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Visa Inc. and Mastercard Inc. agreed to cap credit-card swipe fees — a deal that US merchants say will save them at least $30 billion over five years — in one of the most significant antitrust settlements ever, following a legal fight that spanned almost two decades. 
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The move would reduce the fees that banks receive when consumers shop with debit cards.
Vineet Anand's insight:
"Higher for longer?" - merchants complaints have hit a chord for Fed to consider stepping in towards reducing Debit card fees for 21C + 0.05% that generate ~$17b in fees each year! Next week Fed meeting to potentially reflect some of their thinking to reduce or retain caps.
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Visa (NYSE: V) today announced it has signed a definitive agreement to acquire Tink, a European open banking platform that enables financial instituti
Vineet Anand's insight:
Tink for European Open Banking will be a great asset in the PSD2 environment given the fallout over the Plaid acquisition by DoJ. Great move by Al to drive innovation in open banking space!
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Canadian payments firm Nuvei has agreed a $250 million cash deal to acquire Simplex, a fintech startup providing fiat infrastructure to the cryptocurrency industry.
Vineet Anand's insight:
Nuvei purchase of Simplex to offer EMI license and access to Visa network to expand product services
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Brazil's central bank has given Facebook-owned WhatsApp the greenlight to relaunch P2P payments in the country - nine months after suspending the service.
Vineet Anand's insight:
WhatsApp payments pause gets lifted by Central Bank. PIX service from the central bank for instant payments will compete with FB payments. Libra in the future?
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The European Payments Initiative, a bank-backed joint venture that aims to build a rival to Mastercard and Visa, has put out a Request for Information for 'qualified technical partners' to help build its central infrastructure.
Vineet Anand's insight:
EPI planning for an operations commencement in 2022!
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Mastercard is preparing its network to handle the direct processing of cryptocurrency payments later this year.
Vineet Anand's insight:
Networks creating pipes for stable-coins as more central banks get on board in coming 3 to 5 years!
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The Bank of England is to take supervisory action against Visa following a widespread outage last year that disrupted payments for millions of shoppers across Europe.
Vineet Anand's insight:
Bank of England appoints PWC to oversee the implementation of remedial actions that impacted nearly 2.5 million transactions last year
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Visa appears to have won the bidding war for cross-border payments firm Earthport after rival Mastercard dropped its bid and instead struck a deal to buy another money transfer network, Transfast, for an undisclosed amount.
Vineet Anand's insight:
MasterCard to acquire Transfast and drops bid for Earthport. The bidding war resulted in Visa to bid nearly PS50 million more than the original PS198 million offer.
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Visa has raised its takeover offer for cross-border payments outfit Earthport, beating off a rival bid from Mastercard
Vineet Anand's insight:
Going Once Going Twice.. oh oh wait MC, Visa has placed a new offer for Earthport! A rival bid now at $247 million - previous offer was $198 million.
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The European Central Bank is floating the idea of using instant payment rails to link up national card schemes as a means to break the duopoly enjoyed by Visa and Mastercard, who between them account for over 80% of all EU card transactions.
Vineet Anand's insight:
Will instant payments lead to the fall of V/MC powerhouse? Connecting the different EU based country payment systems can breed a new scheme that is cheaper and faster, however it needs a lot of collaboration between banks across countries and merchants.
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Visa reported strong earnings driven by growth in payments volume as more consumers use cards to make purchases, but warned that political uncertainties could affect consumer spending.
Vineet Anand's insight:
Payments volume neared $2.3 trillion, with 11 percent growth year over year,. Credit was $1.2 trillion up 9 percent, and debit, the remainder, up 13 percent. U.S. credit transactions at $498 billion, and $446 billion for debit. B2B acquisition of earth-port loss to MC leaves open the door for other buy options to drive B2B capability. Contactless card roll-out in US by JPM and with WF and BAM to follow suit.
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Petal, a US credit card startup that is ditching traditional credit scores in an effort to sign up young people and the underbanked, has closed a $30 million Series B funding round led by Peter Thiel's Valar Ventures.
Vineet Anand's insight:
Petal for underbanked closes $30 million funding! Product launched in October last year with no/low fees.
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Mastercard has opened up a turf war with rival scheme Visa over the acquisition of cross-border payment firm Earthport, posting a £233 million cash offer for the UK firm.
Vineet Anand's insight:
MasterCard offers a 10% premium to Visa's acquisition bid for Earthport! The cross-border pipelines are proving to be of value for network, reflecting that DLT and other tech are not yet enterprise / consumer ready to make inroads.
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In December banks, credit unions, fintech businesses, retailers, and technology providers submitted comments to the Federal Reserve regarding their proposal
Vineet Anand's insight:
Should the Fed provide Faster Payments in US? There are learnings from emerging and advanced payments markets including India, Malaysia, Singapore, Australia that have been effective in demonstrating success. TCH cannot be the only solution?
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Visa Inc is paying 198 million pounds ($250.6 million) to buy Earthport Plc , a British firm that facilitates international transactions for banks and businesses, the U.S.-based payments group said on Thursday.
Vineet Anand's insight:
Earthport gets a new lifeline with Visa acquisition! Earthport connectivity will serve Visa's cross-border payments and will support B2B payments channel as well.
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Visa has made a strategic investment in YellowPepper in an effort to push the adoption of mobile payments and tokenisation in Latin America and th
Vineet Anand's insight:
Visa's series D stake in YellowPepper to expand acceptance whilst pushing mobile payments in Latin America.
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IBM has struck a deal with Visa which will give all of Big Blue's Watson IoT platform customers access to the card giant's payment services
Vineet Anand's insight:
Watson IoT platform to open payment API's for access to Visa token service.
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Visa is working with blockchain outfit Chain on the development of a near real-time funds transfer system for high value bank-to-bank and corporat
Vineet Anand's insight:
Visa partnering with Chain on private chain for large value B2B transaction in direct competition with SWIFT.
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MasterCard and PayPal have engaged in a "constructive dialogue" about a possible strategic alliance, according to a report in the Financia
Vineet Anand's insight:
Right on the heels of Visa and PayPal deal, MC is exploring an alliance with Paypal very likely on similar lines as Visa.
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Visa has signed up more than 40 financial institutions to its new issuer-branded digital commerce app, which lets firms offer their customers a hos
Vineet Anand's insight:
Visa offers digital commerce application for small banks to create services like card control, balance checks, token services
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hold 1 billion yuan ($152 million) in registered capital in a local company, be based locally and meet cybersecurity standards.
Vineet Anand's insight:
"Cards Welcome" - that is the message central bank delivered inviting other networks to China, slated to become the largest card market by 2020. There are specific regulations that networks will need to follow - hold $152 million in registered capital in a local company, be based locally and meet cybersecurity standards. Likely set-up a local data centre for domestic transactions! This is end the long outstanding WTO ruling for China to open its market for other international networks to compete with UnionPay.
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Olympic and Paralympic Games sponsor Visa is handing out NFC-enabled rings to favoured athletes competing in Rio this summer, enabling them to mak
Vineet Anand's insight:
Visa is adding 4000 NFC terminals across RIO avenues to facilitate contactless payments. 45 athletes (wonder why so small a number) will be provided rings with NFC chips... having applied NFC to cufflinks, bracelets, straps, gloves, and now rings will assess customer affinity to such products. Apple and other Watches with NFC have seen limited traction for contactless in US - its a journey for contactless.
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Visa Inc is expected to seal its takeover of Visa Europe by the end of the month, after getting full regulatory approval from the European Commission.
Vineet Anand's insight:
EC gives regulatory approval for Visa Europe acquisition, a move that will finally create one entity with vast set of synergistic opportunities to bring cost savings and a common strategy.
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Shares in Jack Dorsey's Square received a much needed boost on Friday on news that Visa has a 9.99% stake of Class A shares in the payments firm.
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Curated by Vineet Anand
Payment Industry leader passionate about Fintech, Innovation in Banking, Product Management & Strategy, driving revenue growth through client management, business development and P&L focus.
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The Payments ecosystem is evolving at an unprecedented pace driven by mobile, cloud computing, start-up's challenging the behemoths, and new technologies. My personal collection of curated stories and blogs.
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A prolonged 2 decades of legal drama over interchange fees seems to be reaching at least a medium-term settlement. Key aspects here are:
- Visa & MC rake in $100B in fees (2003 numbers)
- Rise in digital transactions is leading to increased volume of transactions CNP (tap, dip, and wallet) and card present transactions
- Total household card debt is around ~$1.5T (excludes corporate card spend at merchants). Delinquencies have been higher in the past three to four years.
- Both networks paid $6 billion in a class-action lawsuit in 2019.
- The settlement will save merchants approximately $30 billion.
- The reduction in interchange fees is small, at 4 basis points over three years and 7 basis points over five years. SMB's will have limited benefits from changes in fees.
- "Honor all cards" removal may lead to large merchants considering a surcharge option, which is unlikely to be implemented given the negative impact such a move has had in other markets around the world.
- A large trade group of over 200 members has agreed to the settlement.
- Finally, the impact on larger issuers, who generate most of the fees, is likely to be small, with only a 7 basis point reduction. This may be passed on to customers in the form of slightly higher annual fees or changes to reward programs to maintain current net income levels
In conclusion, this settlement should put an end to the ongoing legal battles, lobbying, and other activities, enabling stakeholders to focus more on creating value, including the growth of mobile wallets.