Revolut halts crypto purchases; Santander warns about scams

Revolut plans to suspend crypto trading for U.K. businesses

U.K. challenger bank Revolut on January 3 will halt crypto purchasing for U.K. clients while it works on compliance for new regulations. The users will still be able to sell from their accounts, reports City AM, which attributed the news to a note Revolut sent to clients that leaked to the press. The Financial Conduct Authority in October released crypto regulations that require firms to be authorized and registered with the FCA before marketing cryptocurrencies for purchase. Firms that are not registered must have their marketing programs cleared by a FCA-approved company. The regulations also stipulate that crypto marketing and sales must not be misleading and include warning labels about the risk of crypto investments. The FCA in October issued more than 140 compliance warnings to firms in the first 24 hours of the regulations going live. Revolut did not return a request for comment by deadline. — John Adams

Santander adds warnings for Facebook Marketplace payments

Santander will reject bank transfers for Facebook Marketplace transactions if consumers say they have not seen the item in person before making a purchase. The bank contends it has lost about $9 million this year related to scams on the social media company's online market, or more than double 2022's losses. When making a payment, buyers will now be asked if they have viewed the item. A "no'' answer will trigger additional steps before a payment can be made. Consumers who answer "yes": will be able to proceed, but will also receive a warning about social media payment scams. "Building on existing measures in place to protect customers, this latest move will prompt our customers to think twice before handing over money to any potential fraudsters," said Chris Ainsley, head of fraud risk management at Santander, in a release. Meta, which operates Facebook Marketplace, did not return a request for comment. —John Adams

Visa plans to buy a majority stake in Mexican payment firm Prosa

Visa has agreed to acquire a majority stake in Prosa, a Mexico City-based transaction processor. Prosa will remain an independent company with its own management team, technology stack and products and services, which it sells to financial institutions and other clients. Visa will aid Prosa in developing and adopting new payment technology, such as faster payment processing and tokenization, which in this case means replacing a payment card's account number with a substitute number for an individual transaction, a key element in e-commerce payments. Visa is hoping to become more active in Mexico, where the payments industry is becoming more competitive. "With the enhanced technology infrastructure provided by Visa's global payments network, we are setting the groundwork to develop new, innovative ways to pay and be paid for consumers and small businesses alike alongside local issuers and acquirers in Mexico," said Eduardo Coello, regional president for Visa Latin America and the Caribbean, in a press release. The Prosa deal is expected to close before the end of 2024, and terms were not disclosed.— John Adams

TD expands data sharing capabilities in Canada, U.S.

TD has signed a deal with data company Plaid that will enable bank customers in Canada and the U.S. to share data with more than 8,000 apps and services that are part of Plaid's network. Consumers will connect to these apps through Plaid's application programming interfaces. TD has similar agreements with Mastercard's Finicity unit, Envestnet Yodlee and other data aggregators. The Plaid partnership will add to TD Bank's ability to offer open banking, defined as using permissioned data sharing for consumers to access multiple financial and non-financial products though a primary bank account. "Our data-access agreement with Plaid is another pivotal step in developing a more secure, reliable and innovative digital experience for our customers," said Franklin Garrigues, vice president of external ecosystems at TD, in a release. —John Adams

M-Pesa will issue a plastic payment card

The Kenyan mobile money service M-Pesa in the coming weeks will add a Visa debit card that will enable consumers to pay at physical points of sale. M-Pesa, which is operated by the mobile operator Safaricom, will issue the debit cards to more than 60 million consumers and 5 million businesses in the eight countries where M-Pesa operates. M-Pesa also plans to add a service for tourists that will provide card acceptance for about 1 million merchants. M-Pesa, which enables telco customers to use their mobile accounts to make payments, has long been a source of financial inclusion in Africa. It was initially an alternative to banks in regions where mobile phones were more prevalent than bank branches. But M-Pesa has more recently expanded its reach through partnerships with banks, e-commerce firms and payment companies. — John Adams

JCB expands contactless payments in the U.K.

Japanese payment processor and merchant acquirer JCB has expanded its collaboration with bank technology firm FIS to fill a coverage gap among merchants. JCB covers about 20% of U.K. merchants and the enhanced collaboration is expected to cover the entire market by the end of 2024. "Worldpay's merchants will benefit from an enhanced customer experience. The payment preferences of consumers across the region are changing rapidly," said Nick Fisher, general manager for the U.K. at JCB International, in a release. Digital payments have been on the rise in the U.K. for years. That has led to a rush to address the growth in digital banking and a political push to protect access for consumers who still rely on cash, which is holding on as a payment method despite a multiyear decline. — John Adams

Paytm founder launches new fund to bet on AI, EVs roundup slide

Paytm's Vijay Shekhar Sharma

Bryan van der Beek/Bloomberg

Paytm billionaire bets on young, wealthy users in India to hit profit sooner

Paytm plans to revamp its online wealth management services and hire more than 15,000 contract salespeople to get more merchants on its network, aiming to hit profitability sooner than targeted.

Billionaire founder and CEO Vijay Shekhar Sharma is overhauling Paytm's suite of money management products to better tap growing wealth among younger users, who are warmer to the idea of investing online. At the same time, the company is orchestrating a campaign to boost its salesforce to 50,000-plus people next fiscal year to try and sign up more merchants across smaller Indian cities and towns.

The twin initiatives mark an ambitious effort to turn around Paytm, officially called One 97 Communications Ltd., once hailed as a new-economy symbol of India's startup scene. The company has fallen roughly 70% since a $2.5 billion 2021 IPO as investors fret about persistent losses, while rivals such as Walmart Inc.'s PhonePE and regulatory curbs threaten to sap growth.

Now, Sharma says the wealth and merchants push, coupled with cost savings from AI automation, could help Paytm generate an operating profit in under a year. That would be faster than previous internal projections or analysts' estimates, the CEO said without elaborating.

"We have learned and we will amplify our ability to serve India, its small merchants and businesses," he told Bloomberg News in his company's chrome-and-glass headquarters on the outskirts of New Delhi. "We should be crossing about 50 million merchant-base signups on the Paytm platform in the year," he said from offices overlooking condominiums on one side and a large construction site on the other.

The Noida-based company had about 38 million merchants as of September, nearly 10 million of whom were paying for offerings such as QR codes, Soundboxes or audio payments confirmation machines and card machines.

Sharma, 45, the son of a teacher from a small town in India's most populous state of Uttar Pradesh, founded One 97 in 2010. The company began by offering services such as recharges for prepaid mobile services, but a federal withdrawal of high-value currency notes in 2016 gave its business a fillip. It grew rapidly into India's most ubiquitous payments brand, and counted Jack Ma's Ant Group Co. and Masayoshi Son's SoftBank Group Corp. among its backers. — Sankalp Phartiyal, Bloomberg News

African Development Bank to pull some staff from Ethiopia after assault

The African Development Bank, the continent's biggest multilateral lender, said it's withdrawing its international staff from Ethiopia immediately after two of its employees were arrested, detained and assaulted in the country on Oct. 31.

The two staff members were released after Akinwumi Adesina, the bank's president, contacted Ethiopian Prime Minister Abiy Ahmed. The bank made an official complaint on Nov. 6, demanding an investigation. Finance Ministry officials didn't immediately respond to a request for comment.

"The situation is still not yet resolved in a satisfactory manner," Adesina said in a statement on Wednesday, adding that a delegation of senior bank staff had traveled to the country. "The Ethiopian government has, to date, not shared with the bank any report, or details of investigations into the incident," he said, adding that its international staff do not feel safe in the country.

The souring of relations with the crucial lender comes at a time when Ethiopia's economy is already struggling. The country defaulted on its international debt last week and last month an auction for a third mobile license failed to attract any bidders. The only internationally owned financial services company said it was closing down after the central bank changed foreign exchange rules.

"The incident has also raised concerns among the bank's shareholders, other multilateral development banks, international financial institutions, the broader diplomatic community, and other stakeholders," Adesina said. "While the bank appreciates the excellent relations it has with Ethiopia until this egregious incident, its continued operations and future presence in the country could be negatively affected if the incident is not fully resolved." —Antony Sguazzin, Bloomberg News