SWIFT’s ISO 20022 Eurosystem migration postponed to March 2023, as requested by the financial community

SWIFT has postponed the Eurosystem's migration to ISO 20022 until March 2023. The global provider of secure financial messaging services has collaborated closely with its global community in preparation for the onset of the ISO 20022 transition for cross-border payments and reporting (CBPR+). As of August, all necessary capabilities have reportedly been deployed, and financial institutions are now able to exchange ISO 20022 messages on an opt-in basis.

With the goal of preserving operational and business continuity throughout the global financial system, SWIFT has reportedly agreed to further analyse and validate impacts on the timeline for CBPR+ as well as facilitate implementation with the ECB's revised schedule. As a result, SWIFT now plans to start the ISO 20022/MT coexistence period for all users on 20 March 2023. Additionally, financial institutions are urged to continue their planning for the 20 March start date and take into account all possible scenarios in order to ensure preparedness for the start of ISO 20022 coexistence for CBPR+.

Japan officially launches a major spending scheme to stimulate the economy

The Japanese government has reportedly unveiled an economic package worth approximately 39 trillion yen (nearly US $270 billion) to help the nation's economy amid inflationary pressures and a weakening national currency. The package reportedly contains local and central government spending, geared towards tackling price increases with attempts to revive the economy, commented Prime Minister Fumio Kishida.

Additionally, the government intends to reduce utility bills to help households save $19 per month on electricity and $6 per month on gas.  According to government statistics, Japan's inflation has reached its highest level in forty years, with core consumer prices in Tokyo, which is said to be a leading indicator of national figures, rising 3.4% year on year in October. The jump has been attributed to rising energy, raw material and food prices, as well as the economic fallout from Russia's conflict with Ukraine. However, the Bank of Japan has kept its short-term interest rate at -0.1%, despite the global rising interest rates.

Hong Kong's regime revises its position on virtual asset ETFs, tokenized securities and retail investors

The Financial Services and Treasury Bureau of Hong Kong is prepared to collaborate with global virtual asset service providers (VASP), said reports. As part of proposed amendments to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, the Legislative Council of Hong Kong, a Special Administrative Region of the People's Republic of China, is actively investigating Hong Kong's new VASP legislative framework, which is set to take effect on 1 March 2023.

The Hong Kong Securities and Futures Commission (SFC) is expected to hold a public consultation session on how retail investors can be offered an appropriate level of access to virtual assets on licensed exchanges. At the present time, retail clients can trade cryptocurrency on unlicensed exchanges such as Binance. However, following the implementation of the VASP regime, only VASP licensed exchanges would provide any crypto services, with some able to provide crypto services to retail clients.

Julia Leung, Deputy Chief Executive Officer, Securities and Futures Commission, stated that the SFC has been working extensively to establish a regime to authorise ETFs that provide exposure to widely known virtual assets with suitable investment safeguards. Initially, the underlying assets are expected to be limited to Bitcoin and ether futures traded on the Chicago Mercantile Exchange, stated Leung.

Furthermore, Leung proposed amendments to the SFC's stance on tokenized securities, adding that tokenized securities should be handled similarly to existing financial instruments. Reports noted that tokenised securities will no longer be classified as complex products simply because they are issued on the blockchain, according to the SFC.

The SFC is reportedly prepared to grant retail access if proper safeguards are put in place. The government plans to revisit property rights for tokenized assets and the legality of smart contracts in the future, considering the differences that exist between traditional and virtual assets. Moreover, Hong Kong is looking into pilot projects for NFT issuance for Hong Kong FinTech Week, green bond tokenization and eHKD.

Mastercard plans to develop new payment channels and aims to target debit card volumes

Mastercard aims to strengthen its strategies towards diversifying payment flows as well as exploring new network opportunities such as open banking and cryptocurrency. Simultaneously, the company expects to compete for debit volume in the aftermath of a Federal Reserve ruling on debit card transaction routing, said reports.

The Fed's decision reportedly specifies that issuers must adhere to the regulations and facilitate alternative networks for both online and in-store transactions. The rule is expected to go into effect on 1 July 2023. However, Michael Miebach, Chief Executive, Mastercard, emphasizes high optimism between the company’s new payment flow strategies with its commercial point-of-sale payments, open banking and cryptocurrency, even though open banking is still in its early stages. Additionally, Miebach commented that its commercial payments, which run parallel to Mastercard's traditional focus on consumer transactions, is a major area for diversification. He claims that business-to-business transactions represent a "14-trillion-dollar opportunity".

Miebach claims that the Mastercard Send network currently meets the need for cryptocurrency users who desire to withdraw funds from their digital wallets. Moreover, Mastercard is reportedly researching regions and partnerships with large global corporations in order to expand Mastercard Send in efforts to offer widespread and universal capabilities.

Reports indicate that Mastercard processed US $6.04 trillion in total volume for the quarter, an increase of 7.7% from the previous year. Volume reached $1.98 trillion for the US market, an 11% increase. Net revenue was reported at $5.8 billion, a 23% increase in currency terms.

Stripe, a fintech company, debuts its operations in Thailand to boost digitalization

Stripe, a US-based SaaS provider, unveils its financial infrastructure platform in Thailand to assist in resolving the intricate payment-related problems currently faced by Thai businesses.

Thailand reportedly has one of the most rapidly growing digital economies in Southeast Asia, commented Tee Chayakul, Thailand Country Director, Stripe. However, online funds transfers remain extremely complicated and time-consuming, said reports. Chayakul expects that Stripe will provide a financial infrastructure that enables businesses to increase revenue, automate low-value tasks and expand globally.

Thai businesses can expect to have complete access to Stripe solutions such as Billing for subscriptions and recurring payments, Checkout and Payment Links for e-commerce, Invoicing for automated payment collection and reconciliation, Radar for fraud detection and prevention, and Connect for software platforms and marketplaces. Additionally, Thai businesses can also expect to accept payments via major credit cards such as Visa and Mastercard, as well as PromptPay, a Thailand-based payment method that uses unique identifiers such as a phone number, citizen ID or QR code to enable customers to pay using their preferred apps.

Stripe reportedly worked closely with the Bank of Thailand to prepare for the launch of payment services support for Thai businesses. Siritida Panomwon Na Ayudhya, Assistant Governor, Payment Systems Policy and Financial Technology Group​, Bank of Thailand, expects that Stripe's entry into Thailand will aid in the advancement of innovation and the expansion of access to digital payment services for both businesses and individuals. Stripe's investment in Asia Pacific is reportedly expanding, with its services now available to businesses in Australia, Hong Kong, Japan, Malaysia, New Zealand, Singapore and Thailand.

The EBA releases a fraud classification system

In an effort to combat the growing threats to the European payments system, the Euro Banking Association (EBA) has reportedly made its payment fraud taxonomy public. This classification system, via the EBA’s advisory committee, intends to provide a streamlined and simple methodology for describing fraud cases associated with all different types of payments, including card transactions. The association expects banks to utilize the taxonomy guideline to develop some common terminology pertaining to payment fraud, making it simpler to share data and intelligence while reducing fraud in Europe's payments market.

Reports indicate that the EBA's move comes just days after the European Commission revealed its plans to make instant payments accessible to all EU and EEA countries in an effort to improve customer convenience and increase cash flow. The EBA's taxonomy implementation is expected to initially focus on three use case areas: fraud reporting, intelligence sharing and data sharing.

The OCC plans to create an Office of Financial Technology

The Office of the Comptroller of the Currency (OCC) plans to establish an Office of Financial Technology in early 2023 to strengthen the agency's expertise and ability to adapt to a continuously evolving financial sector landscape. The Office of Financial Technology plans to expand and integrate the Office of Innovation, which was established by the OCC in 2016 to collaborate with the bureau’s initiatives that promote proper financial advancements.

Financial technology is rapidly evolving, and bank-fintech collaborations are likely to increase in both number and complexity, commented Michael J. Hsu, Acting Comptroller of the Currency. Furthermore, the office plans to help ensure that the financial landscape becomes more adaptable and encourages sustainable innovation. The Chief Financial Technology Officer is reportedly a Deputy Comptroller reporting to the Senior Deputy Comptroller for Bank Supervision Policy. Additionally, the office will reportedly provide strategic direction and perspective for the OCC's financial technology tasks and governance.

TreasuryPay aims to strengthen and maximize treasury and trade functions via UST

TreasuryPay, a real-time data and intelligence company, and UST, US-based digital technology and transformation provider, have collaborated to create an integrated AI platform to ensure clients achieve their key strategic goals. TreasuryPay plans to utilize UST's system integration capabilities to expand and improve the customer benefits provided by its real-time data and intelligence solutions.

Reports indicate that TreasuryPay's instant platform provides global intelligence from a single data network, including real-time visibility into global transactions such as receivables, reconciliation, foreign exchange, liquidity management, supply chain, marketing and performance management. Its SaaS platform is reportedly designed for banks, payment processors and payment types, as well as large, complex organizations, to help them streamline critical processes, guard against loss, and drive growth through improved information.

The collaboration with UST reportedly optimizes treasury and trade functions while also responding to the growing demand for human-centric customer experiences and measurable results. Maureen Doyle-Spare, General Manager of Financial Services, UST, stated that UST will be able to assist clients in optimizing treasury management by digitizing their corporate treasury departments and developing more efficient operational models capable of adapting to and overcoming the challenges of a constantly evolving treasury environment, which is characterized by economic uncertainty and increased competition.