Central Bank of Ireland's loan data snafu, BofA on Interac

ByJohn Adams, Kate Fitzgerald, Bloomberg News

August 30, 2023 9:37 AM

This week in global news: Ireland's central bank holds loan data for too long, Bank of America enables two-way corporate disbursements in Canada, and more.

See what's happening around the world.

The Central Bank of Ireland.

Frantzesco Kangaris/Bloomberg

Central Bank of Ireland mistake threatens lending

The Central Bank of Ireland has discovered an archiving error that caused it to retain personal credit histories for longer than it is allowed, a mistake that could make it harder for people to obtain loan approvals. The borrower information is stored on a credit registry within the central bank, which is limited to holding that information for five years by law. About 20,500 consumers had their data stored for three additional months, potentially raising a red flag with lenders that the potential borrowers had difficulty paying their bills or other loans. The central bank is not able to determine the extent of the damage to individual credit reports and is contacting lenders to see if the error impacted lending decisions. It's the second major mistake in Ireland's banking system in the past month, following a commercial bank-related glitch earlier in August that resulted in overfunded ATMs and mistaken withdrawals. —John Adams

Trevor Snapp/Bloomberg

MPesa reaches Ethiopia

The mobile money service MPesa has launched in Ethiopia, adding the country to about a dozen African nations where MPesa plays a key role in financial inclusion. The Kenyan telco Safaricom operates MPesa, which is popular in regions where mobile phones have a larger penetration than traditional banks do. Consumers can link the app to their mobile accounts and make payments, buy airtime, pay bills and link to other financial service providers. MPesa has also partnered with firms such as Alipay to build a larger network outside of Africa for remittances and other cross-border transfers. MPesa's model has influenced fintechs in other countries, such as Mexico, where local fintech Stori uses mobile money to help consumers access digital payments and build credit toward additional financial services. —John Adams

BofA launches global digital disbursements in Canada

Bank of America is the first U.S. bank to offer the capability for two-way corporate disbursements via Canada's Interac e-Transfer rail, using the bank's Global Digital Disbursements service, according to a press release. The integration aims to cut cash and check payments by enabling BofA to process multiple business payouts to consumers and to collect payments from consumers where the identifier is the person's email address or mobile phone number. BofA also plans to launch its "Request for Pay" feature soon in Canada, enabling companies to send invoices to customers via text or email with a link to pay the amount owed. —Kate Fitzgerald

N26 links to local payment rail in the Netherlands

Challenger bank N26 has integrated with iDeal, a bank-supported cross-institutional payment network in the Netherlands. Dutch customers of N26 can access iDeal without leaving the N26 app, and can directly access Tikki, a local P2P payment service. Consumers can use iDeal to make payments without knowing the account details of the payee, instead using a QR code to automatically populate transaction details. "The inherent innovative attributes of iDEAL align well with those of a neobank like N26," said Daniel van Delft, CEO of Currence iDEAL, the app's operating organization, in a release. Like other fintechs, the Germany-based N26 has struggled during the past year as the industry resets following a spike in e-commerce during the pandemic. N26 laid off about 4% of its staff in May and earlier scaled back its U.S. expansion. —John Adams

Mastercard launches AI hub in UAE

The United Arab Emirates' government has partnered with Mastercard to open the Centre for Advanced AI and Cyber Technology in Dubai to focus on generative artificial intelligence research. Generative AI refers to an advanced form of machine learning that can produce original content. Financial institutions are still seeking use cases for generative AI, with most projects focusing on internal staff use or basic functions such as customer service. The Mastercard UAE hub will work on broader uses, such as combating cybercrime. Mastercard also recently partnered with a local UAE fintech to develop virtual cards for use in the Middle East and other regions. —John Adams

Alipay, PayNet to connect Malaysian travelers with Asian digital wallets

Ant Group and Payments Network Malaysia (PayNet) have signed a memorandum of understanding to create interoperability between Asia's Alipay+ merchant payment acceptance network and four major Asian digital wallets, according to a press release. By the end of this year, users of digital wallets including Hong Kong's AlipayHK, the Philippines' GCash, South Korea's Kakao Pay and Thailand's TrueMoney will be accepted by 1.8 million Malaysian merchants. Users of Malaysia's DuitNow QR code, operated by PayNet, will in turn be able to pay at Alipay-accepting merchants globally. Ant Group and PayNet also plan to collaborate on marketing campaigns to promote participating merchants within users' digital wallets, the release said. —Kate Fitzgerald

BBVA cuts most registration details for Spanish payments

BBVA is accessing Bizum, a bank-supported payments network in Spain, to enable registration and login via a phone number associated with the consumer's Bizum account. The feature will eliminate the need for consumers to enter emails or passwords, and is designed to support instant payments by shortening the user experience that takes place before the transaction. When accessing the merchant's site, the consumer selects Bizum as a payment option, and receives an instant notification to confirm. Most Spanish banks support the Bizum network, and more than four million BBVA customers in Spain use Bizum on an average day. BBVA is trying to attract young consumers, noting that more than 40,000 people under the age of 17 have enabled the Bizum function on their BBVA app since October 2022. —John Adams

JPMorgan boosts bet on money-losing digital bank in Brazil

JPMorgan Chase agreed to increase its stake in Brazil's C6 Bank, stepping up its bet on digital banking in Latin America's largest economy. The Wall Street giant will boost its holding in Sao Paulo-based C6 to 46% from 40%, according to a statement Tuesday. Terms of the transaction, which requires regulatory approval, weren't disclosed. JPMorgan revealed its initial investment in the online lender two years ago. C6 Bank, which was founded in 2019 by former Banco BTG Pactual SA partner Marcelo Kalim, seeks to cater to retail clients in a nation with many under-banked consumers.

C6 posted a 2.2 billion real ($453 million) loss for 2022, compared to a 692 million-real loss a year earlier, while provisions for bad loans almost quadrupled to 1.6 billion reais. The bank said it expects to turn a profit by year-end and saw its base of clients expand to 25 million, up from 8 million around the time New York-based JPMorgan first invested in the firm. C6 also said its total credit portfolio has jumped to 40 billion reais. JPMorgan bought a minority stake in Brazilian fintech FitBank Pagamentos Eletronicos SA through its strategic-investment unit about three years ago. —Vinícius Andrade and Cristiane Lucchesi, Bloomberg News

Trustly Acquires French Fintech SlimPay in €70 Million Deal

Swedish payments firm Trustly has acquired the French recurring payments platform SlimPay as it continues its Europe-wide expansion. The deal was worth €70 million ($75.7 million), people with knowledge of the matter said, asking not to be named as the figure isn't public. Trustly, which competes with card companies and digital rivals like PayPal, plans to use the deal to expand into repeating payments such as subscriptions or donations. The buyout was part of a strategy "to enable open banking to consumers across Europe," Johan Tjärnberg, chief executive officer of Trustly, said in an interview. The rollout will begin in SlimPay's existing markets in Germany, France, Spain and Italy. —Aisha S Gani, Bloomberg News