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Industry roundup: 29 November

Pay by QR code? UnionPay and Razer Merchant Services partner to enable this capability in Malaysia

As emerging technologies continue to grow, the rise in merchants delivering a variety of payments option to customers has become commonplace, especially due to the pandemic.

UnionPay, a global payment network with over 2,400 organizations worldwide, card acceptance in 180 countries and issuance in 70 countries and regions, and Razer Merchant Services (RMS), a fintech company, have partnered to enable UnionPay Quick Response (QR) codes at all Razer Merchant Services (RMS) physical merchant locations and online merchants in Malaysia. The widespread use of UnionPay QR codes will introduce digital payments to UnionPay-enabled electronic wallets, creating the opportunity for more local consumers to become cashless. In addition, the partnership will enable QR acceptance of merchants of all sizes across many industries (e-commerce, education, government services, healthcare, beauty, hobbies, parking, retail, travel and more).

UnionPay was Malaysia's first global payment network (2018) to launch UnionPay’s QR code for payments nationwide. UnionPay QR is Europay, Mastercard and Visa (EMV) compliant, a global standard for inter-operation of secure transactions helping to reduce the risk of fraud.

Currently, UnionPay's QR code is accepted by approximately 100,000 local merchants, in addition to reaching over 30 million merchants and 44 countries outside of Malaysia (Australia, China, Indonesia, Korea, Japan, Singapore, Thailand and Vietnam to name a few). Huiming Cai, General Manager, UnionPay International (UPI), commented that customers can reduce the need for physical contact and commute by simply scanning UnionPay's QR code online for purchases and services, making this a convenient and unified payment experience for clients.

Razer Fintech, Razer Inc.'s financial technology division, founded in April 2018, has evolved into Southeast Asia's (SEA) largest O2O (online to offline) digital payment network. Currently, Razer Fintech’s online SEA payment network serves over 60,000 merchants in the region, with its offline payment network reaching over 1 million merchant retail sites.

Lee Li Meng, CEO, Razer Fintech, further elaborated that QR codes will provide Malaysia's online and offline merchants with a secure, easy-to-use and affordable alternative payment option.

For more information on Razer Fintech’s merchant services, please visit the website here.


Japan’s outlook of issuance of digital yen by FY2022

A Digital Currency Forum of approximately 74 Japanese organizations, including three mega banks (Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc), plan to launch yen-based digital currency that will function much like a bank deposit by FY2022. Mitsubishi Corp. (MC) will lead the research and testing scheduled to commence in January.

Kazuhiro Tokita, Chief Executive of Cryptocurrency Exchange, DeCurret, said the digital currency, tentatively called "DCJPY", will be backed by bank deposits and utilize a common platform to facilitate large-scale fund transfers and business-to-business transactions.

Some key highlights stated from the Digital Currency Forum report:

  • Ensure the stability of digital currencies by modelling bank deposits.
  • Members include: banks (such as MUFG Bank, Sumitomo Mitsui Banking Corp., Mizuho Bank, Japan Post Bank), companies (such as Nippon Telegraph & Telephone Corp., East Japan Railway, and Mitsubishi Corp.) and local governments. The Bank of Japan, Financial Services Agency of Japan and three ministries will oversee the activities.
  • Plans to experiment with large corporate transactions using the digital yen as early as January.
  • The Mitsubishi-led Industrial Distribution Settlement Consortium Subcommittee will test the "automatic execution of contracts using digital currencies in the settlement of maritime transportation transactions."
  • A beta version of the non-fungible token (NFT) digital currency, unique cryptographic tokens/assets that exist on a blockchain and cannot be replicated, will be released into marketplace by 2022.
  • Set to be the first central bank digital currency (CDBC) on business transactions (previously focused on retail transactions) to be adopted by one of the top economic indexes.

As more and more countries aim to promote cashless transactions to increase productivity within their footprint, policymakers are working closely with the private sector to remain compliant with CBDC regulations.


The increasing shift to cloud from bank legacy systems to keep up with competition: Large Canadian banks are transitioning.

According to the Canadian Press, banks are accelerating a major shift from older computer systems to the cloud, given the intensifying competition with start-ups, rising consumer expectations, and rising digital demand of COVID 19. The transition to move to more sophisticated systems began before the pandemic, but the unexpected closure of branches and offices in March 2020 pushed banks to speed up their effort to become more dependent on online systems, according to Robert Borks, Managing Director of Financial Services, Canada at Accenture.

Cloud-based systems, occasionally operated by banks and usually by third-party tech companies, enable faster, free data exchange and allow banks to customize and automate transactions for customers while reducing potential costs. Because of the great need, many banks have committed to embracing this cloud technology.

The Canadian Press stated that Bank of Montreal recently completed its first major system change by migrating all of its transportation finance operations (approximately 1000 servers of data) to the cloud since its partnership with Amazon. Sid Deloatch, Chief Information and Operations Officer for North American Commercial Banking, Bank of Montreal, stated the cloud infrastructure was established and reliable enough for the bank to make that transition. Deloatch further added that Bank of Montreal saves approximately thirty percent on operating cost while offering automatic loan decisions in many circumstances.

Small banks and start-up financial companies have the advantage over banks with complex legacy systems, as they are able to embrace cloud technology faster and meet customer digital expectations in a seamless manner. Hillery Hunter, Chief Technology Officer, IBM Cloud, stated that financial institutions are transitioning their main systems onto the cloud because data integration and access to information is key to making informed banking decisions such as loan decisions. However, the reliance on third parties, which host most of the banking operations, has heightened concerns among regulators. In order to mitigate the financial stability risks from third-party organizations, additional policy procedures are needed, according to the Bank of England.

Earlier this month, Canadian bank regulators launched a tech and cyber risks draft plan on exit strategies from third-party cloud providers. This guide will allow banks to move data from one cloud provider to another. A more detailed guideline for third-party vendors will be published early next year.


National Bank of Egypt goes digital

The National Bank of Egypt (NBE) announced an introduction of B2B electronic payment services for businesses of all sizes (wholesalers and retailers) for the first time in the Egyptian banking market. The new service provides electronic collection and payment tools for transaction processing and security.

NBE, Vice Chairperson, Yehia Aboul Fotouh, said the bank will digitize payments in line with the Central Bank of Egypt's (CBE) plans for digital transformation, transitioning to a less cash-dependent society and financial inclusion. Karim Soos, CEO of Retail Banking and Branches, NBE, aims to support small, medium and large businesses with the necessary technology tools. Therefore, NBE developed automated payments and receipts products for corporate credit card and debit card products for all sizes of businesses. According to Soos, NBE’s B2B product offering meets the financial inclusion requirements designated by the Central Bank of Egypt.

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