Barclays is struggling to have parts of its British payment company sold. Meanwhile, BBVA is busy with expanding its stablecoin operations in Switzerland. Let’s take a deep look into the recent changes in the world payment industry.
Within the framework of creating cross-border interoperability, Swift is working on a global system that involves major bank digital funds and other promising new payment methods.
The world payment messaging service is on the verge of testing a range of distributed-ledger models to assess their ability to handle international transactions with a gradual transfer from traditional fiat money to digital funds. Swift intends to work out digital currency messaging standards and elaborate on this technology before working with huge volumes of transactions.
The organization is going to work on major bank digital money – the type of money considered promising and being already tested in many countries around the globe. Given such currencies service domestic needs, there’s a big problem of making them work within one solid system. That’s one of the major barriers that question the very existence of major bank digital funds. These currencies exploit different technology and operate under different regulations.
Nevertheless, Swift is already making a huge effort to make that come true. Back in 2023, the payment messaging service started a sort of sandbox to test the integration of major bank digital currencies with each other. The sandbox is actively used by various technology firms and major as well as commercial financial institutions.
As a matter of fact, Lloyds is going to have up to 292 branches closed in 2025. A year before it planned to shut down about 60 branches. The upcoming closures are going to take place among the company’s 128 branches.
In Great Britain, branch closures turn out to be a controversial thing, with government agencies and politicians applying pressure on financial institutions on a regular basis in order to maintain personal access for cash-dependent customers as well as small firms.
In the United Kingdom, the Financial Conduct Authority urges financial institutions to ensure fund access. Moreover, the watchdog urges them to timely realize if there’s a huge need for expansion of cash services once local services undergo changes. Besides this, banks are obliged to respond to consumer groups and local residents as for their need for cash access.
The executive director of competition and customers at the Financial Conduct Authority, Sheldon Mills told that up to three million customers still prefer cash notwithstanding the constantly growing popularity of digital transactions.
In addition to that, the watchdog has also urged building societies and banks to evaluate how reducing hours or closing branches might influence services provided. Britain’s Link ATM network has come up with a so-called “pooling” – a special model that let machines take deposits from multiple financial institutions. This measure should greatly contribute to maintaining access to cash.
Barclay is currently struggling to have its merchant payment service sold in Great Britain against the backdrop of a massive selloff in the EU payments sector. As a matter of fact, Brookfield Asset Management skipped a potential sale explaining its move by a failure to negotiate a price. Furthermore, Global Payments’ takeover of Takepayments, a UK-based Barclays partner has generated complications and backed worries that the Takepayments deal could potentially diminish Barclays’ payment profit. However, Barclays didn’t comment on the situation.
For the last two years, in the European Union payment firms have faced difficulties because of the dropping economic surge, and higher inflation, not to mention geopolitical issues. While American payment businesses have complained about slower growth for the same time, the situation with revenue and stock selloffs hasn’t been as harsh as in the EU.
Last week Nik Storonsky, the CEO and Revolut founder had up to $300m in company stock. It followed last month’s secondary share sale, which put the firm’s value at about $45b.
Initially known as a mobile payments provider, the challenger bank based in the United Kingdom has introduced a number of new services for the last time. They include payment cards, savings accounts, advisory services, and investments. Besides this, it has expanded overseas, rolling out a financial super app to face off with such rivals as PayPal, Stripe, Monzo, and Block.
In Switzerland, BBVA gives private banking as well as institutional customers an opportunity to manage a popular stable crypto asset “USDC” alongside traditional financial instruments in the same mobile application.
Users are free to sell, purchase, or convert this popular stable coin to American dollars, euros, or other fiat money. The bank hopes to boost trading by means of the same blockchain technology used in the USDC coin. Moreover, the financial institution backs BTC and ETC in Switzerland.
As a stablecoin backed by the US dollar, USDC is good at hedging the volatility of other digital coins. Many experts consider stablecoins to be an ideal payment method. Mastercard and Visa have both declared support for stablecoins transactions. Meanwhile, PayPal has rolled out its own stablecoin.
The Church of England is ramping up digital giving through contactless payments having attracted up to $6m in donations for the last three years. As of now, over 2,200 churches accept digital donations through contactless payment terminals in collaboration with CollectTin, Give A Little, and other charitable organizations.
Today more and more philanthropic and charity organizations use digital channels to collect donations. It’s no wonder about this since today people use less cash than in the previous decades.
Meanwhile, Sweden’s major financial institution suggests that cash access should be guaranteed by the country’s constitution.
The given move is expected to back the government’s capability to pass laws that urge merchants to provide customers with a cash payment option. The same laws are expected to make financial institutions ensure cash protection when a branch closure takes place. In Sweden, bank rules support cash as a payment method.
With well-developed mobile and digital banking, Sweden appears to be one of the most digital economies in the world. It has made financial institutions give less priority to cash services. As a result, such services are outsourced to companies that handle cash. Loomis is a typical example of such companies.
The Riksbank states that can’t be enough to support the use of cash as one of the major payment methods because it leaves financial institutions and businesses not ready for this scenario.
In America, municipalities and New Jersey have already passed corresponding laws. Respectively, local businesses are already obliged to accept cash. The move has made Amazon Go start working with in-store cash payments.
In Canada, about 63% of in-store payments are contactless. In 2023, in this country, contactless payments amounted to 80b Canadian dollars that turned out to be 20% more compared to the previous year.
In Canada, about 75% of contactless payments are carried out via contactless cards. Since approximately 74% of smartphones in this country come with Near Field Communication that ensures mobile contactless payments and credit payment, as well as debit cards, can be currently used to make contactless payments, no one questions the dominant status of this technology in the future.