Commerce Feed: Issue No. 15 – April 2022

Russia’s Financial System: Visa & Mastercard Sanctions

Western economic sanctions disrupted Russia’s financial system, with one exception, the WSJ reported. Russian consumers continued to use their Mastercard and Visa cards, even though these two organizations exited the country as the war began. Why? Payments made by these cards issued in Russia aren’t processed via U.S. networks, but rather through a system developed in-country.

DCA Insight:

Setting up their own national payment card system gave Russia the ability to cushion just the sort of disruption that’s happening now. The almost 200 million Mastercard and Visa cards in Russia still work—a rare exception to the effectiveness of sanctions imposed on the country. However, the cards don’t work outside of Russia.

Banks Consider Zelle as Card Alternative

A group of banks that own money transfer service Zelle are contemplating promoting the payment option, which competes with card networks Visa and Mastercard. The move would open growth opportunities for Zelle, which doubled its number of transactions in 2021 driven by the pandemic.

DCA Insight:

Collectively, banks and card networks earn billions each year from fees merchants pay when shoppers pay with credit and/or debit cards. A payment option that moves funds directly between consumers’ bank accounts and merchants’ bank accounts, while convenient to shoppers, may jeopardize a significant revenue stream of revenue for FIs as a whole.

Farfetch Invests $200 Million Into Neiman Marcus

Online luxury retail platform Farfetch Ltd. is investing in Neiman Marcus. The investment will enable the luxury retailer to expand its brands overseas digitally, as well as more closely associate its e-commerce business with its in-store experience.

DCA Insight:

While consumers of luxury goods will always value physical interaction with humans, e-commerce technology will play an important role in this market. Payments translation, call centers and the ability to recognize online shoppers when they enter stores are just a few benefits an application such as Farfetch brings to the equation.

Plaid Founders Buy NorCal National Bank

The co-founders of data network Plaid have purchased Northern California National Bank. The newly acquired one-location FI has been renamed Column and it will manage Plaid’s regulated tasks including holding customers’ deposits and issuing debit cards.

DCA Insight:

Name-brand banks don’t generally perform these tasks, so the work is usually done by community banks, many of which have limited digital offerings and charge high fees. Plaid is betting this move will streamline the bank/data/fintech app/consumer supply chain.

FDF May Webinar

Open Banking Data and Crypto: Integration and Best Practices

Tuesday, May 24th | 10am – 11am PST

Operating at the forefront of financial technology, cryptocurrencies and chains are set to become the next standard in financial data transmission. Novel technologies, though, are always built on solid foundations. Learn about how open-banking APIs are helping crypto become mainstream.

Speaker | Pietro Grandinetti – Chief Technology Officer, Pentadata

Financial Data Forum (a division of DCA) hosts a live, interactive webinar each quarter featuring speakers from some of the world’s most influential companies. They share insights on important and relevant topics for your business—including the impact of Covid-19 on consumer credit behavior, mobile wallet adoption, card-linking and lending trends. The webinar is always free to members and non-members are invited to attend at $99 per registration. Members and non-members are encouraged to register now as space is limited!