WeChat and Alipay support Visa and Mastercard, U.K. stalls on BNPL regs

July 26, 2023 1:22 PM

Travelers in China can now add Visa and Mastercard to WeChat Pay and Alipay, providing a boost for the country's tourism industry as it tries to recover from the pandemic. Additionally, British regulators may delay plans to tighten the rules for by now/pay later lenders, partly based on concerns that some of the largest lenders may depart the market.

Here's what's happening around the world.

WeChat, Alipay add support for Visa, Mastercard

Travelers in China can now add Visa and Mastercard to WeChat Pay and Alipay, providing a boost for the country's tourism industry as it tries to recover from the pandemic. WeChat Pay will support Visa and Mastercard transactions of up to about $800, while Alipay will accept Visa, Mastercard, JCB, Diners Club and Discover. Both WeChat and Alipay will charge a 3% fee for most transactions. WeChat Pay had previously allowed only locally-issued cards, while Alipay accepted international cards with a 5% fee. U.S.-based payment companies have historically had trouble penetrating the Chinese market, largely due to shifting regulations. WeChat and Alipay's moves do not allow the U.S. firms to directly enroll consumers in China, and are designed for consumers who already use the U.S. cards in their home countries.

Lloyds plans more branch closures

Lloyds Banking Group is adding 44 branches to its previously-announced closure list, which will total 155 for 2023. The holding company will shut 86 Lloyds branches, 53 Halifax branches and 16 Bank of Scotland locations. Lloyds Banking Group delayed the closure of another 16 branches until 2024. The bank attributed the closures to the increase of digital banking, saying it has more than 20 million regular users of its online channels. Among other U.K. banks, Barclays plans to shut 156 branches in 2023, Natwest will close 143 and HSBC will close 114, according to Finextra. The Financial Conduct Authority plans to update regulations to make it harder to close bank branches.

Westpac updates organizational structure to manage tech projects

Following a reorganization that expanded some technology products while closing other lines of business, Westpac has established several units to oversee the company. For example, the Sydney-based bank formed a standalone group to oversee technology development. It also moved the bank's operations department — which previously had responsibility for technology oversight — to corporate services, which oversees business operations. Westpac additionally eliminated its business services and separated consumer and business banking operations into two distinct departments. Westpac has aggressively pursued advanced artificial intelligence over the past year as it ramps up its technology strategy. The bank recently began testing an AI language program similar to chatGPT. And in 2022 Westpac developed a centralized system to manage the bank's growing number of virtual assistants.

Revolut extends joint accounts to the U.K.

London-based fintech Revolut has launched a joint account in the U.K. The feature enables consumers to add an extra person, such as a partner, family member or friend, to an existing account. Revolut has signed up 100,000 joint account users in the European Economic area since the product's launch in April. Adding joint accounts brings Revolut's product menu more in line with traditional banks as the fintech works on its financial super app strategy, becoming a provider of multiple financial services beyond digital transfers. "The joint accounts are designed to help consumers sort out money matters with whomever we share our financial life, blending the best of existing social and banking features," said Antonella Benhamou, head of banking and user experience product owner at Revolut, in a release.

Visa partners with London fintech to expand installment payments

Visa is collaborating with installment lending firm Tymit to support installment for financial institutions and merchants in the U.K. and Europe. The installment plans can be offered as a co-branded product or on a white-label basis. Tymit has traditionally worked with retail clients and is expanding to financial institutions and B2B installment lending. Tymit and Visa's partnership also includes a traditional co-branded credit card option, and is designed to enable financial institutions to compete with BNPL fintechs in the U.K. and EU.

BNPL regulatory push stalls in U.K.

British regulators may delay plans to tighten the rules for by now/pay later lenders, partly based on concerns that some of the largest lenders may depart the market. The Financial Conduct Authority in February asked BNPL lenders to clarify how they protect consumers, a move that led some BNPL fintechs to refund late fees. The FCA's February move was a precursor of potentially tougher regulations that would govern BNPL similar to credit card lending. The U.K.'s treasury is now concerned that BNPL lending may not be available if the government regulator takes too tough a stance, according to Sky News, adding that the government is also concerned that any new rules could make the U.K.'s cost of living challenges worse. Regulators may still update existing consumer regulations to address BNPL lending, Sky reported.

U.K. banks fail to comply with payment disclosure rules

The Competition and Markets Authority has cited HSBC, TSB and Nationwide Building Society for failing to disclose payment histories to consumers. The U.K. government requires retail banks to provide transaction histories to consumers when they close accounts, partly to help those consumers demonstrate credit for applications at a new bank. Failing to provide this information could make loans, credit cards and mortgages more difficult to obtain or more expensive. The CMA says Nationwide did not send this disclosure to more than 51,000 customers over the past five years, TSB did not send histories for 105,000 consumers over the past year and HSBC did not send transaction information to 12,000 consumers over the past year. In separate statements, the banks told Yahoo they planned to improve their procedures to prevent these violations in the future. The CMA does not have power to impose financial penalties.

Spanish banks collaborate to fight fraud

Banco Santander, BBVA and CaixaBank have formed FrauDfense, a joint venture that will combine security risk strategies and data sharing to mitigate financial crime. The banks will initially partner on a way to share information on attacks and transaction fraud and strategies to spot and prevent incidents as fraud risks from faster payment settlement and other fraud risks increase. The banks have shared their plans with Spain's bank regulators, and have invited other financial institutions and firms from other industries to join.