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Daily briefing - 26 July 2019


As Lafferty News has been helpfully pointing out for the last year, the world's retail bankers, investors and venture capitalists have switched their focus to serving small and medium businesses. While offering practically the same service to consumers and small business customers, banks nonetheless charge several times the price for a business service with added hoop-jumping. Why? Well, for a long time, banks controlled the rails and the wires that ran with them. But these days, we're all on social networks, which connect us as effectively as bank networks or card networks. More so, even, because we're already part of the social network of people we do business with.

Facebook has been testing new products in India as part of the rollout of India's broad digital financial policy which includes the national payment interface UPI and the national digital identity programme Aadhaar. "According to a report by Omidyar Network and the Boston Consulting Group (BCG), nearly half of MSME owners with annual business revenue between Rs 3 lakh and Rs 75 crore would use WhatsApp Payments once it is fully rolled out," reports Zeenews. "Niti Aayog CEO Amitabh Kant said Facebook-owned WhatsApp was delayed in meeting India`s regulatory norms to launch its digital payments service. 'We look forward to WhatsApp Pay in India once it fulfills all the regulatory requirements,' Kant said."

While India might be at the forefront in testing digital regulations, it's not much of a leap across to Kenya, where more than 80 percent of the country's savvy street traders use WhatsApp as part of their business ecosystem. WhatsApp Pay could be a big success - if Libra doesn't get there first. Of course, Facebook can always off several different services through its messaging networks, including the Calibra wallet that could potentially hold many digital payment tokens in one place.

The newly-installed prime minister of the UK Boris Johnson has filled his cabinet with hardline Brexiteers and insisted yesterday in his first speech as PM that the backstop must go from the Brexit Agreement. Rejecting a time limited backstop, he said: "For our part, we are ready to negotiate in good faith an alternative with provisions to ensure that the Irish border issues are dealt with where they should always have been: in the negotiations on the future agreement between the UK and the EU."

Nine out of ten people in the UK and Ireland don't actually know what the backstop is: it's the non-technical term that means there will be no border re-established between Ireland and Northern Ireland. The border was taken down twenty years ago after the Good Friday Agreement that saw the IRA disband and disarm in exchange for a power-sharing agreement between traditional British unionist and Irish nationalist parties. The backstop was a disastrous tactic dreamt up by Irish prime minister Leo Varadkar, who is half-Indian and therefore actually knew what a backstop is. In fact, it's a term taken from cricket, to which most Irish people are oblivious. Technically, the backstop is the fielding position behind the wicket keeper. (British people even have an expression for not playing by the rules: "it's just not cricket.") The Irish negotiators believed that the backstop, initially agreed by the UK, would remain in place even in the event of a no-deal Brexit. Boris Johnson does not see things that way: the border may be inevitable in the event of a no-deal Brexit. However, many polls in the UK suggest Conservative party members can live with destroying the United Kingdom of Great Britain and Northern Ireland, and even the Conservative Party itself, if it brings about the departure from the EU.

In the FT, Philip Stephens offers three "safe bets" about Johnson's time in number 10 Downing Street: "There are three safe bets to be made about Mr Johnson's premiership. The first is that for all his do-or-die promises otherwise, Brexit will not be settled any time soon. Deal or no-deal, Britain will be trapped in uncertainty for years to come. The second, that the splintering of national unity will set the UK on a path that leads to the break-up of the four-nation union. And the third, that Mr Johnson's spell in No 10 will end in dismal failure."

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