Latest global payments news

By John Adams, Kate Fitzgerald, Charles Gorrivan, Bloomberg News

July 12, 2023 10:53 AM

This week in global news: Lisbon takes contactless payments to the subway; U.K. politicians say AML actions rules are politically motivated; and more.

Here's what's happening around the world.

Alex Kraus/Bloomberg

EU plans new cash designs

The European Central Bank is planning to change the design of its currency, and has published a short list of themes including birds, European culture, Europe's rivers, innovation, European values, and the "hands" that build Europe. Behind the design is an effort to retain cash as an option as digital payments expand, as well as a movement to replace bills with more sustainable materials. The ECB has opened the themes for public comment, and will choose a theme or themes based on that feedback, with a more detailed design contest to follow. The ECB plans to choose a design and schedule for issuance by 2026. Volume on the survey link was so high early in the week that it could not be accessed. —John Adams

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Lisbon subway enables open-loop contactless payments

Portugal's largest transit system, the Lisbon Metro, has adopted an open-loop contactless payments fare system similar to London's, so that riders can tap to pay with any NFC-enabled card, phone or smartwatch. U.K.-based payment technology firm Littlepay worked with ticketing hardware specialist Indra on the implementation, along with local acquirer Unicre, with Visa's Cybersource providing device-validation services, according to a press release. The new approach eliminates the need for riders to prepay for tickets, and eases tourists' access to Lisbon's subway system, which spans four routes, 56 stations and carries 173 million passengers per year. Each one-way ride costs €1.50 (US$1.63) with a daily cap of €6.50 (US$7.00). —Kate Fitzgerald

Jeremy Hunt

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U.K. politicians contend AML enforcement politically motivated

U.K. Chancellor Jeremy Hunt claims the challenger bank Monzo denied his request for a bank account because he is a "politically exposed person," suggesting his position in the U.K. government played a role, according to the Daily Mail. The PEP rules in the U.K. are designed to mitigate anti-money laundering risk by subjecting high-profile politicians to added scrutiny. In recent years, this process has become part of political fighting, with Nigel Farage, the former Brexit party leader, claiming he was politically targeted by the PEP rules and had difficulty obtaining a bank account. Other members of the House of Lords and political organizations have complained about having their credit cards terminated or being asked to provide extra documentation to banks they have had relationships with for years. Some of this allegedly occurred during debate over financial services legislation. Monzo did not provide comment. The Financial Conduct Authority told the Daily Mail it has reminded banks of the need to be proportionate in PEP vetting. —John Adams

Russian parliament approves digital ruble

Russia's central bank digital currency project, the digital ruble, passed a lower assembly chamber on Tuesday and will be piloted with consumers in August. The proposed legislation must still pass through an upper chamber of parliament before reaching the president's desk. It is a step forward for the Russian government's previously stalled plans to use blockchain technology to develop cross-border payment systems that mitigate the effects of Western sanctions over its ongoing invasion of Ukraine, which prompted its ousting from the Society for Worldwide Interbank Financial Telecommunications. Should the digital ruble be approved, Russia would become the largest nation with an official CBDC. —Charles Gorrivan

CBA invests in climate venture capital firm

Australia's Commonwealth Bank has made a strategic investment in Wollemi Capital, a firm that invests in companies involved in carbon-neutral strategies. The bank will also partner with the firm to develop carbon marketplaces for the bank's corporate clients. Wollemi Capital raised more than $220 million, although CBA's individual investment was not disclosed. The Sydney-based Wollemi's investments have included AgTech startups, carbon credit platforms, energy transition firms and general climate services. CBA's investment follows its participation in a climate reduction roadmap project and comes amid concerns large banks may be scaling back their investments in green energy due to shortages resulting from Russia's war in Ukraine. "This investment will enable CBA and Wollemi to collaborate on a broad range of initiatives aligned to the bank's commitment to play a leadership role in Australia's transition and ambition to help our customers reduce their emissions," said Andrew HInchliff, CBA's group executive for institutional banking and markets, in a release. —John Adams

CBDCs show signs of progress

Fifteen retail and nine wholesale central bank digital currencies should be in the market in the next seven years, according to the Bank for International Settlements. BIS surveyed 86 central banks and found more than half are working on a CBDC pilot, and nearly all of the central banks are at least studying digitizing their currency. Ninety-three percent of central banks were working on a CBDC-related project, up from 90% in 2021. BIS also reports work on retail CBDCs, which are designed for consumer use, is more advanced than wholesale CBDCs, which are designed for transfers between large organizations such as banks. BIS also reports stablecoins, which are privately built digital currencies that are used to hedge against the volatility of cryptocurrencies, are rarely used for payments outside of cryptocurrency-related environments. —John Adams

Italian mobile wallet partners with China’s Alipay

Tinaba, a Milan, Italy-based mobile wallet that works with local banks, has partnered with China-based Ant Group so users can pay at merchants across China that accept Alipay+, according to a press release. Italian tourists with the Tinaba app can make QR code-based payments in euros and in their own language at participating merchants in regions including South Korea and Malaysia. Tinaba plans to expand its reach to 2.5 million merchants across Asia in the coming months. —Kate Fitzgerald

BofA’s Duarte to run Latin America global transaction services

Bank of America promoted Annali Duarte to head of global transaction services for Latin America. Duarte, who has been head of Brazil global transaction services, will also join the region's executive committee, according to an internal memo seen by Bloomberg News. Duarte brings 35 years of experience to the business, which includes activities such as cash management and trade finance, according to the memo, which was confirmed by the Charlotte, North Carolina-based company. The executive has been with BofA for more than 11 years, and prior to that had stints at Citigroup and Santander, according to her LinkedIn page. —Cristiane Lucchesi, Bloomberg News

U.K digital bank Monzo weighs deal for Nordic rival Lunar

Monzo, a U.K. mobile bank, is exploring a potential combination with Nordic peer Lunar Group as it looks for ways to expand in Europe, people familiar with the matter said. London-based Monzo has been holding preliminary discussions with the Danish company about the structure of a possible deal, the people said, asking not to be identified because the information is private.

Lunar last raised funds in 2022 at a valuation of about $2.2 billion, according to data provider PitchBook. Its investors include Kinnevik, Tencent Holdings, Greyhound Capital and Socii Capital. Many fintech companies have seen their valuations fall dramatically since that time amid rising interest rates and declining risk appetite. A 2021 fundraising for Monzo valued the firm at $4.5 billion. It brought in money from new investors like Abu Dhabi Growth Fund, Coatue and Tencent as well as existing shareholders including Accel and General Catalyst.

Monzo has also studied other potential targets that would help it expand in Europe, according to some of the people. Deliberations are ongoing, and there's no certainty it will proceed with a deal, the people said. Representatives for Monzo and Lunar declined to comment. —Dinesh Nair, Vinicy Chan and Matthew Monks, Bloomberg News