Fintechs push for a bigger global crypto payments market

July 3, 2024 12:10 PM

Circle, Stripe and Coindesk all make moves to add scale for digital asset transactions. Plus, Ant Group makes an acquisition that will enable it to reach more consumers in Europe and beyond; Klarna tries to reach thousands of new merchants in a single deal; and more.

Here's what's going on in the world of payments.

Yuriko Nakao/Bloomberg

French regulators approve Circle's stablecoin

Cryptocurrency and financial technology firm Circle has achieved compliance with the European Union's Markets in Crypto-assets regulatory framework.

That approval followed the issuance of an Electronic Money Institution license from the ACPR, France's banking regulator. This will enable Circle to issue its USDC and EURC stablecoins in the EU, and introduce Circle Mint France, which can be used to mint and redeem USDC and EURC.

"Achieving MiCA compliance through our French EMI license is a significant step forward, not just for Circle, but for the entire digital financial ecosystem in Europe and beyond," said Dante Disparte, chief strategy officer and head of global policy at Circle, in a release. "As digital assets become increasingly integrated into the mainstream financial landscape, it is essential that we establish robust, transparent frameworks to promote trust and adoption."

Circle's USDC is one of the world's largest stablecoins, and the company is trying to scale its stablecoin by partnering with firms that have large user bases, such as Asian rideshare provider Grab and e-commerce company Shopify. Rival PayPal is also turning to partnerships with digital commerce companies in an attempt to build an audience for its stablecoin. —John Adams

Samyukta Lakshmi/Photographer: Samyukta Lakshmi/B

Coinbase, Stripe partner to boost crypto

Growing scale for digital assets is also the goal of a new partnership between payments company Stripe and cryptocurrency firm Coinbase.

Stripe is adding blockchain technology that is designed to speed up conversions between traditional currency and crypto. Coinbase is adding Stripe's traditional currency-to-crypto onramp to the Coinbase Wallet. That will enable people to buy crypto instantly with credit cards and Apple Pay.

Stripe has been adding cryptocurrency-related services for the past two years, after discontinuing its cryptocurrency program in 2018, citing a lack of use case for payments. The growth of decentralized finance and digital products such as NFTs have drawn Stripe back to cryptocurrency.

Adding partners, particularly in financial services, is key for cryptocurrency companies to build usage for payments. Coinbase recently sued the Federal Deposit Insurance Corp. in an effort to curb the agency's attempts to prevent banks from working with cryptocurrency companies. —John Adams

Lionel Ng/Bloomberg

Ant pushes deeper into the West

Chinese technology giant Ant Group has acquired Dutch payment company MultiSafepay, which supports e-commerce payments, cards, digital wallets, buy now/pay later lending, internet and mobile banking.

The Dutch firm also supports more than 40 cross-border payment systems. It will be combined with Antom, a unit of Ant that has merchant clients in more than 40 countries and supports payments in more than 100 currencies.

Antom said the acquisition will improve its ability to provide merchant services and payment products to small- to medium-size businesses. Terms of the deal were not disclosed, though Reuters earlier reported the firms were negotiating a price of about $200 million.

Ant, which is affiliated with e-commerce provider Alibaba and operates the payments app Alipay, recently partnered with Checkout.com and Splitit to grow its footprint in the U.S. Ant and its affiliates specialize in building payment markets outside of China for Chinese travelers and expats. —John Adams

Adrian Dennis/Photographer: Adrian Dennis/AFP/

Monzo takes steps to improve its crime-fighting game

U.K. challenger bank Monzo has added three security controls that are designed to reduce the risk of payment fraud.

Known Locations enable consumers to choose "home" or "work," which are places where the user needs to be when making transfers or withdrawals over a certain limit. Secret QR codes are stored on a second device and must be used along with the user's primary device to approve a payment or withdrawal over that limit. Trusted Contacts are chosen family members or friends who also use Monzo. These settings can determine whether a transaction is suspicious before it can go through.

Consumers will need to have at least two of these features activated, and can set the transaction limits.

The security products come as Monzo expands in the U.S. following a $430 million fundraise earlier this year. —John Adams

Hollie Adams/Bloomberg

Klarna adds BNPL for Adobe Commerce clients

Swedish financial institution Klarna has partnered with Adobe Commerce, enabling Adobe's merchants to offer Klarna's buy now/pay later lending and other financing.

Adobe acquired Magento in 2018, adding more than 150,000 online stores that use the firm's technology to manage digital sales and other functions.

"Consumers are embracing the flexibility that buy now/pay later services can provide, with Adobe Analytics data showing over 11% growth this year," said Jason Knell, senior director of content and commerce partners at Adobe, in a release. "Klarna's global footprint enables Adobe Commerce merchants to meet the changing needs of their consumers and stay competitive in today's digital economy."

One of the best known BNPL lenders, Klarna competes with companies such as Affirm Afterpay, PayPal and a growing number of banks that offer BNPL.

Klarna recently added to its ability to extend credit via a new version of its Visa card that enables qualified consumers to pay over time with interest, adding it as an option alongside an older debit card that included a $4.99 fee for interest-free installment loans. —John Adams

David Paul Morris/Bloomberg

Marqeta makes inroads in Switzerland

Marqeta has signed Geneva-based financial institution Swiss4 to use Marqeta's technology to support real-time payments and other transactions.

Swiss4, which was founded in 2020, is building an application that combines financial services with travel, hospitality, access to cultural venues, sporting events and recommendations for new experiences. Marqeta will enable Swiss4 to design payment options that are linked to these lifestyle features.

Marqeta has been trying to diversify its revenue sources beyond Block, which currently makes up about half of Marqeta's revenue, or down from about 70% two years ago. The firm has added partnerships with Klarna to support the firm's payment card, and Rain, a company that provides earned wage access features for Hilton, McDonald's, Arby's and Subway.

Marqeta has also expanded collaborations with Uber Eats, adding new markets in Canada, Australia and Latin America. —John Adams

Bank for International Settlements

Bloomberg News

Cross-border real-time payment project may reach 1.7 billion people

The Bank for International Settlements in the next few days will implement Project Nexus, which connects real-time payment networks in different countries.

The launch follows a test that included Eurosystem's Target Instant Payments Settlement, Malaysia's Real-time Payments Platform and Singapore's Fast and Secure Transfers. A new phase will add schemes in India, Malaysia, the Philippines and Thailand, expanding the network to 1.7 billion users.

Nexus standardizes how domestic systems interact by enabling connections between national networks and itself as a centralized hub. This avoids the need to build individual connections between nations.

Since most real-time payment networks are focused on domestic transactions, additional projects must connect networks to enable instant processing for cross-border payments. —John Adams

Brent Lewin/Bloomberg

Sezzle gamifies BNPL in Canada

Buy now/pay later lender Sezzle has introduced a financial health feature called Payment Streaks in Canada.

While Sezzle is based in Canada, it first introduced Streaks in the U.S., making Canada its second market for this tool. It adds points, or "streaks," for successful payments toward BNPL loans if those payments are made before the due date.

As users build streaks within a 90-day window, they are advanced to a higher tier of products and incentive marketing.

"By turning on-time payments into a rewarding journey, we're empowering users to manage their finances wisely while enjoying exclusive perks," said Patrick Chan, general manager for Sezzle in Canada, in a release.

Sezzle is focusing on financial responsibility in an environment in which regulators are pressuring BNPL lenders out of concerns the loans are causing consumers to quickly accumulate debt. —John Adams

Kiyoshi Ota/Bloomberg

Japan revamps banknotes

Japan issued newly designed banknotes for the first time since 2004 in a move that may provide a small boost to the economy while potentially nudging some cash hoarders to invest money instead of stashing it under the mattress.

The Bank of Japan shipped the first bundle of newly designed notes on Wednesday. The new ¥10,000 bills ($62) feature a portrait of Eiichi Shibusawa, seen as the father of Japanese capitalism.

While the move aimed at keeping counterfeiters and tax dodgers on the back foot appears at odds with the growing popularity of cash-free transactions by consumers and businesses, central bank and finance ministry officials continue to flag the enduring importance of paper money.

"Despite the trend toward cashless payment, cash is a secure means of payment that can be used by anyone, anywhere, and at any time, and it will continue to play a significant role," Bank of Japan Governor Kazuo Ueda said Wednesday morning, echoing comments by Finance Minister Shunichi Suzuki the previous day.

Prime Minister Fumio Kishida reiterated that point and the improved security of the new notes at a press conference Wednesday to commemorate the launch of the new banknotes.

"I hope they will be liked by Japanese people while adding a spark to the economy," Kishida said at the BOJ. —Erica Yokoyama, Bloomberg News