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MODULR BECOMES A PRINCIPLE ISSUING MEMBER OF VISA

VISA

The FinTech Modulr today announced it has joined Visa as a principal issuing member, granting it direct access to the industry-leading global payments network. The new partnership will add extra functionality and benefits to Modulr’s offering, including optimised pricing, improved speed to market and simpler ways to launch Visa products.

 

By removing the requirement to go through an intermediary bank, Modulr’s membership eliminates extra layers of friction and complexity, and gives them the ability to issue Visa products directly, meaning greater control over the FinTech’s delivery, payment infrastructure and scheme compliance issues.

 

Modulr will use the partnership to further expand its customer base in Europe, with a view to launching both consumer and business card capabilities for partners in the future, as well as additional issuing currencies. The partnership will also be used by Visa and Modulr to drive adoption within its key market verticals, including travel and alternative banking.

 

Myles Stephenson, CEO of Modulr, comments: “Gaining direct access to key financial infrastructure, such as the Visa network, means that we gain more control and are able to deliver faster, simpler and increasingly friction-free full payment capability to our clients. By opening up access to non-banks such as ourselves, it also helps to provide a more level playing field for competition in the sector.

 

“We look forward to extending the functionality of Modulr’s core platform with a leading card scheme, enabling us not only to build a more reliable service, but to pioneer payments innovations even faster.”

 

Jill Docherty, Head of Business Development, UK & Ireland at Visa, comments: “We are thrilled to announce our partnership with Modulr, an exciting payments platform that enables digital businesses to offer innovative, user friendly, payment solutions. We look forward to working with Modulr as it looks to expand its portfolio and grow across key sectors in Europe such as travel. We look forward to seeing how our partnership will enable even more businesses across the UK and Europe to benefit from Visa products, driven by powerful payment solutions built by Modulr.”

 

In 2019, Modulr became one of only a few non-banks to gain direct access to Bacs and Faster Payments and recently won Best Initiative from an SME at the Card & Payments Awards 2020.

 

Through direct access to Faster Payments, Modulr holds an account in the Bank of England’s (BoE) Real-Time Gross Settlement (RTGS) system, allowing the FinTech to settle payment obligations in central bank money under its Modulr FS Limited entity (FRN 900573). And through direct access to Bacs, Modulr takes full control of its Bacs payment flows and removes any reliance on third-party banking partners. It has now done the same with its Visa principal issuing membership.

 

Modulr, which powers the likes of Sage, Liberis, Salary Finance, Iwoca and Paxport, is a Payment as a Service API platform created for digital businesses that need a faster, easier and more reliable way to move money. Backed by investors, Blenheim Chalcot and Frog Capital, Modulr has raised a total of £35m in funding since inception in 2016. The FinTech was most recently named as one of 25 Top Startups to work for in the UK by LinkedIn.

 

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ERSTE BANK HUNGARY IMPROVES AND SECURES THE REMOTE BANKING EXPERIENCE WITH ONESPAN MOBILE SECURITY

ONESPAN

Leading Hungarian bank deploys OneSpan’s Mobile Security Suite to one million customers to make mobile banking convenient while fighting fraud and meeting PSD2 requirements

 

OneSpan™ (NASDAQ: OSPN), the global leader in securing remote banking transactions, today announced that Erste Bank Hungary, a subsidiary of Erste Group Bank AG, one of the leading banks in Central and Eastern Europe, has integrated OneSpan’s Mobile Security Suite into its banking app MobilBank. Erste Bank Hungary selected Mobile Security Suite to enable and protect online and mobile transactions and to comply with PSD2 requirements for authentication and dynamic linking.

The European Payment Council has stated that social engineering attacks continue to increase and remain instrumental in fraud schemes, often in combination with malware.[1] Erste Bank Hungary chose to implement OneSpan’s Mobile Security Suite to protect against potential social engineering and malware attacks directed at its customers. OneSpan’s technology enables banks to integrate application shielding, biometric authentication and transaction signing.

Erste Bank Hungary added Mobile Security Suite’s Cronto visual transaction signing to replace the bank’s SMS authentication with push authentication for login and transaction signing. This new process improves security and eliminates significant costs related to SMS delivery. OneSpan’s Cronto technology also helps fight social engineering attacks like phishing, while enhancing the customer experience by  enabling transaction signing using a color QR code.

“OneSpan’s proven technology will help us maintain our leading position in the market without compromising on security or the customer experience,” said Erste Bank Head of Digital Services, Akos Andras Molnar. “As part of this roll-out, our customers can also make online purchases using push notification with any retailer connecting to Erste Bank via the 3-D Secure protocol.”

“Criminal hackers continue to target banking customers as social engineering remains a preferred technique,” said OneSpan CEO, Scott Clements. “In their search for security solutions, banks need to consider cost, convenience and regulatory compliance. OneSpan’s technologies address these concerns so that banks can focus on providing a secure and convenient customer experience.”

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HOW WILL LENDERS TREAT THE FINANCIAL SYMPTOMS OF COVID19?

FINANCIAL

COULD the coronavirus pandemic spark a financial crisis similar to that which was seen in 2008? Tim Kirby, Group Commercial Director of the global fintech Monevo, a personal lending marketplace and platform, discusses how Covid-19 could play out for lenders.

The 2008 financial crisis, explains Kirby, was about credit over-exposure. While strains are apparent in the money markets today, it is not 2008, when risky mortgage investments in the US banking sector and into the UK caused everything to collapse.

Kirby said: “The financial crash was self-inflicted for many reasons, including poor income verification, poor credit quality assessment and poor employment verification (self-certification). It was asset-backed predominantly as it was led by sub-prime mortgage lending.

“My thoughts are that once the virus is contained, the economy will most likely turn back on within a few months, however recovery to current levels will be somewhat longer.”

Kirby predicts that it is very possible this downturn will be shorter than the 2008 financial crisis based on a number of factors.

He said: “The financial crash was either at a house purchase level or encouraging debt consolidation through re-mortgaging that placed unsecured debt into secured debt over a longer term. The consumer then ramped up unsecured debt again with the same poor assessment applied and eventually ran out of headroom.

“This was propped up by the capital markets and warehouse funding lines being supported through securitisation models that rated the loans held in the bonds as AAA.”

Kirby adds that the coronavirus outbreak is more micro and consumer-led than the recession was.

“There is still a great deal of uncertainty, but consumers are certainly going to experience affordability difficulties in the short-term, perhaps three to six months,” Kirby explains. “Lenders are already tightening their criteria and that could lead to more tactical initiatives being introduced.”

Kirby points to the potential introduction of black-listing certain occupation types most affected, and reducing opening balances to applicants that they are most prepared to lend to.

He said: “At Monevo, we have been speaking to lenders who are predicting a 50% slow down, with some pausing to assess short-term strategies, as clearly there are aspects of credit / risk scorecards that aren’t working at the moment.”

Kirby also adds that access to capital markets will be a challenge in the short term: “Lenders who don’t lend off balance sheet may become constrained and you would have to question the Peer-to-Peer lender impact as the returns and appetite of investors could be under threat.”

“Additionally, those lenders nervous about funding certain cohorts of consumers, now have those very same consumers currently in their loan books.

“So, for lenders, focussing on forbearance and other support activity to protect these consumers in the short term of 3-6 months, will be a priority.

Kirby takes the view that it is important lenders relieve some repayment pressure from consumers in the short term, so they can rehabilitate when the new normal arrives.

“Lender feedback in the last week is that they haven’t seen a massive increase in defaults, it’s very early days though. Anecdotal feedback from lenders that are strong and well-funded is that they expect strong growth when the market returns, and that those who are optimised and agile will see an upswing.

“What I am hearing, is that consumers will remedially seek liquidity through debt, as the world normalises to address the short-term pain being experienced at present.”

Kirby adds that lenders who look at credit risk closely when the upturn comes in three to six months could see dramatic growth, albeit from a reduced base.

He added: “From Monevo’s perspective, day trading is difficult to predict and lenders are re-assessing short-term strategies.  We are using the time at present to apply additional focus on our internal tech pipeline in driving the product development roadmap forward to continue to deliver great solutions for our partners.

“We want to ensure when normality returns and the upswing in both demand and supply inevitably happens, that we are supporting our origination partners and the lenders on our panel as effectively as possible.”

 

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