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Malaysia and Singapore connect real-time payment systems - Industry roundup: 20 November

Malaysia and Singapore connect cross-border real-time payment systems 

The Monetary Authority of Singapore (MAS) and Bank Negara Malaysia (BNM) have jointly launched the real-time payment systems linkage between Singapore’s PayNow and Malaysia’s DuitNow. The initiative follows the QR payment linkage announced on 31 March 2023, which enabled cross-border QR payments to merchants.

The PayNow-DuitNow linkage is designed to enable instant, secure and cost-effective P2P fund transfers and remittances between the two countries. This real-time payment systems linkage is also the first to include the participation of non-bank financial institutions from both countries, providing access to a broader group of users. Consumers of participating financial institutions can now send and receive funds of up to S$1,000 or MYR3,000 daily by using the recipient’s mobile phone number or VPA.

The service will be made available to Singapore customers of Liquid Group, Maybank Singapore, OCBC and UOB under a phased approach, where these institutions will progressively increase the number of eligible user groups from now until end of January 2024. This is to support customers' familiarisation with the service. For users in Malaysia, the service will first be available for all CIMB, Maybank and TNG Digital users, with other financial institutions gradually onboarded thereafter.

The PayNow-DuitNow linkage is an outcome of extensive collaboration among both countries' central banks, payment system operators, scheme owners, and participating financial institutions. It is a milestone in improving cross-border payments' cost, speed, access and transparency. Users from both countries will benefit from the linkage’s cost-effectiveness, inclusivity and accessibility.  It is also aligned with the objectives of the ASEAN Payment Connectivity Initiative and the G20 Roadmap for Enhancing Cross-border Payments. In 2022, P2P and remittance transactions between the countries stood at S$2.3bn/MYR7.8bn.

“The PayNow-DuitNow linkage is the culmination of a shared aspiration by Singapore and Malaysia to facilitate cross-border payments between the two countries,” commented Ravi Menon, MAS Managing Director. “This linkage represents another step towards ASEAN’s vision for regional payments interconnectivity.”


Ant International unveils Web3-powered treasury solutions

Ant International has unveiled its next-generation treasury management solutions powered by Web3 technologies. The solutions use Web3 technology, including advanced encryption and tokenisation, zero-knowledge proof, artificial intelligence and decentralised finance with the aim to improve the efficiency and transparency of global fund clearing and settlement and enable 24/7 real-time, on-demand and multi-currency treasury fund movement between bank accounts.

Speaking at the Tech Stage of the Singapore Fintech Festival, Kelvin Li, Head of Global Fund Platform at Ant International, presented the solutions and their use cases. According to Li, the solutions so far have been deployed in multiple business scenarios of Ant International, including cross-border acquiring and instant tax refund services. With the help of the solutions, SMEs in cross-border trades can enjoy always-on payment collection with their account period significantly reduced, and outbound travellers can see their tax refunding being instantly settled and receive their refunds almost immediately.

“Web3 technologies are enabling a new wave of digital transformation and digital collaboration, bringing innovations on the value movement,” said Li. “The development and application of the solutions is another demonstration of Ant International’s long-term commitment to resolving industries' pain points through technological innovations. We will continue to leverage Web3 and other fintech innovations to improve the efficiency and trustworthiness on treasury management, while exploring more innovative and inclusive services.”

In collaboration with its industry partners, Ant International also trials enhanced global treasury management solutions as part of broader industry efforts, including Project Guardian led by MAS, exploring the transformative potential of tokenisation while ensuring regulatory safeguards and collaboration with industry stakeholders.


2023 ranked one of the most challenging years for British business owners

British business owners have felt the pressure this year, with three in five (59%) saying they found 2023 one of their most challenging in business, according to research from NatWest that polled 500 British business leaders to give an insight into their shared experiences. The survey reveals that generating new business (37%), rising operational costs (32%) and balancing work and personal life (32%) top the list of pressure points in 2023.

The survey also reveals that many British businesses show a healthy growth appetite. Two-thirds of British business owners surveyed (67%) reported that they are looking to grow their business by focusing on areas including product diversification (27%), market expansion (27%), their digital presence and e-commerce (26%), and financial management (27%). Generating new business, therefore, tops the list of the biggest challenges to business owners, and though 89% think it’s essential to have strong pitching and presenting skills, nearly six in 10 (59%)  business leaders admit to feeling nervous when doing so in front of people in a working environment –  with over half (55%) saying their business would have benefitted if they’d been taught public speaking as a child.

Nearly a quarter (24%) say they also have or would like to seek support on generating new business, with other vital areas business leaders are looking for advice on being rising operational costs (21%), cost reductions (19%), cash flow problems (19%) and keeping up with tech advancements and digital trends (17%). More than three-quarters (77%) of business leaders admit to regularly losing sleep in their role, over a third (39%) often work beyond regular working hours, and 34% have to take work calls on the weekend. But despite this, almost half (49%) agree that running their own business gives them more freedom to spend their time as they like, with a further 77% stating that it's worth putting in the hours now to continue to grow their business.

To support their growth, over a third (36%) of business owners would consult a bank or financial advisor, alongside a professional advisor or consultant (46%) and an industry peer (32%) – with three in ten (30%) turning to their family and a quarter (25%) to their friends, though nearly one in ten (9%)  would even consult a stranger such as a taxi driver or bartender.


Canadian SMBs lack confidence in ability to decarbonise

Ahead of the upcoming COP28 United Nations global climate summit, the pressure is on Canadian companies to reduce their greenhouse gas (GHG) emissions. Still, many are finding it difficult to go green, according to research from KPMG in Canada. Although the vast majority (78%) of small- and medium-sized businesses (SMBs) have established policies or initiatives to reduce their emissions footprint, seven in 10 find they lack the time and resources to prioritise it, according to KPMG’s 2023 Private Enterprise Business Survey. Similarly, less than a third feel very confident in their plans to reduce emissions across their value chain.

When asked to identify the greatest barriers to achieving their net-zero goals, SMBs cited a shortage of skills and expertise to implement solutions, the complexity of decarbonising their supply chains, and a lack of appropriate technology. Adding to these challenges is a critical shortage of quality data, with over two-thirds expressing concern about their ability to effectively measure, implement and evaluate their carbon footprint.

According to KPMG International’s 2023 CEO Outlook survey, Canadian CEOs believe decarbonising their supply chain – which often includes smaller to mid-sized companies – and gaps in technology to be the most significant barriers to achieving net zero. Relative to their global peers, Canadian CEOs are also much more focused on addressing environmental challenges, including the net-zero transition. They prioritise those investments as part of their broader environmental, social and governance (ESG) goals. Similarly, nearly eight in 10 Canadian SMBs are willing to increase their investments in line with their climate-related goals.

While government decarbonisation policies, reporting guidelines and stakeholder expectations are helping drive these investment decisions, extreme weather events and other climate-related risks have also added a sense of urgency.


BNP Paribas delivers inclusive and sustainability-linked financing to three microfinance firms

BNP Paribas, in partnership with the JuST Institute, has developed an Inclusive and Sustainability-Linked Financing (ISLF) strategy for all players in inclusive finance. Subject to the achievement of predefined environmental, social and just transition objectives, microfinance institutions will benefit from reduced interest rates or technical assistance. The JuST Institute will support them in their actions to promote ecological transition.

The first three of these loans have been granted by BNP Paribas to three microfinance players in Europe and Brazil: L’Adie in France, PerMicro in Italy and Banco da Familia in Brazil.

Since its creation in 1989, over 180,000 entrepreneurs in France have received financing from L’Adie. As part of its ISLF, several objectives have been monitored, including the number of professional loans to women, the number of loans to entrepreneurs from priority neighbourhoods of the city and welfare recipients. The share of microloans that finance the environmental transition of its clients and the reduction of the carbon footprint of its activities were also considered.

Founded in 2007, PerMicro grants microloans to entrepreneurs and households throughout Italy. As part of its ISLF, BNP Paribas monitored several objectives, including the volume of microloans to microenterprises run by young people and women and the value of the portfolio dedicated to financing green technologies and practices, including sustainable mobility, energy efficiency and renewable energies. The volume of loans with environmental impact and climate vulnerability assessment were also important.

Created in 1998, Banco da Familia promotes economic development in southern Brazil (Santa Catarina, Rio Grande do Sul and Paraná) through loans to small entrepreneurs. As part of its ISLF, issues such as the volume of loans dedicated to renewable energy projects and dedicated to water access projects were assessed. Also monitored were the percentage of credit agents trained in managing risks and opportunities related to biodiversity the number of agricultural loans analysed during the year with climate and biodiversity indicators.


UK retailers start selling Christmas earlier than ever

Christmas is coming early for the UK’s corporate retail sector, with nearly half (49%) opting to display festive-themed goods earlier this year to help their customers spread the cost of Christmas. A quarter (25%) now put up Christmas displays as early as September, with the majority (57%) going up by October. A small number of retailers (1%) even started putting up Christmas displays in June. This is according to data from the Barclays Business Barometer, which measures the UK corporate business environment in the hospitality and leisure, retail and manufacturing industries.

Retailers are showing strong resilience in the face of a challenging economic environment, with optimism that the coming ‘critical Christmas’ period will deliver a rebound in sales compared to last year’s disappointing season. In addition to selling Christmas goods earlier, the industry expects sales will accelerate in Q4, with retailers anticipating average revenue growth of 20% quarter-on-quarter compared to 2022.

The sector’s optimism is fuelled by expectations that consumers will return to the high street, with three in five retailers (60%) expecting greater footfall in stores this year compared to online shopping. More than four in five (82%) retailers anticipate relying on a temp workforce during this festive season, with those hiring expecting to expand the size of their current workforce by more than a quarter (28%) to meet anticipated demand. 

The sector’s resilience is further underscored by the fact that 23% of retailers plan to hire more than previous Christmases. This is set to impact all demographics of workers, with 43% of large retailers expecting to hire over-50s to meet demand. At the same time, employee welfare remains a top priority. More than half of large retailers (51%) said they would not open for sales on Boxing Day (26th December) to give their employees an extra day off.

With more consumers opting to do their Christmas shops in person rather than online, over two-thirds (67%) of retailers have invested in better customer experiences at their stores. In addition, 64% have invested in data analytics and other similar technologies to improve customer loyalty. Furthermore, the majority (56%) have also invested in their own delivery infrastructure this year to minimise any supply chain disruptions for consumers.


One Inc and J.P. Morgan Payments partner on property and casualty claims 

One Inc, a digital payments network for the insurance sector, and J.P. Morgan Payments have announced they are working together to enable insurance carriers to leverage J.P. Morgan’s liquidity and payments capabilities as part of One Inc’s digital claim payouts platform.

This partnership merges both organisations’ insurance industry expertise, positioning insurers to offer end-to-end solutions for a broad spectrum of Property and Casualty (P&C) insurance claims payment needs.

While cheques have traditionally dominated insurance claim payouts, today, claimants expect more instant, digital payment options. One Inc’s ClaimsPay solution aims to expand claims payment capabilities for insurers while helping insurers accelerate revenue realisation, reduce operational costs through digitisation, and improve customer satisfaction.


Temenos to work with MAS to advance sustainable finance

Temenos has announced a collaboration with Gprnt, an integrated digital platform launched by MAS, to cooperate on technology solutions, explore data integration and foster product development innovation capable of powering the future of sustainable finance.

Temenos says it is the first core banking software vendor to collaborate with Gprnt, the culmination of MAS’ Project Greenprint, which aims to address the financial sector and real economy’s needs in collecting and accessing trusted climate- and sustainability-related data. 

Potential product co-development use cases with Temenos include enhanced KYC that takes ESG data from verifiable sources through the Gprnt platform and feeds directly into a bank’s client onboarding. Also, augmented data analytics incorporating additional ESG metrics for a bank’s loan origination system flow, setting targets for pipeline loans that increasingly will see embedded elements of sustainability.

“Technology is a key enabler for financial institutions to surmount the challenges of green transition and achieve their net-zero targets,” said Sopnendu Mohanty, Chief FinTech Officer, MAS. “Temenos is a global name in developing banking platforms and we are delighted to have them onboard Gprnt to cooperate on initiatives to power the financial sector’s mounting need for better sustainable finance solutions.”


Vesta and Stripe partner to help increase authorisations and fraud protection

Vesta, a transaction guarantee platform, has partnered with Stripe, a financial infrastructure platform for businesses, to enable a fraud prevention and risk protection solution that indemnifies merchants from losses from fraudulent transactions.

Under the partnership, Vesta Payment Guarantee, which provides 100% indemnification from fraudulent chargebacks, will incorporate Stripe Radar risk scores to offer a fraud and revenue protection option to increase transaction approval rates and thwart first-party and third-party chargebacks. This is particularly attractive to merchants who are at-risk due to high fraud or excessive disputes. 

Merchants can access Vesta Payment Guarantee on Stripe App Marketplace in the first half of 2024. Additionally, Vesta will integrate Stripe Connect, which lets businesses facilitate purchases and payments between third-party buyers and sellers. With Stripe Connect, Vesta says that its merchants and their customers will have a holistic solution that mitigates fraud and risk while processing payments quickly and securely.

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