Key developments of interest over the last month include:

  • United Kingdom: FCA extends the deadline for implementing strong customer authentication (SCA) for e-commerce to 14 September 2021. UK Finance, as coordinator of SCA for the industry, will discuss the revised phased implementation plan and critical path with all stakeholders and agree it with the FCA as soon as possible.
  • China: It has been reported that the People's Bank of China has started to test the digital yuan.
  • Europe: European Commission publishes Action Plan to strengthen AML/CTF policy over the next 12 months, including plans to set up a pan-European supervising body.

Regulatory Developments

United Kingdom: FCA delays implementation of strong customer authentication (SCA) for e-commerce amid COVID-19 pandemic

On 30 April 2020 the FCA announced that, in light of COVID-19, it is giving the industry an additional six months to implement SCA for e-commerce under the Payment Services Regulations 2017. The new deadline for implementation is 14 September 2021 (previously 14 March 2021). Firms are required to take all necessary steps to comply with the revised detailed phased implementation plan and critical path to avoid the risk of FCA enforcement action.

The FCA expects UK Finance, as coordinator of SCA for the industry, to discuss the revised phased implementation plan and critical path with all stakeholders and agree it with the FCA as soon as possible. In the meantime, firms should continue with the necessary preparatory activities such as robust end-to-end testing.

The extension of the deadline was announced amidst pressure on the European Commission and the EBA to postpone the implementation of SCA across the EU beyond the current deadline of 31 December 2020.

On 6 May 2020 the European Consumer Organisation (also known as BEUC) published a statement which conveys its concern about growing online fraud and encourages against the EBA postponing the deadline.

China: The People's Bank of China tests digital currency

On 23 April 2020 it was reported that the People's Bank of China has started to test the digital yuan. Trials are taking place across four cities (Shenzhen, Suzhou, Xiong'an New District and Chengdu) with some banks and large corporates, such as Starbucks and McDonald's, set to take part. Participants will be testing a mobile app which stores and transfers the digital currency.

The central bank indicates that the currency may be ready for official launch by the 2022 Winter Olympics which will be held in Beijing.

Europe: European Commission publishes Action Plan to strengthen AML/CTF policy

On 7 May 2020 the European Commission published an Action Plan setting out its objectives over the next 12 months to harmonise and strengthen the EU's AML/CTF rules and supervision.

The Action Plan is built on the following six pillars:

  1. Closely monitor the implementation of EU rules by Member States.
  2. Propose a more harmonised set of rules in Q1 2021 as the current rules are being interpreted in various different ways.
  3. Propose to set up an EU-level supervisor to monitor the application of EU rules in Q1 2021.
  4. Propose an EU mechanism in Q1 2021 to help coordinate the different Financial Intelligence Units based in Member States.
  5. Issue guidance on the role of public-private cooperation to enhance information sharing.
  6. Publish a revised methodology for identifying high-risk countries, so as to align with the Financial Action Task Force's list of countries.

This Action Plan is subject to public consultation so authorities and stakeholders can provide feedback until 29 July 2020.

Europe: Advocate General (AG) opinion on PSD2 suggests unilateral variation of T&Cs should be limited to 'non-essential changes'

On 30 April 2020 the Court of Justice of the EU (CJEU) published the opinion of AG Campos Sánchez-Bordona in the case of DenizBank AG v Verein für Konsumenteninformation (VKI) (Case C-287/19).

The Austrian courts asked whether the contactless functionality on NFC-enabled payment cards is a separate payment instrument, and if so whether a contactless low-value payment is to be considered as anonymous use of the payment instrument within the meaning of the derogation in Article 63(1)(b) of PSD2. They also queried whether the scope for making tacit changes to the terms of framework contracts under Articles 52(6)(a) and 54(1) is unrestricted.

The AG concluded that contactless functionality on a payment card is a separate payment instrument in its own right (rather than a means of consenting to use of the card). He argued that multifunctional bank cards such as that issued by DenizBank have a 'twofold nature or functionality', meaning that they are both:

  • personalised payment instruments, if SCA is required; but also
  • anonymous payment instruments taking the form of a 'non-personalised set of procedures' agreed between the payment service provider and the user where the contactless functionality is used without SCA for low-value payments.

According to the AG, this finding in relation to the contactless functionality is consistent with a purposive interpretation of the PSD2 definition of 'payment instrument', reflecting the Directive's objectives of enhanced consumer protection and competition. Rejecting the Czech government's submission that the payment instrument is the personalised multifunctional payment card itself and the contactless functionality merely one of the ways to use the card, he argued that while the 'physical medium' of the card is identical, that medium 'features two different payment instruments'. The AG supported this view by referring to the principle of technological neutrality which underpins much of PSD2.

The AG thought that tacit (or passive) acceptance of changes to T&Cs could only be available for 'non-essential changes'. He argued that, in accordance with the objectives of PSD2 (in particular, consumer protection) and as suggested by the fact that the relevant provision on tacit agreement sits among the Directive's provisions on pre-contractual information requirements, the possibility of providing for tacit acceptance of changes should be interpreted restrictively to reflect its status as an exception to the general rule requiring express acceptance.

Given that - in his view – the addition of contactless functionality to a payment card adds a new payment instrument to that card, the AG argued that this should either be treated as a new service with a new contract or as an 'essential change to the conditions of the previous framework contract'. In either case, the unequivocal 'explicit consent' of the consumer would in his view be required, meaning that inactivity or continued use of the card would be unlikely to suffice.

The CJEU's judgment is awaited. For further analysis of this opinion, see here.

Global: Financial Action Task Force (FATF) publishes paper on new AML and CTF threats arising from COVID-19

On 4 May 2020 the FATF published a paper identifying the challenges, good practice and policy response to AML and CTF threats arising from the COVID-19 pandemic.

The FATF notes that the efforts of governments and the private sector may be focused on responding to the COVID-19 crisis, to the detriment of compliance with AML/CTF obligations and related supervision. This may give criminals the chance to:

  • Bypass customer due diligence.
  • Move and conceal criminal proceeds through online financial services and virtual assets.
  • Conceal and launder criminal proceeds by exploiting economic relief and insolvency measures.
  • Move into cash-intensive lines of business in the wake of economic downturn.

The report provides examples of policy responses that can manage these risks, including:

  • Operational co-ordination and establishing taskforces to tackle financial crime related to COVID-19.
  • Cross-border cooperation to facilitate international responses to financial crime.
  • Strengthening communication with the private sector.
  • Encouraging a fully risk-based approach to customer due diligence.
  • Clarifying AML/CTF requirements in respect of economic relief measures.

United Kingdom: Lending Standards Board (LSB) publishes summary report on approach to reimbursement of customers under the Contingent Reimbursement Model Code for authorised push payment (APP) scams (the CRM Code)

On 30 April 2020 the LSB published a summary report on its review of firms' approach to the reimbursement of customers under provision R2(1) (c) of the CRM Code.

The review included all firms signed up to the CRM Code at the point of its launch in May 2019. The summary report sets out the LSB's findings and recommendations, including:

  • How those firms have interpreted and applied the requirements of the CRM Code for reimbursing customers.
  • The CRM Code's effectiveness in delivering fair outcomes for consumers.
  • How consistent the approach across signatory firms has been, having regard to the circumstances of the individual and the scam.

The report notes that positive steps have been taken by all firms to implement the CRM Code. It also recognises examples of good practice where the CRM Code has been applied correctly. However, the LSB also identifies the need for greater consistency across certain areas, including the reimbursement processes, identification of vulnerability, effective warnings, and record keeping. The LSB has issued all the firms reviewed with individual reports and hosted a roundtable to share the review's findings. The LSB will monitor firms' progress before conducting a follow up review later this year. The LSB will also conduct a full review of the CRM Code itself during 2020.

United Kingdom: Regulators publish first Regulatory Initiatives Grid

On 7 May 2020 the Financial Services Regulatory Initiatives Forum published a new Regulatory Initiatives Grid, which sets out the regulatory initiatives taking place over the next 12 months. This is currently a one-year pilot exercise.

The Forum consists of representatives from the Bank of England, FCA, PRA, Payment Systems Regulator and the Competition and Markets Authority, with HM Treasury as an observer member. The Forum plans to publish the Grid at least twice a year to help the industry and other stakeholders to better plan for the operational impact of upcoming initiatives.

The Grid contains a section on "Payment services and systems and market infrastructure" which flags the following developments:

  • 14 September 2021 – Deadline for implementing SCA for e-commerce (see the separate item on this change to the original deadline of 14 March 2021, above).
  • 31 March 2020 – Deadline for implementing Confirmation of Payee (although enforcement will be delayed until 30 June 2020).
  • June 2020 – Interim report on the supply of card-acquiring services to be published.
  • Q1 2021 – Policy statement for New Payments Architecture to be published.
  • Q2 2020 – Joint Authorities Cash Strategy Initiative.
  • Q3 2020 – Call for evidence for HM Treasury's Payments Landscape Review.

The scope of the Grid may be extended to 24 months if the pilot is successful. The Forum welcomes feedback at [email protected].

United Arab Emirates: Dubai Financial Services Authority (DFSA) invites applications for regulatory sandbox

On 22 April 2020 the DFSA invited applications, from both local and international entities, to join its 2020 summer cohort. Successful cohort applicants can then apply for the DFSA's regulatory sandbox, referred to as the Innovation Testing Licence (ITL).

The ITL was established in 2015 and since then the DFSA has accepted 25 companies into the cohort process, ranging from tokenised crowdfunding to the use of AI in credit analysis. The ITL enables companies to test innovative solutions in the Dubai International Financial Centre by relaxing regulatory requirements.

Applications must be submitted by 31 May 2020. Applicants should explain their business model and proposed innovative product or service. Successful applicants will be announced on 16 June 2020, and subsequent ITL applications will need to be submitted by 26 July 2020.

Further details of the ITL and cohort applications will be published on the FinTech section of the DFSA's website.

Global: Saudi G20 Presidency launches the G20 Tech Sprint Initiative with the Bank for International Settlements (BIS) Innovation Hub

On 29 April 2020 the Saudi G20 Presidency and the BIS Innovation Hub announced the launch of the G20 TechSprint Initiative. The hackathon-style competition aims to spur the development of innovative technological solutions addressing the challenges of regulatory reporting, monitoring and supervision. These challenges are identified and set out on the G20 TechSprint Initiative's webpage.

Proposals and expressions of interest must be submitted by 20 May 2020. From these, solutions will be shortlisted and developed to be presented in July 2020. Ultimate winners will be chosen by an independent expert panel commissioned by the Saudi G20 Presidency, and receive US $50,000 per problem solved.

United Kingdom: FCA accelerating plans for a digital sandbox in light of COVID-19

On 4 May 2020 the FCA announced that it is accelerating plans to create a digital sandbox, in light of the challenges arising from COVID-19. The FCA envisages that the sandbox will:

  • Provide access to high-quality data, including synthetic and anonymised data, on which technology solutions can be tested.
  • Help the FCA identify areas of regulation which would particularly benefit from innovation.
  • Serve as a platform for collaboration and knowledge-sharing to solve industry-wide challenges.
  • Allow regulators and other interested stakeholders to observe testing at a technical level and contribute to policy thinking.
  • Increase interoperability as FinTech, RegTech and other companies can set out their solutions and APIs.
  • Provide regulatory support to solution developers, e.g. by creating testing plans, or helping developers understand the regulatory environment.

The FCA will provide an update on its plans to develop the pilot in due course. In the meantime, they welcome expressions of interest, which can be emailed to [email protected].

Europe: ECB publishes bulletin on global stablecoins

On 5 May 2020 the ECB published a bulletin providing a regulatory and financial stability perspective on global stablecoins.

The bulletin notes that regulators will need to analyse and understand the complex ecosystems, features and functions of stablecoin arrangements in order to regulate them. For example, depending on a stablecoin's features, it could be subject to existing regulations relating to e-money, banks, or investment funds. Alternatively, it may not be subject to any currently existing regulation at all.

The bulletin points out the risks to the stability of financial systems if a stablecoin is used globally without users appreciating the risks involved with what is essentially "investment in financial assets with payment and transfer functions attached".

To reduce these risks, the ECB encourages the design of stablecoins in a way that complies with existing regulations. In the alternative, a new regulatory framework should be put in place to address risks.

Global: Libra makes substantial changes to White Paper

On 16 April 2020 the Libra Association published a new version of its White Paper. There have been some substantial changes since the original version, which was published in June 2019. Changes to note are:

  • Libra will launch single currency stablecoins instead of a single digital currency to be used globally. These single currency stablecoins will be backed by the corresponding fiat currency.
  • Libra has put aside its vision for a permissionless system so that the Libra network is safe against unknown participants.
  • Libra aims to strengthen the design of the Libra Reserve, for example by maintaining a capital buffer.
  • Libra will work to enhance the safety of the Libra payment system and ensure regulatory compliance following feedback from regulators. For example, unhosted wallets will be subject to balance and transaction limits.

The changes are aimed at removing some of the initial concerns held by regulators when Libra's original plan was published.

United Kingdom: PSR sets out regulatory approach during COVID-19 pandemic

On 1 May 2020 the Payment Systems Regulator (PSR) updated its COVID-19 webpage to set out its regulatory approach during the pandemic. It states that it will not hesitate to take any steps necessary to ensure payment systems continue to work for everyone and markets continue to function well.

The PSR recognises that this is a challenging time for businesses of all sizes. It is closely monitoring the situation, in particular, the impact that COVID-19 may have on its work now and in the future and, importantly, how its response to those impacts will affect the UK's payment systems.

The PSR is working closely with the government, the Bank of England, the FCA, the Competition and Markets Authority and other stakeholders to make sure work is coordinated and aligned so that industry has clear direction.

The PSR knows that, during this time, many organisations will need to review their current arrangements to address the evolving situation while managing the risks to their employees, customers and the impact on the market. It expects them to be taking reasonable steps to ensure they are prepared to meet the challenges that COVID-19 could pose to customers and staff. Regulated parties should report to the PSR immediately if they believe they will be in difficulty or if circumstances could lead to them being unable to offer the full range of their services.

United Kingdom: FCA expectations on financial crime systems and controls in light of COVID-19

On 6 May 2020 the FCA published information on its expectations relating to firms' financial crime systems and controls in light of COVID-19, including in relation to operational challenges and client identity verification.

The FCA stresses that, in the current climate, it is important for firms to maintain effective systems and controls to prevent money laundering and terrorist financing. It reminds firms that individuals performing required functions (including the Money Laundering Reporting Officer (SMF17)) should only be furloughed as a last resort.

The FCA notes that criminals are already taking advantage of COVID-19 to carry out fraud and exploitation scams through a variety of methods, including cyber-enabled fraud. Those seeking to launder criminal proceeds or finance terrorism are also likely to exploit any weaknesses in firms' systems and controls. As a result, it is important that firms remain vigilant to new types of fraud and amend their control environment where necessary to respond to new threats. This should include the timely submission of suspicious activity reports (SARs).

FinTech: TheCityUK report on enhancing UK approach

On 7 May 2020 TheCityUK published a report on enhancing the UK's approach to innovation in financial services.

The authors note that the UK is seeing the emergence of an increasingly sophisticated FinTech ecosystem as start-ups, technology firms and established operators step up their collaboration efforts. The UK's supportive regulatory landscape is a cornerstone of its FinTech success, and initiatives pioneered by the FCA in particular have been emulated by regulators worldwide. These have enabled the UK to build its reputation as a world leading FinTech hub, attracting and nurturing the companies that are setting the standard for the future of financial services.

However, the authors suggest that more support is needed to help firms take the next step into international markets, both at the regulatory level, as well as the wider challenge of understanding market context, culture and legal frameworks. The report focuses on four key elements which are essential to supporting the next stage of UK FinTech growth:

  • Clarifying regulatory support and engagement.
  • Building on success by delivering new initiatives.
  • Integrating innovation across the supervisory framework.
  • Strengthening support of FinTech expansion into overseas markets.

Europe: European Parliament briefing on key developments, regulatory concerns and responses relating to crypto-assets

In May 2020 the European Parliament published a briefing note on cryptoassets, setting out key developments, regulatory concerns and responses. It focuses on tokens, stablecoins and the possibility of central bank digital currencies (CBDCs).

Europe: European Systemic Risk Board (ESRB) publishes occasional paper on the making of a cyber crash

On 4 May 2020 the ESRB published an occasional paper on "The making of a cyber crash: a conceptual model for systemic risk in the financial sector". It examines cyber security vulnerabilities within the financial sector and their potential impact on financial stability and the real economy.

Europe: European Commission staff working document on new methodology for identifying high-risk third countries under MLD4

On 7 May 2020 the European Commission published a staff working document setting out a new methodology for identifying high-risk third countries with strategic AML and CTF deficiencies under Article 9(2) of the Fourth Money Laundering Directive (MLD4). The aim of the new methodology is to provide more clarity and transparency in the Commission's process for identifying third countries.

The new methodology supersedes and replaces the methodology set out in the Commission's June 2018 staff working document.

The Commission has adopted its first Delegated Regulation using the new methodology (see the separate item on this below).

Europe: European Commission adopts Delegated Regulation amending list of high-risk third countries under MLD4

On 7 May 2020 the European Commission adopted a Delegated Regulation that amends the list of high-risk third countries with strategic AML and CTF deficiencies produced under Article 9(2) of the Fourth Money Laundering Directive (MLD4).

The Delegated Regulation will amend the Annex to Delegated Regulation (EU) 2016/1675 by:

  • Adding third countries that have been identified as having strategic AML and CTF deficiencies: the Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Mongolia, Myanmar/Burma, Nicaragua, Panama and Zimbabwe.
  • Removing third countries that no longer present strategic AML and CTF deficiencies: Bosnia-Herzegovina, Ethiopia, Guyana, Lao People’s Democratic Republic, Sri Lanka and Tunisia.

The Delegated Regulation will be submitted to the Council of the EU and the Parliament to consider for approval within one month (with a possible one-month extension). If neither objects, it will be published in the Official Journal of the EU (OJ). It will enter into force 20 days after its publication in the OJ. The Delegated Regulation states that Article 2 (that is, the Article adding third countries to the list) shall apply from 1 October 2020. The Commission has provided a later application date for this Article because of COVID-19. It believes the later date should give sufficient time for effective implementation. The Commission envisages no major implementation issues for the delisting changes, so considers it reasonable to require delisting without undue delay. This update is necessary since the EU list has not reflected the latest FATF lists adopted since October 2018.

Global: FATF extends mutual evaluations and follow-up deadlines in response to COVID-19

On 28 April 2020 the Financial Action Task Force (FATF) announced that it has extended its mutual evaluation assessments and follow-up deadlines in response to COVID-19.

The FATF Plenary acknowledges the severe challenges that countries face at this time. As a consequence, it has agreed to temporarily postpone all remaining FATF mutual evaluations and follow-up deadlines. A new mutual evaluation schedule has been published.

The FATF has also decided to pause the review process for the list of high-risk jurisdictions subject to a call for action and jurisdictions subject to increased monitoring. Jurisdictions are being given an additional four months for deadlines. As a result, the FATF will not be reviewing them in June 2020. Mongolia and Iceland, however, have asked the FATF not to extend their deadlines, and continue on their current schedule. In the light of this request, and the limited number of their remaining action plan items, their follow-up deadlines have not been postponed and the FATF will issue updated statements on them in June.

The FATF is closely monitoring the situation as it evolves and will review the deadlines where necessary.

United Kingdom: FCA extends latest reporting deadline under Payment Accounts Regulations in light of COVID-19

On 7 May 2020 the FCA updated its webpage on the Payment Accounts Directive (PAD) to include information on reporting under the Payment Accounts Regulations 2015 (PARs).

Under the PARs, the FCA is required to gather data on basic bank accounts and switching from payment service providers offering payment accounts within the scope of the PARs. Submissions covering the reporting period 1 March 2018 to 29 February 2020 are now due. Normally, the FCA would expect to receive these within two months of the end of the relevant reporting period, which would be 30 April 2020 in this instance. However, for this reporting period the FCA has decided to extend the deadline to 30 June 2020.

Europe: EBF publishes implementation guidance on Cross-Border Payments Regulation

On 13 May 2020 the European Banking Federation (EBF) published implementation guidance on the Cross-Border Payments Regulation ((EU) 2019/518) (CBPR2), which introduced amendments to the Regulation on Cross-Border Payments (924/2009) relating to certain charges on cross-border payments in the EU and currency conversion charges.

The EBF has received a number of questions from its members relating to the implementation of the CBPR2. The guidance sets out these questions together with responses developed by the EBF Payment Systems Committee. The guidance aims to assist EBF members in implementing the CBPR2, in particular in respect of the new obligations concerning transparency requirements for currency conversions for card-based payments and credit transfers. The guidance may be updated from time to time, as considered necessary.

United States: KyckGlobal partners with Visa to boost real-time push payments for businesses

On 14 April 2020 cloud-based payment platform, KyckGlobal, announced its partnership with Visa to boost push payments for businesses in the United States.

Push payments allow money to be sent directly to a recipient, and these have garnered increasing interest as person to person (P2P) payments grow more popular. Unlike traditional electronic bank transfers, these payments don't require account numbers, and can transfer money more cheaply.

KyckGlobal therefore sees a lot of opportunity in real-time payments, and plans to leverage Visa's network to expand the uses of push payments beyond the realm of P2P.

Singapore: Memorandum of understanding signed to develop a real-time payment platform for central banks

On 13 April 2020 Singaporean payment service provider, Network for Electronic Transfers (NETS) Group, signed a memorandum of understanding with technology provider, NCS, to develop a real-time Electronic Payment and Securities Settlement Platform for central banks.

The partnership will combine NCS's ability to build secure and complex government infrastructure with NETS's experience as a payments provider, including cross-border payments.

The aim is to provide this platform to central banks in the Asia Pacific region in order to boost cross-border interbank payments and settlements, and expand both companies' presence in these markets.

United Kingdom: Santander launches money transfer app, PagoFX

On 16 April 2020 Santander announced the launch of its new low-cost cross-border money transfer service, PagoFX. This service is available to the open market so it can be used by users based in the UK who do not bank with Santander.

PagoFX is designed to be a user-friendly, secure and reliable app through which users can send money to the US and EU Member States for a fee. In light of the COVID-19 outbreak, fees will be waived on up to GBP 3,000 worth of transactions until 16 June 2020.

Thailand: Deutsche Bank launches PromptPay to boost instant payments

On 16 April 2020 Deutsche Bank announced the launch of PromptPay in Thailand through its branch in Bangkok. PromptPay is part of a government initiative aimed at boosting electronic payments to increase financial inclusion.

With PromptPay, users, including corporate users, can send and receive funds quickly, accurately and efficiently, which maximises the amount of working capital available.

Deutsche Bank plans to similarly boost instant payments in the Philippines and Vietnam within the next two years.

Global: GoCardless uses machine learning to redress failed payments

On 22 April 2020 GoCardless, a global network geared for recurring payments, launched payment intelligence tool, Success+. The tool determines the optimal schedule for payment retries so that businesses can recover payments from their customers more efficiently.

By automating retries and using machine learning to determine when a certain customer is most likely to be able to pay, Success+ aims to help reduce unnecessary administration work and increase customer satisfaction.

Hong Kong: Zwipe enters agreement to develop biometric payment cards

On 22 April 2020 FinTech company, Zwipe, announced that it has partnered with card manufacturer, Toppan Forms Card Technologies, to develop biometric payment cards in Hong Kong and Macau. With this partnership, Zwipe aims to make payments more convenient in a secure manner.

Vietnam: TPBank boosts remittance in Vietnam with RippleNet

On 29 April 2020 RippleNet published an insight piece on its partnership with TPBank to facilitate international money transfers in and out of Vietnam. TPBank is one of the leading innovative banks in Vietnam, and with RippleNet they will use blockchain technology to speed up remittance transactions. Customers can therefore benefit from real-time transfers and 24/7 transaction processing.

Pakistan: SadaPay partners with MasterCard to boost digital payments

On 4 May 2020 SadaPay announced its partnership with Mastercard which will allow it to leverage Mastercard's card issuing capabilities and payment processing platform. The press release reports that 87% of the Pakistani population remain unbanked, but that the usage of smartphones is on the rise.

Currently, with SadaPay e-wallets, customers can carry out faster and safer transactions, both domestically and internationally. SadaPay now plans to issue debit cards, which will be linked with the app, to serve the unbanked and hopes to develop innovative digital payment solutions with MasterCard.

Global: Mastercard study illustrates global move towards contactless payments

On 29 April 2020 Mastercard published an article summarising the findings of a global consumer study it carried out. According to the study, nearly 80% of those surveyed in 19 countries said that they use contactless payments, with nearly 75% of these consumers saying that they will continue to use contactless payments post-pandemic.

Mastercard also reports that its data shows a 40% increase in the volume of contactless transactions globally compared to Q1 2019. From February 2020 to March 2020, the number of contactless transactions also grew twice as fast as the number of non-contactless transactions at grocery stores and pharmacies globally.

Global: Paysafe report on the impact of COVID-19 on consumer payment trends

On 4 May 2020 Paysafe published its key findings from its survey of 8,000 consumers from the US, UK, Canada, Germany, Austria, Italy and Bulgaria on their attitudes to payment methods. Paysafe highlighted the following:

  • 18% of consumers said that they are shopping online for the first time due to COVID-19, which signifies a great boost for e-commerce.
  • Some consumers still have concerns with online shopping, e.g. concerns about delivery, perceived difficulties with obtaining refunds, and online fraud.
  • Consumers have been using various different payment methods, including digital wallets.
  • Having experienced contactless payments due to COVID-19, some consumers have grown more confident in using this payment method and have said they will continue to use it in the future.

United States: AppsFlyer reports increased popularity of finance apps

On 21 April 2020 AppsFlyer published a report on the finance app industry in 2019. AppsFlyer reports an increase in adoption of finance apps globally, from 16% in 2015 to 64% in 2019, and notes the growing popularity of digital banking in particular.

The report focuses on trends seen in the US, including:

  • The market share of the app industry by finance apps in 2018 increased by 25% in 2019.
  • More than half of finance app installations were from financial services apps, e.g. digital payments, budget management and credit score apps.
  • A third of finance app installations were digital banking apps.

In light of COVID-19, AppsFlyer predicts that monitoring finances digitally will become more popular, and that there will be a boost in mobile payments.