Giant Leaps for Instant Payments

AI-first banking set to arrive

Ryt Bank says is launching the first "regulator-approved" AI service as the principal interface for the bank's services, while maintaining a "human-in-the-loop" approach. Ryt Bank, launched in August 2025, is the fifth digital bank to be licenced in Malaysia. "We present Ryt AI, the first worldwide deployment of an LLM-based agentic system at Ryt Bank, the world's first licensed AI-native bank, executing real fund transfers under regulatory approval," says the bank. "This represents the first global regulator approved deployment worldwide where conversational AI functions as the primary banking interface, in contrast to prior assistants that have been limited to advisory or support roles," according to a new paper, available here. The Ryt AI is powered by a closed source large language model that has been developed entirely in-house.

Euro gets 24/ payments at last

It's been a long time coming but from the end of last week, EU banking customers are now able to make instant payments 24/7 and at no extra cost. "In a nutshell, payment service providers in the euro area now have to offer their clients the possibility of sending instant payments in euro," according to the EU's Directorate-General for Financial Stability. "They have been obliged to offer the possibility of receiving euro instant payments since January of this year. Furthermore, payment service providers must now also offer the service of payee verification. This means that a payee's name must match the provided IBAN in order for a payment to be processed, which helps prevent mistakes and scams." Buried at the bottom of the press release is one of the key goals of the new system: "More broadly, the rules will boost Europe's economy and help reduce overreliance on non EU payment providers, by offering new methods of payment at points of sale."

The FT today carries a short case study and thought experiment for how to build a fintech, looking at Ivory Coast fintech Djamo, which offers users prepaid cards and has just received a banking licence. "The region remains one of the least banked in the world," notes the FT. "Fewer than a quarter of adults in francophone Africa hold a formal bank account, compared with more than 60 per cent in anglophone African countries. Yet mobile phone penetration exceeds 80 per cent and mobile money adoption has surged, creating a digital-first consumer base without traditional banking infrastructure. 'People are not looking for a bank branch,' said (co-founder Hassan) Bourgi tells the FT. 'They are looking for a financial experience that fits in their pocket.'" The question for the case study is whether Djamo should expand its existing service into neighbouring markets, or "go deep" in Ivory Coast and Senegal by expanding its product offerings there. Djamo has expanded from an app-based account to add savings and last month gained a banking licence, positioning it to aim for a full service digital bank, and it had been piloting digital loans. "Djamo's rise has not gone unnoticed. Regional banks have reacted, creating digital divisions and mobile money providers have expanded their products. Could Djamo become the Revolut of francophone Africa -- a fintech growing into a full digital bank -- or does its context demand a different playbook?" In Ivory Coast, Djamo now has several serious competitors, including Wave's partnership with Orabank, Orange Group's partnership with Jumo and Wizall Money backed by Banque Atlantique.

Revolut must keep waiting on UK licence

The UK regulator is holding up issuance of a full banking licence for Revolut until it is satisfied that the fintech's risk management operations are robust enough to keep pace with its international expansion, reports say this morning. "Bank of England officials have sought commitments from the fintech group, which has 65mn customers in about 40 countries, that it will build its risk management infrastructure to match its ambitious international expansion plans, according to three people familiar with the matter," writes the FT. "The PRA is scrutinising the robustness of Revolut's controls both in Britain and internationally before awarding it a licence to operate as a fully fledged bank in the UK, which is why the process has dragged on for more than a year, according to the people familiar with the matter. As Revolut's lead regulator, the PRA was mindful that approving a full UK banking licence was likely to trigger a wave of similar accreditations in other countries that would follow its lead, two of the people added." The hold-up has been a source of some frustration for Revolut, which cannot yet put its UK capital to work for lending, though the bank acknowledged in July that "getting this right was more important than rushing to a particular date." The FT cites insiders quoting chief executive Nik Storonsky as telling staff last month: "When we started international expansion many years ago, we tried to short-cut our banking licences and apply for lighter licences, e-money licences, FX licences, payment licences...€and it was a worse product."

Eastern and southern African countries are trialling a new payments platform to cut costs of cross-border payments. "The new platform, known as the Digital Retail Payments Platform, is starting off with trials between Malawi and Zambia, COMESA said in a statement", writes Reuters. "It is being rolled out in partnership with two digital financial services providers and a foreign exchange provider, the bloc said without naming the partners. 'For the first time, cross-border trade within COMESA can be settled directly in local currencies,' said Kenya's trade minister Lee Kinyanjui. 'This is a game-changer.' The initiative seeks to assist medium, small and micro enterprises, who account for 80% of business and 60% of employment in member states, but have to deal with 'cumbersome, insecure and expensive' cross-border payments systems, he said." Mr Kinyanjui said the initiative could drive an increase in trade without relying on "scarce foreign currency".

From banking to lifestyle:

From banking to loyalty and lifestyle providers? As one speaker noted last week at our Council meeting, a great example of interoperability was mobile roaming services, which is the type of increasingly adding value-added services ranging from airtime to travel concierges. UK business Lendable becomes the first fintech business to launch an airtime offer, which will operate over the Vodafone network. "It joins a string of firms in other countries tapping into the telecoms market and seeking to build 'super-app' ecosystems that combine banking, shopping and communications," writes Reuters. "Lendable's plan will be powered by U.S.-based tech company Gigs, which provides the operating system, and will be available on the Lendable-owned Zable app, which has 2 million customers. The plan includes unlimited 5G data, calls and texts on Vodafone's network, plus 10GB of roaming across 38 nations." Lendable offers a mobile-first credit card through its Zable app and personal loans.

Lendable's offer means it will get in ahead of Revolut, which is also a superapp contender with plans for airtime services. Revolut's original offer attracted customers who liked the low FX rates, and the UK fintech said this week it has acquired AI-powered travel agent Swifty, which comes out of Berlin. (Readers may have noticed a recent theme of AI-first business offerings based on agentic AI, though Revolut is likely to call it an AI concierge.) "Founded in 2023 originally incubated at Lufthansa Innovation Hub (LIH), Swifty is an AI assistant that autonomously manages essential steps of business travel, encompassing planning, booking, payment, and invoicing, all within the chat interface, helping travellers book their business trips in 5 minutes via chat," reports EU-startups.com. "This acquisition complements Revolut's development of its AI financial assistant, building on the lifestyle offering."

How Instant Payments are Endrunning Networks

In 2020, Visa announced its intention to acquire fintech business Plaid for north of $5.3 billion, but the deal was stopped by the US Department of Justice. In the intervening years, Plaid has bloomed. The business provides financial plumbing, allowing people to connect financial data between their bank accounts and other accounts, apps and services: Plaid says it is connected to more than 10,000 financial institutions in the US. This week Plaid announced a new consumer credit score programme, entering a market that has long been dominated by FICO scores, though VantageScore from the three main credit reporting companies was recently allowed to enter the mortgage space. "Real-time cash-flow data will be used to generate the ratings, unlike other scores that may present a delayed assessment of a consumer's creditworthiness," writes Bloomberg. "Traditional scores typically take into account factors such as payment history and age, as well as varieties of credit already utilized and to what extent. Cash-flow data is different, given its timeliness. 'If you get a new job and you have more income, yet your expenses stay the same, then you should qualify for a better loan rate,' Plaid Chief Executive Officer Zach Perret said in an interview. Plaid also has a tie-up with Experian, a company well-known for creating consumer credit reports. 'Our view is that the cash-flow underwriting space is so nascent right now that there is value in working together,' said Rich Franks, Plaid's head of credit."

Attitudes to Visa and Mastercard are far from standard in the US. The venerable card networks were rattled by the arrival of UPI in India and PIX in Brazil, to the extent that the Office of the US Trade Representative launched an investigation to see if Brazil's digital payments system is discriminatory and harming US companies. Speculation was that Google Pay, Apple Pay and Meta's WhatsApp payments were taking a hit, along with Visa and Mastercard. While the results are not yet known, it's not looking good. Daniel Ruhman, founder & CEO of Cumbuca, writes that Visa and Mastercard are applying for direct payment licences in Brazil. "The card networks' move to obtain direct payment licences is not just about protecting revenue, though obviously that is part of it," writes Ruhman. "It is about survival. They have analysed the PIX data and understood that their traditional model of sitting between banks and merchants, taking a percentage on every transaction, simply does not work in an instant payment world. So they are doing something remarkable: they are becoming the thing they used to partner with. Consider what this means for banks. The companies that extended your reach into every corner of the market are now your direct competitors. The 'partner' that helped you issue cards to millions of customers is now trying to bypass you entirely. If you are observing Brazil and thinking this is interesting but not relevant to your market, you are mistaken. India has UPI. Europe has instant SEPA. The UK has Faster Payments. The US is implementing FedNow. Mexico has SPEI. Central banks are developing digital currencies. Every major market is moving – or has already moved – towards instant payments."