NEW YORK—Big banks continue to respond to new competition from fintechs, the latest being Citigroup, which has announced its plans to develop its own consumer-payments platform that would allow payments from many of the world’s most popular digital wallets.
“Citigroup’s announcement comes shortly after the partnership between Barclaycard and Ant Financial was formed, which threatens to open up U.K. spenders to the digital payment app AliPay, used by 800 million Chinese; days after Fidelity’s $35 billion acquisition of WorldPay, which analysts say is a means to ‘play the structural growth in digital payments;’ and six days after HSBC spoke publicly for the first time about its digital-only banking offshoot known as Project Iceberg,” Best Exchange Rates explained.
In Citigroup’s case, it says it wants to “extend our leadership beyond the B2B payment space by developing capabilities to enable institutions to collect from consumers in a globally consistent and seamless fashion.”
Not Cryptocurrency
“What Citi won’t be doing is seeking to develop its own cryptocurrency, in step with J.P. Morgan. Per its global head of innovation for treasury and trade solutions, Gulru Atak, Citicoin is no longer on the agenda, and the bank now believes there are better, non-crypto ways of improving payments,” Best Exchange Rates said.
“Leveraging the [current] payments ecosystem,” which includes SWIFT, the vast messaging network to which 11,000 institutions have been onboarded, is simply less of a challenge than attempting to move all of those banks over to a new blockchain-enabled system, Atak said.