Thursday August 10 2017, Daily News Digest

Lending Club

News Comments Today’s main news: NSR Invest, LendingRobot merge: Now the largest alt lending robo-advisor.LendInvest makes London Stock Exchange debut.Big banks losing ground to China’s fintech giants. Today’s main analysis: Q2 update from LendingClub CIO.MarketInvoice loanbook snapshot. Today’s thought-provoking articles: LendingClub’s surprise comeback.Sanborn looks ahead.Personal financial management apps fold as banks work them into their […]

Lending Club

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News Summary

United States

NSR Invest and LendingRobot merge to become the largest robo-advisor in the alternative lending space (LendingRobot Email), Rated: AAA

NSR Invest and LendingRobot, two of the largest specialized Registered Investment Advisors in the alternative lending space, announced today that the companies have merged to create the leading independent advisory platform for alternative lending. Lend Core LLC, the parent company of NSR Invest, acquired Algorithmic, Inc. and all its assets, including the LendingRobot website and technology.

The joint team will combine its knowledge in the industry, investment algorithms, machine learning and blockchain technologies with the goal of providing steady investment returns to more than 8000 clients.

The websites, operating, and trading systems of NSRinvest.com and LendingRobot.com will continue to function separately in the short term. In the immediate future, the company is focusing its newfound strength on the LendingRobot Series.

Q2 2017: An Update from Our CIO (LendingClub), Rated: AAA

Projected investor returns are also largely unchanged from the first quarter and continue to range from approximately 4% to 9% (see below).

A few factors that influence returns on the platform1 are listed below:

  • Economic Backdrop. The American economy remains robust but growth continues to be relatively modest. The unemployment rate has changed little over the past year, measuring at 4.4% as of July 2017. Meanwhile, GDP increased by 2.6% in the second quarter of 2017.
  • Borrower Performance. Recent vintage performance continues to come in broadly in line with our expectations. As mentioned above, we continue to see lower delinquency rates across most grades and terms than in loans issued in the second and third quarters of 2016, which we attribute to changes made in 2016.
  • Interest Rates. The overall interest rate environment remains low, though the Federal Reserve raised its Target Rate by 25 bps in June 2017. After announcing its latest rate increase, the Federal Open Market Committee signaled its willingness to raise rates further, as it “expects that economic conditions will evolve in a manner that will warrant gradual increases in the Federal Funds Rate.” Interest rates on the LendingClub platform are not changing at this time.
Source: LendingClub

Lending Club makes a surprise comeback (Business Insider), Rated: AAA

In Q1 2017, US alt lender Lending Club published disappointing results, which showed a flat performance and seemingly vague turnaround plans, sparking concerns that it could be headed for a dead end. However, the company has now reported its second-highest quarterly revenue to date for Q2 of this year, with analysts pointing outthat it appears back on a growth trajectory.

In Q1 2017, US alt lender Lending Club published disappointing results, which showed a flat performance and seemingly vague turnaround plans, sparking concerns that it could be headed for a dead end. However, the company has now reported its second-highest quarterly revenue to date for Q2 of this year, with analysts pointing outthat it appears back on a growth trajectory.

LendingClub CEO Sanborn ‘Looking Ahead’ After Scandal (Bloomberg), Rated: AAA

LendingClub Corp (NYSE:LC) Stock Soars As Banks Prove To Be Hypocrites (BNL Finance), Rated: A

Importantly, peer to peer lending is the fastest growing industry in lending, and while there are a lot of players in the game, LendingClub is one of the largest. On many occasions over the last year, BNL Finance has told members that banks would come back and that LC stock losses were overdone.

With that said, LendingClub stock has rallied 26% over the last three sessions.

PFM apps are folding as banks work them into their own apps (Tearsheet), Rated: AAA

Last week,  Level Money, the money management app owned by Capital One Financial, said it will shut down on Sept. 1. Also last week, Prosper Marketplace said it would discontinue the Prosper Daily app and urged customers to bring their PFM needs to Clarity Money. Earlier last month, SoFi said it would nix the services by Zenbanx, just six months after it acquired the online banking company, and would use its technology and personnel for its own online bank.

PFM has never been a prominent feature of consumer bank accounts. For most of banks’ existence people had to balance their own checkbooks based on debits and credits. That’s changing now as banks realize the importance of personal financial management for continued customer engagement. And they’re starting to implement PFM features into their offerings to provide more complete banking experiences. As it is today, PFM is usually a separate entity found in entirely different apps like Clarity Money, Moven or Mint.

For example, one of the biggest nuisances of PFM historically has been the lack of good financial data. Customers using an app would have to hand over their online banking credentials so the third party financial app could access their banking data to be able to provide users with their financial snapshot. The data that appeared on the home screen of their online banking wasn’t always in sync with what they would see in their PFM app.

Chinese Stock That Rallied 4,555% Could Get the Boot From the Nasdaq (Bloomberg), Rated: A

Wins Finance Holdings Inc., the Chinese loan guarantor that couldn’t explain a 4,555 percent surge in its stock, is set to be delisted from the Nasdaq Stock Market, which cited violations of exchange rules related to its shareholder base.

Nasdaq said Wins doesn’t meet regulations requiring it to have at least 300 shareholders who own 100 shares. The exchange’s decision was also based on “the making of alleged misrepresentations by the company relating to the 300 round-lot shareholder requirement,” as well as public interest concerns, Wins said in a statement Wednesday.

Source: Bloomberg Markets

Installment Loan Provider Earns Top Rating from TopConsumerReviews.com (PR Web), Rated: A

TopConsumerReviews.com recently awarded their highest five-star rating to Lending Club, an industry leader among companies offering Installment Loans.

“For Installment Loans ranging from $1000 to $40,000, Lending Club provides incredible customer service with fair interest rates and fees,” according to Brian Dolezal, of TopConsumerReviews.com, LLC.

StreetShares raises $ 10.3m for “Shark Tank meets eBay” approach to P2P lending (Banking Technology), Rated: A

Alternative lending platform StreetShares raised $10.3 million in a venture round this week, writes Finovate(Banking Technology‘s sister company).

The funds come from an undisclosed investor and bring the Virginia-based company’s total funding to almost $20 million since it was founded in 2013.

Real Estate Crowdfunding Platforms Work to Find a Niche (National Real Estate Investor), Rated: A

However, as crowdfunding marketplaces are getting bigger and more investors are coming onboard, the power to raise equity through this marketplace is growing, says Tore Steen, co-founder and CEO of CrowdStreet Inc. Initially, many sponsors have been looking to raise $1 million to $2 million as a supplement to their existing base of investors. Those levels are now moving to $3 million to $5 million. CrowdStreet’s largest equity raise on a single offering to date was close to $8 million.

Although it remains a fragmented niche that is difficult to quantify, research firm Massolution had estimated the size of the global real estate crowdfunding industry at $3.5 billion in 2016.

RealtyMogul emerged as one of the early players in real estate crowdfunding. Since the firm launched in 2013, it has raised more than $280 million in equity through its online real estate investing marketplace.

Currently, CrowdStreet has more than 25,000 registered investors on its marketplace. In addition, among its active investors, over 55 percent are repeat investors.

Crowdfunding firms such as RealtyMogul are also fueling growth with online “eREITs” that allow them to target a bigger pool of non-accredited investors. Currently, RealtyMogul has 135,000 registered users on its platform, including both accredited and non-accredited investors.

How David Zalik Skipped High School On His Way To Becoming A Billionaire (Forbes), Rated: A

With that I become the first public witness to the long, irregularly shaped basement office where GreenSky, America’s third-most-valuable fintech company (after Stripe and SoFi), has been incubating in obscurity for the past decade. And it’s Zalik who holds the golden ticket: Last September, GreenSky raised $50 million at a $3.6 billion valuation. The 43-year-old cofounder and CEO still owns more than half of the company, shooting him well into the billionaire ranks.

GreenSky’s real magic, however, is something you can’t see: a model that transfers much of the risk, as well as the work, to other parties–and profits from both sides of each deal. Those 17,000 contractors not only market the loans to homeowners but also pay GreenSky, on average, 6% of the loan amount.

From Illinois’ woes to the state of credit: Jamie Dimon lets loose (Crain’s Chicago Business), Rated: A

Obviously you’re a believer in online lending, given JPMorgan’s relationship with small-business lender OnDeck. Tell me how you see online lending going.

What the real issue in peer-to-peer lending is that the borrower will need the money in good times and bad, but the lender will not lend the money in good times and bad. The second there’s a recession, they’ll pull back. That’s exactly what you saw in February of last year when all of a sudden people were pulling back in giving money to the peer-to-peer lenders, who couldn’t then make loans. And they all got crushed. Some have been quite bright. So I think Chicago-based Avant has been quite bright, and they kind of anticipated this, and they created permanent capital. There are multiple ways to create permanent capital. Securitizations kind of work. But they don’t work in tough times. They disappear. Bank relationships work. There are ways to fix the problem. But that is an issue: Can you sustain your business model through the cycle? I think some of them will succeed.

Would you ever see banks getting directly into online consumer lending?

Remember, there is nothing online lenders can do that we can’t. ling With Insurance Companies Less Miserable

5 fintech trends disrupting retail banking (and how banks can fight back) (The Financial Brand), Rated: A

  1. Quick money transfer apps – Millennials have come to expect such an experience. Many banks and credit unions are starting to realize this, but they’re a little behind the eight ball.
  2. Chatbots and Messenger-Based Payments – Soon, you’ll be able to pay for that used TV you found on Craigslist by texting the seller directly from your phone’s messenger app, including Apple which turned on the Messagespayments functionality in June 2017.
  3. Forget the Card, Pay With Mobile Devices – On its own, this doesn’t seem like much of a Trojan horse for banks, but as more people shift behaviors so too will the expectations of banking customers. And with the global mobile payments market estimated to hit $3.4 trillion by 2022, it’s worth monitoring in relation to banking customers.
  4. Smart Budgeting and Personal Finance Management
  5. Digital Currencies That Don’t Require Central Banks

Fintech expert Maule to join British digital banking startup (American Banker), Rated: A

Fintech expert Sam Maule has been hired by nascent digital banking firm 11:FS to head up its expansion in North America.

Marketplace Lending Abs Fund Form D (Weekly Register), Rated: B

The New Jersey-based Marketplace Lending Abs Fund, Lp filed Form D for $2.75 million offering. This is a new filing. The Limited Partnership raised $2.75 million. The offering is still open. The total offering amount was $2.75 million. This form was filed on 2017-08-09.

Online Lending Policy Institute to Host Second Annual Summit in Washington, D.C. (Markets Insider), Rated: B

The Online Lending Policy Institute (OLPI), the leading voice for policy analysis, in-depth research, and education for the online lending industry, today announced it will host its Second Annual Summit on Sept. 25 at The Renaissance Hotel in Washington D.C.

Capital One VP Joins veteran-focused fintech firm (American Banker), Rated: B

A former Capital One executive has moved to StreetShares, an online lending and investing platform.

Heather Tuason, formerly senior vice president of small business at Capital One, is now the fintech startup’s chief product officer, it announced Tuesday.

EquityBuild Announces Master Class Webinar on Five Years to Wealth Through the Brand New Model (Benzinga), Rated: B

EquityBuild announces a new master class on the Power of Five, highlighting their new five-year investment model.

Here is the upcoming webinar master class to attend August 14, 2017:

EquityBuild Power of Five Master Class – Find out how this unique model changing the way investors view real estate. Join us for this special event here.

Labor Department delays fiduciary rule implementation date (Reuters), Rated: B

The U.S. Department of Labor will give wealth management companies more time to get in line with the new “fiduciary rule,” a regulation that requires financial advisers to put retirees’ interests ahead of their own, the regulator said on Wednesday.

Securities brokerages like Morgan Stanley and Bank of America Corp’s Merrill Lynch now have until July 1, 2019, to present retirement savers with new contracts that spell out the fees brokers make on certain investment products or transition them into accounts that charge a flat fee based on assets.

United Kingdom

LendInvest makes London Stock Exchange debut with £50m raise (Finextra), Rated: AAA

LendInvest, the UK’s leading online platform for property lending and investing, today listed a £50 million retail bond on the London Stock Exchange’s Order book for Retail Bonds (ORB).

The process to raise LendInvest’s first retail bond was closed early and oversubscribed, thanks to strong demand from retail and institutional investors. About half of the proceeds raised came from major financial institutions including several multi-billion pound asset managers, two global insurance businesses and a major UK state pension fund.

The bond pays a fixed annual coupon of 5.25% for five years, and is secured against a portfolio of property loans and guaranteed by LendInvest. From today, the bond trades under the LSE ticker LIV1.

P2P Lending: MarketInvoice Loanbook Snapshot (LinkedIn), Rated: AAA

MarketInvoice, founded in 2010, is the largest UK online P2P lending firm specialising in invoice discounting and invoice factoring. Selective invoice discounting is a facility that allows businesses to sell individual invoices at a discount in order to unlock immediate funding which can be an attractive solution for SMEs periodically strained with cashflow. In early 2017 the platform launched an additional product in the form of MarketInvoice Pro, an invoice factoring product that essentially is a debt facility which businesses can draw on backed by the business’s sales ledger.

Source: Sukhwinder Shoker

MarketInvoice celebrated its strongest origination quarter in 2017Q2 with £161.9m in invoices traded and a healthy 25.3% increase from the previous quarter. Annualised invoice origination growth (2013-2016) for the platform stands at 82.6% and, whilst encouraging, it is clear to see from the oscillation in monthly advanced funding that to-date annualised return performance has been highly influenced by seasonality trends.

Source: Sukhwinder Shoker

Invoice terms exceeding 60 days formed 28.3% of origination in 2016Q2, however, this has significantly increased to 58.2% of 2017Q2 origination.

Invoice originations have shifted away from riskier price grades since the introduction of Market Invoice Pro and this is welcome news for investors.

Meet Finimize: The fintech startup that turned a popular newsletter into a financial planning platform (Tech World), Rated: A

Rofagha quickly realised that the banks couldn’t help him, a financial advisor was unreachable with his income, and the rise of the robo-advisor hadn’t really taken off yet.

Then there is one of his favourite statistics: “86 percent of millennials save each month but they keep more than 50 percent of their assets in cash, because there is no suitable way for them to get financial advice.” This was his lightbulb moment.

Now Rofagha has launched the next phase, a financial planning platform called Finimize MyLife, which is currently in beta and has a waiting list of more than 24,000 people.

The Finimize MyLife platform is free to use and helps users create a financial plan by answering a few questions about their financial position, setting goals and then selecting from a range of options, be that opening an ISA or investing with a partner like Nutmeg or Moneyfarm.

The next steps for Rofagha will be to invest in data science so that the platform can make more tailored product recommendations for users, once it has built out its data set.

WiseAlpha opens up corporate bond market for investors (AltFi), Rated: A

Online lending platform WiseAlpha is adding corporate bond and loan investments to its platform.

Retail investors can now access Tesco’s £300m institutional bond that has a 4.8 per cent return.

Users can buy the debt for as little as  £100 and cash in their bonds via the secondary market on the platform. The grocers bond matures in 2042.

Six of the best alternative income ideas (IG.com), Rated: A

Looking at the ten years to the end of May 2017, inflation as measured by the Retail Price Index (RPI) rose 31.8%, while anyone receiving the Bank of England (BoE) base rate would have made a total return of 13.2%. In other words, cash in a bank account has lost 18.6% of its real value over ten years.

Over several years, the Investment Trust sector has seen huge growth in alternative income products, and here we list six products from sectors that investors may want to consider for inclusion in their investment allocations.

MARKET INSIGHT: OLD MONEY, NEW METHOD (Campden FB), Rated: A

Marketplace or ‘peer-to-peer’ lending can be attractive for family office investors for several reasons:

  • attractive absolute and relative returns compared to other fixed interest instruments
  • ability to create some granular/diverse portfolios through investment in loan parts
  • transparent credit process and loan pricing
  • ability to match maturity profile to desired outcomes

At present, the lack of a uniform set of standards places some obstacles for investors willing to invest across multiple marketplace lenders. The data structure, terminology, and methodologies differ greatly from platform to platform. However, good platforms are able to clearly demonstrate how loans are underwritten, an expected loss rate and basis for making investment decisions.

How can family offices engage with marketplace lenders?

Firstly, investors need to consider the asset class and risk profile they wish to invest in.

Secondly, investors need to consider how active they wish to be—in its truest form marketplace lender allow absolute discretion to bid on individual loans at whatever size suits.

Glint is a stealthy London fintech startup that promises to turn gold into a ‘new global currency’ (TechCrunch), Rated: A

Glint, a stealthy London fintech startup that promises a new “global currency,” has raised £3.1 million from a plethora of individual backers in the financial services and asset management space, alongside early-stage investor Bray Capital.

However, I understand that Glint will offer a frictionless way to both store and spend your money in gold, including at the point of sale, just like a regular local currency.

Railsbank, a new fintech startup from founder of Currencycloud, raises $ 1.2M led by Firestartr (TechCrunch), Rated: A

Railsbank, a relatively new fintech startup co-founded by CEO Nigel Verdon, who previously founded money exchange and payments platform Currencycloud, has raised $1.2 million in a funding round led by seed investment firm Firestartr.

The company, yet to see its full launch and over a year in the making, offers what it describes as an open banking and compliance platform aimed at other companies, including other fintechs, that have global banking requirements that need to be accessed programatically via an API.

China

China targets mobile payments oligopoly with clearing mandate (Financial Times), Rated: AAA

China’s central bank has ordered online payment groups to operate through a centralised clearing house, a move likely to undercut the dominance of Ant Financial and Tencent by forcing them to share valuable transaction data with competitors.

China is the world leader in mobile payments, with transaction volumes rising nearly fivefold last year to Rmb59tn ($8.8tn), according to iResearch. They are now widely used for everything from high-street shopping to peer-to-peer lending.

Now the People’s Bank of China is requiring all third-party payment companies to channel payments through a new clearing house by next June, according to a document sent to payment companies on August 4 and seen by the Financial Times.

Ant Financial, the financial services affiliate of Alibaba Group, is the market leader in mobile payments, with its Alipay unit processing 54 per cent share of all transactions in the first quarter of the year, according to iResearch. WeChat Pay, linked to Tencent’s mobile messaging app, held a 40 per cent share.

Big banks on notice that they’re losing ground to China’s fintech giants (SCMP), Rated: AAA

“JPMorgan every year, as we speak, processes through our QuickPay 94 million payments,” she said, “But Tencent, the Chinese company, over Chinese New Year, in five days processed 46 billion payments. Basically that means 800 million payments per hour.

“Visa has a maximum capacity of processing 25,000 payments per second. But Alipay can process 50,000 payments, twice as much, per second.”

The rise of online payments through non-bank services, exemplified by Alipay and WeChat Pay – which falls under the Tenpay umbrella – in China, has caused another banking giant, Goldman Sachs, to stand up and take notice too.

The firm recently published a report, led by Mancy Sun, which reveals the value of third-party payments in China grew more than 74 times from 2010 to 2016, from US$155 billion to a staggering US$11.4 trillion.

Of that total, 56 per cent took the form of peer-to-peer transfers while about 16 per cent was consumption-related. Furthermore, payments made via third-party payment companies comprised 40 per cent of all retail sales, a figure that is still growing.

Top3 Chinese block chain asset trading platform (the second-tier platforms) (Xing Ping She), Rated: A

First of all, how to define the Chinese second-tier platforms? We refer to the following three factors:

  1. It has been established for a long time, and there is little risk of failure for the company after a long-term market test and trials.
  2. Popular and profitable.
  3. It belong to the major currencies which are the top of the list. And it has certain dominance in a few currencies.

So, the TOP3 Chinese second-tier platforms are finally selected as:

BTC
Online date: May 2013
Website: btc38.com
Registered capital: 10 million
Office address: Shenzhen

CDC CloudCoin
Online date: April 2014
Website: yunbi.com
Registered capital: 10 million
Office address: Beijing

CHBTC
Online date: early 2013
Website:chbtc.com
Registered capital: 10 million
Office address: Zhongshan city, Guangdong province

China Commercial Credit Enters Share Exchange Agreement with Sorghum Investment Holdings Limited (Markets Insider), Rated: A

China Commercial Credit, Inc. (NasdaqCM: CCCR) (“CCCR” or the “Company”), a microfinance company providing financial services to small-to-medium enterprises (“SMEs”), farmers and individuals in Jiangsu Province, today announced that, it has entered into a share exchange agreement (the “Share Exchange Agreement”) by and through its Board of Directors and majority shareholder dated August 9, 2017 with the equity holders of Sorghum Investment Holdings Limited (“Sorghum”), an Internet platform specializing in providing peer-to-peer lending services to individuals and small business owners in China. Pursuant to the Exchange Agreement, the Company has agreed to acquire all of the issued and outstanding equity interests of Sorghum in exchange for 152,586,795 shares of the Company’s Common Stock (the “Acquisition”). Upon completion of the Acquisition, the Company will own 100% of Sorghum, and will be a financial services group operating in both smart financing as well as microfinance sectors in China.

Sina Corp Establishes $ 500M Online Finance Fund To Back Chinese FinTech Firms (China Money Network), Rated: A

Chinese Internet portal Sina Corp said it would establish an Online Finance Fund with a target fundraising size of US$500 million to invest in Chinese fintech companies.

Fintech is one of the most important opportunities in the next three to five years, Chao said during the call. The company believes that it can leverage its own online traffic, data, and microblog services Weibo to attract users and create a strong new brand.

Sina will focus on the business categories where it can obtain its own operating license, such as micro-lending. The company is currently offering micro-lending to users via a partnership with other financial firms, but it is in the process to get its own license.

LendIt Lang Di Fintech Names Omega One PitchIt Competition Winner (PR Newswire), Rated: B

LendIt, the world’s largest show in lending and fintech, named Omega One the winner of its Lang Di Fintech PitchIt competition in Shanghai on July 16. Out of eight PitchIt finalists (and hundreds of applicants) at China’s largest fintech conference, Omega One, an automated trade execution platform, was chosen as the winner for its innovation in the cryptocurrency markets.

As the winner, Omega One received a RMB 1 million investment from JadeValue and co-working space for six months. The company also received two tickets to LendIt USA 2018 as well as round trip airfare and full accommodations for the duration of the conference. The LendIt team will also curate meetings with fintech companies and investors during Omega One’s trip to the U.S.

Lang Di Fintech was held in Shanghai on July 15 – 16, 2017.

European Union

FinTech Group Counts on BearingPoint RegTech (BusinessWire), Rated: B

Management and technology consultancy BearingPoint, a leading provider of Risk and Regulatory Technology (RiskTech/RegTech), announced that FinTech Group AG, one of the leading providers of innovative financial technologies in Europe, included BearingPoint’s regulatory reporting solution ABACUS/DaVinci in its product portfolio.

International

Fintech startup brings blockchain and cryptocurrencies to invoice finance (GT Review), Rated: A

New fintech startup Populous is introducing smart contracts, blockchain technology and digital tokens to the invoice financing space.

Having raised more than US$10mn in crowdfunding in just five days, the company has now started piloting its new platform, which lets firms and individuals sell or buy invoices globally.

Australia

Locked out of property market? Five better places for Millennials to put money (The Sydney Morning Herald), Rated: A

Below are five better places to put your money as a young Australian in 2017.

Another investment opportunity emerging with the rise of fintech is peer-to-peer (P2P) or marketplace lending.

You input a few details into an online form, such as your preferred credit grade, loan term, and maximum amount you wish to invest in any one loan. The algorithm then does the rest on your behalf, and some lenders claim returns as high as 12 per cent per annum.

Women in Finance finalists revealed (TheAdviser), Rated: B

Online lender Prospa received nods in three categories — Alison Binskin, head of operations, made the cut for Fintech Leader of the Year, Lauren Davidson received recognition for Human Relations Professional of the Year and Anna Fitzgerald for Public Relations/Communications Professional of the Year.

India

Just Rent, Don’t Buy (Business Today), Rated: AAA

India has many consumer-lending companies, but there are very few consumer-leasing firms that borrow, convert the money into assets and lease them. RentoMojo does just that and says it has discovered the playbook fairly early, which could be used across categories and not just furniture.

There is one weakness in this model – it is capital intensive, and assets have to be bought before they can be leased.

Adukia, who looks after internal finances, says that the company has lines of credit with banks, non-banking financial companies (NBFCs) and high net-worth individuals (HNIs).

There has been no independent study on the market size of the consumer-leasing business, but the company claims it is about $10-12 billion. To stay on top of this market in terms of affordability, RentoMojo does not deal with middlemen and buys directly from manufacturers, says Nain. “We also act like a quasi-bank that takes a call on the creditworthiness of its customers [to protect our revenues].”

Is our banking industry facing existential crisis from fintech boom? (The Jakarta Post), Rated: A

Recent developments in the rise of Robo-advisers and investments in digital and P2P lending platforms, however, appear to support arguments on the contrary. Already we are seeing Alibaba dominating the payment scene in China while similar local companies like Go-Pay in Indonesia is also rapidly evolving into a commendable competitor of the banks in the payments scheme locally.

The level of threat does not go unnoticed within the banking professionals’ sphere. Based on a survey by PWC, about 81 percent of the banking and fintech players in Indonesia would see a degree of disruption in the way the banks are doing business, with which roughly 50 percent of them observe potential significant disruptions.

On the payment and settlements front, we have also seen how fintech has exposed the inefficiencies in the banks’ existing business processes. For example, in the cross-border interbank payment, the current average transaction costs for sending remittances abroad through bank average around 10.99 percent of the nominal amount globally, according to a report by World Bank. This is highly efficient and perhaps one of the catalysts for online remittance companies like TransferWise to exist.

Another study estimates suggest that mortgage borrowers in the US and European market could potentially save $480 to $960 per loan and banks would be able to reduce costs in the range of $3billion to $11billion by lowering processing costs in the mortgage origination process. Such figure further highlights the inefficiency in the banks’ current operating structure. The figure would likely be more substantial on the percentage basis if similar survey is conducted in Indonesia.

Asia

Globe Telecom’s Fuse to Provide Loans Powered by Mambu (Markets Insider), Rated: AAA

Mambu, the SaaS banking engine, today announced it will be powering the consumer and business lending products of Fuse, the lending arm of Filipino financial technology firm Mynt, by September 2017.

Mynt is increasing access to  financial services through mobile money, micro-loans and technology by leveraging the mobile and store networks of its partners and parent company in a country with 113% mobile penetration but only 31% banking penetration.

Micro, small and medium enterprises (MSMEs), which account for 99.6% percent of total registered companies in the country, as well as individuals face significant difficulty in accessing credit from incumbents due to stringent credit decisioning, limited authentication documentation and lack of collateral.

Singaporean fintech hub Lattice80 to launch office in India (Tech Wire Asia), Rated: A

LATTICE80, Singapore’s fintech hub will be opening an India branch at the end of September, as reported by Bloombergmarking the company’s first step in expanding their global operations.

The fintech hub is planning to open offices in world’s financial capitals, especially London, New York and cities in the Middle East.

MODALKU has become the first and only peer-to-peer (P2P) lending company to attain membership at the International Association of Credit Portfolio Managers (IACPM), a forum where financial institutions share and discuss best practices for credit risk management.

Modalku co-founder and CEO Reynold Wijaya stated that his team is focused on attaining international, even global standards.standards.

Authors:

George Popescu
Allen Taylor

Friday June 2 2017, Daily News Digest

alternative lending mergers & acquisitions

News Comments Today’s main news: OCC policy on exam treatment of violations goes into effect July 1. Comparisons of Zopa’s IFISA to others. RateSetter hits highest valuation. Seedrs, NatWest partner to offer alternative funding options. Zhong An seeks Hong Kong IPO. Today’s main analysis: Alternative Lending Market Analysis. International P2P lending volumes. Today’s thought-provoking articles: Under the hood of asset-level […]

alternative lending mergers & acquisitions

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United States

Nutter Bank Report, May 2017 (JD Supra), Rated: AAA

Supreme Court Rules That Cities Can Sue Lenders Under the Fair Housing Act

The U.S. Supreme Court has issued a decision that reaffirms the standing of municipalities to sue lenders, including banks, for certain discriminatory mortgage lending practices that violate the federal Fair Housing Act (“FHA”). The Court’s decision stated that this provision of the FHA “reflects a congressional intent to confer standing broadly,” and held that the city’s claimed injuries are within the FHA’s zone of interests. Click here for a copy of the Court’s decision.

Nutter Notes: Despite the Court’s ruling in favor of the city on the issue of standing, the Court’s ruling on the issue of proximate cause may make it more difficult in the future for cities to sue lenders for FHA violations.

OCC Issues Updated Guidance on Exam Treatment of Violations of Laws and Regulations

The updated policies and procedures direct OCC examiners to communicate violations to supervised institutions using a consistent format consisting of legal citation and description, a summary of relevant statutory or regulatory requirements, facts supporting the violation and root causes, corrective actions required, and board and management’s commitments to corrective action. The updated policies and procedures also emphasize the importance of timely and thorough follow-up and tracking of management’s corrective actions and related milestones. This policy will become effective on July 1, 2017. Click here for a copy of the OCC Bulletin.

Nutter Notes: Specifically, the OCC’s updated policy requires that examiners communicate all substantive violations to the bank in a report of examination (“ROE”) or supervisory letter, including substantive self-identified violations in certain circumstances. Examiners will be required to communicate less substantive OCC-identified violations in a separate written document if the examiners decide not to include them in an ROE or supervisory letter. The updated policy gives examiners discretion to determine whether less substantive, self-identified violations may be communicated separately. The OCC stated that it expects the bank’s board and management to take timely and effective correction of all violations regardless of how they are communicated. According to the updated policy, if management fails to correct a violation previously communicated in a separate written document by the OCC, the examiner should include the violation in the next ROE or supervisory letter. The updated policy also requires examiners to identify violations as “New,” “Self-identified,” or “Repeat,” as applicable.

FT Partners’ CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA

FT Partners is pleased to present you with the latest installment of our “CEO Monthly Alternative Lending Market Analysis.”

FT Partners served as the sole strategic and financial advisor to:

  • here.

    Source: FT Partners’ CEO Monthly Alternative Lending Market Analysis June 2017

    Looking under the hood of Asset-Level Disclosures: Income Verification is just the beginning (LinkedIn), Rated: AAA

    Bloomberg published an article last week focusing on a recent auto loan securitization by Santander Consumer USA Holdings, where only 8% of loans in the ~$1Bn collateral pool had income verification on the borrower.

    At Aspire Financial Technologies, we’re already believers in the power of loan level data to give Investors better visibility, understanding, and decisioning around huge volumes of consumer loans, having created the Aspire Gateway platform for Alternative and Marketplace Lending participants. In this sector, loan-level data is paramount to understanding and decisioning for Investors, and Banks providing credit facilities. So, when we learned of the new securitization ALD data files being made available this year, and a requirement from Investors to be able to consume this data, we saw an opportunity for our data engineers to clean, vet and normalize the XML (text-based) data files and load them into our infrastructure API, which is well-suited to accommodating loan level data. The result of this, was our release of the ALD Explorer in April. (Free access to the ALD Explorer is available here.)

    Although our numbers differ from Moody’s as to the % of loans where income was verified (13% vs. 8%), we note a similar conclusion: the vast majority of ~90k loans had no income verification, and were given to low credit score borrowers (WAVG score = 559).

    This is borne out through looking at another ALD Explorer report on a prime auto securitization: Ford Credit Auto Owner Trust 2017-A. This deal has less than 2% of the loans with income verification, but had a WAVG credit score of 740 (note that we have excluded in this table Credit Score Types that were either Commercial (9,437 occurrences) and Unknown/None (2,276 occurrences)).

    To Deliver on its Promise, Crowdfunding Needs Better Language (Crowdfund Insider), Rated: A

    In Part 1 of this series on How To Fix Crowdfunding Education, I made the case for beginning all crowdfunding education by teaching the core fundamental that cuts across all forms of crowdfunding: participation.

    To begin, we need to be more careful in our use of the word “crowdfunding.”

    Since the passing of the Title III equity crowdfunding rules in the U.S., many who write and speak about equity crowdfunding have stopped using the “equity” part of the phrase. Among other impacts, I’ve watched conversations on LinkedIn forums about rewards crowdfunding strike terror into the hearts of project creators as someone offhandedly introduces the terms “investor” and the “SEC” into the discussion of their campaigns. “Investor” is a particularly problematic word when it is used interchangeably to describe both the people who back rewards campaigns (often described as “investing in a creator’s ideas”) and investment in equity or debt offerings. Even the word “equity” itself is confusing since many securities are not actually equity, but debt. And “rewards” doesn’t come close to expressing the power of this kind of crowdfunding to galvanize communities around ideas.

    Then there is the issue of jargon.

    So if “online” is what distinguishes equity crowdfunding from an IPO (Initial Public Offering), does that mean online lending and online donation are crowdfunding, too? To add to our alphabet soup, there’s the DPO (Direct Public Offering) U.S. investment crowdfunding that predates the JOBS Act, and the CPO (Community Public Offering) the acronym used to describe intrastate crowdfunding offerings in Oregon. And then, there’s the “crowdfunding IPO” the term being floated about in publications the likes of The Wall Street Journal and Fortune to describe Spotify’s potential Direct Public Offering (DPO).

    We need consistency in our language to build trust. Looking around the industry, there is language already in use that we could adopt and use consistently. For example, a recent Forbes article by Devin Thorpe was titled “Investment Crowdfunding: What Works And What Needs Fixing” rather than “equity crowdfunding.” By using the word “investment” or “crowdinvesting” instead of “equity” we can make a clear distinction that participants in this type of crowdfunding are investors, but that not all of these investments result in an equity stake in a business.

    Goldman Sachs’ new online lending business is changing the bank’s culture (Business Insider), Rated: A

    Omer Ismail, the chief operating officer of Marcus by Goldman Sachs, described the online lending business as “more casual” in an interview on the Lend Academy Podcast.

    Ismail believes that some of that more relaxed, creative culture is beginning to find its way into other parts of Goldman Sachs.

    “I was with the chief technology officer of Goldman and I went down to his office a couple of days ago and I noticed that now he has white walls so it’s actually really cool to see how folks at Marcus are actually influencing other parts of Goldman.”

    Top 9 most active VC investors in fintech (Pitch Book), Rated: A

    Since the beginning of last year, 605 US venture investors have participated in at least one fintech transaction, spreading a total of

    NEW FINTECH LEADERS JOIN THE CONSUMER FINANCIAL DATA RIGHTS GROUP (Yodlee), Rated: B

    The Consumer Financial Data Rights (CFDR), an industry group formed by leading companies in the financial sector to support the consumer’s right to access their financial data, has expanded its membership to now include 27 companies. Recent additions include ActiveHours, Clarity, DataCoup, Draft, LifeLock, Morningstar, NextCapital, Onist, Oportun, Petal, Quovo, SnapCheck, Vested, and WorldRemit.

    Kushner-backed Cadre wants to raise $ 65M at $ 800M valuation (The Real Deal), Rated: B

    The Jared Kushner-backed real estate investment platform Cadre is looking to raise $65 million in venture funding.

    The funds, if raised, would give Cadre a valuation of more than $800 million, the Information reported.

    The Token Fund – Enter the Digital Mutual Fund (The Merkle), Rated: B

    The Token Fund is akin to a traditional market mutual, index, or hedge fund.

    So this is a digital fund management group that is aiming to bring non-crypto savvy traders and investors into the digital market, while also providing a service to the veterans users and traders of crypto.

    Disclaimer: This is a sponsored post and does not necessarily reflect the views of any employees of The Merkle.

    United Kingdom

    Zopa Innovative Finance ISA: how it works, rates and how it compares (Love Money), Rated: AAA

    Zopa, one of the major peer-to-peer lenders in the UK, has announced it will roll out its Innovative Finance ISA (IFISA) from 15 June offering returns of up to 6.1%.

    The new Zopa Core deal will join Zopa Plus, while the Zopa Access (offering returns of up to 2.9%) and Zopa Classic (3.7%) deals will close by 1 December 2017.

    Product Risk Markets Target return Minimum Investment Amount*
    Zopa Core IFISA A*, A, B, C 3.9% £1,000
    Zopa Plus IFISA A*, A, B, C, D, E 6.1% £1,000

    The new Zopa Core product will lend in the same risk markets (A*-C) as Access and Classic did, but, crucially – like Zopa Plus which launched in March 2017 – it will not be covered by the Safeguard fund.

    Zopa says it’s scrapping Safeguard as tax laws have changed, allowing investors to claim tax relief from bad debts, so it’s no longer needed, plus it emphasises retiring Safeguard will provide greater expected returns and make products easier to understand.

    Lending Works is Zopa’s closest rival with an IFISA option. It also allows investors to lend to individuals, but it expects lower returns of 3.3% over three years and 4.4% over five years, after fees and bad debts.

    The Crowd for Angels IFISA for example offers returns of up to 9%. This crowdfunding platform raises cash for companies wanting to expand, diversify or develop their business through crowd bonds and shares.

    Rivals in this space include the Crowd2fund IFISA , which can earn you 8.7%, the Crowdstacker IFISA offering rates between 5-7% and LendingCrowd IFISA offering 6% returns.

    Peer-to-peer platforms in this market include Landlord Invest (offering rates of up to 12%), Relendex (10%) and Landbay (3.75%).

    If you’re happy to take on more risk you could try Abundance, an ethical peer-to-peer platform raises money from investors for green energy projects.

    RateSetter hits highest valuation at £200m after recent funding round (Growth Business), Rated: AAA

    RateSetter raised £13 million from existing shareholders, including Woodford Investment Management and Artemis on Tuesday. Since this round of funding, the London-based peer-to-peer lender announced that its valuation now exceeds £200 million. The investment formed its eighth fundraising round, and took RateSetter’s total amount raised in equity to £41.5 million.

    Seedrs teams up with NatWest to offer alternative funding options (London School of Business & Finance), Rated: AAA

    Through the programme, the crowdfunding platform will be joining a panel of funders to provide alternative finance solutions to business and commercial customers of NatWest and RBS in the UK who are unable to access the financial support they need through traditional funding routes.

    Seedrs is currently the only equity-based finance provider on the panel, which features other finance providers such as iwoca, Assetz Capital, Funding Circle, Royal Bank of Scotland Social & Community Capital and Together.

    LendInvest Capital Announces Montello Real Estate Opportunity Fund Milestone (Crowdfund Insider), Rated: A

    LendInvest Capital, a UK-based specialist real estate lender and fund manager, has announced that its flagship private debt fund, the Montello Real Estate Opportunity Fund, is now managing over £100 million ($128m) on behalf of private and institutional clients.

    The Fund hit its three-year track record in January 2017 and surpassed the £100 million milestone at the end this past April, reported LendInvest, “the culmination of a very active year” during which the Fund more than doubled in size (up 113% from  £47m AUM at 30 April 2016 to c. £100M AUM at 30 April 2017). The Fund also had a record quarter for fundraising between January and March of this year, receiving £30 million of new investment.

    Basset & Gold unveils four-year marketplace lending bond (P2P Finance News), Rated: A

    BASSET & GOLD is launching a new four-year bond backed by marketplace lending deals, with regular reinvestment of the interest stream set to deliver higher yields.

    The new debt offering from the direct lending and alternative finance specialist will return a compounding fixed yield of 30.9 per cent at the end of the term, equivalent to an annual return of 7.72 per cent.

    Honeycomb raises £105m from oversubscribed share placing (P2P Finance News), Rated: A

    HONEYCOMB Investment Trust has raised £105m from an oversubscribed share placing, which it will use to capitalise on new business opportunities.

    The alternative finance-focused investment fund said on Wednesday that it had successfully completed its placing of 10 million shares, issued at £10.50 per share.

    Finimize allows you to create a free financial plan from your mobile (This is Money), Rated: A

    Quick, simple, jargon-free – the Finimize My Life plan seeks to sort your finances out, giving you sensible savings goals, investment options and easy plans to pay off debt.

    As many as two-thirds of those aged 18 to 34 wish they had received more money advice at a younger age, according to research from Santander.

    Do you think financial literacy remains a problem then?

    Max: I do. We’ve done some research with YouGov and the results speak for themselves: 59 per cent of millennials could not confidently explain what an Isa is, 84 per cent couldn’t tell you what the term ‘equity’ means and 90 per cent couldn’t confidently explain what ‘asset management’ is.

    Of the 1,000 people surveyed, 50 per cent were not confident explaining ANY of the financial terms listed in the survey.

    Why do you think managing our personal finances has been hard for millennials? 

    Max: It is unsurprising that financial literacy levels are so low amongst my generation. We were never taught these terms in school and it can be daunting to try and plan your financial life when you feel in the dark about how the industry works.

    Do millennials have money to save and invest? 

    Max: Yes. It comes down to confidence: of the millennials we surveyed, 52 per cent of those with between £10,000 and £24,999 of savings do not feel confident explaining what an Isa is.

    How does it work?

    Max: Once you’ve registered with Finimize you enter a few simple personal details.

    These include your country of residence, age, salary, savings, passive income, spare income, whether you own a house (this is a yes or no question), if you have income protection and whether you have any bad debt such as credit cards or personal loans.

    Once a user has provided the basic inputs, the platform generates a financial plan for someone like you.

    Would you take financial advice from a robot at your bank? (The Telegraph), Rated: A

    HSBC has become the latest of the major banks to announce a low-cost online investment service that will use algorithms to match customers to an investment portfolio.

    The service is aimed at those with less than £15,000 to invest, and the bank promised costs would be “far lower than industry standards”.

    The services typically take customers through a questionnaire online to get a picture of their finances and determine how much risk they are willing to take, before advising which investments to put their money in.

    NatWest launched its Invest service in February to its existing customers. The service offers five funds run by Coutts & Co, each with a different portion in stocks, bonds and cash. It charges investors 0.95pc on the first £500,000 they invest and then 0.7pc on any investments above that amount.

    Barclays users pay 0.2pc on money held in funds and 0.1pc on all other investments, with a minimum fee of £4 a month and maximum of £125 per month. Fund and other investment trading costs £3 and £6 respectively if completed online.

    P2P Lender Wellesley Retrenches After Departure of CFO Alasdair Lenman (Crowdfund Insider), Rated: B

    Wellesley has entered a period of retrenchment as CFO Alasdair Lenman has departed the company after less than a year on the job. The Wellesley Group consists of Wellesley & Co Ltd, Wellesley Finance Plc and Wellesley Group Investors Ltd.

    Stephen Bell, Wellesley’s Chief Risk Officer, updated on the performance of their loans including non-performing assets;

    “The Wellesley loan book continues to evolve and now stands at 65 loans with combined committed facilities of £271 million. During 2016 the drawn balanced increased by 10% to £163.6 million which was made up of new loans and additional drawdowns on existing loans of £118.6 million.”

    China

    China’s Zhong An aims to raise at least $ 1 billion in Hong Kong IPO – sources (Reuters), Rated: AAA

    Zhong An Online Property and Casualty Insurance, China’s first online-only insurer, has resumed a plan to raise $1 billion or more in a Hong Kong initial public offering (IPO) in the second half of this year, said two people with knowledge of the matter.

    Zhong An, whose major shareholders include Tencent Holdings Ltd (0700.HK) and Alibaba Group Holding Ltd (BABA.N) affiliate Ant Financial, plans to apply for listing in the coming weeks, said one of the people, who declined to be identified as the matter is confidential.

    The Shanghai-based insurer chose Credit Suisse, JPMorgan and UBS in October to lead the IPO, but later suspended the plan to explore a mainland listing.

    Research on Financial Inclusion and Poverty Reduction in China (Lend Academy), Rated: AAA

    Case study 1: CFPA MicroFinance

    • As of Dec 2016, CFPA Microfinance currently has branches in 229 counties and 18 provinces throughout China, and 85% of the branches are located in areas designated by the Central or Local Governments as poverty stricken counties.
    • As of Nov 2016, CFPA Microfinance has disbursed loans valued at RMB CNY 18.4 billion ($2.7 billion) to 1.61 million clients, with average loan size of CNY 11,000 ($1,620). 62% of all loans have been deployed for the purpose of raising livestock, breeding fish and farming and etc.
    • Approximately 3 million low-income villagers have received microloans from CFPA Microfinance for improving their livelihood and raising local production.

    Social development:

    • 91% of all CFPA Microfinance clients are women
    • At least 80% of CFPA Microfinance clients would not have been able to borrow from anywhere else, according to a survey by the China Agriculture University and China Academy of Social Sciences
    • 49 out of the 53 CFPA Microfinance operating outlets are in China’s Nationally Designated Poverty Countries, the poorest areas in the country.

    Case study 2: Ant Financial

    When it comes to poverty alleviation, Ant Financial chose CFPA Microfinance to partner with.

    With the two parties cooperation in technology and channels, it is possible that when a farmer needs to borrow money, the lending decision would be made based on big data, rather than the information collected by loan officers.

    Research shows that, by the measure of “digital financial inclusion index” created by Prof. Huang Yiping, the condition of underdeveloped areas in China in 2015 are relatively better off compared with five years ago.

    Case study 3: CreditEase

    CreditEase’s efforts in financial inclusion to reduce poverty can be best illustrated by the example of Yinongdai.

    What Yinongdai does is that it helps to match “charitable lenders” with impoverished credible rural borrowers. To be more specific, “charitable lenders” can choose a farmer’s project and “donate” at least RMB 100 ($14.70), and lenders can get roughly 2% return annually.

    For over the seven years, Yinongdai has collected over 200 million RMB ($29 million) from 150,000 lenders, and helped about 20,000 needy farmers, Tang Ning said in an interview in Apr 2017.

    The shortage of financial services in China’s rural areas amounts to $ 447 billion. (Xing Ping She Email), Rated: A

    According to data from Chinese Academy of Social Sciences, the market space of rural finance in China reached to $447 billion since 2014. With policy supports on rural finance and the maturing and saturation of the urban financial market, there comes up an attractive blue ocean market in rural finance.

    In recent years, many participants have flooded into rural market, including traditional financial institutions, agriculture service providers, as well as e-commerce platform and internet finance companies, but few of them succeed.

    Up to now, the traditional institutions such as rural credit cooperatives are still the main force to serve rural areas, however, it could not meet the capital needs of farmers’ production and livelihood.

    Source

    Blockchain Startup Wyre Acquires Remitsy for China Market Push (CoinDesk), Rated: B

    Blockchain payments startup Wyre has acquired industry startup Remitsy in a cash and equity deal of an undisclosed amount.

    According to CEO Michael Dunworth, it was Remitsy’s close proximity to China’s market that was the chief factor prompting the move. (Remitsy uses a combination of blockchain technology and banking relationships to convert user currencies for China-based users).

    European Union

    Robo-Advisor Ginmon receives asset management license (EXtra Magazin), Rated: A

    The Frankfurt-based Robo-Advisor Ginmon has now received the license from the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) for financial portfolio management pursuant to section 32 of the German Banking Act (KWG). Up to now, the digital asset management had only one permission for financial intermediaries according to §34f of the trade regulations.

    International

    International P2P Lending Volumes May 2017 (P2P-Banking), Rated: AAA

    Milestones reached this month are:

    • Assetz Capital crosses 250 million GBP lent sinch launch
    • Lendinvest reaches 1 billion GBP in origination since launch

    Australia

    Robo-advice for SMSFs: what accountants need to know (In the Black), Rated: A

    Accountants referring clients to robo-advice tools need to be wary of licensing constraints.

    We understand that a number of accountants who have chosen to operate without an AFS licence authorisation have entered into arrangements with digital financial advice providers (or “robo-advisers”) to allow their clients to access digital advice about SMSFs.

    Under these arrangements, accountants refer their clients who need financial product advice (for example, about whether or not to establish an SMSF), to a digital advice tool which can provide that advice.

    While digital advice providers might indicate that their tools can be used in such a way that unlicensed accountants who refer clients to the tools would not be providing financial services, this may not always be the case.

    India

    Flipkart will soon offer customers financial products and services (VC Circle), Rated: A

    Homegrown e-commerce major Flipkart is mulling over providing financial products and services online, a segment that has seen tremendous growth in India in the last few years.

    A dedicated team for financial services and products is already in place and lead product manager for fintech and consumer credit products at Flipkart, Monomita Roy Avasarala, has already initiated talks with online lending startups, the report said.

    Flipkart would offer mutual funds and insurance products besides credit and loans, the publication reported citing undisclosed sources.

    Google Launchpad picks 6 startups from India, shows love for AI (Tech in Asia), Rated: B

    This is the only fintech startup from India to make it to the latest Launchpad batch. IndiaLends – like the name suggests – is a lending product.

    It offers personal loans, free credit reports, home loans, and credit cards to consumers. You can check your loan eligibility using the IndiaLends app, which can also alert you when an EMI is due and help you manage and track all your credit accounts as well as monthly spending. IndiaLends uses artificial intelligence tech for credit rating, loan eligibility, and so on.

    Asia

    e-payments make advances in Malaysia, Singapore, Hong Kong (The Asset), Rated: A

    Bank Negara Malaysia, the central bank, on May 22 announced the merger of Malaysian Electronic Clearing Corporation (MyClear) and Malaysian Electronic Payment System (MEPS) to form Payments Network Malaysia or PayNet.

    On May 5 DBS introduced its Smart Nation Ambassador Programme (SNAP). The programme will see DBS recruiting up to 1,000 ambassadors that will encourage small, cash-based merchants to adopt DBS PayLah! QR codes as a payment method in Singapore.

    Bank of China Hong Kong and WeChat Pay Hong Kong announced a collaboration to promote mobile payments in Hong Kong, on May 19.

    Swift introduced a new cross-border payments tracker that enables international payments to be traced in real-time on May 23.

    Japan looks to double cashless payments in 10 years (Nikkei Asian Review), Rated: A

    Cash-heavy Japan aims to double digital payments to 40% in the next decade by helping metropolitan-area businesses afford cashless services to better attract foreign visitors and open their wallets.

    The goal, set by the Financial Services Agency and the industry ministry, will be part of a plan to promote fintech, the intersection of finance and information technology, in a growth strategy to be compiled in June. The move is also a step toward better accommodating foreign tourists, with an eye toward the 2020 Tokyo Olympics.

    Japan’s current 19% rate of cashless payments is less than half the over-50% level seen in nations including South Korea and China, but the targeted 40% rate would put it roughly on par with the U.S.

    Broken down by industry, around 90% of Japan’s lodging facilities accept card payments, compared with roughly 70% of supermarkets and just half of taxis.

    Authors:

    George Popescu
    Allen Taylor