BNPL debt accumulates in the U.K., Ripple expands cross-border tech

Twenty-seven percent of U.K. residents have used buy now/pay later lending in the six months between July and December 2022, according to the Financial Conduct Authority, which released this data on Tuesday. That is up from the 17% of U.K. residents who used BNPL in the 12 months before July 2022. The FCA also reports that people who have used BNPL more than ten times in the past 12 months — dating to November 2022 — also have at least one other high-cost credit product. And 51% of consumers who have used BNPL more than 10 times in the past year have added to their overall debt, versus 27% of consumers who have used BNPL fewer than 10 times. The FCA does not have regulatory oversight over BNPL lending, but it has issued guidance for firms to clarify lending terms over the past year. The regulator also said it has used its power under consumer protection laws to secure changes from lenders. "Our research shows a significant increase in the use of BNPL over the past year," said Sheldon Mills, executive director of consumers and competition at the FCA, in a release. "When used appropriately the product provides valuable benefits, but we want to ensure that consumers, particularly those in vulnerable circumstances, have adequate protections and are given sufficient information." —John Adams

Ripple has entered into a collaboration with Uphold, a global Web3 company that features a trading platform that handles transfers between cryptocurrency and traditional currency. Ripple hopes the partnership will make it easier for its partners to improve crypto liquidity to support international payments. Ripple has used its blockchain technology for years to enable parties to pay across borders while reducing reliance on intermediaries such as correspondent banks. More recently, Ripple has worked on a cross-border network for digital assets, including cryptocurrencies, stablecoins and central bank digital currencies. Ripple is also part of a number of stablecoin and CBDC projects, and earlier this fall received a payments license in Singapore to expand its presence in Asia Pacific. —John Adams

Deutsche Bank and Standard Chartered have piloted digital currency transfers on the Universal Digital Payments Network, a messaging system designed to enable stablecoins and central bank digital currencies to operate outside of their countries of origin. The process is meant to serve as an alternative to Swift, which is also working on a messaging product to make CBDCs and stablecoins interoperable. Deutsche Bank used an application programming interface and transferred funds to digital currency accounts at Standard Chartered's venture capital unit. While dozens of CBDC projects are in various stages of development globally, one challenge is ensuring that cross-border transactions can be securely executed. There are several initiatives underway to address this problem, including a test involving the New York Fed and the Monetary Authority of Singapore. —John Adams