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Industry roundup: January 26

J.P. Morgan acquires 49% of shares in Viva Wallet to expand payment solutions for European SMBs

Viva Wallet Holdings Software Development SA (Viva Wallet), a European cloud-based payments fintech company, along with its existing shareholders, entered into an agreement to sell approximately 49% of its shares to J.P. Morgan, pending regulatory approval. Takis Georgakopoulos, Global Head of Payments, J.P. Morgan Payments, commented that the strategic investment in Viva Wallet will support the vision to drive new growth and payment innovation for European SMEs and middle market customers. According to Georgakopoulos, Europe's payment environment is fragmented, but it still offers many opportunities, with over seventeen million merchants ready to implement scalable payment solutions.

Viva Wallet, founded in 2000 and headquartered in Athens, Greece, currently serves small and mid-size businesses in 23 countries. Additionally, Viva Wallet developed a unique cloud-based payment platform that can offer merchants a wide range of value-added services, such as tap-to-device technology, merchant cash advance, bill payments, expense management, virtual debit card issuance, cash withdrawals, gift cards and loyalty. Haris Karonis, CEO & co-founder, Viva Wallet, stated that Viva Wallet's mission is to transform companies' payment methods in Europe with state-of-the-art technology, unmatched agility and a deep understanding of the European payment environment. Karonis further added that they will be able to provide complete localized payments and transaction services to small and mid-size businesses in Europe.

J.P. Morgan’s Payments enterprise is centred on developing its omnichannel merchant acquiring capabilities offered to SMBs in Europe. Additionally, J.P. Morgan’s strategic investment in Viva Wallet will create an integrated payments experience for customers including its corporate treasury services, trade finance, card, and merchant services capabilities. SMB payments were recently launched in the U.S. through its Chase Payment Solutions product.

According to the press release, the strategic investment in Viva Wallet is an indication of JP Morgan's Payments enterprise pledge to better service its global and European clients, following the recent announcement of its strategic partnership with Volkswagen Financial Services AG with plans to obtain a controlling interest of approximately 75% in the automaker’s payments platform, pending regulatory approval.

Streamlining income verification processes in open banking platform in UK

Europe's open banking platform, Tink, launched Income Check in the United Kingdom, a service that uses open banking technology to streamline income verification. Tink's Income Check product enables banks and lenders to immediately authenticate an individual's income with secure real-time data directly from their bank account. Customers can agree to connect to their bank account with facial recognition or a single click for deposit transaction information over 12 months, in categories such as salary, pension, benefit or cash deposit.

Income Check provides a convenient and seamless process to evaluate an individual's long-term regular or irregular income patterns, creditworthiness and repayment capabilities. Additionally, the lengthy, tedious verification process is eliminated, and application costs and time are reduced, all while optimizing approval rates.

The successful launch of Tink’s Income Check products in Sweden, Finland, Spain, France, Belgium, Germany and the Netherlands led to the introduction into the United Kingdom. Tink’s open banking platform currently operates in 18 markets and serves more than 300 financial institutions, including NatWest, American Express, PayPal, ABN AMRO and BNP Paribas.

Income verification is an important part of the lending industry, and this new service has made the process itself simpler, enabling partners in the UK to rapidly verify income directly, commented Tasha Chouhan, UK & IE Banking Lead, Tink. Furthermore, the new digital opportunities made available through open banking have shortened the income verification processing time significantly. Chouhan further added that businesses are able to reduce costs and improve the customer experience by obtaining key data to make effective decisions in financial services and offer lending services to a broader number of customers.

CIMB Philippines partners with Zoloz to streamline virtual banking services

As digital banking continues to evolve, regulatory procedures are becoming more critical. CIMB Philippines, a commercial bank providing innovative mobile-first digital banking solutions and services, and Zoloz, an electronic Know Your Customer (eKYC) tech provider, partner to enhance virtual banking services. With Zoloz’s digital KYC solution, CIMB will be able to enhance the client onboarding process and improve the payment experience, making financial services available to consumers in the Philippines.

According to the press release, Zoloz's RealID eKYC solution offers financial institutions an improved customer identity verification process. Furthermore, inefficient paper-based procedures are eliminated, and the cost and time required to perform manual reviews is significantly reduced. Additionally, the digital solutions help expedite the onboarding process while improving the customer experience.

The eKYC solution also supports financial institutions in complying with applicable regulatory guidelines through a vigorous AI model and a comprehensive risk management engine. This further guarantees higher accuracy while reducing identity fraud.

Vijay Manoharan, CEO, CIMB Philippines, commented that more than five million depositors and one million lending customers since 2018 have onboarded due to promoting financial inclusion in the Philippines. The bank will continue to strengthen their platform banking model, integrate solutions into more services and platforms and provide better access for loans, credit or insurance needs to the population in the Philippines, added Manoharan. Chen Jidong, General Manager, Zoloz, further agreed that the partnership will benefit the unbanked and digital banking community with eKYC solutions enabling an easier method and access to account opening.

Thailand regulates the use of cryptocurrencies as a means of payment

Thailand financial sector regulators will publish guidelines to curb the use of cryptocurrencies as a means of payment. The Bank of Thailand (BOT), the Securities and Exchange Commission (SEC) and the Ministry of Finance (MOF), commented that the use of cryptocurrencies in payments poses risks to the country's financial industry. As stated in the press release, authorities acknowledged the widespread use of digital currencies as a means of payment, but regulators aim to focus on consumer protection.

Regulators have considered the pros and cons of using digital currencies for payments. However, price volatility, cybercrime, data privacy and money laundering are some of the main risks associated with digital currencies. Additionally, regulators will consider enforcing authority in accordance with appropriate legal outlines in limiting the extensive use of digital assets as a means of payment for goods and services in light of these risks and implications.

The regulation guideline is expected to place emphasis on certain cryptocurrencies, recognizing the importance of financial innovation. Ruenvadee Suwanmongkol, SEC Secretary-General, Thailand, commented that the agency has an obligatory duty to promote the improvement of digital asset enterprises in addition to customer protection and regulating the financial sector.

Thailand has emerged as an important crypto market; however, Thailand is progressively driven to enact legislation for the financial industry. The Ministry of Finance has planned to implement a capital gains tax of 15% on the profits of cryptocurrency transactions. In addition, BOT warned banks of their direct investment in cryptocurrency trading platforms in December 2021, citing market volatility risks. Cryptocurrency growth in Thailand was highlighted by the November 2021 SEC report, showing that digital currency transactions totalled 205 million baht (US $ 6 million). In particular, Bitcoin hit a record high of $ 68,000 in November 2021.

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