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VCs Bank, Mastercard Rises Fees, CRR II Challenges, Oceania Fintech Grows and Others Top News



Happy Wednesday!



Today's news:


  • VCs flood into banking-as-a-service

  • CRR II – Regulatory challenges for the next three years

  • Number of FinTechs in Australia passes the 700 mark

  • 51% of Consumers Ready to Switch Banks for Biometric Payment Cards

  • Mastercard Fees to Rise by 5% for Brits Buying From EU

  • COVID-19: Making the case for robust digital financial infrastructure




VCs flood into banking-as-a-service



Andreessen Horowitz once predicted that “every company will be a fintech company”. Venture capitalists may be known for making slightly grandiose predictions, but recently it seems like many of the firm’s peers are starting to agree.


The result has been a flood of money into start-ups that provide the tools for any company to begin offering financial services.


Instead of building consumer-facing apps, these start-ups largely trade in so-called application programming interfaces — APIs — which plug into a company’s code and give it the ability to accept payments or perform any number of financial transactions. A growing number of the companies embrace the moniker of “banking as a service”, a play on the concept of “software as a service”.


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CRR II – Regulatory challenges for the next three years



After more than two years of intensive discussions and deliberations, the EU’s “Banking Package” was finalised on 14 February 2019 and passed the EU parliament on 16 April 2019. The final drafts entered into force on 27 June 2019. The general date of application for CRR II is 28 June 2021.

The implementation of the Banking Package, consisting of significant amendments to the Capital Requirements Regulation (“CRR II”), the Capital Requirements Directive (“CRD V”), the Bank Recovery and Resolution Directive (BRRD II) and the Single Resolution Mechanism (“SRMR II”), is expected to be a major and challenging task. With such enormous changes, banks may banks may find themselves needing help quickly.

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Number of FinTechs in Australia passes the 700 mark



The latest roundup of Australia’s FinTech landscape shows more than 100 new FinTechs entered the in-demand segment over the course of the past twelve months, with lending apps and blockchain technology dominating the market entry list.


Professional services firm KPMG last examined Australia's FinTech market back in September 2019, when there were just short of 630 active FinTechs in the country. Per the latest study published, this number stands over 730 – signalling rapid growth in a year that posed unprecedented economic challenges.


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51% of Consumers Ready to Switch Banks for Biometric Payment Cards



A global survey from Fingerprints has found strong consumer appetite for biometric payment cards with 51% ready to switch bank for one.


The pandemic has rapidly changed the way we pay and our attitudes towards how we want to pay in the future. The need for safer and more touchless ways to pay has escalated and consumers are embracing contactless cards as the preferred means of payment, with 77% using them regularly in-store. However, in parallel with the increased use of contactless are rising security and usability concerns.


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Mastercard Fees to Rise by 5% for Brits Buying From EU



Mastercard has announced that it will be raising its fees by as much as 5x its current charges whenever UK cardholders order goods and services from the EU.


The credit card giant is increasing the “interchange fees”, set by the provider on behalf of banks. The current rate stands at 0.3% after a 2015 cap on fees was set by the EU. However, from October, Mastercard recently announced that it will up its interchange fees to 1.5% on every transaction.


If merchants pass on the increase to consumers it could raise the price not just of goods and services in general, but also airline, hotel and holiday companies which are based in the EU. Even shopping empire Amazon could be affected, as most payments are processed via its Luxembourg headquarters.


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COVID-19: Making the case for robust digital financial infrastructure



The pandemic has been a tough, real-life stress test for government disbursement schemes, highlighting opportunities but also gaps and vulnerabilities.


Governments worldwide reacted to the COVID-19 crisis with an outpouring of financial aid to businesses and individuals that was exceptional for both its size and the speed with which the disbursements were made. According to the IMF, fiscal measures announced globally amounted to $11.7 trillion, or close to 12 percent of global GDP, as of September 2020. As a result, the pandemic has served as a high-stakes, real-life stress test for the financial infrastructure in many countries, bringing into sharp relief critical gaps and opportunities as well as providing valuable lessons about how to improve efficiency and resilience for the future.


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