Latest global banking news

October 26, 2022 11:48 AM

In global news this week, India fines Google over its payment policy; U.K. regulators crack down on "greenwashing," and JCB tests a digital currency.

Here's what's happening around the world.

David Paul Morris/Bloomberg

India orders Google to allow third-party payment services

The Competition Commission of India has fined Google $113 million and directed the company to allow developers on the Google Play Store to offer third-party payment services for in-app purchases. India regulators said Google's mandate that developers use Google's billing system was an "unfair condition" and discriminatory. Regulators often pressure Google and Apple, which have long required developers to use the technology companies' payment systems, typically for a fee of up to 30%. Google and Apple have countered the payment fees fund security risks in the app stores. "Indian developers have benefited from the technology, security, consumer protections, and unrivaled choice and flexibility that Android and Google Play provide," said Google's media relations department in an email on Wednesday. "We remain committed to our users and developers and are reviewing the decision to evaluate next steps."

Jasper Juinen/Bloomberg

EU plans to mandate instant euro payments

The European Union plans to require banks in the zone to support instant payments in euros. Regulators want to jump start adoption of instant payments, given that only 11% of euro credit transfers in 2021 were settled in real time, reports Reuters. A draft of the new regulation will be distributed to EU states and the European Parliament in the coming week, with six months to comply if approved. Dozens of countries globally are expanding real-time settlement to accommodate the speed of e-commerce transactions, among other use cases. In the U.S., The Clearing House's RTP rail has been live for several years, while the government-backed FedNow rail is expected to launch in 2023.

ABN Amro including financial management in mobile app

Dutch bank ABN Amro will add its personal financial management tool Grip to the ABN Amro app later this year, extending the feature to more than 3 million clients. The expansion will be gradual, with a feature allowing users to view upcoming expenses the first to go live. A single overview for fixed expenses and subscriptions will be next, including a way to digitally cancel subscriptions. The bank hopes the move will incorporate Grip into as many accounts as possible ahead of discontinuing Grip as a standalone app on December 16. The bank began notifying customers of the move this week.

Japan's JCB testing central bank digital currency

Japanese credit card firm JCB is teaming with identity technology firm Idemia and fintech Soft Space to pilot a central bank digital currency with Tokyo merchants. JCB contactless cards and a special JCB digital currency (Japan's CBDC has not yet launched) will be used at existing point-of-sale terminals to determine if existing infrastructure can be used for CBDCs. Japan is one of dozens of countries that are either developing or experimenting with CBDCs, which are designed to extend access to digital commerce to more consumers and businesses, while acting as an alternative to cryptocurrencies.

U.K. House of Commons votes to regulate crypto

The House of Commons has voted to keep a provision in the post-Brexit Financial Services and Markets Bill that would categorize cryptocurrencies as regulated assets, a step that's generally a precursor toward mainstream acceptance of cryptocurrency. The bill would also extend existing regulations that stablecoins be pegged to traditional assets such as gold or dollars, according to Yahoo Finance, adding the provision could bar crypto companies that are not licensed from operating in the U.K. The House of Lords will have to pass the bill before royal approval. Rishi Sunak, the U.K.'s new prime minister, is seen as "pro crypto," given his role in developing the Financial Services and Markets Bill while a member of former Prime Minister Boris Johnson's cabinet.

U.K. proposes tighter rules for 'green' labeling

The Financial Conduct Authority wants to strengthen the rules for when a financial or investment product can use phrases such as "green," "sustainability" or "ESG." The regulator hopes to cut down on financial firms using environmentalism as a marketing strategy while falling short of actually mitigating climate change or other challenges — a practice commonly referred to as "greenwashing." The FCA is proposing sustainability labels, with accompanying criteria, as well as a greenwashing rule that covers all of the companies that fall under the FCA's jurisdiction.

Canadians prefer contactless payment for transit

Thirty-seven percent of Canadians view a dedicated payment method for transit as inconvenient, compared to 19% before the pandemic, according to Interac, the national debit card network. The survey also found 83% of Canadians carry a payment card at all times, and 67% want to pay for transit with that card if available. Additionally, 52% say transit use is important for Canada's economic recovery. Transit agencies globally are adding open loop and contactless payment systems in an effort to bring riders back into systems and reduce the amount of work agencies need to do to produce tickets and accept payments.

ECB delays launch of real-time payment system

The European Central Bank plans to launch the T2 real-time settlement and liquidity management system in March, four months later than expected. The delay is meant to give users more time to test the system, which is designed for larger payments that typically involve banks or corporations. T2 combines several existing systems in an effort to streamline real-time payments that flow between member nations. Central banks in Germany, France, Spain and Italy are providing the software to run the tests. Most users are ready to go live with T2, but there are some parties that have encountered software problems and difficulty accessing the test environment.

Remitly adds markets in Asia Pacific

Money transfer firm Remitly will support remittances to and from Japan and New Zealand, bringing the firm's network to more than 170 countries. Remitly cited World Bank data that found remittances sent from Japan doubled between 2015 and 2022, reaching $8.25 billion. And remittances sent from New Zealand have grown 400% over the past twenty years, reaching $875 million. Remitly has processed more than $2.5 billion in remittance volume from the APAC region. Remitly's global distribution network reaches about 5 billion bank accounts, 705 million mobile wallets and 410,000 cash pickup locations with home delivery in some of its markets.

CBA plans financial crime academy

Commonwealth Bank of Australia has partnered with Griffith University to form investigation techniques and develop security technology that can mitigate cyber risks and aid compliance. Students and professionals will develop standards to conduct forensic accounting and criminology to detect patterns of financial crime and spot risks in data trends. The program will become part of the university's curriculum, and is designed to address a shortage of technology workers in Australia with the required skills. The bank and university estimate financial crime totals more than $3 trillion annually, or about 2% of global GDP. Less than half of this amount is reclaimed.