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PAYMENT CARD ACCEPTANCE EXPANDING FAST IN DEVELOPING MARKETS

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PAYMENT CARD ACCEPTANCE EXPANDING FAST IN DEVELOPING MARKETS 1

Rural expansion is drivingrapid growth in card acceptance in developing markets, while regulation and new technologyare boosting acceptance in more developed markets

Underserved regions are showing the fastest growth

According to RBR’s latest research, Global Payment Cards Data and Forecasts to 2021, the number of card-accepting merchant outlets worldwide rose by over 7 million in 2015 to 54 million. Growth was especially strongin Asia-Pacific, the Middle East and Africa (MEA) and central and eastern Europe (CEE) where payment card acceptance levels remain low.

In Asia-Pacific, the number of merchant outlets where customers can use payment cards increased by 29% in 2015. Unsurprisingly, China was responsible for much of this growth as a staggering 4.7 million new outlets began accepting payment cards during the year. Chinese merchants are racing to keep up with demand from the country’s vast population, especially in underserved rural areas.

Number of merchant outlets accepting cards by region (million)

Number of merchant outlets accepting cards by region (million)

Source: Global Payment Cards Data and Forecasts to 2021 (RBR)

Regulation isboosting card acceptance even in more mature markets

RBR has found that regulatory factors are having a positive impact on acceptance levels in several countries. For example, in Malaysia a reform on interchange fees came into force during 2015, encouraging merchants to begin accepting cards. Meanwhile in Kazakhstan, legislation has been introduced which requires all merchants to accept card payments or face a financial penalty.

Regulation isalso bringing about further expansion in mature markets. For example, the business case for merchants in EU countries to accept card payments is stronger followingthe European Commission’s caps on interchange fees, which came into force in December 2015, and their knock-on effect on merchant service charges.

Contactless and mPOS are extending acceptance to new sectors

In addition, technological advances arestimulating greatercard acceptanceeven in developed markets. Contactless is appealing to merchants that handle low-value payments and appreciate the reduced transaction times that the technology enables. Meanwhile, mPOS devicesare improving acceptance among mobile merchants, such as taxis and tradespeople, for which fixed terminals are often not practical or cost-effective.

RBR’s Chris Herbert remarked: “Whether card acceptance is coming to an area for the first time, moving to lower value payments, or penetrating smaller merchants, theacquiring sector has a remarkable ability to find new opportunities for expansion.”

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Britain’s financial watchdog appoints five women to top roles

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Britain's financial watchdog appoints five women to top roles 2

By Huw Jones

LONDON (Reuters) – Britain’s financial watchdog announced five new appointments on Thursday, creating an executive committee dominated by women as it pressures the firms it regulates to get serious about diversity.

The Financial Conduct Authority, under CEO Nikhil Rathi who took up the reins last October, said Stephanie Cohen will be its new chief operating officer, with Jessica Rusu becoming its first chief data, information and intelligence officer.

Sarah Pritchard has been appointed executive director for markets, while Emily Shepperd will take up a newly created role of executive director for authorisations, it said.

The overhaul also comes as the watchdog aims to show lawmakers it has learned lessons after a damning report that said its executive committee was responsible for not responding fast enough to problems at now defunct London Capital & Finance investment fund.

The FCA also appointed Clare Cole as director of market oversight, and she will lead the watchdog’s response to a forthcoming review of UK company listings rules.

The review is expected to recommend changes to attract more tech and fintech listings.

Rathi, a former finance ministry and London Stock Exchange official, began an internal shake-up last November with a merger of retail and wholesale supervision units to create a “holistic” view of activities.

There are now seven women and four men on the FCA’s executive committee.

Rathi had said previously that he would seek to increase diversity within the FCA’s own ranks, and last year he said he wanted firms that it regulates to deliver on diversity in a sector where women and BAME communities remain underrepresented.

The FCA said the new appointments were part of its transformation into a “data-led” regulator of more than 60,000 firms, and were aimed at speeding up decision-making.

Britain’s large financial sector is navigating Brexit, which left it largely adrift from the European Union with chunks of stock and swaps trading shifting to the bloc, but freeing up the FCA to write its own rules.

(Reporting by Huw Jones; editing by Tom Wilson and Hugh Lawson)

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Carbon offsets gird for lift-off as big money gets close to nature

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Carbon offsets gird for lift-off as big money gets close to nature 3

By Susanna Twidale and Shadia Nasralla

LONDON (Reuters) – An expected dash by big corporations for offsets to meet their climate targets has prompted financial exchanges to launch carbon futures contracts to capitalise on what could be a multi-billion dollar market.

It’s a step change. Carbon offsets, generated by emissions reduction projects, such as tree planting or shifts to less polluting fuels, have struggled for years to gain credibility, but as climate action has become urgent, their market is expected to grow to as much as $50 billion by 2030.

Among the major corporations that say they expect to use them to compensate for any emissions they cannot cut from their operations and products are Unilever, EasyJet, Royal Dutch Shell and BP, which all have climate targets.

Singapore-based digital exchange AirCarbon told Reuters it planned to launch an offset futures contract by the second quarter.

“The entire concept behind carbon trading and offsets is to employ the profit motive in order to push decisions towards climate change mitigating activities. (We ensure) that you find the most efficiently priced offsets,” William Pazos, co-founder of AirCarbon, said.

The futures market would allow companies to buy a simple credit, effectively a promise to reduce a tonne of emissions but not specifying where that would take place, in contrast to the existing market that offers direct access to particular offset projects.

Advocates, such as AirCarbon, say the resulting liquidity and transparency are positive.

Critics, including some environmental groups and some project developers, say making the market bigger may just make it cheaper for emitters without providing any guarantee it will support the projects most effective in reducing emissions.

“There is a risk in a … switch from something which has a large proportion of over-the-counter buyers at least taking some interest in what they are buying and its quality to large wholesale transactions that aren’t so easily unpacked,” said Owen Hewlett, chief technical officer at Gold Standard, one of the biggest carbon offset registries.

SMALL AND OPAQUE

Carbon offset credits are currently traded in small, bilateral and typically project-specific deals.

An emitter can buy a credit awarded to a forestry or clean cooking stove project for a tonne of carbon dioxide emissions the project has prevented.

The buyer uses these credits to offset past or future emissions and the credit is “retired”, or removed from the system.

The retail price of an offset can vary from 50 cents for a renewable energy project in Asia to $15 for a clean cook stoves project in Africa to $50 for a plastic recycling project in eastern Europe.

These voluntary deals are distinct from compliance cap-and-trade markets, such as the European Union’s Emissions Trading System, based on lawmakers setting a carbon budget and allocating a finite number of allowances, which can be traded by emitters or market players.

The underlying principle echoes the carbon offset market in that those that have emitted too much carbon can buy pollution permits from those with allowances to spare.

As demand to limit carbon emissions grows, carbon prices in the EU ETS have soared to a record high of over 40 euros a tonne this year.

In the off-exchange, bilateral market for carbon offsets, some say they are struggling to navigate the proliferation of standard setters, registries, verifiers and criteria.

“The market today is very small. It’s difficult to be confident that the product you are investing in is credible,” said Bill Winters, CEO of Standard Chartered bank and Chair of a private sector task force seeking to create a multi-billion dollar offset market in the coming months.

DECISIVE YEAR?

This year in theory should mark the coming of age of carbon markets as decades of U.N. talks on tackling climate change reach a decisive stage.

Delegates at the United Nations climate conference in November in Glasgow, Scotland, are expected to work on designing a market to channel money into offset and emissions removal projects to prevent global temperatures from rising more than 1.5 degrees Celsius (2.7 degrees Fahrenheit) above the preindustrial average.

Some players, such as AirCarbon, are eager to launch their financial products sooner.

Global exchange CME, home of the main U.S. crude oil benchmark contract, will launch an offset futures contract in March.

“It is a brand new market for many players,” CME Chief Executive Peter Keavey told Reuters. “We can help provide standardised pricing benchmarks and improve price discovery in the voluntary offset market. That’s our goal.”

Ahead of the talks later this year on market design, both CME and AirCarbon plan to use standards set under the aviation CORSIA offset scheme, which many environmental campaigners have said are not rigorous enough as they allow the aviation sector to use most types of project to reach its emissions targets.

They say they fear a repeat of problems that beset the offset market of the Kyoto Protocol, the Clean Development Mechanism (CDM).

The market under Kyoto, a precursor of the Paris climate deal, was flooded with cheap credits from industrial gas projects, mainly from Asia. That led to price crashes and made it harder for other projects to attract funding.

“CORSIA allows a lot of project types and does not have particularly stringent criteria, such as forestry projects with permanence issues and old CDM (Kyoto) credits with little environmental benefit,” Gilles Dufrasne, policy officer at the non-governmental organisation Carbon Market Watch, said.

Asked about criticisms of CORSIA, the International Civil Aviation Organization (ICAO), which developed the scheme, said in an email CORSIA had been agreed by a consensus of member states and was “under constant review”.

Some project developers, brokers and environmental groups also question the wisdom of decoupling carbon units from their underlying project.

They say combining emissions-focused projects with those that might prioritise other issues, such as community engagement, education or biodiversity, could lead to a race to the bottom in terms of price.

This might make it harder for more capital intensive projects to attract buyers.

More broadly, green groups are concerned companies may place too much emphasis on offsets which, if priced too cheaply, could lead them to focus less on cutting their own emissions.

There are no rules on how many tonnes of carbon a company is allowed to offset a year.

Emitters, such as Royal Dutch Shell, BP and Unilever and project developers, say the first priority must be to reduce emissions.

“We have always acknowledged that offsetting can only be an interim solution while zero-emissions technology is developed,” EasyJet said in an email.

The private sector task force, chaired by Winters and promoted by former central banker Mark Carney, wants to encourage a range of participants, such as bankers and trading houses, as well as emitters to join the market to boost liquidity.

“Markets work best when they are efficient, and that efficiency comes from greater rather than smaller liquidity. So it’s important to have as many participants as possible, from all different types of background,” said Abyd Karmali, Managing Director, Climate Finance at Bank of America, who is also a member of the private sector task force.

Others question the role of speculative trading in a climate context.

“There might be a place for a bunch of traders flipping margins on some futures contracts, but at the end of the day I don’t see how the volume of trading going through (exchanges) has any positive impact on climate change,” said Wayne Sharpe, CEO and founder of ecommerce site Carbon TradeXchange.

(Reporting By Susanna Twidale and Shadia Nasralla; Editing by Katy Daigle, Veronica Brown and Barbara Lewis)

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The school leader getting New Mexico’s tribes online

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The school leader getting New Mexico's tribes online 4

Indigenous language teachers prepare for a remote virtual lesson in Santa Clara Pueblo library in February 2021. Thomson Reuters Foundation/Handout by Santa Fe Indian School.

Indigenous language teachers prepare for a remote virtual lesson in Santa Clara Pueblo library in February 2021. Thomson Reuters Foundation/Handout by Santa Fe Indian School.

Kimball Sekaquaptewa (middle) with the consortium of six pueblo governors and family members, breaking ground on a fiber-optic internet construction project in December 2017. Thomson Reuters Foundation/Handout by Santa Fe Indian School.

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