Global Fintech news yesterday focused mostly on Asia and developments in payments. With influence from “Asian tigers” Singapore and Hong Kong, South East Asia has huge potential for growth. Fintech in this region helps the unbanked access financial services more easily which increases financial stability. Payments innovation and developments in digital banking and digital currencies are particularly relevant to these economies.
Payments innovation in Asia
Singapore-based digital payments solution TransferTo links mobile wallets, bank accounts and cash networks. This week, TransferTo announced a partnership with ride share company Grab. Drivers are instantly paid wages into their digital mobile wallet. The added financial security of instantaneous payments will help drivers and their dependants. Also this week, progress in financial inclusion in Bahrain with the signing of a MoU between Mastercard, Bank Asia and a2i, an innovation lab in Bangladesh. Digital solutions can immensely increase access to financial services for rural populations.
However, the position for foreign payments card providers such as Mastercard and Visa may become more strained in China due to reports that partnerships with domestic firms will be required to retain corporate licences. Perhaps this announcement is timed with President Trump’s tour of Asia, including Beijing.
UK-based money transfer platform Xendpay announced its entrance into India after approval from the Royal Bank of India. Its pay-what-you–want money transfer service operates in 205 countries. The service is like Transferwise, also UK-based. Both platforms allow international or domestic money transfers without the delays or charges of traditional banks.
Payments are increasingly digital and painless. All these developments bring two words to the minds of the incumbents: disruptive innovation. Innovation itself must be assessed. It is really disruptive and revolutionary? Only this will secure market power in the fast-transforming future.
Cryptocurrencies getting more government attention
In recent months, governments globally have been stating their positions vis-à-vis cryptocurrencies. This emerging trend was backed up by announcements from the Securities Commission Malaysia saying a regulatory framework will be constructed which facilitates local cryptocurrency exchanges with a registration regime. Government support for regulation of cryptocurrencies has recently been demonstrated in Australia, where double taxation was removed in October.
Across the Pacific, Uruguay is steaming ahead with digital currency adoption, announcing a six-month pilot period of a digital Uruguayan peso. The digital wallet is accessible via a mobile app. The Uruguayan Central Bank has stressed it is not a cryptocurrency like bitcoin but a digital currency that will revolutionise the way business is conducted. Digitisation increases government capacity for regulation and surveillance of money transfers. The digital currency pilot period initiated by the Uruguayan government resembles the freedom of startups to experiment. Dynamic experimentation allows startups to come out on top. If smaller economies can better adjust to and innovate with technological developments, a drastic reshuffling of the global structure could occur.
By Grace Appleford, Research Analyst at Holland FinTech.]]>