What The FinTech #118 - 6 Nov 2022
Medhy Souidi
Transformation Lead - Head of Innovation & Experiences at DBS HK | Host of What the FinTech | Senior Editor at Money20/20
Happy Sunday & Welcome back to What The FinTech, your regular FinTech & Innovation Newsletter focusing on Hong Kong & Asia!
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What you would have missed If you spent the entire week at the HKFTW22 or SFF22
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What The FinTech Video & Podcast - Episode 44
Last Wednesday, I was joined by Peter Wong, CTO of Prenetics, for an enthralling interview about their mission to decentralize healthcare through testing covering prevention, diagnostics, and personalized care.
The previous interviews are available on podcast: Spotify, Apple Podcasts, Google Podcasts.
What The FinTech - Episode 45
On Wednesday, I'll be in an interesting interview with Daren Gun from Reap.
Please join us and let me know if you have any questions.
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What was the FinTech this week in: 📰
HONG KONG
HK decides onrules for Crypto ETFs
One of the Four Asian Tigers, Hong Kong, is now set to allow crypto investments to retail and institutional investors, and it has unveiled plans for regulations. Take Advantage of the Biggest Financial Event in London.This year we have expanded to new verticals in Online Trading, Fintech, Digital Assets, Blockchain, and Payments.The Securities and Futures Commission (SFC) confirmed its intentions to launch a consultation paper with proposed guidelines and regulatory rules for cryptocurrencies or, as officially called, virtual assets (VA). The regulator is further considering allowing retail access to virtual assets through exchange-traded funds. Despite the industry push, such ETFs are yet to receive approval in the United States. However, several European countries have allowed them. A separate circular by the SFC detailed that only management companies with a “good track record of regulatory compliance” that can demonstrate “at least three years’ proven track record in managing ETFs” will be allowed to issue VA ETFs in the jurisdictions.The management companies must also follow active investment strategies for flexibility in portfolio composition, rolling strategy and handling any market disruptionevents. Moreover, the net derivative exposure of the futures ETFs should not exceed 100 percent of the fund’s total net asset value. Further, virtual asset futures traded on conventional regulated exchanges will only be allowed. Initially, the regulator would only allow Bitcoin futures and Ether futures traded on Chicago Mercantile Exchange.
Real-time settlement system for HKD payments between two SARs unveiled
A cross-border mechanism that allows real-time settlement of Hong Kong-dollar payments between Hong Kong and Macau banks came into service yesterday, two years after Macau created its own RTGS system for HKD payments.The transfer system is a ‘fruitful collaboration’ between the city’s de-facto central bank and the Hong Kong Monetary Authority, which aims to boost interconnectivity between the two SARs’ financial markets. The payments handled by the local edition totalled nearly HKD700 billion (US$89.18 billion) since its launch two years ago. The authority said that it would continue to cooperate with its Hong Kong counterpart to encourage more banks to participate in the transfer mechanism.
Airwallex enables merchants to accept BNPL payment option through partnership with Atome
Leading global fintech platform Airwallex announced a Buy Now Pay Later (BNPL) functionality in partnership with Atome, Asia’s leading BNPL brand.The collaboration will enable Airwallex merchants1 to offer BNPL as a payment option to shoppers across Hong Kong, Indonesia, Malaysia and Singapore. The partnership is Airwallex’s first tie-up with a BNPL provider, giving merchants an opportunity to increase their revenues while allowing them to diversify their payment options through flexible deferred payment options. In addition to BNPL, Airwallex also offers its merchants multi-currency card-based payment solutions with Visa, Mastercard and UnionPay, as well as over 20+ local payment methods across Hong Kong, Indonesia, Malaysia and Singapore.Airwallex will expand its collaboration with Atome and soon enable its merchants to offer BNPL as a payment option to shoppers in Japan, the Philippines, and Thailand. This partnership follows Airwallex’s official launch in Singapore earlier in January and subsequent roll out of key offerings in its global payments suite. The company also raised US$100 million in its recent Series E2 fundraising round, and will continue to scale its reach and product offering globally.
HKEX launches carbon marketplace
Hong Kong Exchanges and Clearing (HKEX) has launched an international carbon marketplace to connect capital with climate-related products and opportunities. Core Climate will let participants source, hold, trade, settle and retire voluntary carbon credits. The credits will come from internationally-certified carbon projects from around the world, including carbon avoidance, reduction and removal projects.
Citi unveils first Citi global wealth center globally in Hong Kong
Citi has unveiled its first Citi Global Wealth Center (“CGW Center”) globally at K11 ATELIER Victoria Dockside to support the growing financial needs of Citi Private Bank (CPB) and Citigold Private Client (CPC) clients.The CGW Center underlines Citi’s commitment to invest and support clients in Hong Kong, one of the bank’s four global wealth hubs. Citi Global Wealth, the combined consumer and private banking businesses that were merged last year, is an integrated platform serving clients across the wealth continuum, from affluent to ultra-high net worth segments.Citi is proud to play a leading role in the industry’s drive to a more sustainable future with clear targets to reach zero emissions by 2050 for our clients and 2030 for our own operations. In Hong Kong, Citi has a longstanding partner CLP Power Hong Kong Limited (“CLP Power”) which has provided Citi’s staff with sharing on the latest solutions of energy management and decarbonization.Citi will launch the NextGenAcademy collaborating with the K11 Group through which a series of eco-educational activities will be hosted at Nature Discovery Park atop K11 MUSEA targeting the second generation of the Center’s clients as it is Citi and K11 Group’s shared vision that combating climate change has to be a concerted effort across generations. To extend its commitment towards sustainability outside the CGW Center, Citi Hong Kong also becomes a member of Mastercard’s restoration projects within the defined framework of Mastercard for the next two years.
SINGAPORE
MAS proposes new measures regarding crypto trading and stablecoins
The Monetary Authority of Singapore (MAS) has published two consultation papers aimed at reducing the risk of consumer harm from crypto trading and supporting stablecoins. Trading in cryptocurrencies (also known as digital payment tokens or DPTs) is highly risky and not suitable for the general public. However, cryptocurrencies play a supporting role in the broader digital asset ecosystem, and it would not be feasible to ban them. Therefore, to reduce the risk to consumers from speculative trading in cryptocurrencies, MAS will require that DPT service providers ensure proper business conduct and adequate risk disclosure. The proposed measures cover three broad areas: Consumer Access: DPT service providers will be required to provide relevant risk disclosures to enable retail consumers to make informed decisions regarding cryptocurrency trading. They must also disallow the use of credit facilities and leverage by retail consumers for cryptocurrency trading. Business Conduct: DPT service providers will be required to implement proper segregation of customers’ assets, mitigate any potential conflicts of interest which arise from the multiple roles they perform, and establish processes for complaints handling. Technology Risks: Similar to other financial institutions such as banks, DPT service providers will be required to maintain high availability and recoverability of their critical systems.
DBS goes live on SGX unit's cryto platform
DBS has become the first bank to go live on a new digital asset trading platform from Singapore Exchange unit MaxxTrader.SGX-owned MaxxTrader provides foreign exchange pricing and risk services to over 100 global and regional banks, broker-dealers and hedge funds. It is now moving into crypto with the MaxxDigital offering, which promises the ability to price, trade and distribute any cash or tradable tokenized digital assets. The platform incorporates OTC and FX execution features for digital asset trading, as well as streaming, Request for Stream and Request for Quote workflows. Separately, DBS has formed a partnership with Open Government Products (OGP) to launch a live pilot where purpose-bound money-based vouchers (PBM vouchers) are issued using tokenised SGD to facilitate “real-world” live transactions with selected merchants. PBM enables senders to specify conditions, such as validity period and types of shops, when making transfers in digital SGD. The live pilot will involve up to 1,000 selected consumers and six merchants. This forms part of Project Orchid, an industry effort led by the Monetary Authority of Singapore (MAS), to develop the technology infrastructure and technical competencies to enable a programmable digital Singapore dollar (DSGD). While MAS has assessed that the case for a retail CBDC in Singapore is not compelling for now, it continues to actively explore good use cases for digital currencies. Project Orchid aims to build the technical capabilities and competencies necessary for MAS to issue a retail CBDC, should the need arise.
MAS to conduct trials for digital Singdollar that support government payouts, vouchers
MAS will be conducting trials with smart contracts and digital Singapore dollars that could help make the use of government payouts and digital vouchers more targeted and seamless. Central to these experiments –conducted with government agencies, banks, and other players –is “purpose-bound money” (PBM), a protocol that specifies conditions upon which an underlying digital currency can be used. Examples of conditions include expiry dates, specific merchants and product classes, or predetermined denominations.PBMs are bearer instruments transferable between two parties without intermediaries. One of these trials is a partnership between DBS and GovTech to disburse government vouchers to selected participants at the upcoming Singapore Fintech Festival. This builds on the government voucher platform RedeemSG, and involves the government working with DBS to issue digital Singdollars in the form of tokenised bank deposits to retail consumers. Each consumer can then use the vouchers at a specified list of merchants via a unique crypto wallet. Merchants will receive the digital dollars embedded in a “PBM wrapper”. Once the conditions specified by the PBM wrapper are met, the money will be instantly released to the merchant. Apart from tokenised bank deposits, PBM protocols can also be “wrapped” onto XSGD stablecoins –which will be the case in a separate trial led by Temasek, Fazz (formerly known as Xfers) and Grab. In this trial, corporate sponsors would work with Fazz to mint and issue the stablecoins “wrapped” with specific terms and conditions. The PBM is uploaded to the blockchain wallet of Singapore Fintech Festival participants during registration, which can be used at designated merchants. When spent, the PBM is “automatically unwrapped” and the underlying XSGD deposited in the merchant’s Grab wallet.
Weavr expands to Singapore, bringing embedded finance to the region’s businesses
Weavr, a London-headquartered technology provider that empowers businesses with plug-and-play embedded finance solutions, sets up in Singapore as part of its mission to make embedded financial services available to any digital business. Backed by a US$40m Series A led by American investment firm Tiger Global, the official launch of Weavr in Singapore will be announced this week at the Singapore Fintech Festival at the Singapore Expo, wherein Weavr will be part of the United Kingdom (UK) Trade Mission pavilion led by the UK Department for International Trade. With rising economic uncertainty, inflation rates at decade highs, and escalating geopolitical tensions, companies need to re-orient their business models to become more resilient. One sure way to do so is to deliver greater value to their existing customer base. Embedded finance can help digital businesses achieve this by providing the relevant financial services at the point they are needed by customers, using the rich data that many such businesses collect and process for their customers. In doing so, digital businesses have the opportunity to add significant new revenue streams from their existing customer base, in other words increasing their revenues without the need to increase their marketing budgets.Weavr’s unique Financial Plug-ins represent a simple solution for any business to seamlessly deploy financial services within its own platform with zero heavy lifting. Key benefits include: Pre-defined solutions for a range of use cases that reduce time to market to just 5 weeks and take care of compliance, data security and regulation; A low-code offering that allows brands to embed services quickly and seamlessly without compromising on quality and security; Extensible solutions that enable customers to add new financial services in new markets as they grow.
Paxos becomes “major payments institution” in Singapore
Paxos Global Pte Ltd had acquired a license from the Monetary Authority of Singapore (MAS). Under the new license, Paxos will be able to offer digital payment token services, and it will become the first blockchain infrastructure platform from the USA with a MajorPayments Institution (MPI) license. Paxos can now offer its blockchain and digital assets products to businesses operating within the local market. It is worth noting that Paxos is one of the first companies from the crypto sector with an MPI license.The newly received license should help Paxos establish a better presence of its services in the Asian region. Paxos can now provide digital payment token (DPT) services and join the ranks of other authorized companies like FOMO Pay, Revolut or Digital Treasures Center (DTC).
PingPong to launch in Singapore, strengthening regional coverage and providing innovative payment solutions to Southeast Asia customers
PingPong, a global payment solutions provider, debuts at Singapore FinTech Festival (SFF) 2022 (2-4 Nov 2022) to present its latest one-stop payment services and comprehensive cross-border solutions for online merchants, financial institutions, technology platforms, and enterprises. During the event, the company also announces that it is applying for a Major Payment License in Singapore and plans to launch in Singapore upon receiving approval from the regulator. A pioneer in providing end-to-endpayment solutions for global cross-border businesses, PingPong offers global e-commerce sellers the ability to manage multiple currencies in a single, secure platform across the U.S., Europe, and Asia. Since it was established in 2015, the company has been growing rapidly, and as of today, more than one million merchants utilize its technologies for cross-border, value-added tax, and supplier payments. The company's TPV had reached more than USD 90 billion by the end of September 2022. PingPong is strengthening its coverage in Southeast Asia at a time when buying and selling habits in the region have changed profoundly following the unprecedented challenges of the global pandemic. In 2022, Southeast Asia's digital economy is expected to grow by 20%, approaching $200 Billion GMV. PingPong is well-positioned to capture the growth of cross-border e-commerce in Southeast Asia with its extensive experience in working with both upstream and downstream participants in the e-commerce payment ecosystem and providing high-quality cross-border financial services for enterprises of all sizes in the region.
Pundi X announces XPOS Web 3.0 in Singapore fintech festival
Blockchain solutions startup Pundi X is excited to announce the release of XPOS Web 3.0 in Singapore Fintech Festival 2022. This new feature builds off the XPOS, which is a unique point-of-sale machine enabling brick-and-mortar retailers to accept crypto payments and transact on the blockchain.With the XPOS, ordinary retailers can accept top coins like Bitcoin and Ether with just a scan of the QR code or a tap of a NFC enabled card. The XPOS Web3.0 gives an exciting new spin on the original XPOS' unique proposition. This is because the XPOS Web 3.0 will support multiple blockchain networks including Bitcoin Lightning Network, Binance Smart Chain, Ethereum, Polygon, and Avalanche. With the cross-chain capabilities of XPOS Web 3.0, users can buy and pay for all sorts of crypto with their blockchain wallets. For example, the new Cashier Pro function accepts BTC, ETH, BNB, and USDT crypto payments from 3rd party wallets supporting their relevant blockchain networks. XPOS Web 3.0 is good for more than just individual use cases. Merchants will be able to use the p(x)Change dApp powered by Function X technology to connect their blockchain wallets to accept crypto payments and sell crypto via multiple blockchain networks. Finally, XPOS Web 3.0 doubles down on its commitment to enable easy Web 3.0 transactions by introducing the p(x)Card, a Near Field Communication (NFC)-empowered hardware wallet card developed jointly with renowned semiconductor manufacturer Infineon. The NFC technology facilitates secure and efficient two-way communication in a transaction and ensures that transacting with crypto is as easy as swiping a card.
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Rapyd releases multi-currency treasury platform
Rapyd, the leading fintech platform for global payments, payouts andbusiness everywhere, has announced the launch of a multi-currency Treasury Solution, which is the first of its kind for the Asia-Pacific market.This new solution is a collection of cash management features that optimize the cost and effort of global payments operations. The multi-currency Treasury Solution enables international businesses to manage funds globally without the complexity, frustration and added expenses of managing multiple banking relationships, payment providers and funds flows across countries and currencies. It is well-suited to businesses of any size -from mature global enterprises that want to streamline treasury operations to finance professionals at emerging regional exporters who want to compete more effectively. By reducing the number and frequency of wire transfers needed, decreasing associated cross-border banking fees, offering competitive FX rates, and optimizing operations for fund collection and disbursement, businesses can achieve 70-90% lower costs than traditional methods. A multi-currency Treasury Solution allows businesses to: Collect funds in over 100 countries, including:Getting paid locally into Rapyd Virtual Accounts in 40+ countries and over 25 currencies without needing to open and manage multiple overseas bank accounts; Receiving instant bank transfers funds via local Real Time Payments systems including FAST, PayNow, and PromptPay; Other local collection methods include cards, eWallets, and more; Concentrate funds by aggregating these from multiple accounts from across the globe into a central multi-currency account located in Singapore, supervised by the high standards of the MAS; Disburse funds to suppliers, employees and partners in 190+ countries around the world from the same account, with Real Time Payments, Local ACH, and SWIFT and other local options, andSettle the remaining funds as fast as instantly to their local lead bank, enabling businesses to maximize credit and interest benefits, and maintain their core banking relationships.
Singapore to trial purpose bound money CBDC, digital currency, with DBS, OCBC, UOB pilots
The Monetary Authority of Singapore (MAS) issued a whitepaper on purpose bound money, a tokenized form of digital currency which restricts how money can be used.It is part of the Project Orchid retail central bank digital currency research (CBDC) initiative. Four pilot projects are being run, three of which involve Singapore’s largest banks, DBS, OCBC and UOB. The central bank distinguishes between programmable payments –conventional payments with rules, programmable money, where the rules and the payment instrument are combined in a blockchain-based token, and purpose bound money (PBM), which it views as a third model building on programmable money. The money involved might be central bank digital currency, tokenized bank deposits or stablecoins, collectively referred to as digital Singapore dollars (DSGD). In the DBS pilot it is tokenized bank money. It could be a government voucher,where the money is intended for a specific use, or a private voucher, even a gift voucher. For a government or private issuer to distribute a PBM voucher they have to lock up cash to back the voucher, be it a CBDC, tokenized bank money or a digital currency. In the case of DBS Bank, for the pilot, it has partnered with Open Government Products (OGP) to help it issue Community Development Council vouchers used to help people cope with the rising cost of living. Singapore’s other big banks are also involved in pilots. OCBC and the Central Provident Fund Board will trial government payouts where the recipients don’t need to have a bank account.
CHINA
China's digital currency records huge demand in pilot project
China's digital currency, or e-CNY, was the most issued and actively transacted token in the $22 million pilot that used central bank digital currencies to settle cross-border trades. The six-week test, which ended late last month, is part of m-Bridge —a project that pilots cross-border payments in digital currencies issued by central banks of China, Thailand, the United Arab Emirates and counterpart bodies in Hong Kong SAR. China is at the fore of a global competition to develop CBDCs, and is ramping up domestic pilot schemes, mainly for retail payments. A total of 11.8 million yuan ($1.64 million) worth of e-CNY were issued in the testing between Aug 15 and Sept 23, and the Chinese currency was used in a total of 72 payment and foreign exchange transactions, far greater than the other three currencies each. China's top five state banks, including Bank of China and China Construction Bank, participated in the pilot, settling the CBDCs on behalf of their corporate clients. The relatively high number of e-CNY issuances "could reflect greater demand for yuan-denominated transactions", given the country's high share of regional trade.
How MBridge cross border CBDC encourages foreign digital yuan use
The central bank participants in the MBridge cross border payment initiative discussed the central bank digital currency (CBDC) project. Examples mentioned in the first use case for trade payments and other potential applications appear to encourage the digital yuan‘s internationalization. The recent MBridge pilot involved commercial and central banks from Hong Kong, China, Thailand and the UAE making international corporate payments. The project is hosted by the BIS Innovation Hub in Hong Kong. As a quick overview, MBridge is a multi-CBDC project involving a single blockchain infrastructure, with each central bank hosting its own node and controlling its digital currency. It’s a wholesale multi-CBDC payment infrastructure where only the central and commercial banks participate, and it is primarily intended for cross border payments.
ASIA
Indonesia and Thailand implement QR payment linkage, key to increasing digital integration in SEA
Indonesia’s central bank (Bank Indonesia) and Thailand’s central bank (Bank of Thailand) have implemented a cross-border QR payment linkage between the two countries after holding successful trials last year.The new system allows Indonesian consumers to pay for goods or services in Thailand by scanning Thai QR codes. As well, Thai consumers can use their mobile applications to scan the Quick Response Code Indonesian Standard (QRIS) when buying products or services in Indonesia. There are some 76 payment service providers from both countries that have joined this project, and this is expected to grow. Bank Indonesia is exploring other QR payment linkages with Singapore and Malaysia. For Singapore, the cooperation is targeted for launch in 2023, whereas for Malaysia, the cooperation has been in a pilot phase since January 2022 and is expected to be operational by the end of 2022.
GoTyme bank partners with Daon for secure, frictionless account setup for new digital bank
Daon, the Digital Identity Trust company, announced that GoTyme Bank, a new digital bank designed to provide financial inclusion and empowerment to consumers, will utilize Daon IdentityX for digital identity capture and authentication in the GoTyme banking app.As GoTyme Bank launches in the Philippines, it needs to establish an account setup infrastructure that delivers a fast, frictionless signup process to reach a broad customer audience, while at the same time complying with that country’s regulations around customer and data protection as well as fraud prevention. Daon’s IdentityX platform, using the company’s leading document-centric identity proofing technology, will help reduce the barriers for account setup for consumers, and at the same time ensure GoTyme Bank has accurate identity verification and proofing for all new customers. To drive more financial inclusion and reach as many customers as possible in the Philippines, GoTyme Bank is offering consumers the ability to open an account in under five minutes with a paperless process via digital kiosks located in malls and supermarkets across the country. In addition to its identity proofing technology, Daon’s fraud prevention features, like biometric watchlists, third-party identity checks, and manual review service, can be leveraged to ensure that GoTyme Bank can match the fast account setup with a fully inclusive and secure identity proofing and verification process.
National fintech associations sign MoU to form Asean Fintech Movement
The Singapore FinTech Association (SFA) and five other national FinTech associations in Southeast Asia have signed a memorandum of understanding (MOU) to form the ASEAN FinTech Movement. The six national FinTech associations are from Singapore, Cambodia, Malaysia, the Philippines, Thailandand Vietnam:Singapore FinTech Association; Cambodian Association of Finance & Technology; FinTech Association of Malaysia; Digital Pilipinas; Thai FinTech Association; Vietnam FinTech Club.The MOU also outlines four key areas where the associations can collaborate on: Education:Mutual sharing of training materials and resources to promote stakeholders’ level of understanding towards FinTech and the market; Updates on regulatory developments:Providing updates on regulatory developments from each respective country. Networking: Providing a platform where selected members from respective national FinTech associations can be promoted; Supporting mutual FinTech associations’ signature events and programmesthat are aimed at market expansion. Promote Southeast Asia as a regional FinTech powerhouse:Supporting the creation of reports that aim to increase awareness of Southeast Asia’s FinTech market; Supporting the dissemination of similar reports to external stakeholders to raise awareness of the market.
UnionDigital bank deploys thought Machine's Vault Core
UnionDigital Bank, the digital banking subsidiary of Union Bank of the Philippines, announces its partnership with cloud-native banking technology company Thought Machine and has deployed its core banking engine, Vault Core.Thought Machine’s next-generation core technology has enabled UnionDigital Bank to swiftly build its products while offering flexibility, control, and ease of integration with other technology systems. Vault Core’s unique product-building framework has been instrumental for UnionDigital to build, modify, and launch innovative new products. Vault Core is fully API-enabled and operates in real-time, allowing UnionDigital Bank to have an up-to-date, accurate view of customer and ledger positions.
Fintech company Chqbook ties up with NSDL Payments Bank to launch a zero-balance digital current account for SMBs
Gurugram-based fintech company Chqbook joined hands with National Securities Depository Limited (NSDL) Payments Bank to launch a zero-balance digital current account for small business owners. The Chqbook’s current account for business will allow businesses to make deposits, and withdrawals and will also accept UPI transactions. Small business owners like kiranas, chemists and others running small proprietorship establishments can open a current account on the Chqbook App from their smartphones in any of the eight languages available, including English. The digital current account allows downloading of account statements and adding and managing beneficiaries while ensuring easy fund transfers with enhanced biometric security. The current account facility on the Chqbook App digitizes the entire process of account opening. The digital current account will have zero maintenance charges and it will also provide a zero-fees Rupay debit card, the company said. In addition to that, customers will also have the option to avail a payment acceptance device and the point of sale machine through the Chqbook App.
Malaysia’s RHB aims to launch digital bank in 2023
RHB Bank plans to introduce its digital banking platform as early as the second half of next year. The bank and its partner Boost, an arm of communications giant Axiata Group, could invest as much as 1 billion ringgit (S$300 million) in the venture.Boost and RHB were among five groups that won digital bank licences from Bank Negara Malaysia, the country’s central bank, in April. The others chosen include ventures led by Singaporean tech firms Grab Holdings and Sea.Established firms like RHB are facing pressure from fintech upstarts that move quickly to embrace new technology and are often more willing to burn through piles of cash to peel away their clients.For Malaysia’s central bank, the licences are an opportunity to encourage lenders to help people outside the traditional banking system to have access to credit and more chances to build wealth.RHB is also looking to spread its digitisation push beyond Malaysia to the rest of South-east Asia, home to more than 650 million people. The lender aims to launch a mobile app offering full banking services in Cambodia later this year, pending regulatory approval, as it seeks to position itself among the top 10 banks in the country.
Central Bank of Thailand to release a CBDC pilot project
Thailand’s central bank is consistently operating on the creation of a central bank digital currency (CBDC). However, it requires additional time to guarantee it brings the extra facilities to the country’s economy with a better mechanism for risk management. The regulatory entities are evaluating the benefits as well as the hazards associated with a digital baht. Apart from that, they are drawing parallels to PromptPay (the prominent venue for digital payments). A partnership has been started by the Bank of Thailand with a couple of commercial banking organizations –taking into account the Bank of Ayudhya and Siam Commercial Bank –for the CBDC pilot program. The central bank has been operating in collaboration with the BIS Innovation Hub Hong Kong Center, the People’s Bank of China-based Digital Currency Institute, the Central Bank of the United Arab Emirates, and the Hong Kong Monetary Authority. These 4 have effectively accomplished the initial pilot project with the utilization of a wholesale central bank digital currency as included in the project called “mBridge.” This project evaluated 3 forms of transactions, redemption, as well as the issuance of the central bank digital currency between central banks and commercial banks, cross-border payments throughout the native currencies, as well as cross-border centralized exchanges among the commercial banks in overseas currencies. With mBridge, cross-border transfers can be carried out just in some seconds rather than wasting three to five days.
Zaggle, NPCI partner to launch multiple credit cards on RuPay network
Zaggle, a profitable SaaS FinTech company and a pioneer in digitizing business spends, has collaborated with National Payments Corp. of India (NPCI) to issue contactless credit cards on the RuPay network.Zaggle and NPCI along with partner banks would use this platform to launch multiple credit cards to address the ever-growing demand of corporates, SMEs, and consumers. The cards would be enabled for international as well as domestic transactions, making business travel convenient and easy. Besides, users would be able to use this credit card for contactless transactions as well. Zaggle would focus on enhancing user journey through digital onboarding and instant issuance along with intuitive in-app customer experience, spend insights, credit score, etc. This would be supplemented by product innovations like gamification, customised partner offers, and other ancillary services.
Ingenico and Premise partner to deliver cashless inclusion in the Philippines
Ingenico, a global leader in payments acceptance solutions, announces a partnership with Premise, a payment-led embedded banking platform to provide integrated digital payment solutions and financial services to cash-driven micro merchants across thePhilippines.Ingenico is Premise's preferred certified payment terminal provider, deploying the AXIUM DX8000. Running on Android, the terminal allows third-party software integration to enable digital payments for these micro-businesses. Premise will alsoscale its service offerings by linking to Ingenico's Payment Platform as a Service (PPaaS), a cloud-based platform to manage and deliver advanced payment and commerce services quickly and efficiently to terminals.Premise's turnkey universal payment acceptance platform, which includes payment terminals, financial services capabilities, and regulatory licenses, removes businesses' reliance on banks for payments. The partnership between Premise and Ingenico opens an omnichannel payments acceptance platform by bringing alternative and cashless payment methods directly to the merchant's point of sale, emulating the online customer experience.
Digital payments key to untapped growth in Southeast Asia
Despite initial concerns of a post-Covid downturn, the digital payment market continues its growth trajectory in Asia and is expected to hit US$2 trillion by transaction value in 2030 as more fintech and digital banks emerge.But, part and parcel of this broader digital economy growth is the proliferation of alternative digital payment options such as BNPL, bank transfers, e-wallets and even cryptocurrency. It's an opportunity -and a challenge -that's becoming increasingly difficult for merchants, particularly small-to-medium sized businesses, to navigate. It's what some are referring to as a financial revolution -the democratisation effect of digital paymentoptions levelling the playing field for consumers who may struggle to access traditional financial institutions. In addition to the challenge of having to navigate an increasingly complex digital payment maze, merchants face the challenge of growing consumer preference for convenience. A recent survey from Stripe found that 53 per cent of shoppers in Malaysia said they would abandon a purchase if the checkout process took three minutes and 99 per cent said it was important for common payment methods to be provided. When it comes to identifying why, the same study found that 74 per cent of merchants in the region reported that complex merchant payment processing and high fees were major barriers to adoption. For merchants looking to enter -or even expand within -the Southeast Asian market, time and resources are needed to invest into integrating local, preferred payment options. These developments are a good start, but as payment options continue to proliferate, businesses that want to truly capture the opportunity of the digital economy boom in Southeast Asia need to be able to provide interoperability between payment providers, allowing them to enter new markets and access new customers quickly and easily. As consumer expectations grow, the ability to seamlessly offer alternative, local payment options alongside traditional credit card transactions is no longer a nice to have for merchants -it is essential.
India starting wholesale CBDC trials to settle government bonds
The Reserve Bank of India plans to start its first wholesale digital rupee pilot tomorrow. Earlier this month, it published a paper outlining its central bank digital currency (CBDC) plans which included both a wholesale and retail CBDC.The goal is to reduce transaction costs by removing the need for centralized intermediaries to guarantee settlement and reduce the need for collateral to address settlement risk. In India, the Clearing Corporation of India Limited (CCIL) is the central counterparty through which government securities are usually settled. Based on what’s learned from this pilot, the plan is to progress to other wholesale transactions and cross border payments. The nine banks involved in this pilot are the State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC. For cross border payments, the question is which project it will join. The two large Asian multi-CBDC projects are Dunbar out of Singapore and MBridge out of Hong Kong. Logically one would expect MBridge because Hong Kong, China and the UAE are involved and respectively rank two, three and four as Indian export partners. In fifth place is Singapore. However, the recent MBridge trials had several observers, and India was not among them.
Unpacking the market conditions of digital corporate banking in SEA
With the advent of open banking, the finance sector has been undergoing radical changes. Unfortunately, while the retail banking sector has been agile in adapting to these changes, the corporate banking sector in Southeast Asia is lagging behind.Through digital corporate banking, services such as account onboarding, set up, management, and maintenance will be done through digital channels. That said, the biggest benefit of corporate banking is the provision of real-time data from corporate banks to their clients’ treasury, ERP and finance systems. Essentially, the lack of an encompassing regulatory body like the Berlin Group (BG) in Europe is creating challenges in real-time corporate banking. In addition, despite the region’s acknowledgement that digital technology is a critical enabler of growth, only a limited number of regional banks have invested in the digitalisation process such as the adoption of Application Programme Interfaces (APIs). For example, the Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) published an API Playbook outlining guidelines for banks adopting APIs. However, despite the progress, current corporate banking system problems still prevail. For example, Philippine bankers and chief executives opined that the current corporate banking system in the Philippines is far too unreliable, resulting in major transaction discrepancies. In addition, a General Manager from an international company in the Philippines mentioned that looking at finances through online banking platforms can be time-consuming. Since the company employs various banks to serve their needs, they must go through every banking platform to see their finances.
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