Receiving Wide Coverage ... Struck out: The U.S. remains “an elusive market” for Alibaba founder Jack Ma, whose bid to combine the Chinese company’s Ant Financial payments unit with Dallas-based MoneyGram International was vetoed Tuesday by government regulators. The rejection was “the latest in a string of setbacks for the Chinese billionaire, whose companies have long sought to establish beachheads in America,” the Wall Street Journal says. The $1.2 billion deal for MoneyGram “would have given Alipay an instant foothold in America and the ability to market its services to MoneyGram’s customers, who have roughly 2.4 billion banking or mobile accounts in 200 countries.”
Ant may have struck out in its attempt to buy into the American payments market, but China remains far ahead of the U.S. in mobile payments. Mobile payments in the U.S. totaled just $112 billion in 2016, according to Forrester Research, compared to $9 trillion in China, according to iResearch Consulting Group, a Chinese firm.
The Chinese market is dominated by Ant parent Alibaba Group and Tencent Holdings, which are in it “not just for the transaction fees they make from merchants, typically 0.6%,” the Journal reports. “It’s also the consumer data collected, which can transform their apps into marketing platforms for an expanding array of services, from bike sharing to travel.”
Wall Street Journal In this corner: The mortgage industry is split about which consumer credit scores to use. Commercial banks want to stick with the current system, which uses FICO scores, while nonbank lenders, which often account for more than half of industry loan volume, want to use scores provided by VantageScore, which they say would open the mortgage market to more consumers. The matter will be decided by the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, the government agencies that buy the vast majority of mortgage loans and currently require lenders to approve borrowers using FICO scores.
No bitcoin for you!: Bank of America’s Merrill Lynch said it will prohibit clients and financial advisers who trade on their behalf from buying bitcoin.
Financial Times Taking a hit: American Express joined the ranks of companies saying they would take an immediate earnings hit as a result of the recently passed tax legislation. The firm said the charge will reduce its fourth-quarter earnings by $2.4 billion, pushing it into the red. It also said the tax law would reduce its capital ratios for the fourth quarter.
Washington Post Seeing double: Some customers of Capital One said they were charged multiple times for the same debit card transactions on Wednesday. It wasn’t immediately clear how the errors occurred or how many people were affected, but the bank said customers will be credited for the inaccurate postings and no one would be charged any fees as a result. “We’re working to resolve [the matter] as quickly as possible and apologize for this inconvenience,” spokesperson Amanda Landers said.
Quotable “I strongly believe that a large number of customers are being excluded because of the slavish reliance on FICO.” — Sanjiv Das, CEO of Caliber Home Loans Inc., who says VantageScore could open up homeownership to more customers.
The New York-based bank says it will push its concentration of commercial real estate loans below 400% of risk-based capital over the next two years and focus more on C&I.
The San Francisco-based firm's Anchorage Digital Trusted Liquidity and Settlement network, better known as Atlas, will allow clients to settle a range of cryptocurrency transactions.
Consumer spending slowed and charge-offs rose during the first quarter, but Bread Financial said a pending late-fee rule may not be as devastating to its revenue as the Columbus, Ohio-based firm initially feared.
The FDIC board debated and ultimately withdrew two separate proposals to address asset managers' control over banks, but acting Comptroller of the Currency Michael Hsu said he couldn't support either and called for more research and debate about how asset managers' control over banks impacts safety and soundness.
The state's comptroller of public accounts is one of several notable non-depositories with access to the Fed's payments system, along with the Chicago Mercantile Exchange and the Tennessee Valley Authority. So why do they have accounts while some neobanks don't?