Snippings

I many parts of the world,

The Isle of Man has become the first part of the British Isles to encourage businesses to round prices to the nearest five pence amid the declining use of coppers.

From: The end of the one and two pence coin? The Isle of Man becomes the first place in Britain to encourage businesses to round their prices to the nearest five pence amid declining use of coppers | Daily Mail Online.

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But now Mark Carney, the Governor of the Bank of England, has suggested that the 1,200-year-old British penny could be scrapped.

From After 1,200 years, could it really be time for the penny to be dropped?

Actually, I’ve suggested it more than once but just because he’s the Governor of the Bank of England his plagiarised proposal gets all the attention.

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Some 126 million coins have been taken out of circulation since a scheme was introduced to round shoppers’ bills up or down.

From 126 million coins taken out of circulation since rounding scheme introduced – BelfastTelegraph.co.uk

Ireland can do it, why can’t we?

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If you are interested in the subject of rounding, there is a very good paper on rounding written by Robert Whaples called “Time to Eliminate the Penny from the U.S. Coinage System: New Evidence” that was published in the Eastern Economic Journal way back in 2007. This confirms the European experience that dumping low-value coins and rounding prices is economically neuter. Rounding is not that complicated! Whaples wrote that a detailed study of convenience stores found the final digit of purchases, which usually involves multiple products and sales tax, was pretty much random so that “if you round it to the nearest nickel, the customer wouldn’t get gouged”. Sometime you’d round up, sometimes you’d round down. It balances out. (Here is how they do it in Belgium where total amount payable in cash has been rounded up or down to the nearest five cents since December 2019: if the total amount payable in cash ends in one or two cents, it is rounded down to zero,  if it ends in three, four, six or seven cents then it is rounded to five cents and if it ends in eight or nine cents then it is rounded up to one euro. As far as I know, Belgian civil society has not collapsed and shops are operating normally under the circumstances.) Pennies and nickels are scrap metal and a private coin industry would not be able to waste taxpayer cash on subsidising miners to keep producing them.

From: Who needs a digital currency when you have a Coin Task Force?.

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HSBC Labs is prototyping a DID solution for internal account opening powered by Polygon ID. When a customer opens an HSBC account, the bank conducts KYC and creates a verified credential that later can be used for a number of transactions, including logging into an HSBC account, purchases, applying for a loan, carbon credits, and much more.

From: Why HSBC is Building a Decentralized Identity Solution With Polygon ID.

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TBD and Circle have launched a partnership centered around open source adoption of decentralized identity.

The collaboration, announced Monday (Oct. 23), will also culminate in a non-profit founded by TBD — Block’s decentralized finance (DeFi) company — and USDC-issuer Circle, the companies said in a news release provided to PYMNTS.

From: Circle and TBD Aim to Launch DeFi-Focused Foundation.

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The group’s concerns over the amendments largely centre on Article 45 of the reformed eIDAS, where it says the text “radically expands the ability of governments to surveil both their own citizens and residents across the EU by providing them with the technical means to intercept encrypted web traffic, as well as undermining the existing oversight mechanisms relied on by European citizens”.

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A group of 309 cyber security experts, researchers and scientists hailing from 31 countries around the world has called on the European Union (EU) to rethink proposals to reform the electronic identification, authentication and trust services (eIDAS) Regulations, saying that “as proposed in its current form, this legislation will not result in adequate technological safeguards for citizens and businesses, as intended. In fact, it will very likely result in less security for all”.

From: EU digital ID reforms should be ‘actively resisted’, say experts | Computer Weekly.

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I’d argue the biggest competitive landscape shift came from creating a new path to banking licenses and giving central bank payment system access.

From: Fintech 🧠 Food – 1033: Open Banking Endgame.

Simon is totally right about this. Open banking did not, by itself, lead to more competition. Instead it led to a pointless bidding war where banks were forced to provide incentives.

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The rule doesn’t let banks charge for API access so have to take the hit on cost? This will further reinforce the perception that open banking has zero upside for incumbents and all downside. (See lessons from the UK in next section)

From: Fintech 🧠 Food – 1033: Open Banking Endgame.

The lack of upside is one of the key lessons from the U.K. If the U.S. can learn something useful from their friends across the pond it is that while basic APIs should be provided free (as a condition of being a regulated institution), there should be plenty of opportunity for premium APIs. Broadly speaking, there are two rather obvious categories of premium APIs that banks should be looking forward to: identity and data. Identity because, well, obvious. Data because while third parties can access and download consumer’s transaction data, that is the raw data only. Under the CFPB rule, banks do not have to provide algorithms or other processing.

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There are two possible transitions from a valid PID: either it automatically expires, by passage to the ‘validity end date’ or it is actively revoked by its Provider. Expiration and revocation are essentially independent transitions.

From: EU Wallet In Depth #6: Revocation | LinkedIn.

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“It makes no sense to me why you would be building it on the back of Twitter,” Jason Mikula, a fintech analyst and author of Fintech Business Weekly, told Insider in April. “It basically sounds like he wants to make a new version of PayPal.”

From Twitter Becoming a Super-App Would Be Difficult, Experts Say.

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In recent years, Africa has witnessed substantial growth in its digital landscape, significantly altering the way people access financial services. Digital innovations, particularly in the domain of digital identity, have played a central role in extending financial access and fostering inclusion across the continent. In this discussion, we delve into the pivotal role of digital identity in advancing financial inclusion in Africa and how it has the potential to revolutionize the continent’s banking, payments, and financial services sectors.

From The Role of Digital Identity in Promoting Financial Access and Inclusion in Africa.

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New research by FreedomPay and Retail Economics shows that the UK is on the brink of a digital payments transformation, with digital wallet purchases set to surpass card transactions within ten years.
Currently, around a fifth (17.0%) of retail, leisure and hospitality spending is made through digital wallets; compared to over half (55.7%) by plastic, and a fifth (18.8%) for cash. This is set to increase to £127.7bn in 2027/28 (£72.5bn currently). By 2033, the share of digital wallet payments will likely more than double to 39.7% to £210bn.

From UK Digital Wallet Transactions Set To Surge Ahead Of All Other Payment Methods.

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