New Virus Strain Hits Markets, Fintech Ruling a “Death Sentence”By MBN Staff | Thu, 12/24/2020 - 14:23
A new more contagious COVID-19 variant caused stock markets to stumble despite good news of the rollout of vaccination campaigns. Meanwhile, 2021 could be the year for contactless payment in Mexico, a CNBV regulation could spell disaster for the emerging FaaS sector, and the fiscal stimulus for the capital enduring its second period of maximum lockdown will fall well short of requirements, says COPARMEX.
All this and more in The Week in Finance.
The announcement by over 40 countries that they would close their doors to flights from the UK following the identification of a more contagious strain of COVID-19 sent ripples through global stock markets this week.
In Mexico, the S&P/BMV IPC, fell 1.09 percent or 479.11 points by 11.04 CST on Monday, having opened with a 1.51 percent drop by 8.45 CST. The FTSE 100 also suffered with a 1.73 percent fall while the S&P 500 fell 0.69 percent.
The UK’s new strain is considered to be not more harmful than the main strain, but up to 70 percent more contagious. Though many European countries refused flights from the UK, the new strain is likely already on mainland Europe, say scientists.
Consultants at Fintech Legal Paradox said that a regulation from the National Banking and Securities Commission (CNBV), which effectively makes illegal the use of non-authorized third-party software and API’s in financial institutions digital banking services, is a “death sentence” for Fintech-as-a-Service.
The decision means that APIs and software that are essential to running digital financial services, like financial apps, must be made by the financial institution that is authorized by CNBV to operate in Mexico. But because of the time and specialist expertise these software take to build from scratch, financial institutions usually contract third parties. Now, this will not be allowed.
The Mexican Confederation of Business Owners (COPARMEX) said that the financial support system put in place in Mexico City after the maximum movement on restrictions was reinstated this week, will not be sufficient to support local businesses.
According to COPARMEX, the additional US$41.5 million that the Mexico City government will offer to businesses and people through loans and support packages will come nowhere near the US$3.2 billion they estimate the city requires to help business and support employment growth.
US-based companies are eyeing up opportunities for contactless payment in Mexico as it becomes ever more important in the services of major tech companies like Apple and WhatsApp Pay.
Though contactless payment is big in Europe and the US, there are few places in Mexico where consumers can make purchases with contactless payment. The method relies on radio frequency technologies and, while not remove the dangers of theft or fraud, is just as reliable as current security methods used with credit or debit cards, like the PIN.
Apple Pay said it would arrive in Mexico “very soon”, while WhatsApp Pay, the digital payment arm of the messaging service company, is already present in Latin America. Next year could see movements made towards contactless.