The ongoing and escalating conflict between Russian and Ukrainian forces has prompted Western governments to enact numerous and widespread sanctions against Russia and its oligarch class. The short-term consequences are constantly in flux while the outlook of the U.S. and worldwide payments industry will no doubt experience profound changes that are already unfolding in the week (of writing) since the Russian invasion of sovereign Ukraine.
Payment and credit card giants Visa and Mastercard have blocked financial institutions from their networks in response to sanctions targeting Russia after its invasion of Ukraine. Last week, Russia launched an unprecedented invasion of Ukraine, forcing the U.S. and governments around the world to impose a series of sanctions aimed at cutting off Moscow from the global financial system. Last week, the U.S. placed a number of Russian individuals and financial institutions on a sanctions list called the Specially Designated Nationals list.
Shift4 Payments Inc. early Tuesday said it has concluded agreements to acquire international e-commerce acquirer Finaro and cryptocurrency-based donation platform Giving Block in deals valued at $875 million in cash and stock, including future earnout provisions. The latter deal has already closed, while Allentown, Pa.-based Shift4 expects to close the much larger Finaro acquisition later this year. The acquisitions will propel Shift4 into the growing field of cryptocurrency transactions and expand its services into international processing.
Installment purchases can be a lifeline if you’re in a bind—if you’ve maxed out your credit limit or have an emergency trip or repair, for example. Yet many consumers become fans of buy-now-pay-later services because for the most part, the terms make it easy to forget what they really are: loans. As credit bureaus start to include these transactions on your credit report, missing a payment will carry consequences.
“People have gotten used to almost treating buy-now-pay-later like a budgeting tool,” said Sheridan Trent, senior analyst at The Strawhecker Group, a payments research firm. For casual users of these services, a reality check could come in the form of a credit-report ding.
Buy now-pay later providers Affirm and Klarna said they met a March 1 deadline to respond to Consumer Financial Protection Bureau (CFPB) questions about their business practices, making them the only two out of five companies to publicly acknowledge they expected to fulfill their obligations. The federal agency made the request for detailed information from five big buy now-pay later (BNPL) providers in December because of concern over consumers taking on too much debt as the installment payment tool grows in popularity.
Toronto-Dominion Bank is buying First Horizon Corp. in an all-cash, $13.4 billion deal that would create a top-six bank in the U.S. by assets, the two companies announced on Monday. The Canadian company has been looking for a major M&A deal in the U.S. for about a year and found one in the Memphis, Tennessee, regional power First Horizon, opening itself up a gateway to coveted markets in the Southeast. The agreement comes at a time, though, when U.S. regulators have tussled over taking a harder look at consolidation within the industry before approving major acquisitions.
Australian buy-now-pay-later (BNPL) firm Zip Co Ltd plans to buy U.S. rival Sezzle Inc for A$491 million ($352.59 million), building its footprint in the largest retail market as sluggish trade elsewhere earned it a half-year loss. Zip and Sezzle, which are both listed in Australia, had previously disclosed that they were discussing a buyout. They said they agreed terms on Monday, just as Zip confirmed a A$108.1 million loss for July-December, excluding one-off items, versus a small underlying profit a year earlier.
Ukraine’s official Twitter account has been sharing cryptocurrency wallet addresses for the past few days to raise funds during the Russian invasion of Ukraine. As I previously reported, it seems likely that the Ukrainian government is in control of the funds received on these wallet addresses as a spokesperson for Ukraine’s Ministry of Digital Transformation confirmed that “these accounts are state-owned.” But what are the goals with these crypto donations and what’s going to be purchased with those funds?
Revolut's Russian-born CEO Nik Storonsky has joined fellow co-founder Vlad Yatsenko in condemning the attacks on Ukraine. Storonsky had been notably quiet when Yatsenko went public with a personal attack on Putin, branding him a "monster and a liar". In a blog post, Storonsky says he kept his counsel out of concern for the safety and wellbeing of Revolut staff on the ground in Ukraine and Russia. "I would like to make clear, publicly, what I’ve felt privately from day one: war is never the answer," he writes. "This war is wrong and totally abhorrent."
Multinational eCommerce giant eBay Inc is reportedly looking into accepting crypto as a means of payment. The firm’s CEO Jamie Iannone said that eBay could make an official announcement on its upcoming investor day on March 10. "We're not accepting crypto currently. But on March 10, we're going to go deeper on all of these things, payments, advertising, our focus categories," he said to The Street. The move to accept cryptocurrency will be geared towards making eBay the “go-to platform” for Gen Z and Millennials.
N26, the German banking startup, will be ready for an IPO by the end of the year, according to co-CEO Maximilian Tayenthal, CNBC reported Tuesday (March 1). The stock market debut might happen in 2024, according to Tayenthal. But the company isn’t in a rush. He said they are “not stressed to enter the public markets” any time soon, as private markets had been “incredibly liquid.” Tayenthal founded the company in 2013 with Valentin Stalf, a longtime friend.
Amazon is shutting down all its Amazon Books physical bookstores, as well as its Amazon 4-star and Amazon Pop Up stores, which sold a variety of electronics and other hot items. The closures affect 68 stores across the U.S. and U.K., Amazon said. Closure dates will vary by location and Amazon will help affected employees find roles elsewhere in the company. Workers who opt not to stay with the company will be given severance, Amazon said. News of the store closures was first reported by Reuters.
As Bed Bath & Beyond® strengthens its authority in the home category, it is providing customers with a modernized shopping experience that includes an improved store layout, inspiring collection of national and Owned Brands, and in-store features on its mobile apps. The retailer is also investing in technologies and turned to the provider of enterprise technology and world’s largest self-checkout provider, NCR Corporation, to help support its store transformation.
U.S. retailer Target Corp posted record holiday quarter earnings on Tuesday and forecast an upbeat 2022 as it expects supply chain pressures to ease later in the year, lifting shares 14%. Margins remain front and center for investors this earnings season, with big retailers spending heavily to expedite shipments and hiring thousands more people to navigate bottlenecks and ensure well-stocked shelves.
Kohl’s reported a mixed fourth quarter as earnings topped estimates and sales came up short. But the company gave an upbeat revenue outlook for 2022 and said it is doubling its dividend. Despite supply chain, inflation and labor challenges, Kohl's noted that it achieved an operating margin goal of 8.6% — two years ahead of schedule. Kohl’s posted net income of $299 million, or $2.20 per share, for the quarter ended Jan. 29.
The Senate on Tuesday passed major cybersecurity legation, moving one step closer toward forcing critical infrastructure companies to report cyberattacks and ransomware payments. The passage comes as federal officials have repeatedly warned of the potential for Russian cyberattacks against the United States amid the escalating conflict in Ukraine. The legislation, which still has to pass in the House, would require critical infrastructure owners and civilian federal agencies to report to the Cybersecurity and Infrastructure Security Agency within 72 hours if they experience a substantial cyberattack.
Chargebacks911, a post transaction fraud platform, is working with Microsoft to launch a new fraud protection solution for financial institutions that identifies and combats fraud with the use of integrated data and adaptive artificial intelligence (AI) technology. By combining Chargebacks911’s dispute and chargeback technology with Microsoft Dynamics 365 Fraud Protection, financial institutions get a complete package covering both pre-authorization and post-transaction friendly fraud protection.
Although credit cards were involved in the highest number of fraud reports – about 88,000 – they only accounted for $181 million in fraud losses as a payment method, according to the FTC report. By contrast, cryptocurrency was the payment method in about 39,000 fraud cases, but accounted for an outsized share of losses, $750 million. With crypto, "there’s lots of consumer fraud going on, because there’s tons of bad actors that know this is bleeding edge, they know there’s tons of gaps all over the place, so they’re taking advantage," said Cliff Gray, a senior associate with the industry consulting firm The Strawhecker Group.
Federal Reserve Chairman Jerome Powell still sees interest rate hikes coming, but noted Wednesday that the Russia-Ukraine war has injected uncertainty into the outlook. Powell said he sees a series of quarter-percentage-point increases coming, though he left open the possibility of moving more aggressively should inflation persist. In remarks prepared for dual appearances this week before House and Senate committees in Congress, the central bank chief acknowledged the “tremendous hardship” the Russian invasion of Ukraine is causing.
The easing of COVID-19 restrictions as cases of the omicron variant declined helped lead to a drop in initial jobless claims last week, sending them to the lowest level this year. The Labor Department reported weekly unemployment claims fell 18,000 to 215,000, below economists’ forecasts. That was the fewest claims since the last week of December. The total number of those receiving jobless benefits in the week ending February 19 was unchanged at 1.48 million. However, the four-week moving average fell by 36,250 to 1.54 million. It hasn’t been that low since April 4, 1970.
EVERTEC, Inc. announced that it entered into a share purchase agreement to acquire 100% of the outstanding shares of BBR SpA ("BBR") a Santiago, Chile based payment solutions and business technology company with operations in Peru. The aggregate purchase price for the shares is CLP 48,600 million, approximately USD$60 million at current exchange rates and is subject to customary adjustments. Mac Schuessler, Evertec's President and Chief Executive Officer stated, "The acquisition of BBR complements our existing technology and product portfolio in Chile and opens the Peruvian market for Evertec."
Fulton Financial Corporation and Prudential Bancorp, Inc. announced that they have entered into a definitive Agreement and Plan of Merger under which Prudential will merge with and into Fulton in a stock and cash transaction.Fulton Financial Corporation, the bank holding company for Fulton Bank, N.A., with consolidated assets of approximately $26 billion, provides financial services through 200 financial centers in Pennsylvania, Delaware, Maryland, New Jersey and Virginia. Prudential is the holding company of Prudential Bank, a Pennsylvania-chartered savings bank with assets of approximately $1.1 billion.
“We are pleased with our fourth quarter results which exceeded our revised guidance for revenue and adjusted EBITDA. We saw continued strong performance from US Acquiring and the turnaround of our digital wallet business is well underway with the actions we’ve taken driving positive results, repositioning the business for success, and enabling us to absorb market risks in Europe,” said Philip McHugh, CEO of Paysafe. “We continue to win and pursue competitive deals with some of the most disruptive companies in high growth verticals, such as North America iGaming and crypto, and our teams remain extremely focused on delivering on our commitments, positioning Paysafe for strong future growth.”
Paya Holdings Inc., a leading provider of integrated payment and commerce solutions, today reported financial results for its fourth quarter and full year ended December 31, 2021. “Paya finished the year on a strong note driven by our integrated payments and ACH solutions, and the continued favorable trends in the key markets we serve, especially B2B,” said Paya chief executive officer Jeff Hack.
The Electronic Transactions Association (ETA), the world’s leading advocacy and trade association representing the digital payments industry, announces the appointment of Mr. Riaz Ladha as its Vice President of Industry Affairs. "As the industry continues to rapidly evolve and innovate, developing products and services that facilitate the efficient and secure flow of commerce and foster financial inclusion, the role of ETA in supporting that dynamic ecosystem is increasingly important,” says Jodie Kelley, CEO ETA.
Financial technology leader FIS announces that its Worldpay from FIS business is helping merchants seamlessly comply with complex web of evolving crypto regulations, all designed to create a secure ecosystem for transactions. To continue to help merchants easily comply with the evolving regulatory landscape in crypto, Worldpay is partnering with Shyft Network. The partnership will enable Worldpay merchants to utilize Shyft’s Veriscope solution to meet multi-jurisdictional requirements set out by the FATF (Financial Action Task Force) Travel Rule.
Fiserv, Inc., a leading global provider of payments and financial services technology, announced that its Board of Directors elected Frank Bisignano, President and Chief Executive Officer and a current director of Fiserv, as Chairman of the Board. The board also elected Doyle Simons, a current director, to serve as lead independent director. Both appointments will be effective upon reelection at the Fiserv Annual Shareholders Meeting on May 18, 2022.
Visa announced that Frank Cooper III will join the company as Chief Marketing Officer (CMO) in May 2022. Mr. Cooper will also serve as a member of the company’s Executive Committee and report to Chairman and Chief Executive Officer (CEO), Al Kelly. “Frank is a rare mix of creative brand strategist with strong business acumen and a leader who understands the deeper brand opportunity that comes from leading with purpose,” said Al Kelly, Chairman and CEO, Visa. “We are thrilled to welcome Frank to Visa and for the broad perspective and skillful leadership he will bring to our business and ongoing brand evolution.”
The Worldline proposition for the Japanese market is based on a strong partnership with Vesca, a leading local provider of payment solutions and network service provider (NSP). Worldline will provide transaction processing, leveraging the footprint, scale and technology of its global payment processing facilities, while Vesca is the technical enabler that acts as the acceptance layer in the country. Through this set-up, starting to accept credit cards will no longer be cumbersome for merchants, and they can do so at competitive costs.
Flywire Corporation a global payments enablement and software company, reported preliminary and unaudited financial results for its fourth quarter and fiscal year 2021. "Flywire delivered strong results in 2021, with total annual revenue increasing 53% and total annual revenue less ancillary services increasing 58% year-over-year. The demand for domestic and cross-border payments led to another strong quarter of revenue growth, backed by our success in growing existing clients, winning new clients, and expanding our channel partnerships around the world,” said Mike Massaro, CEO of Flywire.
