E-Payments

Crypto payments: PayPal’s stablecoin ripple effect on markets

Earlier this year, PayPal released its own stablecoin. What effect has it had on crypto adoption?

PayPal’s introduction of its native stablecoin, PayPal USD (PYUSD), has sparked heated debates within the crypto industry regarding its possible sway on payments and wider crypto adoption.

While this step seems to be a big jump toward accepting cryptocurrencies in regular finance, some industry observers advise caution.

What is PYUSD?

This initiative aims to bridge the fiat and digital currency realms for consumers, merchants and developers. PayPal CEO Dan Schulman highlighted the need for a stable digital-fiat conduit.

“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.” 

Read more

Here’s why crypto companies need to focus on embedded finance

Personalized offers, financing loans, insurance, seamless payment and preferred payment mode were key features that came out as top priorities for customers.

A new study by Decta highlighted the importance of embedded finance features in today’s fintech world. With online shopping and digital payments becoming a norm, the study pointed toward some key drivers for a seamless customer experience.

Embedded finance is a new type of software distribution that works with financial infrastructure providers to include financial services in the ecosystems of already-existing products. The most common embedded finance offerings include banking, lending, insurance, payments and branded credit cards.

According to the study, quick payments and the availability of a selected payment option are the most crucial elements for a satisfying online buying experience. The lack of a preferred payment option or friction during the checkout process is the main reason for a bad shopping experience, with nearly 49% of respondents stating they would probably stop shopping if they ran into these issues.

Related: How Web3 could revolutionize loyalty programs

Personalized offers became one of the key features in embedded finance, which is valued and can be enhanced by focusing on different demographics. For example, 54% of Americans preferred integrated add-ons like financing and insurance. Generation X participants were most satisfied with personal offers, while Gen-Z and Baby Boomer participants gave the offers they got a lower rating.

Loyalty rewards, frictionless payments and same-page checkouts were some other preferred embedded features that got the respondents’ approval.

While crypto companies are slowly trying to integrate embedded finance features, be it crypto-based credit cards or loans, the study offers insights into customer targeting and acquisition. Crypto companies have been exploring loyalty rewards and helping mainstream firms incorporate these embedded finance services using blockchain.

The cryptocurrency ecosystem saw an influx of institutional investment during the last bull market. Some of the biggest fortune 500 companies and traditional hedge funds jumped on the crypto bandwagon, giving a glimpse of mainstream crypto adoption. 

However, there is still a long way to go with the main focus on making crypto a daily driver for retail users. The study around embedded finance could help crypto companies take a cue from the mainstream and implement it with crypto-linked products to offer a better customer experience. 

ePayments shutters as FCA Anti-Money Laundering regulations tighten

The electronic payment provider is permanently closing operations due to the inability to satisfactorily meet the standards of the FCA after suspending operations for three years.

The electronic payments provider ePayments is putting the final nail in the coffin of its operations. ePayments issued email notices to clients on Tuesday, stating that it is officially closing its business operations in light of local regulations.

The financial services provider was one of the largest electronic payment providers in the United Kingdom. However, almost three years ago, it was ordered to cease operations by the U.K.’s Financial Conduct Authority (FCA) due to alleged weaknesses in its “financial crime controls.”

At the time of the initial suspension, it was estimated that ePayments held $149 million, or 127.5 million Great British pounds, in customer funds, which were temporarily inaccessible.

After years of restructuring efforts, the company attributes the final closure to “extremely challenging and unprecedented global economic conditions,” years of halted operations and being unable to satisfactorily meet the FCA’s requirements.

It says funds are safe and encourages former customers to withdraw funds in eWallets and stand by for refund information. Users on Twitter responded to the update with a mixture of relief and frustration, with one user saying he had funds stuck in ePayments since 2020:

While another tweeted to the company that his funds were still inaccessible.

This development comes as the U.K.’s financial regulators have been tightening the reins on the industry. The FCA recruited nearly 500 new employees over the last year in accordance with its new three-year strategy.

One of the positions filled included the newly created director of payments and digital assets which will oversee matters such as e-money, payment and crypto-asset markets. The position was filled by former director at the National Economic Crime Command.

Related: FCA highlights limited role as unregistered businesses continue to operate

While some regulators in the country believe the U.K. cannot afford to send mixed signals as to its stance on digital assets and payment services, it still appears to be the case.

The newly appointed finance minister, Kwasi Kwarteng, has not addressed the issue of crypto regulations and advertising watchdogs recently cracked down on crypto-related ad content on Instagram.

On the other hand, the economic secretary made a statement on Sept. 7 in which he said he wants to make the U.K. a crypto hub and top choice for innovators under the new prime minister.