Key developments of interest over the last month include:

  • Europe: The CJEU has found that (i) PSD2 does not restrict the type of terms that can be changed by tacit consent, but where the payment service user is a consumer the UCTD applies and (ii) contactless functionality is a separate payment instrument.
  • France: Ministry of the Economy and Finance has published a revised charter on banking inclusion and over-indebtedness prevention.
  • Hong Kong: Securities and Futures Commission has announced a new crypto regulatory regime for virtual asset exchanges.

For previous editions of the Global Payments Newsletter, please visit our Financial Services practice page.

Regulatory Developments

Europe: CJEU rules on scope of variation provisions under PSD2

On 11 November 2020 the Court of Justice of the EU (CJEU) handed down its judgment in the case of DenizBank AG v Verein für Konsumenteninformation (Case C-287/19).

The Austrian courts had asked whether the contactless functionality on NFC-enabled payment cards is a separate payment instrument, and if so whether it is to be considered as anonymous use of the payment instrument for the purposes of Article 63(1)(b) of PSD2, allowing providers to impose liability for misuse on users. They also queried whether the scope for making changes to the terms of framework contracts under Articles 52(6)(a) and 54(1) is unrestricted. The two questions were connected as DenizBank had varied its terms so as to shift liability for unauthorised transactions using the contactless functionality onto the payment service user (PSU).

Contrary to the previous Advocate General’s (AG) opinion (covered in the May 2020 edition of our Global Payments Newsletter), the Court found that Article 52(6)(a), when read with Article 54(1), does not contain any restriction on variation relating to the status of the PSU or the type of contractual terms that may be subject to acceptance by the PSU through tacit consent; it simply provides for the possibility of changes by tacit consent and for the requirement of full transparency in relation to the changes.

However, the Court reasoned that it is clear from the provisions of PSD2 that other EU consumer protection legislation remains applicable. Therefore where the PSU is a consumer, unilateral variation clauses are subject to a potential finding of unfairness under the UCTD. The Court also stated that the presumption of tacit consent by the PSU, as agreed with the PSP, relates only to "changes to the conditions of the framework contract", being changes that do not affect the conditions of the framework contract to such an extent that the proposal from the PSP would in reality constitute a new contract. The scope of this limitation will be for the national courts to decide.

The CJEU confirmed the AG’s position 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). The Court described the contactless functionality as ‘legally separable’ from the other functions of the card, which require the use of personal security data, in particular in order to pay an amount above the threshold set for use of the contactless functionality. It is therefore capable, in the Court’s view, of being regarded as a separate, anonymous, payment instrument when used for a contactless payment.

As a result, DenizBank could rely on the derogation on Article 63(1)(b) to impose liability on the PSU for unauthorised low value payments under their T&Cs.

For further analysis of the judgment, see here.

France: Ministry of the Economy and Finance publishes revised charter on banking inclusion and over-indebtedness prevention

On 16 September 2020 the French Ministry of the Economy and Finance published a revised version of the charter on banking inclusion and over-indebtedness prevention (Charter), which was initially published in 2014.

The Charter imposes various obligations on a number of financial institutions (including payment institutions and e-money institutions), including requirements to:

  • Offer basic banking services;
  • Cap banking fees in relation to payment incidents for clients identified as financially vulnerable; and
  • Set up dedicated procedures for early detection of financially vulnerable customers.

In addition, a Decree of 7 September 2020 imposes obligations on financial institutions (including payment institutions and e-money institutions) to file a report on the detection of financially vulnerable customers and measures adopted in order to ensure banking inclusion with the French Banking Inclusion Observatory. The report must be filed on an annual basis.

Hong Kong: SFC announces new crypto regulatory regime for virtual asset exchanges

On 3 November 2020 Ashley Alder, Chief Executive Officer of the Hong Kong Securities and Futures Commission (SFC), gave a speech as part of Hong Kong Fintech Week 2020 in which he announced that the SFC is going to propose a new regime on licensing for virtual assets later this year.

The new licensing approach requires all platforms that trade any types of crypto assets, including both those operating in Hong Kong and those targeting Hong Kong investors, to apply for an SFC licence. The SFC can then ensure compliance, monitor operations, investigate irregularities and enforce rules.

In his speech, Mr Alder also noted that the SFC and other regulators are focusing on new ground-breaking changes, all of which relate to fintech innovations. Specifically, regulators are increasingly focusing on digital central bank currencies, cross-border payments, cloud computing, artificial intelligence and outsourcing of crucial aspects of financial services to unregulated technology firms.

United Kingdom: Bank of England's revised approach and final schemas for ISO 20022 migration

On 28 October 2020 the Bank of England (BoE) published a document setting out the revised approach and final enhanced schemas for ISO 20022 migration, which is the new baseline document for all of the BoE's ISO 20022-related documentation.

The document should be used by stakeholders, including CHAPS direct participants, real-time gross settlement (RTGS) account holders and technology providers, as a handbook and for reference as part of ISO 20022 migration. It supersedes previously published related documents in which the BoE consulted on its plans and updated stakeholders on progress.

The revised ISO 20022 migration approach is outlined in section 1 of the document. Information for CHAPS direct participants and RTGS account holders is included in sections 2 and 3, respectively.

The BoE has also updated its webpage on ISO 20022.

United Kingdom: FMLC responds to HM Treasury consultation on expanding financial promotion regime to include cryptoasset promotions

On 26 October 2020 the Financial Markets Law Committee (FMLC) published a letter responding to HM Treasury's July 2020 consultation on cryptoasset promotions. The consultation outlined the government's proposal to expand the perimeter of the financial promotion regime by amending the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 to include certain unregulated cryptoassets in the list of controlled investments and to amend some of the current controlled activities.

In its letter, the FMLC highlights the following:

  • Certain terms in the definition of a "qualifying cryptoasset", such as "fungible" and "transferable", might not provide the specificity and certainty needed to determine which cryptoassets fall within the proposed financial promotion regime. It is therefore suggested that HM Treasury focuses on specific types of cryptoassets rather than defining the category as a whole.
  • The FMLC refers to attempts being made around the world to define cryptoassets for the purposes of regulation. It encourages authorities to consider the uncertainty that might be caused by a proliferation of sometimes conflicting or overlapping definitions.

Global: FATF publishes updated version of AML and CTF standards including counter-proliferation financing amendments

On 28 October 2020 the Financial Action Task Force (FATF) published an updated version of its anti-money laundering (AML) and counter-terrorist financing (CTF) standards.

The FATF has adopted amendments to recommendations 1 (Assessing risks and applying a risk-based approach) and 2 (National co-operation and co-ordination) and the related interpretative notes, with the aim of strengthening counter-proliferation financing.

The FATF expects all countries and regions to take steps to ensure implementation of these new obligations at the national level.

United Kingdom: FCA announces participation in GFIN cross-border testing of financial products and services

On 29 October 2020 the FCA published a press release announcing that it will be participating in a new cross-border testing initiative organised by the Global Financial Innovation Network (GFIN), along with 22 other regulators.

The GFIN is welcoming applications from firms to test innovative financial products, services, business models or regulatory technology across multiple countries or jurisdictions.

The deadline for applications is 31 December 2020.

Europe: EPC further updates 2019 SEPA scheme rulebooks

On 30 October 2020 the European Payments Council (EPC) published a press release announcing the publication of the following updated versions of its 2019 Single European Payments Area (SEPA) scheme rulebooks:

The EPC has also published an updated version of the document Maximum amount for instructions under the SCT Inst Scheme Rulebook. A related webpage explains that this document sets the maximum amount per instruction that can be processed under the SCT Inst scheme, based on the 2019 SCT Inst Rulebook (version 1.2), to which it forms a binding supplement.

Europe: EPC publishes document on criteria for participation of non-EEA countries in SEPA Schemes

On 23 October 2020 the European Payments Council (EPC) published a document (dated 1 April 2020) containing criteria for participation in the Single Euro Payments Area (SEPA) Schemes for communities of banks or financial institutions outside the EEA.

In the document, the EPC explains that the geographical scope of the SEPA Schemes is set out in its list of SEPA Scheme countries (EPC409-09). It has recognised the need to establish criteria and procedures for determining whether a community of banks or financial institutions (that are equivalent to payment service providers (PSPs) in the EEA), from a non-EEA country or territory that is not yet within the geographical scope of the SEPA Schemes should be considered eligible to participate in the SEPA Schemes.

The document lists the common conditions that an applicant must meet before institutions from that particular non-EEA country or territory could be considered eligible for participation in the SEPA Schemes. This includes conditions on the applicant's relationship with the EU and ensuring a level playing field with other SEPA Scheme participants, in addition to conditions on market and operational criteria. The EPC confirms that this criteria does not apply to PSPs that are licensed in EEA countries.

United Kingdom: FMLC responds to HM Treasury call for evidence as part of Payments Landscape Review

On 22 October 2020 the Financial Markets Law Committee (FMLC) published its response to HM Treasury's (HMT) call for evidence as part of the Payments Landscape Review.

The FMLC’s response highlights uncertainties in a number of areas, including:

  • Distributed ledger technology (DLT): The FMLC notes that, although HMT states that it will seek input relating to cryptoassets (including stablecoins) and central bank digital currencies separately, it has not addressed the implications of the development of technologies based on DLT (eg blockchain). The FMLC believes that DLT arrangements may make certain payments clearing system processes cheaper and possibly more resilient than the existing highly centralised processes. However, it encourages the government to consider the uncertainties that may arise as a result of DLT-based innovation.
  • Regulatory scope: The FMLC suggests that since both Part 5 of the Financial Services (Banking Reform) Act 2013 (FSBRA) and Part 5 of the Banking Act 2009 were enacted before the concepts of payment initiation services (PIS) and account information services (AIS) were introduced by PSD2 and the Payment Services Regulations 2017, the government should consider whether these regimes should be extended to cover PIS and AIS.
  • Regulatory treatment of cross-border payments in fiat currencies that involve a fiat-to-digital currency exchange and a digital-to-fiat currency exchange at the points of origination and receipt, which are effected between these points on a digital platform in a cryptocurrency: The FMLC thinks that the government should consider this because it believes that these situations can give rise to legal uncertainty.

South Africa and United States: CFTC and South African Reserve Bank announce cooperative effort to promote fintech innovation

On 2 November 2020 the U.S. Commodity Futures Trading Commission (CFTC) and the South African Reserve Bank (SARB) announced that they have signed a Statement of Intent to cooperate and support innovation through each authority's respective financial technology initiative – CFTC's LabCFTC and SARB's Fintech Unit.

The "Statement of Intent on Cooperation and the Exchange of Information on Financial Technology Innovation" focuses on information sharing regarding fintech market trends and developments. It also aims to enable referrals of fintech businesses and the sharing of information and insights derived from each respective authority's experiences. The arrangement is designed to support both authorities' goals to assist market-enhancing fintech innovation and increase international cooperation on emerging regulatory best practices.

Europe: ECB consults on draft Eurosystem oversight framework for electronic payment instruments, schemes and arrangements

On 27 October 2020 the European Central Bank (ECB) published:

  • A consultation paper on the draft Eurosystem oversight framework for electronic payment instruments, schemes and arrangements (PISA framework). It replaces the "Harmonised oversight approach and oversight standards for payment instruments" and all related oversight frameworks for cards, direct debits, credit transfers and the security objectives for e-money.

  • A consultation paper on the draft Eurosystem assessment methodology for electronic payment instruments, schemes and arrangements, which complements the PISA framework.

  • A consultation paper on the draft exemption policy for the PISA framework. The policy defines the criteria used to identify the payment schemes and arrangements overseen by the Eurosystem and those which are exempt, taking into account their relevance for the overall payment system.

The consultations close on 31 December 2020.

United Kingdom: FCA publishes policy statement on amendments to open banking identification requirements

On 3 November 2020 the FCA published a policy statement (PS20/13) on amendments to the open banking identification requirements (eIDAS certificate).

The FCA has confirmed (with some minor changes) its previous consultation proposals on amending Article 34 of the retained EU law version of Commission Delegated Regulation (EU) 2018/389, which sets out regulatory technical standards (RTS) on strong customer authentication (SCA) (SCA-RTS) (UK RTS) to allow alternative means of identification.

Under the Payment Services Regulations 2017 providers of account information and payment initiation services (third-party providers (TPPs)) are required to identify themselves to account servicing payment service providers (ASPSPs) to access customer's online payment account data and initiate payments from such accounts.

The SCA-RTS set out the standards of communication required and regulate access by TPPs to customer accounts held with their ASPSPs. The requirement to rely on an eIDAS certificate for identification will be carried across into the UK RTS and the eIDAS Regulation will be onshored at the end of the Brexit transitional period.

Without intervention, TPPs in the UK will no longer be able to access their customers' account data held with ASPSPs after the transition period ends. To avoid disruption to open banking services, the regulatory requirements are being changed to allow for the use of an alternative form of identification.

The changes are set out in the Technical Standards on Strong Customer Authentication and Common and Secure Methods of Communication (Amendment of eIDAS Certificate) Instrument 2020, which is in Appendix 1 to PS20/13. It will come into force, along with the UK RTS, at 11 pm on 31 December 2020. Firms must review the changes immediately and implement any necessary changes as soon as possible.

The FCA is providing a transition period until the end of June 2021 for compliance with the new rules.

United Kingdom: House of Lords EU Services Sub-Committee call for evidence for inquiry into financial services after Brexit

On 3 November 2020 the House of Lords EU Services Sub-Committee published a call for evidence relating to its ongoing inquiry into financial services after Brexit.

The Committee invites evidence on the priorities for the future UK-EU relationship in the financial services sector and the potential consequences if no free trade agreement is reached. Some of the questions include:

  • Is the UK financial services sector well prepared for the end of the Brexit transition period? What are the main areas where arrangements are not yet in place?
  • How important is a UK-EU comprehensive trade agreement for the UK's financial services sector? Which specific areas should be a priority?
  • What would be the implications of a "no agreement" scenario for financial services firms? What more can be done to help the financial services sector prepare for a "no agreement" scenario?
  • What would be the consequences if the EU does not grant the UK positive equivalence determinations? In what areas are equivalence decisions particularly important?
  • What are the strengths and weaknesses of the proposals in the Financial Services Bill 2019-21 and the Financial Services Future Regulatory Framework Review consultation paper?

The deadline for providing written evidence was 20 November 2020. Public hearings are expected to take place in November and the Committee plans to write to the government with its findings before the end of 2020.

India: Reserve Bank of India bans new proprietary QR codes

On 22 October 2020 the Reserve Bank of India (RBI) announced that payment system operators in India can no longer issue new proprietary QR codes for mobile payments. The move is part of the RBI's plan to implement a fully interoperable QR code infrastructure in 2022.

India's two existing interoperable QR codes, UPI QR and Bharat QR, will remain in place, while payment system operators using proprietary QR codes will move to using one or more interoperable QR codes. The migration process will be completed by March 2022.

The RBI is now working to standardise and improve interoperable QR codes and the measures it has announced are expected to reinforce the acceptance infrastructure, provide better user convenience due to interoperability and enhance system efficiency.

Europe: EBA opinion on prudential supervisors taking money laundering and terrorist financing risks into account in SREP

On 4 November 2020 the EBA published an opinion on how prudential supervisors should take money laundering and terrorist financing risks into account in the supervisory review and evaluation process (SREP).

In its opinion the EBA explains that money laundering and terrorist financing can have a significant, adverse impact on a firm's soundness and viability, which can also impact on the stability and integrity of the financial system. It stresses that prudential supervisors need to develop a sufficient understanding of money laundering and terrorist financing risks to identify these risks and prudential concerns.

The EBA points to specific money laundering and terrorist financing risks which are of particular relevance to prudential supervisors. These include the risk that a firm is misused for money laundering or terrorist financing purposes by members of its management or staff, or by other parties, including beneficial owners, as well as the risk that criminals use weaknesses in a firm's internal governance.

Prudential supervisors are expected to co-operate effectively and in a timely manner with anti-money laundering and counter-terrorist financing supervisors to exchange information on money laundering and terrorist financing risks, and assess the implication of these risks for the safety and soundness of the firms they supervise.

The EBA will include more detailed guidance on how money laundering and terrorist financing risks should be considered by prudential supervisors as part of the overall SREP assessment in the revised version of the SREP guidelines that it plans to finalise by the end of December 2021.

Australia: Reserve Bank of Australia collaborates to explore use of central bank digital currency

On 2 November 2020 the Reserve Bank of Australia (RBA) announced its partnership with Commonwealth Bank, National Australia Bank and Perpetual and ConsenSys Software (a blockchain technology company) on a new project to explore the potential use and implications of a wholesale form of central bank digital currency (CBDC) using distributed ledger technology (DLT). This is part of ongoing research at the RBA on wholesale CBDC.

The project involves the development of a proof-of-concept for the issuance of a tokenised form of CBDC that can be used by wholesale market participants for the funding, settlement and repayment of a tokenised syndicated loan on an Ethereum-based DLT platform.

The project should be completed around the end of 2020 and the parties plan to publish a report on the project's main findings during the first half of 2021.

United Kingdom: UK Finance review of UK sanctions statutory instruments in light of Brexit

On 5 November 2020 UK Finance (UKF) published a document containing information to assist financial institutions and other firms in complying with UK sanctions legislation both in the UK and overseas.

The document relates to statutory instruments (SIs) passed in application of the Sanctions and Anti-Money Laundering Act 2018 and replacing regulations made under the European Communities Act 1972, in addition to new regimes such as the Global Human Rights Sanctions Regulations 2020.

The UKF review focuses on financial sanctions and related trade sanctions that could impact financial institutions and firms in international trade.

The document divides identified issues into the following categories:

  • Areas where existing EU-derived sanctions requirements drop away and are not carried through to the equivalent UK autonomous SI.
  • Areas where the UK autonomous SI brings in new sanctions requirements not present in the equivalent EU-derived instrument.
  • Areas where the spirit of the requirement remains, but the language changes and causes a different opinion or obligation to arise.
  • UK autonomous sanctions SIs that use a different interpretation or language for a provision, causing inconsistency in the total UK sanctions framework.

UKF has also issued a related press release stating that the review document will continue to be updated as more SIs and amendments emerge. The current version will expire after 30 November 2020, at which point it will be replaced with an updated version.

United Kingdom: Pay.UK paper on consumer protections in payments

On 5 November 2020 Pay.UK published a paper providing an overview of the UK consumer protection landscape relating to disputed transactions.

The paper includes a summary of findings and insights from secondary research that Pay.UK commissioned from PwC Research on the evolving payments and consumer protection landscape and regulatory perspectives. It also discusses consumer perceptions and a global perspective on consumer protection. The paper concludes with next steps, including Pay.UK's ongoing primary research project focusing on consumer perception of consumer protection.

This research will be fed into Pay.UK's policy work on the topic, which is expected to follow by the end of 2020.

Global: FSB discussion paper on regulatory and supervisory issues relating to outsourcing and third party relationships

On 9 November 2020 the Financial Stability Board (FSB) published a discussion paper on regulatory and supervisory issues relating to outsourcing and third party relationships. The paper is based on findings from a survey conducted among FSB members.

The paper provides that while outsourcing and other third party relationships can bring multiple benefits to financial institutions, such as enhanced operational resilience and cost reduction, they can also give rise to new or different risks to financial institutions and potentially to financial stability.

One of the main conclusions stemming from the paper is that effective cross-border co-operation and dialogue among supervisory authorities, combined with the effective application of existing standards and other emerging practices, are key to address the challenges and risks. It also notes that additional analysis may be needed to better understand the risks posed by the changing landscape of outsourcing and third party relationships.

Comments on the paper can be made until 8 January 2021.

Europe: EBA reminds firms to prepare for end of Brexit transition period

On 9 November 2020 the EBA published a press release reminding financial institutions of the need for readiness in view of the Brexit transition period ending on 31 December 2020.

The EBA instructs financial institutions to finalise the full execution of their contingency plans and reminds them to provide appropriate communication regarding their preparations and possible changes to any affected EU customers. Some of the issues addressed by the EBA include:

  • UK-based financial institutions have to finalise their authorisations and fully establish EU-based operations. Associated management capacity should be in place in the EU, and must be commensurate to the size, scope and complexity of activities and the risks generated in EU operations.
  • Any eIDAS certificate issued to UK-based third party providers under PSD2 will no longer meet the legal requirements of Article 34 of Commission Delegated Regulation (EU) 2018/389 (SCA RTS). Qualified trust service providers that have issued eIDAS certificates to UK-based account information service providers (AISPs) and payment initiation service providers (PISPs) should revoke the certificates.
  • Transfers of funds to or from the UK will be subject to requirements in Regulation (EU) 2015/847 on information accompanying transfers of funds on payments from outside the EU. In particular, payment service providers will need to provide more detailed information on the payer and payee.
  • Customers should be informed in a timely way about preparations for the end of the transition period.

United Kingdom: FCA updates webpage on firms’ preparations for end of post-Brexit transition period to include expectations of EEA firms

On 11 November 2020 the FCA updated its webpage on firms' preparations for the end of the post-Brexit transition period to include considerations for EEA firms that conduct business in the UK.

The updated webpage states that the FCA expects EEA firms that are not intending to take advantage of the temporary permissions regime (TPR) or the financial services contracts regime (FSCR) to notify the FCA of their plans by contacting it directly or through their usual supervisory contacts. In addition, there is an emphasis on the FCA’s expectation that firms will treat customers fairly, including when considering what notice to provide and what support customers need to make alternative arrangements.

United Kingdom: Chancellor statement on future of financial services

On 9 November 2020 Rishi Sunak, Chancellor of the Exchequer, made a statement in the House of Commons on financial services.

The statement contains announcements on UK government initiatives and decisions relating to:

  • Equivalence. The UK has taken financial services equivalence decisions relating to EU and EEA member states.
  • Payments and digital currencies. HM Treasury will publish plans to support the payments sector, following the conclusion of the first stage of the Payments Landscape Review, and will also publish a consultation on stablecoins.
  • Access to UK markets. HM Treasury will launch a call for evidence on the UK's overseas regime, establish a taskforce on the UK's listings regime and consult shortly on the UK's regime for investment funds.
  • Sustainable finance. The UK intends to mandate climate disclosures by large companies and financial institutions by 2025, implement a new "green taxonomy" and issue its first ever Sovereign Green Bond in 2021, subject to market conditions.

Europe: Second EBA report on implementation of POG guidelines in banking sector

On 3 November 2020 the EBA published a report on the implementation of its guidelines on product oversight and governance (POG) arrangements for manufacturers and distributors of retail banking and payment products.

The report explains that the findings are based on a larger sample of firms in a larger number of member states than was the case with its first report (July 2019). The review was carried out with 78 payment, credit and e-money institutions across 12 member states.

The EBA's findings reaffirm the conclusions that while the surveyed manufacturers had implemented the internal processes relating to product oversight for retail products, this was not necessarily done in a way that put the required focus on ensuring that consumers' needs are met. Despite the objectives of the POG guidelines to enhance consumer protection and address prudential risks arising from misconduct, manufacturers appeared to focus almost entirely on the requirements set out in the EBA guidelines on internal governance under the CRD IV Directive (2013/36/EU).

In the report the EBA also provides examples for firms on how to further strengthen the application of the POG guidelines. It does this by outlining a range of good practices identified in the sample concerning the scope of the guidelines, general governance, identifying the target market, product testing and monitoring, remedial actions and the arrangements for distributors.

Payment Market Developments

Netherlands: Crypto firm Amdax obtains registration from the Dutch central bank

On 7 October 2020 Dutch Amdax Group announced that it has become the first provider of crypto services in the Netherlands to be registered by the national central bank. This will enable the company to process and store various crypto currencies. The registration process has taken approximately four months.

Europe: Contis partners with Ordo for instant payments

On 14 October 2020 European payments provider Contis announced that it has enhanced its support for businesses through a new collaboration with UK fintech startup Ordo. The partnership is intended to help improve the performance of businesses through next-generation accounts, cards and apps used by their customers.

Singapore: Spend management platform Finaxar issues corporate Visa cards

On 15 October 2020 Singaporean FinTech Finaxar announced the launch of its Flex by Finaxar program, which will work with Visa to help small to medium-sized businesses unify spend, payables and receivables.

United Kingdom: Ecosia invests in wooden debit card startup

On 15 October 2020 an eco-friendly search engine Ecosia obtained a 20% stake in TreeCard, a London-based fintech startup that makes wooden debit cards. Apart from a minor amount of plastic used for the contactless chip - made from recycled plastic bottles - the rest of the card is made from FSC certified British cherry wood.

Asia: Mastercard to trial biometric card payments in Asia

On 21 October 2020 Mastercard announced that it will conduct the first pilot in Asia of a biometric card that uses a fingerprint to authorise transactions at in-store payment terminals. Mastercard is working with augmented identity firm Idemia and Singapore fintech MatchMove on the product, which operates under the name F.CODE Easy.

United States: PayPal allows Bitcoin and crypto spending

On 21 October 2020 PayPal announced that it has been granted a first of its kind conditional Bitlicense by the New York State Department of Financial Services and will begin enabling its users to buy, hold and sell cryptocurrency directly from their PayPal account from early next year.

Global: Visa rolls out Tap-to-Phone contactless technology

On 21 October 2020, after piloting Visa Tap-to-Phone over the last year, Visa announced product availability in more than 15 markets with plans to expand to the United States and accelerate global product growth in the rest of the world via more than 35 new partners. The new product allows Android phones to be used as point of sale terminals without having to add any extra hardware.

Global: Danske Bank replaces plastic payments cards with recycled material

On 29 October 2020 Danske Bank announced that it will replace all existing payment cards with new cards made from 86% recycled plastic. After an initial trial period, the new cards will begin to replace the standard plastic payment cards for all Danske's customers.

United States: Paxful launches its own crypto debit card in the USA

On 2 November 2020 Paxful, a digital marketplace, announced that it will launch a cryptocurrency debit card. The card, to be issued by Visa, will allow its users to convert crypto into USD in real time. Paxful's customers will be able to make payments and withdraw money using the card at over 45 million merchants and ATMs around the world.

Global: ASOS announces APEXX Global payments partnership

On 4 November 2020 international online fashion retailer ASOS launched APEXX Global's payments orchestration layer across several of its European markets. The partnership will begin with APEXX processing payments for ASOS customers across several major European markets, before supporting ASOS in more international geographies at a later date.

United Arab Emirates: Visa partnered with NOW Money to provide access to low-income customers

On 4 November 2020 NOW Money, a digital account service, and Visa announced a partnership aiming to offer digital banking for low-income people in the UAE. As part of the partnership a contactless-enabled Visa payment card will be issued to NOW Money customers, and an account that will not require a minimum balance will also be offered.

Global: HSBC to launch rival to Transferwise

On 5 November 2020 it was announced that HSBC is launching its Global Money Account, a free mobile-based, real-time service that can be used by the bank’s customers to hold, manage and send funds in various currencies and transfer them to other HSBC account holders without incurring any fees. In the future the bank intends to extend the payment service to allow instant international transfers to customers with other banks.

Canada: Interac to provide debit payment options for Walmart Canada

On 10 November 2020 Interac Corp. announced that it is collaborating with Walmart Canada to provide its customers with improved methods of paying with debit online and in-store. The companies intend to launch their joint offering in Spring 2021.

Surveys and Reports

Africa: The World Bank releases its report on digitisation of agribusiness in Africa

On 24 September 2020 the World Bank released a report entitled ‘Digitization of Agribusiness Payments in Africa: Building a Ramp for Farmers’ Financial Inclusion and Participation in a Digital Economy’. The report provides that digitisation of agribusiness payments can aid advancement of financial inclusion among farmers and analyses the current status of digitisation.

The authors report that in 2017, 30% of adults in sub-Saharan Africa reported having received payments for the sale of agricultural products within the past year, and that 85% of these payments were received in cash only, instead of a transfer to a bank account. However, there is a significant difference in approach by country: in Ghana, Kenya, Uganda and Zambia over 30% of recipients reported receiving payments into an account, while in Ethiopia and Madagascar nearly all recipients reported receiving payments in cash. The report states that this is likely to be driven by differences in the extent of digital financial services available across countries and especially in rural areas.

The findings point to low levels of financial inclusion for farmers across the continent. The report argues that increased digitisation of agribusiness payments can help advance financial inclusion for agribusiness firms and improve the broader digital financial services ecosystem on the continent. In particular, the report finds that access to mobile money accounts is a key driver of the digitisation of agricultural payments. The report also recommends that policymakers should work to strengthen the rural digital financial services ecosystem by lowering the requirements and costs involved in becoming a digital financial services agent in order to increase the number of agents available in rural areas to convert e-money to cash and vice versa.

United States: Department of Justice issues a report on the cryptocurrency enforcement framework

On 8 October 2020 the U.S. Department of Justice (DOJ) released a report by the Attorney General's Cyber Digital Task Force titled 'Cryptocurrency: Enforcement Framework'. The report discusses law enforcement's rising concerns regarding the use of cryptocurrency, the legal and regulatory tools the U.S. government uses to fight crimes involving cryptocurrency, as well as the enforcement challenges that cryptocurrencies create for regulators.

Although the report notes that cryptocurrency has transformative potential, it also observes that cryptocurrency has played a significant role in financial transactions which are associated with criminal activity, fraud, money laundering, tax evasion, and theft. It further provides that although strong interagency partnerships have led to significant criminal and civil enforcement actions in the cryptocurrency space, the DOJ still faces various cryptocurrency enforcement challenges.

The report emphasises that there is a strong need for cryptocurrency-related businesses to comply with applicable anti-money laundering requirements. It also stresses that the DOJ will assert jurisdiction broadly in order to reach those businesses in the U.S. and also overseas and will coordinate with other federal and state agencies when exercising their regulatory powers.