Receiving Wide Coverage ... Struck out: The U.S. remains “an elusive market” for Alibaba founder Jack Ma, whose bid to combine the Chinese company’s Ant Financial payments unit with Dallas-based MoneyGram International was vetoed Tuesday by government regulators. The rejection was “the latest in a string of setbacks for the Chinese billionaire, whose companies have long sought to establish beachheads in America,” the Wall Street Journal says. The $1.2 billion deal for MoneyGram “would have given Alipay an instant foothold in America and the ability to market its services to MoneyGram’s customers, who have roughly 2.4 billion banking or mobile accounts in 200 countries.”
Jack Ma, billionaire and chairman of Alibaba Group Holding Ltd., reacts as he arrives for sessions at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, on Friday, June 19, 2015. SPIEF is an annual international conference dedicated to economic and business issues which takes place at the Lenexpo exhibition center June 18-20. Photographer: Chris Ratcliffe/Bloomberg *** Local Caption *** Jack Ma
Ant may have struck out in its attempt to buy into the American payments market, but China remains far ahead of the U.S. in mobile payments. Mobile payments in the U.S. totaled just $112 billion in 2016, according to Forrester Research, compared to $9 trillion in China, according to iResearch Consulting Group, a Chinese firm.
The Chinese market is dominated by Ant parent Alibaba Group and Tencent Holdings, which are in it “not just for the transaction fees they make from merchants, typically 0.6%,” the Journal reports. “It’s also the consumer data collected, which can transform their apps into marketing platforms for an expanding array of services, from bike sharing to travel.”
Wall Street Journal In this corner: The mortgage industry is split about which consumer credit scores to use. Commercial banks want to stick with the current system, which uses FICO scores, while nonbank lenders, which often account for more than half of industry loan volume, want to use scores provided by VantageScore, which they say would open the mortgage market to more consumers. The matter will be decided by the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, the government agencies that buy the vast majority of mortgage loans and currently require lenders to approve borrowers using FICO scores.
No bitcoin for you!: Bank of America’s Merrill Lynch said it will prohibit clients and financial advisers who trade on their behalf from buying bitcoin.
Financial Times Taking a hit: American Express joined the ranks of companies saying they would take an immediate earnings hit as a result of the recently passed tax legislation. The firm said the charge will reduce its fourth-quarter earnings by $2.4 billion, pushing it into the red. It also said the tax law would reduce its capital ratios for the fourth quarter.
Washington Post Seeing double: Some customers of Capital One said they were charged multiple times for the same debit card transactions on Wednesday. It wasn’t immediately clear how the errors occurred or how many people were affected, but the bank said customers will be credited for the inaccurate postings and no one would be charged any fees as a result. “We’re working to resolve [the matter] as quickly as possible and apologize for this inconvenience,” spokesperson Amanda Landers said.
Quotable “I strongly believe that a large number of customers are being excluded because of the slavish reliance on FICO.” — Sanjiv Das, CEO of Caliber Home Loans Inc., who says VantageScore could open up homeownership to more customers.
The North Carolina-based bank rolled out a multiyear program to provide loans, investments and philanthropic support to communities in the western part of the state.
Consumer Financial Protection Bureau Director Rohit Chopra said the FICO credit-scoring model has drawbacks in price, predictiveness and market competition, and stakeholders should develop a more open-sourced model that uses artificial intelligence.
Analysts say lenders' shares could rally on deregulation, lighter tax burdens and a resurgence of M&A. Declining interest rates and lower loan losses could further bolster bottom lines and attract investor interest.
