Our first roundup of industry news includes stories from all around the world about new business deals, technology or regulatory updates with a relevant impact on payments and eCommerce. Enjoy your reading and stay tuned for more.
May 2018, the month that GDPR comes into force
Less than one month to go until the General Data Protection Regulation (GDPR) deadline on 25 May 2018. The deadline applies to all businesses that deal with the personal data of EU citizens, sparking high levels of concern. A recent report by NetApp shows that 35% of global organizations might shut down their business due to not being able to comply with the regulation.
Other findings include:
• 67% of global businesses expressed concerns that they will not meet the deadline
• Only 39% of global businesses have confidence in knowing where their data is stored
• 63% of US businesses continue to invest in private cloud services and ensure compliance with data protection
Research involved over 1,100 IT decision makers across France, Germany, the US, and the UK.
In other related news: to comply with GDPR, WhatsApp is planning to raise the minimum age for users in Europe from 13 to 16, while Facebook will add a Clear History feature which will enable users to clear their browsing history on the social media platform.
EU legislators approve new anti-money laundering measures
The European Parliament and Council have signed off the text of the 5th Anti-Money Laundering Directive (“5AMLD”) which aims to better counter the financing of terrorism and ensure increased transparency of financial transactions. Of particular interest to the fintech sector, 5AMLD includes measures to prevent risks associated with the use of virtual currencies for terrorist financing and limiting the use of pre-paid cards. More specifically:
• in the case of remote payment transactions for anonymous prepaid cards, the maximum monthly payment transactions are reduced from EUR 250 to EUR 150. In addition, the maximum amount of money stored on these cards will not exceed this threshold.
• 5AMLD will bring virtual currency platforms and wallet providers within the definition of “obliged entities”, such as financial and credit institutions. Such a classification will impose the obligation on operators of virtual currency platforms and wallet providers to carry out adequate due diligence procedures on their users.
Adopted on 19 April 2018, 5 AMLD should be fully implemented into national law by the various Member States from eighteen months to the date in which it is published in the Official Journal. More on this topic here.
Credit card networks and biometrics
As of April 2018, four of the largest credit card networks in the US no longer require signatures for in-store payments. American Express, Discover, Visa and Mastercard has given merchants the option to stop requesting handwritten authentication for credit and debit card transactions.
Credit companies have started to adopt biometrics as an authentication form. Most recently, Mastercard has taken another significant step towards bringing biometric cards to everyday life. By implementing technology developed by IDEX, the card scheme allows holders of its biometric cards to register their fingerprint onto the card from the comfort of their home.
In other news, Visa and MasterCard revealed plans to collaborate on creating a new method for online shopping that combines Visa Checkout and Masterpass into a single button.
One of the industry giants on the Indian market continues to be digital payment and eCommerce company Paytm. Its latest initiative is bound to increase its market reach even further.
With the recent launch of its Tap Card, Paytm now also enables offline payments. Paytm Tap Card uses near-field communication technology to enable payments at Paytm-issued NFC PoS terminals. Users can add money from their Paytm account by scanning the QR code on the Tap Card and by authenticating it at any of the add value machines (AVM). The new offering is part of the company`s strategy to provide payments solutions for non-internet customers.
Visa and Mastercard have been the dominant player in the card industry in India for decades. In 2012, National Payments Corporation of India launched RuPay cards. Since then, the government has constantly made efforts to increase their popularity: “We (RuPay cards) are already the number 1 scheme in the number of cards issued. This year, we will become number 2 scheme on value and volume done on PoS machines and ecommerce,” according to a top official cited by The Economic Times. More on the Indian payments and eCommerce market here.
And then there is also China
While American Express intensifies efforts to enter the Chinese market, the country is ahead of the curve when it comes to mobile payments. China witnessed an increase in mobile payments from USD 340 billion in 2015 to USD 9 trillion in 2017, in an industry dominated by Alipay and WeChat Pay.