Welcome to our Weekly News Roundup that brings you updates on top industry trends, as well as latest insights from the world of payments and eCommerce.
Today’s coverage includes details on latest regulatory initiatives in Europe, along with new fintech news in Mexico, a recent grocery retail development in India and a “no-passwords” focus in the US.
Let’s take them one by one.
Europe boosts fraud prevention and AML efforts
In the never-ending debate on regulation and its potential to inhibit or stimulate technological change and innovation across the industry, Europe has a unique role to play. Instruments like GDPR, XS2A, PSD2 are intended to provide customer benefits by improving privacy and increasing competition, however regulatory authorities must not lose sight of the bigger picture. As technological developments are unfolding and digitalization is transforming the way we buy and pay, we must not forget that in the shadow of opportunities, there are also risks.
Let’s take online fraud, for example. Although UK banks managed to stop GBP 1.4 billion of fraud in 2017, customers still lost almost GBP 1 billion through scams, the Daily Telegraph reports. Following increasing concerns among UK ministers, the government has recently joined forces with banks on a joint anti-fraud initiative to deal with the rise in scams affecting UK consumers.
Scaling up such efforts at a regional level, last week the European Parliament Committee has decided to give greenlight to more severe sanctions for non-cash payment fraud. As Finextra reports, the new rules are set to:
• “improve EU-wide cooperation to ensure cross-border frauds are better dealt with;
• strengthen assistance to non-cash fraud victims, such as psychological support, advice on financial, practical and legal matters and free legal aid at least for those who lack sufficient resources for it;
• improve prevention and awareness-raising, e.g. through campaigning, education and permanent on-line information tools with practical examples of fraud cases;
• include virtual-currency transactions in the scope of offences”.
As we all know, apart from fraud, another key risk to financial institutions’ profitability and reputation is money laundering. In the wake of recent scandals at various major banks, the European Commission is proposing to grant the European Banking Authority new powers in the fight against money laundering.
“Anti-money laundering supervision has failed all too often in the EU,” said Valdis Dombrovskis, vice-president for financial services policy at the Commission. He added that strenghtening the powers of the EBA would ensure “different supervisors cooperate and exchange information and that anti-money laundering rules are enforced effectively across EU countries”, as The Guardian reports.
Although the urgency to address the situation has been repeatedly signaled in the past months, further actions will be undertaken no earlier than mid-2019 or the end of 2019.
Meanwhile in Mexico
Moving on to Latin American territory, we’ve learned from the media last week that Mexico has approved and published a new fintech law. Just in time for the upcoming discussions and industry debates at ECSE eCommerce Summit and Expo, which we will be attending, by the way.
Described as “the most coordinated effort to tackle regulating fintech firms”, the legislation is said to have an impact on 4 main areas, namely crowdfunding, cryptocurrency, online payments and sandbox ecosystems. Financial technology institutions (FTIs) which provide digital payment services (including digital wallet services and mobile wallets) are under the authority of the Banking and Securities Commission. The Law will allow authorised FTIs to provide money-transmitting services and trade with cryptocurrencies, among other activities. More about the legislation here.
Eliminating app passwords – Project Verify in the US
AT&T, Sprint, T-Mobile and Verizon have taken the “no-passwords” concept to a different level by revealing plans to launch a single sign-on service for smartphones. Dubbed Project Verify and for now in private beta testing phase, the service authenticates app logins so that users don’t need to use passwords for all their apps. The solution verifies users through their phone number, phone account type, SIM card details, IP address, as well as account tenure. More in the video below:
Although the official launch is set for 2019, some concerns have already been raised. In the words of security expert Brian Krebs, “as with most things related to cybersecurity and identity online, much will depend on the default settings the carriers decide to stitch into their apps, and more importantly the default settings of third-party website apps designed to interact with Project Verify.”
Following in China’s footsteps: grocery retail reinvented
Hema in China, Amazon Go in the US and now Watasale in India. Gone are the days with long queues or slow cashiers in Kochi, a city on the south-west coast of India, which has recently seen the opening of a fully-automated, cashier-free shop, inspired by Amazon Go: Watasale. The only thing shoppers now have to do is select an item and leave the store with it, while the cost is debited from their e-wallet. The shop runs on a combination of Artificial Intelligence, computer vision and sensor fusion, the same technology that is employed in self-driving cars.
China may have broken the ice in defining alternatives to the traditional grocery store, with local companies still making breakthroughs that force competitors into more investment and innovation. Take Alibaba`s concept Hema, for example, which is part of a “new retail” wave, a blend of online and offline experiences, logistics and data across a single value chain.
And yet, US players (Amazon and Walmart among them) keep a close eye on similar opportunities and raise the bar for competition. Suffice it to say for now that Europe needs to start paying attention. The age of the automated retail store with less and less human interaction may be closer than we think.
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