India's CBDC project gets larger, Visa/Mastercard expand in Egypt

The major U.S. card networks are pursuing financial inclusion in Egypt, the Reserve Bank of India works to bring central bank digital currencies to more users, and other news in this week's global roundup.

India wants to make CBDCs operable in non-digital locations

The Reserve Bank of India is conducting several tests of the country's central bank digital currency, including programmable payments and a push to support retail CBDC transactions in rural or low-internet areas. The programmable payments could include using the digital rupee to schedule payments at a certain time, or under certain conditions, reports the Economic Times of India and other local media, citing commentary from an RBI press conference. The tests will also determine how the CBDC could be used to make payments offline, which would address access for a wider range of merchants. Retail CBDCs are a type of digital currency which is designed for consumer transactions such as in-store payments, and are considered more difficult to design and build. Wholesale CBDCs are designed for larger transactions between governments or large banks and have progressed faster. —John Adams

Visa connects with Egypt's central bank to boost remittances

Visa has signed a memorandum of understanding with government agencies in Egypt to improve processing for transfers from expatriates to relatives inside Egypt. The card network is working with Egyptian Banks Co. for Technological Advancements (EBC), an organization that operates and builds new payment systems for the Central Bank of Egypt. The program will use Visa's technology and EBC's infrastructure to support digital wallets, electronic payments and other products. The initial project will enable consumers to initiate transfers from Visa accounts to recipients through Egypt's instant settlement network. Another project will include partnerships with commercial banks to support payments via the recipient's mobile phone number. Visa's recent work with central banks includes a partnership to develop Brazil's central bank digital currency to enable local farmers to access clients in other nations. —John Adams

Mastercard expands its reach in Egypt

Mastercard was also active this week in Egypt, signing a partnership deal with Al Baraka Bank to support payment products for consumer, commercial and small-business customers. The card network is seeking to grow its financial inclusion efforts in the country, which, like most nations, is moving away from traditional cash-based payments toward digital, which could leave out certain businesses and consumers that cannot afford to upgrade. By using Mastercard's technology and consulting services, the bank plans to develop products that reach a wider audience at less expense. Mastercard in the past year has pushed financial inclusion initiatives in dozens of countries, including the U.S., where it has extended grants to small businesses in underserved communities in Atlanta, Birmingham, New Orleans, New York and St. Louis. Mastercard also works with technology partners to extend access to digital tools for small businesses and oversees mentorship programs. —John Adams

Westpac targets power-of-attorney abuse

Australia-based bank Westpac has added a layer of transaction monitoring to spot potential misuse of accounts that have a power-of-attorney arrangement. The detection service uses tracking technology to flag payments that are unusual for an account that has a power-of-attorney arrangement, or to flag payments that are simply unusual for specific accounts. The bank has about 15,000 accounts that have a power-of-attorney arrangement, normally involving an older account holder. Westpac has assembled teams of specialists to investigate alerts, and has set a procedure to address cases of likely abuse. Among other Australian financial institutions, Commonwealth Bank of Australia, recently began using generative AI to mitigate domestic abuse through bank transactions. —John Adams

Barclays to acquire Tesco’s retail bank, grocer vows buyback

Barclays said it will acquire much of Tesco's banking business as the lender seeks to establish a greater foothold in retail banking in the U.K. Barclays expects to pay about £600 million ($758 million), according to a statement on Friday. Tesco separately said it expects to receive around £1 billion in cash from the sale — which includes the release of regulatory capital and an earlier dividend paid by Tesco Bank — and it will use the majority of that for a share buyback.

The move comes just weeks after Barclays Chief Executive Officer C.S. Venkatakrishnan said the firm will likely have to grow in areas like retail banking in order to shrink the investment banking unit's share of the bank's overall business as part of his bid to boost the lender's share price. The company is planning to unveil a series of new financial targets at an investor event later this month.

The transaction includes £4.2 billion of credit-card receivables, £4.1 billion of unsecured personal loans and £6.7 billion in customer deposits. The two companies will also enter into a 10-year deal that allows Barclays to use the Tesco brand to market and distribute credit cards, unsecured personal loans and deposits, according to the statement. The transaction, subject to regulatory approvals, is expected to complete in the second half of 2024. —Jenny Surane and Jan-Henrik Förster, Bloomberg News