Receiving Wide Coverage ...
Walmart Enters Mobile Payments: The retail giant will begin the rollout of its own mobile payments services, placing it squarely in competition with the likes of Apple and Samsung. The system, called Walmart Pay, will be integrated into Walmart's mobile app. To make a payment, consumers will open the app and use a camera feature to scan a QR code at the register, which will connect payment cards on file to complete the transaction, the Wall Street Journal reports. By using QR code technology, Walmart has eschewed NFC technology that's needed for Apple Pay, Samsung Pay and other payment systems, which the store still will not accept. The rollout of Walmart Pay will begin near the company's home market in Bentonville, Ark., this month, before rollout to its 4,600 other stores nationwide starting early next year, according to the New York Times. As the Times notes, the service will not debut without some controversy. The mobile app is being perceived as a blow to the Merchant Customer Exchange (MCX). This consortium of retailers, of which Walmart was a major member, had promised to develop a payment system to compete with credit cards and reduce fees retailers pay to card companies. MCX's payment app, CurrentC, still languishes in testing, without any plans for a wide release. And the use of QR code technology – which itself is relatively secure – is intriguing, despite concern that payment information will be stored on Walmart's servers, particularly given the spate of hackings of major retailers in recent years.
Wall Street Journal
Terrorist attacks in Paris and San Bernardino, Calif., scuttled plans by the Federal Reserve to restart shipments of U.S. dollars to the United Arab Emirates. Shipments, which typically involved hundreds of millions of U.S. dollars, were halted three years ago over concerns the money was making its way to Iranian banks in violation of international sanctions. But for a year now, Fed officials were talking with the U.A.E, the Gulf region's banking hub, about resuming the shipments. The Fed wants more information on how the dollars are used and distributed by the U.A.E.'s central bank. Discussions were slow, but now, with terrorism concerns at a recent high, questions about the financing of Islamic terrorist groups have re-emerged, threatening the chance of a deal.
The company that operates the U.S. repo market's only clearinghouse is calling on banks and other trading firms to pitch in on a multibillion-dollar credit line to help reinforce its finances. The Depository Trust & Clearing Corp. (DTCC) is under pressure from regulators at the Federal Reserve and the Securities and Exchange Commission to shore up the resources for its repo lending division, Fixed Income Clearing Corp. The regulators believe the unit's resources wouldn't cover a large default, which could consequently cause problems for the repo lending market. The plan's cost remains confidential, but DTCC says it would reduce banks' risks and reduce their capital charges. But smaller trading firms are upset with the cost and have threatened to leave the clearinghouse, which could concentrate risks.
Financial Times
In a major win for the banking lobby, banks will be able to count on ratings agencies when calculating risk. The plan to prevent this, which was floated by the Basel Committee on Banking Supervision, would have resulted in major capital increases for many banks worldwide. Banks and ratings agencies also said the plan would lead to more crude measurements of credit riskiness. Of course, American banks already face heavy restrictions in what they can rely on ratings agencies for as part of Dodd Frank. Consequently, it may become harder to compare risk between the U.S. banking industry with the rest of the world.
While lots of banks are looking at blockchain technology, it remains only a hot topic of conversation. The technology that underpins bitcoin has been floated as a way for banks to save billions of dollars by automating payment systems. Despite the opportunities it presents – and the fact that the likes of Goldman Sachs, Citigroup, Barclays, UBS and Deutsche are all playing around with it – few working models exist. One analyst compared blockchain technology to gluten, saying that everyone talks about it without knowing what it is in detail. Why the dragging of the heels? One analyst said it could be because banks don't think it will revolutionize business – much like how they reacted to "big data" in the past.
New York Times
When it comes to being a member of the board, you might not want to work for a bank. A study from executive compensation firm Equilar ranked director pay for financial services as the second lowest among all sectors, above only utilities companies. Median pay for directors in financial services is $205,000 – much lower than the median pay of $275,000 for directors in the oil, mining and energy sectors. Financial services directors also get less stock than their counterparts in other industries: On average among the S&P 500, 36% have some stock and 59.4% have restricted stock units, while in financial services only 48% of companies offered stock. Still pay is on the rise overall, the study found, despite harsher regulations aimed at trimming budgets for director compensation.
