Latest banking news, Oct. 28, 2022

Citi Ventures invests in rewards fintech

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Citi Ventures has made a strategic investment in Wildfire Systems, a fintech that supports white-label reward programs. Wildfire will use the funding to add new features and expand its technology, which clients use to provide consumers with cashback incentives, digital coupons and other benefits when shopping online. The size of Citi Ventures' investment was not disclosed, but it is part of a $24.5 million in total venture investment Wildfire has drawn to date. The company's Series A round in 2021 was led by TTV Capital and QED Investors. Wildfire recently started a partnership with Visa to power the card brand's affiliate marketing program. — John Adams

Mastercard picks up banks for digital card program

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Mastercard has added banks in several countries to its Digital First Card program, which enables an entirely automated experience for cardholders. Banco Santander and Citibanamex in Mexico, ING in Spain, Chase in the U.K., Nubank in Brazil and Providus Bank in Nigeria were added this week, bringing the total number of participants to more than 200. The program offers digital enrollment, issuance, identity verification and usage for cards, as well as financial management and benefits. There is an option to receive a plastic card. "Consumers are relying on digital options for their everyday financial tasks that require a safe, seamless and secure payment experience," said Luigi Zanghellini, executive vice president of consumer solutions at Mastercard. — John Adams

Fiserv moving global headquarters to Milwaukee

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Fiserv is establishing new global headquarters in downtown Milwaukee. Currently, its headquarters are in nearby Brookfield, Wisconsin. The payments and financial technology company plans to start moving its operations to Milwaukee in 2023, according to an article in the Milwaukee Journal Sentinel. Fiserv is also planning to add 250 new jobs over five years, which will be based in the 160,000-square-foot space. "Fiserv is precisely the type of innovation-driven company we want and can well support in our state," Gov. Tony Evers of Wisconsin said in a press release. — Miriam Cross

Google adds cloud-enabled blockchain tech

Google Cloud announced Blockchain Node Engine, which refers to the "nodes," or the different devices that form a decentralized network to manage a blockchain. Blockchains support cryptocurrencies and other decentralized financial products. Google Cloud's new product will host nodes in an effort to make it easier for developers to read or write blockchain data, add the smart contracts that trigger transactions when certain conditions are met and help manage security. Ethereum, which underpins cryptocurrency trades and investment, is the first blockchain that will be part of the Blockchain Node Engine. — John Adams

Biden predicts student loan relief checks within two weeks

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President Biden said his administration would prevail in lawsuits challenging his student debt relief plan and predicted that applicants would start getting checks within two weeks. "We're going to win that case," Biden said in an interview with NewsNation, a cable outlet. "I think in the next two weeks you're going to see those checks going out."
The president's anticipated timing coincides closely with midterm congressional elections on Nov 8. Democrats are counting on the debt relief program to boost turnout among young voters and people of color in the election, in which polls suggest Biden's party will lose control of at least one chamber of Congress. A federal appeals court temporarily blocked the White House's plan to forgive as much as $20,000 in debt per borrower last week, siding with six Republican-led states that have challenged the plan. The decision prevents the administration from disbursing relief while the 8th U.S. Circuit Court of Appeals in St. Louis weighs an injunction request.
The case was dismissed by a federal district court judge, but revived on appeal.
The ruling does not prohibit borrowers from applying for relief through the Department of Education. More than 22 million Americans had already applied for the program, the president said last week. Under the plan, the government would cancel at least $10,000 in loans for Americans making less than $125,000 or households making $250,000 annually. For students who received Pell grants, which assist students with financial need, relief bumps up to $20,000. — Akayla Gardner and Jennifer Jacobs, Bloomberg News

Walmart joins FIS payment card loyalty program

Walmart is the latest retailer to join Premium Payback, a loyalty program available to banks through FIS that allows consumers to redeem rewards earned for using credit and debit cards in real time. Upon checking out at a store, customers at Walmart stores will receive a prompt with the option to apply their accumulated rewards in real time, reducing the total purchase price. Walgreens, Shell, BP and PayPal also joined Premium Payback in recent years. More than 7,000 financial institutions' rewards programs are part of Premium Payback, which FIS began testing nearly a decade ago. — Kate Fitzgerald

Zip launches physical Visa card for U.S. BNPL purchases

Afterpay, Affirm, Klarna, Sezzle, Zip, Perpay, and Tabby

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Zip, a buy now/pay later fintech based in Australia, this week announced the rollout of a physical card in the U.S. enabling consumers to apply the "Pay in 4" instant installment-loan model at stores that accept Visa. The card, issued by WebBank, adds more convenience for consumers who previously used Zip's app to make purchases for items that are paid off in four equal payments over several weeks and extends participation in BNPL purchases to stores that don't accept mobile or contactless payments. The Swedish BNPL giant Klarna rolled out a physical card earlier this year augmenting its mobile app. — Kate Fitzgerald

Naira hits record low after central bank plan to replace notes

The naira plunged to record lows against both the dollar and the world's biggest stablecoin on Friday, 48 hours after the central bank announced plans to replace higher denomination notes of its local currency. The naira fell on the official market, where it touched a record 442.62 naira to the dollar before regaining some lost ground. In the unauthorized parallel market, the naira weakened weakened to 780 to the dollar from 753 on Wednesday. The local currency was quoted at 787.9 to the USDT as of 3:41 p.m. local time on cryptocurrency trading platform Binance, compared with 763.5 naira on Wednesday. Nigeria's central bank announced Wednesday that it plans to replace 200-, 500- and 1,000-naira notes by Jan. 31. It said the move will help curb currency hoarding, slowdown inflation and disrupt kidnappings-for-ransom in Africa's largest economy. — Anthony Osae-Brown, Bloomberg News