Is PayPal's New Stablecoin Set to Transform Crypto Transactions? | 2023 #19
Connecting the dots in payments...
Connecting the dots in Payments...
Hi there, you fellow Payments Enthusiast!
Welcome to this fresh newsletter, a dedicated Payments bulletin packed with Digital Payments and PayTech-related news!
It’s nice meeting you and I look forward to the insights and connections we’ll get by interacting here.
Don’t be shy; share your ideas, vision and knowledge to keep improving this newsletter!
Alright, let’s dive into this week’s hot payments news! 🚀💸
📣 Here’s the Takeaway for this Week:
PayPal launches a US dollar Stablecoin
👉What happened?
· PayPal started rolling out a stablecoin pegged to the value of the U.S. dollar on Monday;
· The new asset, called PayPal USD (PYUSD), was designed to address the “emerging potential” to “transform payments in Web3 and digitally native environments”;
· PYUSD will gradually become available to PayPal's US customers, with plans to integrate it into PayPal's popular payments app Venmo.
🤔 Why is this relevant?
· PayPal rolling out a stablecoin is the first such move by a big mainstream payments company;
· PayPal customers who purchase the stablecoin will be able to transfer the token between PayPal and external wallets, send P2P-payments to other users, convert any of PayPal’s supported cryptocurrencies to and from PayPal USD and fund purchases with PYUSD selecting it at checkout;
· The PayPal stablecoin is issued by Paxos, a veteran of the stablecoin space and PayPal’s brokerage partner for its crypto buying and selling services;
· PayPal has 431 million active accounts, according to Statista. U.S. P2P service Venmo has approximately over 83 million users, according to Forbes;
· These kind of user-numbers, and the ‘backing’ of stablecoin PYUSD by PayPal and Paxos, could potentially bring stablecoins into the mainstream and eventually establish them as the default choice for global payments;
· At the very least, the launch of PayPal USD has the potential to provide a significant boost to the sluggish adoption of digital coins for payments;
· Will PayPal’s new stablecoin transform (crypto) payments or will it be ‘just another digital coin’? What are your thoughts on the matter? Feel free to share them in the comments below👇
👉 Read the full release over here
💡Any other notable things happened in Payments?
⭐️ Block shuts European P2P payments brand Verse by Finextra
🤝 SumUp secures new $100 million credit facility by FinTech Global
I hope these quick bites have brought you up to speed again, and let’s keep a close eye on ‘Payments’ for the week to come..;-)
Cheerio and until the next,
Wouter & Marcel
Onwards to the other payments news!
REPORT
👀 NEWS HIGHLIGHT
According to the digital payments giant, nine out of 10 small businesses have reported an increase in this type of fraud over the last 12 months, in which cardholders dispute a legitimate purchase with their card issuer.
📰 ARTICLE
In the mid-2010s, the fintech business of Tencent grew exponentially, with WeChat Pay and its offshoots allowing the company to become a viable competitor to Alipay in China.
The ombud explains that fraudsters are now using stolen bank card information, such as the card number, expiry date and CVV number (card data), to make fraudulent purchases via digital wallets.
VISA, Mastercard, and American Express act as card networks for the clearing and settling of funds.
The card-acquiring bank and the card-issuing bank can be – and often are – different.
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This diagram by ByteByteGo shows a high-level overview of the payments ecosystem:
Airwallex has had a busy 2023 thus far. Not only did it just inject US$165 million into its Singapore entity, it also secured a China payments license in March and inked a partnership with American Express in January that will allow its clients in Australia, the UK, Singapore, and Hong Kong to accept Amex cards as a payment method option.
💡INSIGHTS
According to a report by business payment platform Duplo, electronic transfers made up over 82% of the $994 billion of business-to-business transactions in South Africa.
GlobalData’s Payment Cards Analytics reveals that card payments value in India registered a strong growth of 26.2% in 2022, supported by the improving economic conditions. This trend is expected to continue in 2023 and set to grow by 28.6% to reach INR27.9trn in 2023.
🧐 ANALYSIS
Remittance transfer providers have embraced digitalization to help alleviate many of the pain-points of the industry and enhance the convenience, speed, security, and affordability of sending and receiving from abroad. Now, these companies are expanding to offer business-to-business (B2B) payments, catering to companies of all sizes.
NOW, ON TO THE SUMMARY OF LAST WEEK'S NEWS
🔦 PAYMENTS HIGHLIGHTS
⭐️ PayPal's weak margin eclipses upbeat spending outlook.
⭐️ Vijay Shekhar Sharma buys 10% stake in Paytm worth $628m from Antfin.
⭐️ payabl. gains EMI licence to bolster UK expansion.
⭐️ UnionPay International partners with PayNet.
🌎 REGIONAL HIGHLIGHTS
UK 🇬🇧
Orbital has raised £5M ($6.4M) in an oversubscribed growth round led by Golden Record Ventures. The funding marks Orbital’s first institutional capital raise.
PayPal Holdings announced that Tap to Pay on iPhone is now available for Zettle by PayPal customers. The new functionality enables customers to use their iPhone to accept contactless payments in-person.
TrueLayer announces that Lopay now offers its real-time settlement solution to its 20,000 businesses.
EUROPE 🇪🇺
PaymentComponents is thrilled to announce its strategic partnership with Brillio. This collaboration marks a significant milestone in PaymentComponents' vision to drive ISO 20022/CBPR+ adoption worldwide.
USA 🇺🇸
Dwolla announced the launch of Dwolla Connect, an innovative API solution designed for mid- to enterprise-sized businesses.
Marqeta has signed a four-year extension of its partnership with Block as its revenues increased by nearly a quarter year-over-year (YoY) for Q2 2023.
Visa’s new head of fintech talks partnerships, venture and creators as an addressable market. The relationship between fintechs and incumbents has long been fraught with tension. But Marie-Elise Droga believes it doesn’t have to be this way.
ASIA
Thunes wants to take on SWIFT. Thunes now has bigger ambitions to disrupt the dominance of SWIFT.
TerraPay has secured an In-Principle Approval for a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS), marking a significant step towards being a payments company with the most regulatory approvals.
Visa brings Apple Pay to Vietnamese cardholders. To use, Visa cardholders from the participating banks simply double click and hold their iPhone or Apple Watch near a payment terminal to make a contactless payment.
Mastercard has enabled CVC-less online transactions for its Indian debit and credit cardholders that have tokenised their cards on merchant platforms.
CRED has partnered with the NPCI to introduce RuPay credit card UPI payments and make transactions more convenient for its members.
Worldpay from FIS, will integrate Alipay+ into its global portfolio for e-commerce and Point of Sale (POS) offerings. There will be a phased rollout to FIS’ merchants, starting with the AlipayHK e-wallet.
MOVERS AND SHAKERS
Zip has appointed Cynthia Scott as its new chief executive, with co-founder Peter Gray moving to head the buy now, pay later group’s Australian and New Zealand division.