Welcome to the PaymentsSource Morning Briefing, delivered daily. The information you need to start your day, including top headlines from PaymentsSource and around the Web:

Card brands want quick action in China: American Express, Mastercard and Visa are all preparing to submit requests for licenses to operate in China within months, reports Reuters, which adds it may still be a long time before the networks can do business in China. The U.S. card brands will have to pass a security review, face other regulatory hurdles and overcome a business and political culture in China that has been inconsistent in how welcoming it will be to foreign financial companies. Visa and Mastercard have long wanted to do business in China, and the government in 2015 said it would open its borders to the companies, bowing to pressure from the World Trade Organization that dates to 2012. But China has not given a clear path to the card networks beyond general rules that would require the companies to make substantial investments and have a local presence inside the country. In May, the U.S. and China agreed that more detailed guidance would come this summer, and Reuters reports that guidance has been issued, citing unnamed sources. Visa, Mastercard and American Express could challenge UnionPay, though they would face an uphill battle given UnionPay's government-backed monopoly over the Chinese credit card market.

No more interchange cap workarounds in the U.K.: British regulators have outlawed card surcharges, where consumers can be charged up to 20% extra for card payments, The Guardian reports. The government is responding to industries that are charging extra "processing" or "handling" fees for cards to get around interchange fees of up to 3% for credit cards and 2% for debit cards. While most companies are absorbing these costs, some, such as movie chains and airlines are levying the extra charges. In an interview with The Guardian, the consumer group Which? said the ending of surcharging was “long overdue" and added, “Previous action to protect consumers from excessive card surcharges has been difficult to enforce, leaving consumers paying over the odds just for paying by card. These new rules will finally put an end to this unfair practice.” Other consumer groups warned industries may respond by raising general prices for goods.

A bad day for Brits who mislead consumers: In another move designed to thwart stealth costs to consumers, the U.K. Financial Conduct Authority is warning banks and other currency conversion companies they will face penalties that mislead consumers on rates, reports the Financial Times. The FCA said that despite government warnings, some providers still have tools on their site which convert currency at the interbank rate, a practice that gives consumers the misleading impression that the displayed rate is the one they will receive, rather than the worse consumer rate they will likely get. Consumers are left with the impression these interbank rates are available to them, and often don't find out until it's too late to shop for another currency exchange provider.

Don't 'Venmo' strangers: A week after reports came out that lots of people confess to using Venmo to pay for drugs, the social transfer service unwittingly finds itself in the middle of another odd payment trail. The Verge reports Venmo was used as part of a film equipment theft ring in Los Angeles. The crooks targeted victims on Facebook Marketplace who are looking to sell camera or video equipment. The cash came in small installments instead of a large payment, from a group called "Andy Mai," which insisted victims receive payments via Venmo. The scammer asks the victim to show up with the camera for the exchange, and Venmo subsequently blocked the transfers to the victim's account because of a violation of Venmo policies regarding an exchange of payments for goods. The scammer then escapes with the equipment. The Verge reports at least $20,000 worth of equipment has been stolen in this manner. Venmo told the technology news site that it's designed for payments between groups of friends and people who trust each other—and people should not use Venmo to pay or people they don't know.

From the Web

Alibaba rewrites its e-commerce playbook
Reuters | Thu Jul 20, 2017 - China's e-commerce giant is abandoning its unique selling point. Alibaba is trumpeting a push into bricks-and-mortar shopping. It’s not alone but the stakes are particularly high for the $392 billion giant led by Jack Ma as it marks a reversal of the asset-light model which fuelled its extraordinary profitability. Ma's so-called "New Retail" strategy envisions marrying two worlds. The basic idea is that Alibaba will now build some of its own test stores from scratch and upgrade existing brick-and-mortar shops in partnership with established retailers to make them more efficient in both online and offline sales.

Payments firm Ingenico to buy rival Bambora for 1.5 billion euros
Reuters | Thu Jul 20, 2017 - French payments specialist Ingenico is to buy rival Bambora from Nordic Capital for 1.5 billion euros ($1.7 billion), the latest in a series of deals in the sector. The acquisition of Stockholm-based Bambora, which had gross revenues of 202 million euros in 2016, would lift Ingenico's earnings and lead to synergies, Ingenico said in a statement on Thursday. Payments firms have become targets for credit card companies and banks seeking to capitalize on a switch from cash transactions to paying by smartphone or other mobile devices.

One-third of card payments contactless
BBC | Thu Jul 20, 2017 - More than a third of all card payments are now contactless, according to new figures. Trade association UK Finance said 33% of all spending on plastic was settled with a tap instead of a swipe in May, almost double that of last year's 18%. There was a particular rise in travel-related purchases, such as foreign currency exchanges and airport terminals. A total of £4.5bn was spent through contactless payments in May. Total plastic card spending was £57.2bn on both credit and debit cards. Compared with last May, people spent more on debit cards at £40.6bn, up from £37.9bn the year before. Credit card purchases increased to £16.6bn from £15.2bn.

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