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According to a new BIS paper, e-commerce has ramped up during the pandemic around the world. The growth has differed across sectors and over different stages of the pandemic. Novel data sources can help to follow these trends. It found that the growth of e-commerce has been higher in countries where there were more stringent containment measures and where e-commerce was initially less developed. It speculates that some changes in consumers' shopping habits and payment behaviour may be longer-lasting, and have implications for structural change and the growth of the digital economy.

Japan's equivalent to Amazon, e-commerce giant Rakuten, has started accepting account registrations for its new cryptocurrency exchange, Rakuten Wallet.

FIS published its 2023 Global Payments Report that examines how consumers pay today both in-store and online across 40 global markets. In 2022, there were almost 70 real-time payment (RTP) schemes providing high-speed payment rails that helped drive account-to-account (A2A) payments to account for $525 billion in global e-commerce transaction value, versus $463 billion in 2021. A2A payments flow directly - and often instantly - from a consumer's bank account to a merchant's account, helping to drive down the cost of acceptance for merchants. The growth of A2A in the U.S. mirrors the global trend, with A2A accounting for 9% of e-commerce transaction value in 2022. This is projected to keep growing, fueled in part by consumer use cases arising from the 2023 launch of the Federal Reserve's FedNow payments network, and the existing RTP from The Clearing House and Zelle real-time payment networks

According to McKinsey, digital payment transactions grew rapidly in emerging markets during the past two years, as the pandemic accelerated shifts to contactless payments and e-commerce. E-wallets proliferated, real-time account-to-account transfers took off, and industry players formed new partnerships to access capabilities and broaden their customer base. Some of the fastest growth occurred in Africa and Southeast Asia, where low banking penetration gives payments providers opportunities to capture untapped potential and reach underserved populations... Margins for digital payments providers are already wafer thin and are likely to be eroded further by competitive intensity and declining fees. In many cases, payments are more a means to cross-sell other products than a profit center in their own right. Some services, such as peer-to-peer (P2P) payments, are usually offered to users for free in most markets. In Brazil, for instance, Pix is pushing margins down by offering P2P payments for free and person-to-merchant (P2M) payments at low cost.

Bitcoin spenders can now use the lightning network to shop at e-commerce sites like Amazon. Crypto payment processing startup Moon has announced that any lightning-enabled wallet can now also be used through Moon's browser extension.

Mr Jugnauth reiterated his vision of a cashless society to better secure financial transactions in Mauritius. MauCAS will be a real boost to e-commerce with its 24/7 payment system, he pointed out. The Prime Minister also announced the upcoming introduction of a "Central Bank Digital Currency".

Digital payments allow people to access goods and services while in quarantine or social distancing. SARS epidemic in 2003 expedited China's path in launching digital payments and e-commerce in the country. A robust identification system, widespread, consistent internet access and trustworthy ways to get money into digital formats could be important for digital payments to thrive.

This IMF paper discusses the benefits and risks of quantum computing. On the risk side, they would crack many of the current encryption algorithms and threaten financial stability by compromising the security of mobile banking, e-commerce, fintech, digital currencies, and Internet information exchange. While the work on quantum-safe encryption is still in progress, the paper recommends that financial institutions take steps now to prepare for the cryptographic transition, by assessing future and retroactive risks from quantum computers, taking an inventory of their cryptographic algorithms (especially public keys), and building cryptographic agility to improve the overall cybersecurity resilience.

The Bank of Thailand (BoT) has issued a warning against baht-denominated stablecoin Thai Baht Digital (THT), citing a sixty-year-old law, that makes the "creation, issuance, usage or circulation of any material or token for money is a violation of Section 9 of the Currency Act 1958." "Although THT is currently not used as a medium of exchange, it could cause fragmentation to the Thai currency system should THT or other similar stablecoins come to replace, substitute or compete with Baht issued by the BOT," the BoT noted. THT stablecoin is issued on the Terra platform which has produced various other stablecoins including the TerraUSD and TerraKRW. The Terra platform is also behind the chai payment app, an e-commerce wallet that is mainly used in Asia and powered by stablecoins. https://www.bot.or.th/English/PressandSpeeches/Press/2021/Pages/n1564.aspx

The European Central Bank (ECB) has made clear that banknotes are here to stay. Even if you cannot use banknotes for e-commerce, you could still hoard them at home as a store of value. And the ECB is not only committed to issuing banknotes, but also to supporting the efforts of the European Commission and others to maintain the usability of banknotes. The ECB has no intention at all to make banknotes disappear, but the opposite. Hence, there is no intention to use negatively-renumerated central bank digital currency (CBDC) to help monetary policy below the effective lower bound on policy rates. However, one could imagine a tiering system where citizens can hold up to a certain amount - for example, €3,000 - for which remuneration would never be negative, while for holdings beyond that, an interest rate would be applied which would be below other risk-free liquid investments, and possibly negative.

"Amazon has come out and flatly denied a British newspaper's report that the e-commerce colossus was planning to accept bitcoin (BTC, -4.04%) payments by the end of the year. 'Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true,' a spokesperson for Amazon told CoinDesk by email. "We remain focused on exploring what this could look like for customers shopping on Amazon."

Singapore-based fintech firm Grab launched a micro-investment platform (Auto Invest) and a buy-now-pay-later payment plans for select e-commerce sites, and extended its consumer loan platform to third party providers. AutoInvest funds, which are invested in fixed-income funds, can be withdrawn any time with no penalties and can also be used to spend on Grab services or at any merchant accepting the GrabPay Card. The third party loan platform will start in Singapore before expanding to other Southeast Asia countries.

Oliver Wyman's Shopping Outlook Survey tracks evolving consumer sentiment during the pandemic. It reveals an acceleration of e-commerce, greater consumer demand for mobile and contactless payments, the need for effective and inclusive digital servicing, more flexible business-to-business and government-to-consumer payment options, and a replacement for static fraud models.

Stripe, which processes payments for millions of online businesses and e-commerce platforms, is teaming up with banks including Goldman Sachs and Citigroup to offer checking accounts and other business-banking services. It will soon give its customers the option of offering insured, interest-bearing bank accounts, debit cards and other cash-management services. These products aren't meant for consumers. Rather, they are designed for the merchants and vendors that do business with Stripe's customers.

Suzhou will give away 100,000 red packets of 200 yuan worth of DC/EP to city residents via a lottery, as part of the Peoples Bank of China central bank digital currency (CBDC) pilot. Local citizens can register for the lottery on December 5 and 6 and the results will be announced the day before the annual Double 12 online shopping festival. Lottery winners can spend the free digital yuan from December 11 to 27 at shops that support the DC/EP payment as well as at selected online shops on e-commerce giant JD.com. In addition, the government said selected winners from the lottery will be invited to test out the offline payment feature that's built into a DC/EP wallet. https://mp.weixin.qq.com/s/P7JoXI7G2EcRM1AuyZfP_w

Global payments revenue in the first six months of 2020 contracted 22%, or $220 billion, from a year ago due to the impact of the Covid-19 pandemic, according to McKinsey & Company. The management consultancy expects revenue for the entire year to be about $140bn lower than in 2019, a 7% decline from a year earlier. Consumers in certain geographies seem to be paying off credit-card balances in preparation for the challenging times seen ahead. The pandemic has also accelerated the move from physical to virtual banking, with banks in various countries closing branches and ATMs. Investments in instant payments have begun to reap greater benefits, both in point-of-sale and e-commerce.

Before the pandemic started, payment volumes reached new heights, which are predicted to continue but at a pace reflecting both the increased reliance on non-cash transactions and the effect of a dampened global economy. Global non-cash transactions surged nearly 14% from 2018-2019 to reach 708.5 billion transactions, the highest growth rate recorded in the past decade. Asia-Pacific surpassed Europe and North America to become the 2019 non-cash transactions volume leader at 243.6 billion. The increase was driven by increasing smartphone usage, booming e-commerce, digital wallet adoption and mobile/QR-code payments innovations, led by China, India and other SE Asian markets (31.1% growth).

"Big tech firms entering financial services can scale up rapidly with user data from their existing business lines in e-commerce and social media, and by harnessing the inherent network effects in digital services. In addition to traditional policy concerns such as financial risks, consumer protection and operational resilience, the entry of big techs into financial services gives rise to new challenges surrounding the concentration of market power and data governance. The current framework for regulating financial services follows an activities-based approach where providers must hold licences for specific business lines. There is scope to address the new policy challenges by developing specific entity-based rules, as proposed in several key jurisdictions - notably the European Union, China and the United States."

"As more and more crypto exchanges have announced plans to stop registering mainland Chinese users and phase out existing users there, many investors on the mainland are reportedly making efforts to register companies overseas to bypass the know-your-customer (KYC) checks, which could allow them to trade crypto as corporations. Many vendors on Taobao, China's major e-commerce marketplace owned by Alibaba, are taking the chance to provide intermediary services for those mainland investors."

The European Central Bank (ECB) will be running a digital euro prototyping exercise to allow market participants to develop front-end prototypes that can be integrated with the back-end infrastructure developed by the Eurosystem. The documents were provided to the five companies that were selected to carry out the experimental work (CaixaBank (peer-to-peer online payments), Worldline (peer-to-peer offline payments), EPI (point of sale payments initiated by the payer), Nexi (point of sale payments initiated by the payee), and Amazon (e-commerce payments)). The material published provides the information needed by any market participant to develop front-end prototypes compatible with the Eurosystem's back-end infrastructure, without restricting participants' potential to innovate. The prototyping exercise is expected to be completed in the first quarter of 2023.