American Express expands in U.K., Western Union returns to Cuba

By John Adams, Kate Fitzgerald, Bloomberg News

May 15, 2024 9:39 AM

Amex is working with Worldpay to reach businesses in the U.K., Western Union has resumed remittances to Cuba after shutting down that corridor in 2020, and more.

Here's what's happening around the world:

Bloomberg

American Express extends Worldpay partnership to reach U.K. businesses

American Express has signed a new collaboration agreement with payments company Worldpay as part of Amex's strategy to bolster its appeal to business clients in the U.K.

The partnership will boost the number of locations where American Express cards can be used in the U.K., and the combination will add technology designed to improve user experience, according to Amex. By pairing with Amex, Worldpay merchants will receive a single statement for reconciliation and gain access to a simpler onboarding process and servicing relationship.

"This new strategic agreement will help power our progress, meaning thousands of additional small businesses across the country can benefit from welcoming Amex [consumers] who, on average, spend 3.9 times more annually and 3.2 times more frequently than non-cardmembers," said Dan Edelman, vice president and U.K. general manager for merchant services at American Express, in a release.

During its most recent earnings report, Amex noted slower growth in its small-business segment, a rare blip in what was an otherwise strong performance. The company attributed the weakness to higher interest rates and slower payments volume rather than credit risk. Amex CEO Steve Squeri has expressed long-term confidence in small businesses during the recent period of high inflation and slower economic growth.

Worldpay split from FIS in 2023, part of a strategy to boost FIS's focus on banks, while Worldpay expands its payment services and seeks opportunities for acquisitions. —John Adams

JEAN CLAUDE COUTAUSSE/BLOOMBERG NEWS

Western Union resumes remittance services to Cuba

Western Union resumed money-transfer services to Cuba after suspending them in January due to a cybersecurity incident affecting the country's electronic payment systems, the Miami Herald reports. Users may send up to $2,000 in a single transaction from any U.S. locations, online or via Western Union's mobile app, to recipients with accounts at Banco Popular de Ahorro, Banco Metropolitano S.A. and Banco Credito y Comercio, according to the report. Transfers are sent in dollars and are available the same day, deposited in MLC, Cuba's virtual currency. Western Union closed more than 400 of its locations in Cuba in 2020 after the Trump administration sanctioned Western Union's processing partner, Fincimex, for its ties to the Cuban military. In 2022, Cuba established Orbit S.A. to process remittances on the island and Western Union resumed services in March 2023. Many Cubans are participating in informal cash transfers, The Miami Herald said. —Kate Fitzgerald

Hollie Adams/Bloomberg

Klarna says nearly all employees use generative AI

Eighty-seven percent of Klarna's employees are using generative AI on a daily basis, including 93% of communications staff, 88% of marketing employees and 87% of the legal team. And 86% of Klarna's employees are using Kiki, the company's internal AI assistant, which handles about 2,000 queries per day. Klarna has made internal usage of generative AI a priority, using a version of OpenAI's ChatGPT that is designed for corporate use. Klarna said in February that gen AI was doing the equivalent "work of 700 people," and has improved accuracy in customer query resolutions. Klana has also said it will no longer hire people outside of engineering roles, citing the impact of AI. "We push everyone to test, test, test and explore," Sebastian Siemiatkowski, CEO and cofounder of Klarna, said in a release. —John Adams

Westpac seeks to expand transit tech

Westpac is partnering with local authorities in Canberra, Australia's capital, to introduce its open transit payment technology. Called MyWay+, Westpac's transit app enables commuters to tap on and off trains, buses and other transit modes with a debit or credit card, reducing the need for a dedicated transit pass. The app also provides updates on schedules and alerts on route changes. Transit has become a gateway for payment technology globally, as financial institutions and payment companies try to encourage consumers to use contactless payments for travel, a recurring activity that can build user habits over time. At the same time, transit systems can theoretically reduce overhead by moving ticketing and payment hardware outside of their networks. Last week, for example, Italy's transit authority activated a contactless payment option for Florence's transit system. The new Florence transit technology deployment serves tourist zones, which include travelers who may be unfamiliar with local closed loop transit payment options. —John Adams

Gallant Capital absorbs Fime, UL Solutions’ payment-testing operations

Los Angeles-based Gallant Capital has acquired two key international players in payment testing, including Fime, based in France, and UL Solutions, based in Northbrook, Illinois, according to a press release. The combination expands Fime's geographical reach and streamline testing capabilities for new payments technology across the payments, smart mobility and digital identity industries, Fime's CEO, Lionel Grosclaude, said in the release. Fime supports quality-assurance testing in 19 countries across the Americas, Europe, the Middle East, Africa, India and Asia, and the organization is gearing up to expand its testing services for open banking, instant payments, central bank digital currencies and digital wallets in these regions, the release said. Terms of the deal were not disclosed. —Kate Fitzgerald

Parkopia supports EV charging-station growth across the Middle East

As Middle Eastern nations expand their use of electric vehicles, London-based connected-car service provider Parkopia has teamed with Regeny, a Dubai-based EV charging station startup, to help EV drivers locate charging locations via in-car media systems, according to a press release. Parkopia initially will provide EV charging-station data for UAE drivers, followed by Saudi Arabia later this year, with plans to expand to Egypt, Morocco and Jordan. The UAE government has converted nearly 20% of its fleet vehicles to EVs, while Saudi Arabia's government estimates that 30% of all new cars sold in the kingdom will be powered by electricity by 2030. Parkopia is also working with EV manufacturers in India, Thailand, Singapore and Chile to provide built-in access to charging-station data. Regeny, launched in 2022, is building a network of EV charging stations across the Middle East that will be compatible with all major EV makers, the firm said in the release. —Kate Fitzgerald

Jack Ma-backed Ant’s profit fell 19% as regulations curb growth

Ant Group's quarterly earnings fell 19% as the Chinese fintech pioneer founded by Jack Ma struggles to find new drivers of growth following regulatory clampdowns at home.

The Hangzhou-based company contributed 2.57 billion yuan ($355 million) of profit to Alibaba Group Holding. Based on Alibaba's one-third stake in Ant, that translates to an estimated 7.7 billion yuan in profit for the December quarter, according to Bloomberg calculations based on the listed company's disclosures.

That fall narrowed compared with a 92% plunge in earnings for the previous three months, when Ant was hit by an investment loss. Its earnings lag a quarter behind Alibaba's. A representative for Ant declined to comment.

Ant has been expanding its overseas operations to overcome slowing growth at home. It's tied up with at least 25 e-wallet platforms for cross-border payments in regions including Southeast Asia and Europe. The company made broad overhauls to its business in March, setting up independent boards for international, database and digital technologies units, paving the way for future spinoffs.

The moves come after billionaire Ma gave up control of Ant last year. China wrapped up its crackdown on the once high-flying internet sector by slapping more than $1 billion in fines on Ant and Tencent Holdings in July.

Ant also proposed to buy back as much as 7.6% of its shares last year, giving investors such as Fidelity Investments and T. Rowe Price Group an opportunity to sell some stock. Under the repurchase plan, the valuation was trimmed to about $79 billion — well off its peak of $280 billion before regulators scrapped an initial public offering three years ago. The fintech company is awaiting a financial holding company license, which would help revive the IPO.

Initially catering to Chinese tourists traveling outside the country, the company has expanded its services into a backbone for cross-border payments known as Alipay+ that can be used by different wallets. For example, when customers of GCash from the Philippines travel to South Korea, they can pay with GCash when they see the Alipay+ logo displayed at merchants.

Alipay+ connected more than 88 million merchants in 57 countries and regions as of early March. Ant's affiliate Alibaba saw revenue rise 6.6% after it focused on gaining market share in e-commerce and cloud. —Lulu Yilun Chen, Bloomberg News