Your Friday fix for global fintech and payments news
As the world adapts in response to the global COVID-19 pandemic, like many other industries, the payments industry has also been affected. Digital payments have seen a meteoric rise, while cash usage in the UK has halved just days after the shops closed. However, aside from all the virus news, there has been an announcement from UK-based fintech Revolut, which is to launch its neobank in the US.
Our weekly round-up brings you a dose of some of the biggest news announcements from the past seven days so you can keep an eye on all that’s shaping our world this week.
- Digital payments soar amid coronavirus restrictions
- UK cash usage halves within days as shops close due to coronavirus
- Revolut launches its neobank in the US
Digital payment services have seen a huge surge in demand as consumers on a global scale stock up amidst the coronavirus pandemic. According to McKinsey & Co, many e-payment providers are having to fall back on contingency plans put in place to deal with seasonal bursts in online shopping, like Black Friday or holiday sales, to increase available cloud capacity in line with the surge in demand. Italy alone has seen an 81% rise in e-commerce transactions since the end of February, when the country was first put into quarantine. With even more countries around the world beginning to put their citizens under lockdown, this trend is expected to continue to grow in the coming weeks.
According to Link, a company which operates the UK’s biggest network of ATMs, cash usage in Britain has decreased by half in the past few days. The closure of shops and other retail outlets, in addition to the World Health Organisation encouraging consumers to use contactless payments has, at least for now, moved consumers away from cash. “Consumers’ ATM and cash use has fallen significantly, by around 50%, over the past few days and this is likely to continue as people move to follow the prime minister’s instructions to stay at home,” a representative of Link stated. Among the other factors impacting the usage of cash is the news that many shops that remain open are now refusing to accept bank notes and coins.
European-based fintech, Revolut, has launched its app and services in the US. Anyone in the US is now eligible to sign up for a debit card to join the 10 million plus customers already using its services. Successfully generating a US $500 million funding round, the company, now valued at US $5.5 billion, operates as a financial hub, allowing its customers to spend, send, receive and manage money using its app. Its popularity in the US has been predicted, with tens of thousands already on the company’s waiting list. Card services currently offered by Revolut in Europe include the cardholder’s ability to control card functions via the app, receiving notifications following each transaction. While a basic service is initially being planned in the US, the company is planning to roll out many more of its features in the future.