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Roger Niederer, Head Merchant Services at SIX Payment Services

Roger Niederer, Head Merchant Services at SIX Payment Services

For many years Jeff Bezos’ online shop has had almost every conceivable item in its range.  Now apparently, Amazon wants to expand and offer some kind of current account to its customers.

The offering will be aimed at young people and other consumers who do not currently have their own account. However, according to a report in the Wall Street Journal the project is still at an early stage.

If true, does the move really have the potential to change the payment area in much the same way as they have in the literary market? What does the project mean for retailers and the payments industry, and where can the growth of Amazon lead to?

Roger Niederer, Head Merchant Services at SIX Payment Services, provides a reality check.

Will Amazon now become a bank?

Amazon does not want to become a financial institution in its own right; instead the project is likely to be undertaken in partnership with established financial service providers. It is understood that US financial giant JPMorgan is currently in discussions with Amazon.

The reason for this approach is likely to be that if Amazon built its own banking division and applied for a banking license, the company would face much stricter regulations that could slow its aggressive growth in other markets. In any case, it is clear that retailers understand the benefits of having a strong payment service provider at their side who brings the necessary expertise and can quickly and easily integrate new payment methods into existing processes and systems.

Is this E-commerce expansion without limits?

In the beginning, Amazon mainly sold books; it then offered CDs and DVDs to its customers.   Today, through Prime, customers are able to stream music, video and much more across smart devices.

Thanks to Alexa, its huge selection of online shops can be accessed by voice command and Amazon even wants to take control of the delivery of its packages.  This announcement hit the stock values of UPS and FedEx.

With Amazon Pay, the company has had its own payment service for a while, but gained only moderate traction with other online stores. Here, it seems, the giant had reached its limits.

The company recently opened another lucrative online business with its cloud service, Amazon Web Services. The plan to offer bank accounts is just another link in a long chain of new business ideas. The direction of Amazon’s journey is not yet clear but it is likely that CEO Jeff Bezos is intent on continuing growth. Industry experts assume that in the long term, only one in ten online retailers will remain competitive with this current strategy.

How much influence does Amazon have in daily online commerce?

Like Apple and Google, Amazon has been accused of being a “data octopus”. Since the introduction of language command assistants, the accusation is more topical than ever.

There is growing skepticism surrounding the opaqueness of what exactly Alexa stores and what happens to the recordings. Connected to a fully networked smart home, the digital ‘roommate’ could know a lot more and potentially share it: What time people get home? When do they turn off the lights? When do they go to bed? Are they looking into the fridge during the night? Worrying about the potential for very personal information being shared is likely to outweigh the positives of Alexa & co for most consumers.

With the new bank account function, Amazon would also have access to the financial data of its customers. Using this new data it would eventually prove very easy to determine a customer’s individual willingness to pay a certain price for a particular product and then offer it at exactly that price.

However, we must bear in mind that nobody is forced to shop at Amazon and invite Alexa into their home. In addition, awareness of data protection is increasing amongst both individuals and Governments. In the future, customers will be increasingly concerned about whether they really want to give their personal data in such a concentrated way to a single provider. Payment service providers form an attractive way out, as they, for example, handle the credit card data on behalf of the merchants, sparing them compliance effort.  .

Final thoughts

In the near future we will still buy our bread from the local bakery and it will not get delivered by an Amazon drone. Nevertheless, one thing is certain: retailers are faced with a harsh reality and online shops may soon cease to exist in their current form. Amazon and a comprehensive portfolio of payment methods will be the challenges for today’s online store owners, but with the right technology and consulting partners on their side, nobody has to worry about the future.

SIX has recognized the potential of Amazon and the dangers that can arise for the retail sector, and we are working on a wide range of solutions that should enable the merchant to keep up with Amazon.

Omni-channel, Conversational Commerce and Internet of Things are all geared to the new customer journey consisting of numerous touchpoints and the changing needs and expectations of consumers.

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Hong Kong dropped from Economic Freedom Index as policies ‘controlled from Beijing’



Hong Kong dropped from Economic Freedom Index as policies 'controlled from Beijing' 1

HONG KONG (Reuters) – Hong Kong has been excluded from the Heritage Foundation’s Index of Economic Freedom because its economic policies are controlled from Beijing, the Washington-based think tank said, removing Hong Kong from a list it topped for 25 years up to 2019.

The title of the world’s freest economy for 2021 was retained by Singapore for the second year, the Heritage Foundation said, with Hong Kong’s investment freedom hurt by political and social unrest dating back to 2019.

In the 2021 index published on Thursday, the foundation said Hong Kong and Macau, both special administrative regions of China, were no longer included because even though citizens enjoy more economic freedom than the average resident of China, “developments in recent years have demonstrated unambiguously that those policies are ultimately controlled from Beijing”.

Developments in Hong Kong or Macau that are relevant to economic freedom would be considered in the context of China’s evaluation in the index, it added. China slipped to 107 from 103, among the list of 178 countries.

The U.S. suspended Hong Kong’s preferential tariff rates for exports to the country last year in response to China’s imposition of a national security law on the former British colony, saying it undermined the city’s high autonomy.

Critics of the law say it is aimed at crushing dissent, while authorities in Beijing and Hong Kong say it was necessary to restore stability after anti-government and anti-China unrest.

Earlier this week, London-based non-governmental organisation Hong Kong Watch said in a report that “red capital” – money originating from mainland China – had fundamentally shaped Hong Kong’s politics, media and the city’s status as a business hub.

(Reporting by Clare Jim; Editing by Anne Marie Roantree and Kenneth Maxwell)

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Health policies a shot in the arm for west European insurers hit by COVID-19



Health policies a shot in the arm for west European insurers hit by COVID-19 2

By Inti Landauro and Sergio Goncalves

MADRID (Reuters) – When six-year-old Ainara Fuertes was in pain with an ear infection late last year, her parents wanted to take her to an emergency room at their local public hospital in the Madrid suburb of Valdeolmos-Alalpardo.

Because of the coronavirus pandemic, the hospital was only seeing non-COVID patients two days a week, so they had to make do with a remote consultation.

Ainara has since recovered, but her parents Diana and Javier decided, like hundreds of thousands of people across western Europe, to sign up for private health insurance to complement state coverage.

“The hospital we depend on is overwhelmed with COVID patients and we want to have more options,” said Diana, 40.

In Spain alone, almost 470,000 people signed up to health policies last year, a 47% increase from 2019.

In neighbouring Portugal, Pedro Leitao, 44, has taken out private health insurance for his 84-year-old mother, who suffered internal bleeding last November and was taken to a crammed non-COVID emergency room at a public hospital in Lisbon.

“Public hospitals are overcrowded … and the risk of infection in the emergency room is enormous,” he said. “I’d be irresponsible if I didn’t buy health insurance for my mother.”

Frank Calderon, head of the health division at Spain’s largest insurer Mapfre, whose policy the Fuertes family picked, said most new clients were families with small children.

“People are looking for flexibility and choice,” he said.

In France, where industry-wide data for 2020 are not available yet, the insurer AXA said last week that its revenue from health insurance rose 6%, while overall sales fell 4%.

And in Germany, the number of private health insurance policies rose 1.8% to 36 million last year, helping to boost premium income by 3.8% to 42.6 billion euros.


In fact, health insurance has been one of the few silver linings from the pandemic for Europe’s insurers.

Overall premium income has slumped along with customers’ earnings, while claims related to the pandemic, as well as a huge crop of natural disasters, have soared into the hundreds of billions of euros, with more to come.

In Portugal, total premium income fell 18.7% to 9.9 billion euros in 2020, with life insurance premiums down 50% – but health insurance income rose 8.3% to a record 949 million euros, according to the ASF insurance supervisory authority.

In Spain, health insurance premiums rose 5.1% even as overall premiums fell 8.3%, dragged down by the life, automotive and corporate sectors, the industry group UNESPA said.

“Private hospitals complement the needs of part of the population, especially in times of crisis when demand is putting great pressure on public hospitals,” said Pedro Carvalho, chief executive officer at Tranquilidade, Portugal’s second-largest insurer by premiums and a unit of Italy’s Generali. Even as the pandemic recedes thanks to vaccination, insurers see more health business coming their way, not least because public hospitals will have a huge backlog of treatments and operations that were postponed because of the pandemic.

“There is nothing to suggest that the current growth situation won’t continue, at least in the coming years,” ASF said.

(Reporting by Inti Landauro and by Sergio Goncalves in Lisbon and Tom Sims in Frankfurt; editing by Andrei Khalip and Kevin Liffey)

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SpaceX Starship rocket prototype nails landing… then blows up



SpaceX Starship rocket prototype nails landing... then blows up 3

(Reuters) – The third time appeared to be the charm for Elon Musk’s Starship rocket – until it wasn’t.

The latest heavy-duty launch vehicle prototype from SpaceX soared flawlessly into the sky in a high-altitude test blast-off on Wednesday from Boca Chica, Texas, then flew itself back to Earth to achieve the first upright landing for a Starship model.

But the triumph was short-lived. Listing slightly to one side as an automated fire-suppression system trained a stream of water on flames still burning at the base of the rocket, the spacecraft blew itself to pieces about eight minutes after touchdown.

It was the third such landing attempt to end in a fireball after an otherwise successful test flight for the Starship, being developed by SpaceX to carry humans and 100 tons of cargo on future missions to the moon and Mars.

For Musk, the billionaire SpaceX founder who also heads the electric carmaker Tesla Inc, the outcome was mixed news.

The Starship SN10 came far closer to achieving a safe, vertical touchdown than two previous models – SN8 in December and SN9 in February. In a tweet responding to tempered congratulations from an admirer of his work, Musk replied, “RIP SN10, honorable discharge.”

The video feed provided by SpaceX on the company’s YouTube channel cut off moments after the landing. But separate fan feeds streamed over the same social media platform showed an explosion suddenly erupting at the base of the rocket, hurling the SN10 into the air before it crashed to the ground and became engulfed in flames.

The complete Starship rocket, which will stand 394-feet (120 metres) tall when mated with its super-heavy first-stage booster, is SpaceX’s next-generation fully reusable launch vehicle – the center of Musk’s ambitions to make human space travel more affordable and routine.

A first orbital Starship flight is planned for year’s end. Musk has said he intends to fly Japanese billionaire Yusaku Maezawa around the moon with the Starship in 2023.

(Reporting by Steve Gorman in Los Angeles and Joe Shaw in Washington; Editing by Kenneth Maxwell)

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