Monoup news digest: main updates from fintech industry

It's Friday again, and as usual, we’re breaking down the week’s top news in payments and fintech. This time, there’s plenty to discuss. FATF is seriously tightening the screws and has declared a crackdown on shell companies, which are quite numerous in some countries. The U.S. and UK may be affected, along with Switzerland. Read on to find out what’s happening.

Stripe is potentially ready to take U.S. banks to court over data access fees that banks are still unwilling to waive. The payment company was the first to speak out publicly, stating that this approach harms competition and the development of payment methods in the country.

Let’s dive deeper into what’s happening and how it could impact the industry.

FATF Targets Shell Companies

The Financial Action Task Force (FATF) has set its sights on shell companies — entities that exist only on paper, with no employees, offices, or real business operations. At most, they might have a couple of transactions per year and large sums of money in their accounts with unclear origins. Such companies provide no real value to the country and are often used for money laundering or tax evasion.

The head of FATF announced that the number of these shell entities will now be factored into each country’s ratings. This could be a hint aimed at the U.S. and Switzerland, as both countries traditionally resist disclosing information about the real owners of companies while actively attracting foreign capital.

It seems that public registers of beneficial owners will soon become a mandatory requirement for anyone who doesn’t want to end up on FATF’s gray or black lists. Meanwhile, the U.S. and Switzerland have recently moved in the opposite direction, further restricting access to such information.

But the UK could be hit the hardest. While the country has an open register, it also has a massive number of ghost companies that have remained inactive for years. In response, the UK is launching a large-scale review of all company beneficiaries and directors. They plan to significantly complicate registration procedures to weed out suspicious individuals.

Stripe Fights for the Future of Open Banking

Stripe payment system has sent an official letter to the Consumer Financial Protection Bureau, raising the issue of fees that JPMorgan Chase and other banks are introducing for fintechs’ use of customer data. Stripe advocates for the European approach, where banks are required to share data for free, fostering technological development and the emergence of new companies in this space. There are indeed many open banking providers in the EU; we’ve reviewed the most successful ones in a separate article by the link.

We covered the conflict between traditional banks and modern financial companies in more detail on Telegram. No final decision has yet been made on whether data access will be paid or free, but JPMorgan Chase has already moved to introduce fees and sent a price list to all partners.

Stripe considers these actions illegal and harmful to competition. The company is prepared to take the matter to court if regulators do not intervene. The outcome of this confrontation could essentially determine the fate of open banking technology in the U.S. If traditional banks win, the future of open banking will be in serious doubt. Not every fintech company can afford significant fees for data access, and many may have to shut down operations.

Brazil to Monitor Payment Companies

Now, all payment companies in Brazil must report customer financial transactions to the tax authorities through the e-Financeira system. Previously, this requirement applied only to banks and insurers, but the Central Bank has decided to tighten oversight.

The new requirements apply to all payment structures without exception — even those that have not yet obtained a license from the Central Bank. This means that even the smallest and newest companies, which previously operated in relative obscurity, will now be under scrutiny.

Brazil’s initiative essentially reflects the global trend toward total tax control over the fintech sector. Similar measures are likely to be implemented in other major jurisdictions in the near future.

That’s the news from Monoup for today. We’ll continue monitoring the situation and share the key updates with you next Friday — or daily on Telegram.