Much of the conversation surrounding the release of the Reserve Bank of India’s annual report last week focused on the return of demonetized currency to the system – a confirmation, in the eyes of critics, that the policy of demonetization did not work as intended.
Square ended speculation by confirming its banking intentions this week. Chinese mobile wallet provider and payment facilitator Alipay continues its rapid expansion, adding to its stream of expansion and partnership announcements this week. And Mastercard introduced a program for merchants and other businesses looking for help going digital.
Visa and Klarna announced on Tuesday that the card network plans to invest in the Stockholm-based company.
The move comes at a time when Klarna – which has 60 million consumer and 70,000 retailer customers – has said it is looking to expand its product offerings and challenge the financial services status quo on a larger scale.
Stockholm-based Klarna has secured a banking license from the Swedish Financial Supervisory Authority.
With this license, the company can operate as a bank across the European Union. And according to Klarna, securing the license makes it one of Europe’s largest banks right out of the gate, with 60 million customers.
The company sees itself as a formidable competitor to Europe’s banks.
Businesses that have embraced the payment facilitator model often do so because they recognize the need to simplify the complex business of payments for their merchant clients.
They understand how important it has become to integrate payments into a merchant’s offerings in a flexible way that helps them serve their customers. A natural extension of that is the omnichannel approach – enabling the merchant to seamlessly connect with customers through both digital and in-person touchpoints.
In many respects, India’s 9-year-old Aadhaar national ID system is a global model for simplifying payments, banking and payroll operations. It was designed to be a comprehensive database allowing easy access to bank accounts and other payments mechanisms. As a concept, it worked brilliantly.
But according to data from a report from the Centre For Internet and Society, it also serves as a world-class example of security recklessness, with methods so sloppy that they could have exposed sensitive data about almost a quarter of a billion Indian citizens.
A recent study by the UN-based Better Than Cash Alliance supports what payment facilitators have long known – that enabling access to electronic payments is increasing financial inclusion and creating opportunity.
The report, titled “Social Networks, e-Commerce Platforms and the Growth of Digital Payment Ecosystems in China — What It Means for Other Countries,” looks at the growth and the economic impact in China of leading payment facilitator Alipay and WeChat Pay.
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