China’s crypto colonialism

The rise of cryptocurrencies is nothing new. But what is new is the state-sponsored roll out of crypto at scale.

Look no further than China, where a new currency, the catchily-named ‘Digital Currency Electronic Payment’ (DCEP), has been introduced and trialled in cities such as Shenzhen, where $1.3m was spent online and via mobile platforms such as WeChat in just 1 week.

And although internally the DCEP will work alongside the Yuan for the time being, the idea is for it to act as a truly global currency outside of China – something the Yuan simply can’t do.

But why are they in such a hurry to roll it out?


Brands… as Central Banks

The ugly truth is that China don’t want to see the likes of Facebook or Google developing currencies of their own and dominating the global payments system – something they see as more of a threat to national security than the current US-dominated system.

And you can see why. Over the last few years, Facebook has been developing Libra*, a cryptocurrency that, backed by the US Federal reserve, claims that it will ‘reinvent money’ and ‘transform the global economy’. Normally this would be dismissed as sensationalism, but when it comes from a brand with billions of users, and backed by other digital giants such as Spotify, Lyft, Uber, Shopify and Blockchain, you can see the potential this has to change the world of payments.

From a brand perspective, you can see the appeal: a currency that your customers can earn in return for platform loyalty and spend within your infrastructure; making engagement, measurement and rewarding ‘on-brand’ behaviour easier than ever.

Branded cyrpto even helps brands who’s income streams are faltering amidst the global pandemic. Socios are a new way for professional sports franchises to reward fans for engaging with their brands – which is vital at a time when attendance in person isn’t possible. So far it’s been adopted by clubs such as Paris Saint Germain, Juventus and Galatasaray, along with giants from the eSports world.


The acceleration of contactless payments

Although in-person banking has been limited in 2020, it hasn’t stopped a new tide of innovations helping brands make more engaging, low/no-contact ways of interacting with their customers.

Leading the way is Ali Baba’s AliPay division, with its ‘Smile to Pay’ technology in Asian fast-food stores leading to fewer queues and higher brand engagement. It’s now being rolled out in flagship stores in emerging markets to minimise contact, and create more seamless experiences for customers. With Covid-19 accelerating digital transformation for many, it’s a technology that’s also being explored by the Moscow public transport system, where the virus’ spread has led to new innovations in how to reduce physical contact wherever possible.

From a rewards and loyalty perspective, Chinese bank Taishin has been using facial recognition not only to make customer journeys more contactless, using the technology to allow for ATM withdrawals and app logins, but to recognise VIP customers in retail banking and Wealth Management should they enter a branch.

But it isn’t just the face that holds the key to contactless payment. Amazon One is a new biometric scanner that uses contactless palm-scans to confirm a customer’s identity, allowing an even more seamless shopping experience for customers in their physical Amazon Go stores – and something that may begin to feature in online payments too.


Finance’s role in sustainability

2020 has seen public sentiment rise for more sustainable practices, and they’re looking to brands to help make change possible.

For brands such as Doconomy, that responsibility starts with their customers. They see it as a responsibility to help customers lower their carbon consumption through their purchase habits. That’s why their credit cards have carbon limits as well as spend limits, as defined by world leaders under the Paris Agreement.

But beyond retail banking, Investment banks are supporting the rise of sustainable funding. Investors, and the clients they represent, are now pushing the demand for more environmental-friendly and socially-conscious ways to invest. With big banking so often seen as the real obstacle to change, perhaps now the green tide is turning.

With investment motivations moving towards more sustainable practices, brands in this space are seeing themselves responsible for pushing the ESG (environmental, social & governance) agenda.

This year saw the launch of HSBC’s ESG solutions division, advising on $22.6bn worth of deals in the UK alone since the start of 2020 – all part of the bank’s commitment to a net zero practice by 2050. At the same time, JP Morgan is committing to align its financing goals with that of the Paris Agreement, stopping its financial support of coal-based companies and pledging $200bn to green businesses.

And with Citi Group’s CEO claiming the pandemic is simply a dress-rehearsal for a more destructive climate change crisis, it seems that at last, big banks are preparing to be the catalysts for change that many consumers hope they can be.


Despite 2020 heralding a global economic slowdown, it has conversely led to the acceleration of technologies and attitudes that many commentators have been predicting for some time: a rise in contactless payments, the accelerating digitisation of money (not quite ‘the death of cash’ yet) and the long-overdue rise of sustainability in investment banking policies.

As we emerge in 2021 and new habits begin to form, it will be fascinating to see how financial services brands continue to adapt.

saintnicks has been working in the financial services sector for the last seven years. As a key partner with Fintech West we bring together the West’s finest fintech revolutionaries. If you want to talk finance, drop us a line, we’d love to talk.

* Update: Libra changed its name to Diem on 03.12.20 in an attempt to distance itself from from the increasingly scrutinised Facebook master brand