ST Payment Recruitment

CHINA IS THE ONLY ECONOMY EXPECTED TO GROW IN 2020 (30 seconds read)

The Chinese economy grew 4.9% between July and September 2020, according to government data, as China becomes the first major economy to recover from the Covid-19 pandemic.

The year-on-year expansion represents a dramatic reversal from the first quarter of this year when the economy shrunk by 6.8%.

China’s central bank governor Yi Gang said on Sunday that officials predict annual growth of about 2%. “The Chinese economy remains resilient with great potential. Continued recovery is anticipated, which will benefit the global recovery.” he said.

China is expected to be the only G20 economy to grow this year. The global economy is expected to decline by 4.4%, according to the International Monetary Fund, the steepest downturn since the Great Depression.

While most Chinese cities have returned to normal with schools and offices reopened, data showed industrial production in September rose 6.9% compared to the same period last year. Retail sales were up 3.3%. Auto sales for the month also increased 12.8% while domestic air travel exceeded pre-pandemic levels. Consumer spending has begun to pick up again during a week-long public holiday in October known as Golden Week.

The Chinese leadership are pursuing a new strategy known as a “dual circulation economy.” The concept, first proposed by Xi Jinping in May is aimed at reducing the country’s reliance on overseas markets. “Globalisation is facing a reversal, with rising protectionism and unilateralism. The world economy is weakening. We are forming a new development pattern with the internal economic cycle playing a leading role.” he said.

GOOGLE LAUNCHES REDESIGNED GOOGLE PAY APP. (30 seconds read)

Google Pay has launched its redesigned app, growing from a simple payments tool to a real financial management service.

Available now in the US on Android and iOS, this new version of Google Pay app focuses less on the user's cards than their relationships with friends and businesses.

Americans can make P2P, contactless and e-commerce payments, see past transactions, and find offers and loyalty info around conversations.

For example, if a user needs to split dinner, rent or other expenses with more than one person, they can create a group, split the bill, and keep track of who’s paid in a single place.

The app can also understand and automatically organise spending - enabling users to search over categories to find the relevant transactions and get in-app spending summaries via an Insights tab.

“What we're trying to do with the new Google Pay is bring three things together in one app,” Woodward told Webster. “The first thing is paying friends and businesses. The second thing is helping you explore offers and rewards so you can save money. And the third thing is: How can you get insights on your spending so you can stay on top of your money?”

Google Pay will not sell data to third parties or share transaction history with the rest of Google for ad targeting, he said. "We know that when it comes to money, security and privacy are absolutely critical. And you'll see us take a very strong privacy-forward design approach,” Sengupta noted.

How will established banks respond to these changes?

NEXI BUYS NETS IN $9.2 BILLION DEAL (30 seconds read)

Italian payments processor Nexi SpA agreed to buy private equity-owned rival Nets A/S, creating the Europe’s biggest payments company by volume, number of customers and earnings before interest, tax, depreciation and amortisation. The deal values the Copenhagen-based Nets at 7.8 billion euros.

The two firms wrapped up weeks of talks with a deal that will generate about 170 million euros of synergies per year.

Nexi Chief Executive Officer Paolo Bertoluzzo has rapidly expanded the company through acquisitions. The transaction, finalized just a month after the acquisition of Italy’s SIA SpA for 4.6 billion euros, will extend the Italian company’s reach across Europe. “The strategic rationale of the deal is appealing, extending Nexi’s growth runway beyond Italy.” analyst Paul Kratz said in a note.

Nexi rise as much as 3.6% in Milan trading, giving the firm a market value of 9.45 billion euros.

In third quarter Nexi’s revenue increased 1% to 276 million euros. Volumes recovered in the period, with acquiring transactions on Italian cards back to pre Covid-19 growth levels, but the company said it has seen a new slowdown in volumes since October due to the second wave of the virus.

Can we expect more consolidation in the market?