Daily Review: Zelle Processed $1.5 Billion Worth of Payments in October – Up 90% From the Same Month Last Year

Pre-Thanksgiving week has been rich on interesting updates across sectors, some of which represent a significant push in adopting new technology, embracing startup partnerships, and expansions into new niches and markets.

Lending updates

Seeking bigger US presence, Barclays joins crowded online lending market

  • As part of a broader effort to build out its US consumer business, London-based Barclays is now offering unsecured personal loans online, targeting prime and super-prime borrowers. It has been testing its online lending platform with select US customers since late last year and plans to roll it out in full force in 2018.
  • Barclays’ personal loans typically range between $5,000 and $35,000 and can be repaid in three, four or five years. The interest rates range from 4.99% to 18.99% and the loans carry no origination fees or prepayment penalties.
  • The bank has made roughly 15,000 personal loans to date. The consumers Barclays is targeting are interested in using the loans for things like debt consolidation and home improvements.
  • Barclays has made the entire process – from application to funding – entirely digital and gives borrowers near-instant decisions on loan applications. It is also adding its own features, like giving borrowers (or prospective borrowers) access to a customer service representative should they need help during the loan process.

Read more.

In China, Unsecured Short-Term Lending Now a Trillion-Yuan Industry

  • The unsecured short-term loans in China are ballooning – these loans have already surpassed the 1 trillion yuan ($151 billion) mark. It is projected that the total amount of unsecured short-term loans in 2017 is set to be six times more than in 2016.
  • Credit risks are building up, as borrowers have been found taking out loans from one lender to roll over previous loans from another, snowballing their debt.
  • As of Sunday, there were 2,693 online platforms offering short-term loans to nearly 10 million clients. The average size of such a loan was 1,400 yuan.
  • Most cash loan platforms, defined as those that offer unsecured loans with loan periods of six months or less, charge annualized rates of interest that exceed 100% despite advertising seemingly low daily interest rates.
  • Two million clients have taken out loans from more than one platform in the same month. Half a million of these borrowers took out loans from more than 10 platforms within the same month.
  • Because of easy access to loans, clients are typically low-income individuals that find it difficult to get loans from the formal banking system. Threats and even violence are often used to claim outstanding loans.
  • 1,044 platforms for short-term unsecured loans operated through websites, 860 through WeChat public accounts, and 429 through apps.
  • Nearly 600 P2P websites also offered unsecured short-term loans, accounting for about 16% of all P2P platforms. This compares with 812 online lending platforms that offered unsecured short-term loans, making up about 37% of all online lending platforms.

Read more (+ China clamps down on online micro-lending; US-listed shares plunge).

Payments updates

Sellers can now invoice buyers through PayPal’s new chat extension for Messenger

  • PayPal and Facebook are expanding their integrations with the launch of an extension for Messenger that allows PayPal sellers to invoice buyers directly through private messaging.
  • The launch comes on the heels of last month’s debut of P2P PayPal payments in Messenger, and the arrival of PayPal’s first customer service Messenger bot for handling customer questions and requests for help.
  • With this integration, the focus is on shifting small business transactions and those between buyers and sellers into Messenger.

Read more.

Bank of America's P2P Payments Business Almost Doubled in October

  • Zelle processed $1.5 billion worth of payments in October. That was up 90% from the same month last year.
  • There are now 2.5 million active users of Zelle, with thousands more signing on every day.
  • At the end of Q3 2017, BofA had 23.6 million active users of its mobile app. The volume of mobile check deposits made on the app corresponds to the work of 1,100 branches.
  • Digital banking products are much more efficient for Bank of America to provide. Since Moynihan took the reins at the beginning of 2010, the bank has cut its annual expenses from $70 billion down to $55 billion in 2016. Last year, the bank vowed to drop its yearly operating costs to $53 billion by 2018.
  • Q3 2017 was the second quarter in a row that the Charlotte, North Carolina-based bank turned in a lower efficiency ratio than the notoriously efficient Wells Fargo.

Read more.

China’s WeChat Pay comes to London

  • WeChat Pay, the mobile payment platform — an extension of Tencent's messaging app WeChat — comes to UK (the north London market is popular with Chinese tourists).
  • SafeCharge, a company that helps businesses process payments, took notice and has updated its POS software accordingly. Now, stall owners can accept WeChat Pay with a tablet and compatible till.
  • Camden is the first place in the UK to accept WeChat Pay at the point-of-sale.

Read more.

*Featured image source: Raconteur.

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