scientific and medical officer, and president of Lilly Research Laboratories. “With the emergence of variants such as Omicron, treatment options remain limited. Lilly is pleased to provide another treatment option to help address the ongoing needs of patients and health care providers who continue to battle this pandemic.”
Based on Moderna’s experience with its Covid-19 mRNA vaccine, the company announced on Friday it would expand its mRNA portfolio with three new programs. Leveraging the mRNA technology, Moderna hopes to develop vaccines against herpes simplex virus (HSV), varicella-zoster virus (VSV) reducing the rate of shingles, and a checkpoint cancer vaccine.
“We are pleased to announce these new development programs, which reflect the continued productivity of our platform and the potential of our mRNA technology to impact the lives of hundreds of millions of people,” said Stéphane Bancel, Chief Executive Officer of Moderna. “We are committed to addressing latent viruses with the goal of preventing the lifelong medical conditions that they cause with our mRNA vaccine programs. With our HSV and VZV vaccine candidates, we also hope to improve the quality of life for those with symptomatic diseases. With our new checkpoint cancer vaccine, we look forward to exploring if we can induce T cells specific to PD-L1 and IDO1 through vaccination. Our research teams are working on additional mRNA candidates, which we look forward to sharing in the future.”