Morning Brief 5.1.20: Visa predicts long-lasting coronavirus spending shift

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The information you need to start your day, from PaymentsSource and around the web:

Habit forming

Visa pulled its financial outlook for the rest of the year, but it already has visibility into permanent changes that result from the coronavirus — such as an aversion to handling cash.

People will also be reluctant to leave the country at first, so the recovery path for travel is less clear, though Visa CEO Al Kelly said it would eventually come back.

“It’s possible there could be some business travel that doesn’t come back at the same level,” Kelly said in a Thursday earnings call. “People have been working from home and realizing they can get done what they need to get done without travel.”

For the quarter ending March 31, Visa reported net income of $3.08 billion, or $1.38 per share, up from $2.98 billion or $1.31 per share the prior year. That’s better than Zacks Investment Research’s consensus analyst forecast of $1.35 per share, vs. $1.31 per share in 2019. Visa reported a deterioration in spending, initially in Asia in February and globally in March. Restaurants, travel, entertainment and fuel were particularly hard hit.

Next flight

Paytm is trying to navigate the complex issue of coronavirus-related flight cancellations through a feature that uses refunds to pay for future flight bookings.

Called a "credit shell," it resides on Paytm's app and works similar to an airline incentive, with the credit redeemable for any flight in the next 12 months, reports Business Today in India. This enables airlines to avoid actually paying refunds while Paytm picks up extra transaction volume.

The rush of flight cancellations has drawn attention to the risks of "future delivery" models, in which payments for a pending flight often fund other business activities, making refunds difficult for airlines. An easy transfer to a future flight would mitigate that problem.

Ring to it

U.K. card issuer and merchant acquirer Moorwand is partnering with K Wearables to add bank identification number sponsorship and digital banking to a contactless payment ring.

K Ring executes payments through a knocking gesture at a card reader, and is linked to a virtual Mastercard. The ring can make contactless payments at stores and transit systems throughout the U.K.

The partners plan on adding features that support both companies' strategy to expand internationally.

Expert source

As it navigates the competitive payments market in India, Google is turning to a local expert to consult on the country's banking and payments market.

Former Axis Bank CEO Shikha Sharma will be an advisor and mentor for Google Pay, reports MSN. Sharma is also an independent director at four of India's largest companies, Tech Mahindra, Dr Reddy's Labs, Tata Global Beverages (which operates Starbucks in India) and Ambuja Cement. Sharma, who left Axis in 2018, has also advised private equity firm KKR.

Google Pay has made a series of deals with transportation companies and merchants in India, enough to jump past PhonePe and Paytm in mobile wallet volume.

New threat

There's a new strain of Android malware that could threaten more than 200 financial institutions, including PayPal, Barclays and Capital One.

Called EventBot, it's still in development but is expected to target money transfer apps and cryptocurrency wallets, reports ThreatPost, adding EventBot was discovered in March 2020.

The malware is constantly improving, potentially making it the "next big" mobile malware, coming as more consumers are transacting on mobile apps.

From the web

Walmart is piloting a pricier 2-hour ‘Express’ grocery delivery service
TECHCRUNCH | Thu April 30, 2020
The retailer confirmed today it’s launching a new Walmart Grocery service called “Express,” which promises orders in two hours or less for an upcharge of $10 on top of the usual delivery fee

'Emergency' for millions as coronavirus severs remittance lifeline
REUTERS | Thu April 30, 2020
One in nine people globally – some 800 million – benefited from international remittances in 2019, according to IFAD. With social distancing measures, lockdowns and the closure of many banks and Western Union offices, some digital remittance companies are witnessing a surge in online transfers.

AmEx Mistakenly Issued Card to German With Ties to Nuclear-Weapons Black Market, Treasury Says
THE WALL STREET JOURNAL | Thu April 30, 2020
The subsidiary, American Express Travel Related Services Co., mistakenly issued a prepaid card to Gerhard Wisser, whom U.S. authorities have accused of playing a role in a group run by Abdul Qadeer Khan, sometimes referred to as the father Pakistan’s nuclear program.

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