Following Trump, Czech Republic proposes crypto reserve | PaymentsSource

The governor of Czech Republic’s central bank is pushing his government to invest the country’s reserves into bitcoin, saying Donald Trump and “Trump guys” are focusing on cryptocurrency in a manner that could cause it to rise in value. 

Aleš Michl plans to submit a plan to hold up to 5% of the $145 billion reserves in bitcoin, suggesting Trump’s focus on crypto is creating an investment opportunity for the country’s money, if done carefully. In a social media post, Michl said, “Czech National Bank’s goal is price stability. When we took office in July 2022, inflation was 17.5%. We got it on target. We are also diversifying reserves — gradually increasing gold holdings from 0% to around 5% and planning for 30% in equities.” 

The central bank is considering putting some of the reserves in bitcoin, he said. “It currently has zero correlation to bonds and is an interesting asset for a large portfolio,” Michl said in the post.Trump has created a crypto task force that aims to develop a “comprehensive and clear” regulatory framework for crypto assets. Trump also called for his administration to evaluate a potential  “digital asset stockpile,” a vague instruction that fell short of establishing a cryptocurrency reserve. Trump was opposed to cryptocurrency during his first term but took a more favorable posture before the recent election, accompanied by donations from the crypto industry.

“Given the Trump campaign took in over $100 million from crypto lobbyists, it’s likely he follows through with this,” said Kian Sarreshteh, CEO of digital investing platform InvestiFi. “We see the global impact of Trump’s bitcoin reserve initiative sending shockwaves across almost every continent.”

Brazil, for example, is considering a plan to dedicate about 5% of its reserves to bitcoin. China and Russia have made similar moves.”If enough countries adopt a bitcoin reserve, the predictions of bitcoin’s price reaching unprecedented heights become realistic. And the global bitcoin reserves could ultimately surpass gold as the primary reserve asset in developed, and developing, nations,” Sarreshteh said. —John Adams 

Dutch government pumps the brakes on in-store BNPL

The Dutch government is looking to slow the spread of buy now/pay later services to brick-and-mortar stores, according to a letter sent to parliament last week by Finance Minister Eelco Heinen that was first reported by Reuters. 

The Dutch government believes that BNPL loans are a threat to consumers because they can increase consumers’ debt obligations, particularly younger consumers. The country is not looking to ban BNPL outright, but rather, limit the points in which customers can access the short-duration loan product. 

BNPL is most readily available through e-commerce marketplaces, but providers such as Klarna have sought to increase penetration at retail brick-and-mortar stores. Last September, Klarna struck a deal with Dutch payment processor Adyen to offer its BNPL offering through Adyen payment terminals at in-store locations in North America and Europe. —Joey Pizzolato 

Australia tightens rules for BNPL

The Australian Securities and Investment Commission has required buy now/pay later lenders to apply for membership in the Australian Financial Complaint Authority by June 10.

That means lenders will need an Asic license and will be subject to added regulation as providers of “low cost credit,” a new category of financial services covered by a recent amendment to Australia’s National Consumer Credit Protection Act of 2020.

The new Australian license for BNPL includes tighter credit and disclosure rules, but it also tailors regulations to more closely fit the business model for BNPL lending, which usually involves zero interest loans with a set repayment schedule over four monthly installments. In other countries, including the U.S., regulators and elected officials are applying pressure to BNPL lenders, claiming the loans encourage consumers to unsafely accumulate debt.

The Consumer Financial Protection Bureau’s 2024 guidance subjects BNPL lenders to the same rules as credit card lending.  Klarna was among the BNPL lenders to criticize the CFPB guidance, saying it was not tailored to the BNPL industry. —John Adams 

Affirm upsizes forward flow agreement with Liberty Mutual

Affirm last week upsized its forward flow agreement with Liberty Mutual Investments as the buy now/pay later lender looks to shore up capital amid continued growth. 

Liberty Mutual will invest up to $750 million in Affirm through June 2027 through its loan purchasing program, and expects to invest up to $5 billion. Liberty Mutual and Affirm have been capital partners since 2019, and first entered into the forward flow in 2023. 

“Liberty Mutual Investments’ ability to invest across the capital structure with a single-client focus allows us to flexibly provide solutions and scale to our long-term partners, like Affirm,” said John Kim, managing director and head of Alternative Credit at Liberty Mutual Investments, in a statement. “We look forward to further strengthening our partnership as this collaboration expands.”

The expanded loan sale program comes on the heels of a fresh forward-flow agreement with global investment firm Sixth Street in December. Under that agreement, Sixth Street will purchase up to $4 billion in Affirm loans over a three-year period, which, at the time, marked Affirm’s largest capital commitment to date, the company said. 

The BNPL company has been looking to shore up additional capital following better-than-expected earnings in its fiscal fourth quarter and accelerated profitability guidance. The key to that growth lies in more transactions, which requires more lending capacity, Max Levchin, founder and CEO, said on the company’s most recent earnings call last November. Affirm funds its loans through forward-flow loan sales and asset-backed securities issuances. —Joey Pizzolato

Visa pushes installments for cross-border payments

Visa is turning to a fintech partnership to push two major payment trends that are driving competition–the ability to offer forms of financing beyond credit cards and supporting digital payments between countries.

The card brand is partnering with DealMe, a South Korean digital payments company, to enable shoppers in Vietnam to finance purchases made in South Korea. The corridor is one of several South Korea-based corridors the two companies are planning, including the U.S., Australia, Japan and Singapore.

Shoppers holding Visa cards are checked for eligibility for the installment plans, with a credit decision and terms extended in a few seconds.

By using Visa Installments, which was launched in 2022, issuers enable consumers to use their existing credit card to qualify for an installment loan at the point of sale. Borrowers repay loans through their credit card, debit card or bank account.

Visa Installments is part of a trend toward the traditional card networks and banks offering products designed to counter the popularity of buy now/pay later lending. Mastercard has also added an installment product that enables connections between lenders and merchants.

Among banks, Citi Pay Installments is seeking to boost its merchant network, while other banks have also warmed to BNPL such as Citizens Bank, Synchrony and Bread Financial, which all offer white-label installment loan products, and U.S. Bank, which offers a BNPL option through its Elavon merchant services subsidiary. —John Adams

Santander UK chair steps down

William Vereker has resigned as U.K. chair of Banco Santander as the Spanish bank reportedly considers changes to its British strategy.

Vereker, who became Santander’s U.K. chief in 2020, led the unit through a digital upgrade strategy that accompanied the Covid-19 pandemic, part of a larger Santander global initiative to add more mobile banking and other financial services delivered through digital channels. “With the transformation well under way and having a strong CEO and a refreshed Board in place, now is the right time for me to step down,” Vereker said in a release.

The Financial Times reports Santander is considering downsizing its U.K. presence, adding  there has been a rift between Vereker and Ana Botin, Santander’s global executive chair. Botin and Vereker denied the rift to the paper and said the U.K. remains a major market for the bank. Santander did not return a request for comment. —John Adams  

Pay by Bank gets a boost in Germany

Account-to-account payments are coming to Germany thanks to a fresh partnership between global prepaid payments platform Recharge, Adyen, and Tink, the European open banking platform Visa acquired in 2022. 

Recharge will offer account-to-account payments on Guthaben.de, one of its  flagship websites for the German market, according to a Tink release. 

“The appetite for Pay by Bank among merchants, especially those working with [payment service providers] like Adyen, is really growing,” said Thomas Gmelch, payments director DACH at Tink, in a statement. “At Tink we’ve seen recently that over 10,000 merchants have now chosen Pay by Bank via our PSP partnerships.”  

In the US, pay-by-bank projects have taken off, with Walmart, Plaid, Fiserv and others starting new initiatives as the U.S. adopts open banking rules. —Joey Pizzolato

U.K. regulators look to advance variable recurring payments in 2025

The U.K.’s Financial Conduct Authority and the Payments System Regulator are making variable recurring payments a priority in 2025 as part of wider open banking initiatives. 

Variable recurring payments, which were first launched in 2024 in the U.K., allow customers to transfer money from one account to another at regular intervals. They are similar to direct debits, but settle in real-time and have customizable parameters, such as limiting the total amount of funds that can be withdrawn. 

Open Banking Limited, which was founded in 2016, will be responsible for establishing an independent operator to coordinate how variable recurring payments are made and driving the rollout of new live services that will allow customers to make those payments to utility companies, government and financial services companies, according to the FCA. —Joey Pizzolato