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Buy now Pay later!

A popular digital solution know by the name Buy now Pay later ( BNPL ) is trending and helping the consumers to ensure that they can still make the ends meet in this restriction times the Covid pandemic has brought to the household incomes across the world. The search of liquidity was also elevated during the end of the first quarter of last year and it is likely to remain so throughput 2021. Banks have been keen in providing the digital solutions like BNPL to overcome the liquidity shortages. The plans runs something like this- Allowing the consumers to pay for goods and services in instalments over an agreed time period, rather than as an upfront lump sum as is normally the case, customers who may be under financial pressure can continue to buy their usual products, take possession of those products for immediate use but divide their payments into smaller instalments that are billed to the customer’s chosen account at later dates. Some schemes give customers up to 12 months to make the payments while others allow a window of 30 days only.

Byas Nambisan, chief executive officer of an Indian payments-solution firm, Ezetap Mobile Solutions, that processes BNPL transactions, told Bloomberg in November that, “The general feeling we’re getting from merchants is that people are preferring to buy things on pay later options. Even brands selling these products could be using the pay later scheme to push out old stock, before launching something new. This goes beyond the festive season trends.” And a recent study by and PayPal based on two surveys consisting of separate groups of respondents totaling almost 15,000 US consumers completed from March to September of last year, found that BNPL adoption was markedly on the rise in 2020, “Buy Now, Pay Later: Millennials and the Shifting Dynamics of Online Credit”.

The third-largest US card firm with 62 million accounts in the US alone plus additional accounts in Canada and the United Kingdom stated in December that it would no longer allow transactions identified as point-of-sale loans to be charged on its credit cards, regardless of the point-of-sale lender. “These kinds of transactions can be risky for customers and the banks that serve them,” a company spokeswoman stated. Nearly two-thirds (62 percent) of this group, moreover, said BNPL led them to spend more than they would have otherwise, which only further underlines the risks associated with this payment facility. The Capco study showed that 54 percent of the consumers’ surveyed felt BNPL products should be regulated, while 52 percent believed providers should consider their credit histories before approving financing and also UK consumer attitudes to BNPL and polled more than 2,000 individuals across four age categories between 18 and 65+, found that 50 percent of respondents aged 18 to 34 have missed a BNPL payment.

“Buy Now Pay Later providers are predicted to double their market share of online purchases within the next three years. However, with BNPL coming under increased regulatory scrutiny, plus the ongoing economic fallout of COVID, there are questions to be asked about the future trajectory of BNPL in the UK, and what opportunities exist for established banks to make in-roads in this sector.” Mike Ethelston, managing partner at Capco UK, told fintech newswire Finextra Research in November.

 The and PayPal study, for example, found that of those millennial consumers who had not previously used BNPL, nearly 40 percent expressed interest in using it should it become more widely available in digital wallets. Considering all demographics, the share of potential users willing to pay through installments were three times more than the 6.4 percent of consumers who currently use BNPL plans.

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Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

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Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

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IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

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