FinTech Payments

British Digital Banking Apps Affected By Wirecard Subsidiary Freeze

June 29, 2020 at 11:06PM

After the U.K.’s Financial Conduct Authority (FCA) mandated that Wirecard’s British Wirecard Card Solutions unit stop conducting regulated work, a number of consumers in the U.K. haven’t been able to get ahold of their cash, CNBC reported.

The move affected multiple U.K. digital banking apps such as Anna, Curve, U Account and Pockit since they depend upon the technology of Wirecard to handle payment processing, per the CNBC report.

Apps like Anna and Curve depend upon eMoney licenses that let the platform take care of payments. But complete banking licenses would enable them to keep the funds of their clients. Anna counts 20,000 business banking clients, while Curve has in excess of 1.3 million accounts and Pockit has over half a million users, CNBC reported.

Curve, for its part, was able to get is cards back in operation after efforts by its workers to remedy the issue during the weekend. The company moved its payment processing to from Wirecard.

A Wirecard Card Solutions representative told the outlet, “We fully understand the inconvenience the temporary suspension of our services has caused for our valued customers. We are in constant dialogue with the FCA and are working hard with them and our advisors to have the steps in place which will enable the suspension to be lifted so business can resume.”

Wirecard AG informed customers that Wirecard Bank is not part of the insolvency proceedings and electronic fund transfers aren’t impacted. The company said, “Payouts to merchants of Wirecard Bank will continue to be executed without restrictions.”

On Friday (June 26), news surfaced that the FCA had mandated that Wirecard’s U.K. subsidiary freeze the German payment firm’s funds as the regulator figures out its plan of action. Due to the FCA action, clients of Wirecard Card Solutions would not have access to their accounts.

On Monday (June 29), the FCA said Wirecard AG was rectifying problems brought to light by the $2.1 billion accounting scandal, but limitations on the payments firm would remain.

The FCA said, “We cannot lift the restrictions without reassuring ourselves that the firm has been able to satisfy all our concerns, for example that all clients’ money is safe. We hope to be able to issue an update soon.”

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Infection Report Causes Drop In Planet Fitness Shares

June 29, 2020 at 10:46PM

Planet Fitness shares fell 6.3 percent following reports of possible coronavirus infections at a West Virginia location, Bloomberg reported.

The popular gym chain, like other types of retailers, had been trying to open up again following months of mandated lockdowns due to the virus.

But one person testing positive for the virus has roiled those plans. According to news reports from a local station, as many as 2o5 people could have been infected by being in the same building within the past week.

According to Mary Wade Burnside, a spokeswoman for the Monongalia County Health Department in West Virginia, the infection occurred on June 24.

The press release from the health department says that anyone who was at the gym between 9 a.m. and 3 p.m. on that day should stay home and self-quarantine.

“They also should do their best to stay away from others in their household,” said Dr. Lee B. Smith, MCHD executive director and county health officer, according to the release. “Ways to do this would be to stay primarily in one area of the home and to wear a mask if you must be around others.”

A spokesperson for Planet Fitness, McCall Gosselin, said the gym would temporarily close “out of an abundance of caution” and would deep-clean the building before reopening, according to Bloomberg.

The news marks yet another addition to a list of misfired reopenings after months of coronavirus-related shutdowns. In the South and Southwest, several states have seen drastic rises in infections. West Virginia, thus far, has not been among them.

Planet Fitness stock was down 17 percent this year through June 26, Bloomberg reported.

According to data from the Centers for Disease Control and Prevention (CDC), only around 23 percent of Americans get the recommended amount of exercise per week. That population has had to make do with digital fitness classes and at-home exercise gear since the pandemic set in. Some gyms have been offering equipment rentals and other innovations to try and retain members.

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Singapore’s Central Bank Helping Police Investigate Wirecard

June 29, 2020 at 10:20PM

The Monetary Authority of Singapore (MAS) is collaborating with police to investigate Wirecard AG, the embattled German payment processing firm, Reuters reported.

Singapore’s Commercial Affairs Department (CAD), the white-collar crime unit, has been probing Wirecard’s Singapore operations for 16 months, the news service reported.

“In view of recent developments in Wirecard AG, the MAS and the Accounting and Corporate Regulatory Authority (ACRA) are collaborating with CAD to scrutinize other possible aspects of the case,” the MAS said in a statement Monday (June 29), the report said. “Due to the cross-border nature of some of the transactions, Singapore authorities have reached out to relevant foreign authorities for further information and also stand ready to assist investigations by foreign authorities where requested.”

Wirecard filed for insolvency last week following an auditor’s disclosure that $2.1 billion of supposed deposits were missing from two banks in the Philippines.

MAS noted that it requires financial institutions to report all suspicious transactions, including transactions that are large, complex or present unusual patterns with no apparent economic or lawful purposes.

“We will take firm action if we find evidence of criminal behavior or serious lapses in anti-money laundering controls,” the MAS said.

Shares have fallen by more than 90 percent and the company has lost nearly $12 billion of market value, the report said.

Shortly before news of the missing money broke, the MAS said it had asked Wirecard’s domestic divisions to protect customer funds, Reuters reported. On Monday (June 29), the agency said it also contacted other financial institutions to determine whether any abuse of Singapore’s financial system for illicit purposes, the report said.

The Anti-Money Laundering Council, an agency of the Philippine government, told Reuters it would conduct a swift and thorough investigation into Wirecard. The island nation became involved after Wirecard initially claimed the money was deposited in BDO Unibank Inc. and the Bank of the Philippine Islands.

On Monday the Munich court appointed Michael Jaffe to manage Wirecard’s insolvency case.

Also on Monday, the United Kingdom’s regulatory authority said while Wirecard was correcting issues raised by the accounting scandal, restrictions on the collapsed German company will remain.

“We cannot lift the restrictions without reassuring ourselves that the firm has been able to satisfy all our concerns, for example that all clients’ money is safe,” the Financial Conduct Authority (FCA) said in a statement. “We hope to be able to issue an update soon.”

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Facebook, Cielo Ask Brazilian Watchdog To Allow WhatsApp Payments

June 29, 2020 at 10:06PM

Facebook and Cielo are requesting that Cade, Brazil’s antitrust watchdog, overturn the suspension of WhatsApp‘s payment system rollout in the country, Reuters reported.

The companies argued that their agreements are not exclusive, and other countries would be allowed to forge agreements with WhatsApp as well. They also said they are not in the same business and had only entered into a financial services agreement that they argued wouldn’t pose a threat of market consolidation.

The decision to block the payment system came last week as Brazil’s government had concerns about anti-competitive issues if WhatsApp, which is tremendously popular in the country, was allowed to roll out the new system. Brazil, with 120 million users of WhatsApp in the country, is the second largest market for the app, PYMNTS reported.

The companies said Facebook and WhatsApp “will just offer an additional channel for payments transaction between consumers and merchants,” Reuters reported. The document was filed on Friday (June 26), but only made available on Monday (June 29).

The agreement is for WhatsApp to partner with Cielo, which is Brazil’s largest credit and debit card operator, along with Mastercard and Visa, in order to add a payments function to the popular messaging app.

But Cielo, as the only card acquirer in the deal, is being looked at by regulators to ensure that there would be no favoritism in the future. Cade said WhatsApp has the potential to boost Cielo card transactions by at least 10 percent, PYMNTS reported.

Despite the problems, WhatsApp said late last week that it had been in talks with officials to ensure the payment system will come out eventually. Company head Will Cathcart said the bank had seemed to support companies like his making strides toward digital innovation.

WhatsApp has been testing its payment app in some of its more popular markets, including Mexico and India, for months now. It would allow people to send and receive money using Facebook Pay through the WhatsApp service.

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Domino’s Rolls Out Carside Delivery Contactless Pickup

June 29, 2020 at 09:44PM

To provide another contactless way for consumers to receive their orders, Domino’s Pizza, Inc. unveiled its Domino’s Carside Delivery service. The offering is a contactless carryout method that diners can opt for when they make their prepaid eCommerce orders and can be used at stores throughout the nation per an announcement.

Diners who make a prepaid digital carryout order will see the choice of Domino’s Carside Delivery. After making that selection, they will be asked to input information about their vehicles such as make, model and color that will help make them identifiable at the time they come to a location of the pizza chain.

In addition, diners can also request that their order be delivered to the back seat, the passenger side, the trunk or a choice to be determined at the time they get to the store. Diners can tell the restaurant that they have pulled up to the store by sending a text message or tapping a button on the Domino’s Tracker page.

Once they complete that step, a staffer from the restaurant will deliver the order to the customer’s vehicle. Diners can use the curbside delivery option from 4 p.m. to 9 p.m. in restaurants throughout the country, while further hours depend on the store.

Dennis Maloney, Domino’s senior vice president and chief innovation officer, said in the announcement, “Domino’s Carside Delivery gives customers the option to stay in their vehicle while a team member delivers their order to them, making for a convenient, contactless carryout experience. It’s carryout, delivered.”

As reported in April, restaurants had been on a crazy ride as stay-at-home mandates made them close their doors and sent many of them rushing to digital channels. Successful players such as Domino’s, however, were already adapting. CEO Ritch Allison told CNBC at the time, “We have taken 60 years’ worth of standard operating procedures and rewritten most of them in the last six weeks.”

In April, Domino’s reported that its worldwide retail sales increased 4.4 percent in Q1 as it moved to fight the pandemic with social distancing procedures and contactless delivery. The pizza chain reported 1.6 percent of U.S. same-store sales growth and 1.5 percent of international same-store sales growth.

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Is Disruption The Cure To US Healthcare’s High Costs?

June 29, 2020 at 09:28PM

The COVID-19 pandemic and the related U.S. recession have combined to make already-soaring healthcare costs even more of a crisis. But an increasing number of players are wondering if lowering healthcare costs might be less complicated than it seems. They aim to compete on price and pressure the existing, inefficiently expensive system to cut costs.

Two big innovations:

Walmart’s Network Of Healthcare Clinics

Walmart is looking to take its expertise at building retail supercenters and driving down costs and apply that to healthcare.

The retail giant has been slowly wading into healthcare services, operating about two dozen low-cost clinics in Georgia, South Carolina and Texas. This month, the company opened its latest clinics in Loganville, Ga., and Springdale, Ark.

The clinics offer basic walk-in medical services in roughly 1,500-square-foot spaces. Described as the “supercenter of healthcare,” the sites aim to offer affordable primary care, urgent care, diagnostics, x-rays, behavioral health and dental work.

Primary care appointments cost $40, while a pediatric appointment costs $20. That makes Walmart the more affordable option for consumers — even those with insurance, who often face a $50 copay for a primary care visit.

Such low prices could disrupt the industry, even though Sean Slovenski, Walmart’s president of health and wellness, said in an American Telemedicine Association panel that’s not really the company’s intention.

“We didn’t set out to disrupt healthcare. We set out to meet the needs of our customers at Walmart,” Slovenski said, per MedCityNews. But he admitted that “when we say it’s $20 to have your child seen with a primary care physician and it’s really $20 … when you come in and walk out and get the bill and it’s still $20, that’s quite a disruption in the space.”

The company aims to cut costs by eliminating many of the middlemen and focusing on customers who pay upfront rather than use insurance, MedCityNews said. While the clinics accept insurance, most customers would rather pay $40 out of pocket than a $50 insurance copay, the site said.

Walmart is building even more clinics at a rapid clip in response to consumer surveys about what they were looking for in healthcare services. That reflected consumers’ deep unhappiness with the status quo.

“They felt processed, like they were a number,” Matt Parry, senior director of strategy and customer experience for health and wellness at Walmart, told MedCityNews.

But Slovenski said the company doesn’t want to just use healthcare to bring customers to their local Walmart.

“We’re in healthcare. We’re not in retail healthcare,” he said. “We’re recruiting physicians in all of these areas and bringing them in.”

Telehealth Aims To Reduce Overhead 

Conversa Health CEO Murray Brozinsky recently told PYMNTS that digital health can improve patient care even as it eliminates billions of dollars of waste each year.

For openers, he said taking healthcare out of the doctor’s office brings down overhead, savings 10 percent to 20 percent of an in-office visit’s cost. But the longer-term savings run even deeper because digital platforms give physicians a low-cost way to keep in contact with patients, monitoring their progress and tailoring treatment in automated, nearly no-overhead ways.

After all, Brozinsky said the best way to lower healthcare costs is to find more efficient ways to keep patients healthy and in need of fewer expensive medical interventions.

“When you start to add in virtual platforms like ours, the big financial impact is [that] now you can have a platform with close to zero marginal cost, reaching out to all of your patients all the time on various schedules, depending on their situation,” the CEO said. “When you look at the billions worth of waste in the healthcare system, a big chunk of that could be obviated by having these digital connections in place, ready early on to intervene. That prevents things from getting more medically complicated and costly. And it takes away all those unnecessary, very high-cost outreaches.”

Brozinsky isn’t alone in seeing an opportunity to finally make inroads with consumers who in the past have held back from telehealth for fear over quality levels. Doctor on Demand CEO Hill Ferguson said in an interview earlier this year with Karen Webster that COVID-19 has done much to overcome patient resistance.

Now, he said, “the World Health Organization, CDC [Centers for Disease Control and Prevention] and others are actually recommending telemedicine as a great method to seek care.”

Ferguson said telehealth offers consumers both an easier access path and a lifetime of care at a more managed cost. “Virtual primary care really treats everything as a front door to the patient’s health,” he said. “That might mean preventative care, making sure they’re getting an annual virtual wellness checkup, making sure they’re getting their immunizations, making sure their lab work is up-to-date for their demographic needs. And beyond preventive care, there is also chronic condition management.”

Will Americans Go For The Disrupters?

Perhaps the healthcare industry’s disrupters can attract patients concerned with costs and getting what they need as inexpensively as possible. Some Americans will be willing to duck into Walmart or fire up a telehealth session if skipping a traditional office visit means lower and more transparent prices.

But the traditional U.S. healthcare system has never really dealt with much in the way of price competition. Whether cheaper alternative options can dent that dominance remains to be seen.

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IRS Corporate Audits Drop 71 Pct, Individual Audits Fall 65 Pct

June 29, 2020 at 09:26PM

The number of tax audits on corporations plunged amid the pandemic, with the IRS saying in the National Taxpayer Advocate’s “Objectives Report to Congress” report for Fiscal Year 2021 that it began 716 corporate examinations from April 1 to June 1 this year compared to 2,445 during the same time last year, a 71 percent drop.

The advocate also said in the report that examinations on individual tax returns fell to 5,013 from April 1 to June 1 this year compared to 14,188 during the same time last year, marking a 65 percent fall. Audits of partnership tax returns dropped by 79 percent, while employment tax return examinations fell 42 percent over the same timeframes.

“The IRS announced as part of its People First Initiative that between April 1 and July 15, 2020, it would not start new field, office, and correspondence examinations, unless deemed necessary to protect the government’s interest in preserving the applicable statute of limitations. It also announced the suspension of all in-person meetings in ongoing examinations,” the advocate said in the report.

The advocate also said that the IRS’ “near-shutdown” created challenges of taxpayers who were undergoing collection, particularly if they were aiming to take care of their tax debts.

“Taxpayers faced significant issues due to mail stoppage, suspension of notices, and inability to interact with the IRS in person and by phone. In the meantime, the interest and penalties continued to accrue on their debts,” the advocate noted.

The news comes as tax refund season has evolved into a nightmare for the IRS that reportedly has entire storage units with refund requests that have not been opened amid the pandemic. The agency is said to use many pieces of outdated equipment and much work is completed via paper to process the yearly returns for the whole country.

Last October, the U.S. Treasury Inspector General for Tax Administration raised questions over the business auditing performance of the agency. An October Treasury Inspector General for Tax Administration report contended that the agency was not effectively auditing companies subsequent to tax examination reform that was meant to speed up the auditing process.

The body reportedly discovered that the agency harnessed the new tax examination procedures in just 15 percent of audits of big and global corporations with the rest handled the traditional way.

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‘Buy Now, Pay Later’ Readies For Pent-Up Demand

June 29, 2020 at 09:24PM

With U.S. banks seeing the savings rate hit a historic 33 percent in April, COVID-19 has fundamentally reordered financial priorities for people and businesses. Yet despite the new frugality, pent-up consumer demand – especially for nonessential items like apparel and jewelry – is already starting to materialize. How people pay is what’s changing in 2020.

As PYMNTS’ June 2020 Buy Now, Pay Later Tracker®, done in collaboration with Afterpay, notes, “[COVID disruptions have] led many to defer payments on large-ticket items such as household goods and furniture. One installment payment app saw a record year-over-year high on April 5, when app-enabled purchasing volumes at specialty home furnishing stores was 111 percent higher than the year prior.”

The June 2020 Buy Now, Pay Later Tracker® notes that “…transaction volumes at furniture stores were up 61 percent, while home and garden items rose 26 percent among Generation Z consumers, 5 percent among millennials and 2 percent among Generation X consumers during the week ending April 11.” With those trendlines, players in the sector are wasting no time.

Swedish FinTech and buy now, pay later (BNPL) firm Klarna is jumping on the market opportunity, with upgrades like a new mobile app that “…gives users access to exclusive deals and drops, the ability to create and share wish lists with friends and family, and the ability to shop anywhere online and pay in four, interest-free installments,” according to a statement.

“Klarna’s new product features and brand campaign come at a time [when] the company has seen significant recent growth in the U.S., where it now counts nearly eight million customers and 4,200 retail partners, including leading names such as H&M, Sephora, The North Face, Timberland and Abercrombie & Fitch,” per the statement. This news comes after Klarna announced the U.S. launch of Vibe, a new loyalty rewards program for the BNPL space, which rewards purchases made through the new Klarna mobile app.

BNPL has emerged as a major force in commerce (both physical and online) in the past four years, as new players and business models emerged to update the old layaway concept.

In PYMNTS’ Provider Ranking of Alternative Credit Apps, Klarna has held the No. 1 chart position since the ranking’s inception. Other top BNPL apps in PYMNTS’ Provider Ranking of Alternative Credit Apps are holding their ground as well, with strong players FuturePay steady at No. 2, Affirm at No. 3, Afterpay at No. 4 and QuadPay at No. 5.

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Insurance Marketplace GoHealth Seeks $100M In Potential IPO

June 29, 2020 at 08:42PM

GoHealth, Inc. is seeking to raise $100 million in Class A common stock during a proposed upcoming initial public offering (IPO), according to a filing with the U.S. Securities and Exchange Commission (SEC). The health insurance marketplace is seeking to list with the “GHTH” symbol on The NASDAQ Global Market.

“Our platform utilizes proprietary technology, machine-learning capabilities, data, efficient business processes, and highly skilled and trained licensed agents, or agents, to connect consumers with health insurance carriers, or carriers, through multiple channels,” the company said in its filing.

The firm said in the filing that its net revenues jumped 104.1 percent to $141 million for the quarter concluding March 31 of this year, in comparison to $69.1 million for the quarter that concluded on March 31 of last year.

The development comes as hospitals and doctors’ offices in the United States closed their doors for all but the most important medical services early in the pandemic due to worries of spreading the coronavirus to patients or staffers. But now, an inability to pay after layoffs related to the health crisis is keeping patients away.

But Flywire recently said that it brought on additional functionality to its healthcare payments platform, with a nod in the direction of personalized installment plans that can assist patients in paying what they can afford while getting their health needs met. Providers can offer payment plans before and after services, harnessing data in addition to advanced analytics to ascertain patient affordability.

The digitization of healthcare didn’t abruptly begin with COVID-19, as telehealth companies have been emerging for many years. The pandemic, however, has very much accelerated things, Conversa Health CEO Murray Brozinsky recently told PYMNTS.

The American workforce has transitioned to telecommuting nearly overnight, and regulators have discovered methods to accelerate decision-making from months and years to hours and days.

“The ability for American commerce and American business and American healthcare to be agile and embrace technology, it shows we can make fast changes to make things better,” Fiserv’s Senior Vice President of Healthcare Solutions Colin Mellon said during a recent On The Agenda Digital Roundtable conversation. “It’s just not very clear how well we can adapt and overcome.”

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Pending Home Sales Down In May YOY, But Rose From Last Month

June 29, 2020 at 08:38PM

Pending home sales continue to be sluggish, according to year-over-year data from the National Association of Realtors (NAR).

The Pending Home Sales Index, an advance look at home sales based on signed purchase and sale agreements, fell 5.1 percent in May compared to the same month last year.

When compared to April of 2020, the news was much better. Pending sales increased by 44.3 percent last month after two consecutive months of decline, NAR reported.

“The outlook has significantly improved, as new home sales are expected to be higher this year than last, and annual existing home sales are now projected to be down by less than 10 percent even after missing the spring buying season due to the pandemic lockdown,” said Lawrence Yun, NAR’s chief economist, in a statement.

Three regions of the country saw pending home sales drop in May compared to one year ago, according to the data. The Northeast was down 33.2 percent last month compared to May 2019. The Midwest slipped 1.4 percent from last year. Pending sales were down 2.5 percent in the West from a year ago.

The one exception was the South where pending sales rose by 1.9 percent from May 2019.

But compared to April, all four of the nation’s regions saw home purchase agreements increase in May, the data showed. The Northeast grew 44.4 percent, the Midwest rose 37.2 percent, the South increased 43.3 percent and the West jumped 56.2 percent.

“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership,” Yun said in the statement. “This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”

Listings are on the rise as the economy reopens, helping with inventory choices, Yun added.

According to the data, the largest metropolitan areas where listings were up by more than 10 percent in May compared to April included Honolulu, Hawaii; San Francisco and San Jose, California; and Denver and Colorado Springs, Colorado.

Last month, PYMNTS reported existing home sales fell in May as the pandemic has made homebuying more challenging, according to NAR.

In a PYMNTS interview last month, HomeLight CEO Drew Uher said a survey of agents by the San Francisco real estate referral company in April found 58 percent of sellers and 51 percent of buyers will delay real estate plans for at least several months.

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