Week of August 28, 2023: Keep up with all the latest news, trends, and updates in fintech so you can make informed decisions about your business and tech stack.
“Although inflation has moved down from its peak — a welcome development — it remains too high.” - Fed Chairman Jerome Powell
Central bankers from around the globe last week gathered in Jackson Hole, Wyoming to talk about monetary policy that will set the course for the economy. Fed Chairman Jerome Powell’s comments were among the highlights, leaving corporate leaders, the markets, and investors to read between the lines and decipher his message.
Ultimately, Powell declared that while “inflation has moved down from its peak - a welcome development - it remains too high.” Meanwhile, the economy has yet to show signs of cooling as Fed officials had hoped. As a result, the Fed is prepared to raise interest rates further “if appropriate” and to keep policy at a “restrictive level” until inflation comes closer to the central bank’s 2% target. Powell noted that policymakers should remain “agile” in their response to upcoming economic data.
Wall Street bank JPMorgan has introduced a contactless payment feature dubbed tap-to–pay for its U.S. merchant customers, the first of which to use it is beauty retailer Sephora. The new tool allows businesses to accept payments via an iPhone without having to depend on a physical point-of-sale unit. Tap-to-pay accepts both credit and debit cards, Apple Pay and other digital wallets, and there’s no limit on the transaction size.
Citigroup has acquired a stake in Rextie, a Peru-based forex fintech startup, the bank’s maiden fintech investment in the Latin American region. Citi will be making a cash investment to support Rextie’s growth and expansion. Rextie, which supports forex transactions via digital channel to SMBs and individuals, has completed $4.5 billion in transactions since its founding in 2016.
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Yum Brands, the parent company of fast-food brands such as Taco Bell, is exploring making the shift to 100% digital payments. Yum Brands, which also owns the Pizza Hut and KFC brands, is looking to incorporate at least one digital component to all customer transactions, whether it’s on the website, the mobile app or physical kiosks inside the restaurants. Yum Brands may build artificial intelligence into its drive-thru locations to support the shift to digital payments.
According to ZipRecruiter data cited by The Wall Street Journal, companies across sectors of the economy are paying new hires less money this year vs. last year. The average pay for roles in the technology industry is nearly 20% below last year’s levels after the industry went on a hiring spree following the pandemic. New hires represent less than 4% of the workforce each month, according to ZipRecruiter. Companies are no longer feeling obligated to match tech leaders like Facebook parent Meta on pay.
Image by The Wall Street Journal
Walmart continues to strengthen its financial technology offering. Most recently, the e-commerce and big-box retailer has reportedly hired former PayPal executive Tim Ritz as its chief procurement officer, replacing the outgoing DK Singh. At PayPal, Ritz was responsible for spearheading procurement and real estate for the fintech and is known for cost efficiency through strong supplier relationship management, according to Walmart CFO John David Rainey.
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Now that Jackson Hole is over, the focus shifts to upcoming economic indicators to provide a read on the economy and whether it’s heating up or cooling off. This week’s data includes Dallas Fed Manufacturing Survey, which reflects factory activity. Last month, this poll declined while the production index, which measures manufacturing conditions, held relatively steady.
Meanwhile, a personal income and spending report on Thursday will provide yet another glimpse into the strength of the consumer. Consumers are largely credited with helping the U.S. economy to stave off a recession in 2023. The August employment report is released on Friday, Sept. 1.