Simplicity through Innovation: The Future of Digital Payments

Money and civilisation have walked hand in hand ever since the first appearance of currency. It has undergone continuous evolution, from physical commodities to abstract digital transactions. This transformation reflects humanity’s pursuit of simpler, more accessible ways to transact. As we learn from the past to provide relevance in the future, we believe innovation is key to unlocking financial simplicity.

In its earliest forms, money was a practical instrument for commerce, like salt or even beer, but trade expansion drove the need for abstraction, from rare metals to paper and then to plastic. For a while now, digital payments have been replacing cash. According to the World Bank, two-thirds of adults worldwide make or receive digital payments.

The transition from cash to digital payments was not smooth nor immediate. There were often fears and risks to security and fraud when sending payments. Some users still juggle multiple payment and banking apps, with fragmented and less-than-intuitive experiences. Small businesses also face hurdles to integrating accounting and payments digitally.

These customer pain-points prove that continuous innovation is essential to unlock digital money’s true potential and to bridge the simplicity gap.

Since 2015, Finance Incorporated Limited (FIL) has pursued technology to dissolve boundaries between physical and digital banking. We have engineered an integrated platform to consolidate complexities, providing intuitive and unified tools.

For example, our payment gateway API enables one-click connections between merchant systems and acquiring banks. Paymix SoftPOS turns any smartphone into a card terminal -a technology that removes the need for separate point-of-sale hardware, saving costs and hassle. When Paymix SoftPOS is integrated with Paymix Pro business account, the payouts are faster and free of charge.

Our vision is an open banking ecosystem, blending payments, credit, data analytics, and more in one secure hub. We leverage diverse in-house expertise to adapt quickly to user needs and have been developing and rolling out systems to simplify the lives of customers across our portfolio. 

Examples of technologies designed to make life more straightforward include digital IBAN accounts to receive salary payments, biometric identity verification for easy onboarding, and our ongoing work to deliver micro-ERP services integrated with accounting and reconciliation.

This simplicity liberates individuals and small businesses, while larger institutions benefit from our robust infrastructure, powering billions in transactions. After all, technological innovation delivers benefits across size and scale.

Another key factor to successfully simplify financial experiences and better serve people’s financial needs is through to user feedback. Through this active collaboration, we can shape an inclusive digital economy, which allows us to implement multilingual user experiences, consider intuitive interfaces that do not exclude the elderly or those averse to technology, and of systems that bring payments to all, regardless of their net worth.

The future remains unwritten. How else can technology simplify money? We hear about emerging technologies like atomic swaps, programmable currency, decentralised money, and so many other emerging notions that are all worth understanding and, occasionally, exploring.

By combining cutting-edge engineering with human wisdom, FIL believes financial innovation will culminate in technology fading into the background. Arthur C. Clarke’s third law is his most often cited and states that “Any sufficiently advanced technology is indistinguishable from magic”. Our tech should work very hard in the background so that our users need not face any barriers to make use of it. After all, frictionless financial experiences will underpin tomorrow’s human aspirations.

Money evolved across millennia from early physical forms where we swapped items that we ascribed value to all the way to its present digital form. At FIL, we see this transformation continuing to a future where payments just work – powerfully yet imperceptibly enhancing our lives.

We have a small part to play in this complex web of user experiences and technologies and we continue to approach it with our core philosophy – that of driving simplicity through innovation.

Clear on social objectives, vague on wealth creation

The Malta Chamber of Commerce, Enterprise and Industry notes that an increasing portion of the Government budget is being spent on recurrent expenditure. In addition to energy subsidies, social assistance for pensioners, vulnerable persons and low-income households feature highly in the budget. This is commendable as it helps the most vulnerable strata of society to keep up in the current inflationary environment.

The flip side of heavy social expenditure is that the spend on infrastructure is inadequate especially when one considers population increases in recent years and the resultant pressures on energy distribution, waste management, and our traffic congested road network. This budget was another missed opportunity at introducing concrete measures to disincentivise private car use in congested areas and during rush hours.

There is little clarity in the budget on how Government is going to improve the productive capacity of our economy, beyond mention of a number of schemes to incentivise businesses to make digital and sustainable investments. The Malta Chamber is concerned that the emphasis on subsidies is creating a culture of dependence, and subsidies now constitute such a substantial portion of our GDP that our economic growth is being fuelled largely by subsidies. Government is relying on increases in tax revenue resulting from wage increases, most notably due to COLA, that are fully taxable since there has been no revision in the lower income tax bands, ignoring the recommendations of all social partners including The Malta Chamber.

It must be borne in mind that this budget is being presented against the background of the ongoing war in Ukraine, and a new threat to the stability of international energy prices arising from the war in Gaza with its potential for destabilisation in the oil-rich Middle East. Additionally, the claim for €100 million in relation to the failed hospitals’ deal is still being contested by Vitals Global Healthcare. All the above could have a significant impact on public finances in the coming fiscal year.

The Malta Chamber is pleased to note that Government is finally considering introducing automatic enrolment in private pensions and the launch of a specialised commercial court, both of which were proposals of The Malta Chamber. Other positive developments which draw on the recommendations made by the Malta Chamber include the regulation of temping agencies, venture capital for start-ups, incentives for family businesses, schemes related to ESG for SMEs, and the use of technology for law enforcement. Government was finally bold enough to withdraw an incentive related to the purchase of property in Gozo to protect what is left of the greenbelts of Gozo and increase incentives for the renovation of properties in urban conservation areas.

This budget mentions a number of ideas that need to be explored further and developed in detail to become more tangible. As always, The Malta Chamber is eager to see more tangible proposals that will provide the required impetus for a leap in quality, higher productivity, sustainable growth and improved competitiveness of our economy.

BOV keeps up momentum in educating customers about scams

Increasing vigilance through an innovative online quiz

Since October is widely recognised as cybersecurity awareness month, Bank of Valletta took to social media to continue raising awareness of the different types of scams currently in circulation.

The BOV Spot the Scam Quiz was an innovative way for the Bank to engage with customers, helping the general public increase their knowledge of how to navigate the cyber world in a secure and safe manner. Over 1,600 individuals participated of over two weeks, with questions covering a broad spectrum of topics including scam phone calls, scam SMS alerts, fake websites, fraudulent requests for confidential information, and much more. The winners of the BOV Spot the Scam Quiz were Mr Julian Cassar, Ms Mandy Farrugia, and Mr Justin Vella, who met the Bank’s Creative Hub team at the BOV Centre in Santa Venera to collect their prizes.

As the incidence of scams and hacking attempts increases, the Bank continues to play an important role in arming the general public to protect themselves against the activities of fraudsters, and helping potential victims understand why it is so important to take care of their personal information.

The Bank urges the public to be vigilant and cautious at all times. It is important to keep in mind that BOV employees will never ask for account or card numbers in full, card CVV details (the 3 digits at the back of the card), card PINS, internet or mobile banking passwords, codes, signatures, one-time passwords, or multi-factor authentication. Bank employees will never ask customers for information that leads them to carry out financial transactions over the phone. It is important not to give out sensitive information over the phone, or through any links received via SMS.

Keeping updated and learning as much as possible about these fraudulent activities is the first step. Bank of Valletta invites the public to view a series of short clips featuring common day-to-day situations that they can find themselves in. These clips are shared on the Bank’s YouTube channel and are also available on the Bank’s official website.

Atlas Insurance inaugurates the GEO-INF Rainwater Recovery Facility at De La Salle College

Atlas Insurance inaugurated the GEO-INF Rainwater Recovery Facility at De La Salle College. The GEO-INF project involves the installation of the innovative technology designed by Ing. Marco Cremona in a number of schools, to channel rainwater from the roofs of school buildings directly to the water table and replenish groundwater levels.

The project is being financed through the Atlas Community Involvement Fund that was set up to provide a clear and transparent framework through which Atlas Insurance identifies and supports well-developed projects. Spearheaded by Executive Director and Company Secretary Catherine Calleja, and administered by a committee of representatives from various departments within Atlas Insurance, the Fund also provides a structured platform to maximise Atlas Group’s contribution to a wide range of community engagement projects.

The Minister for Public Works and Planning, Honourable Stefan Zrinzo Azzopardi, attended the inauguration of the GEO-INF project in the presence of Atlas Insurance CEO Matthew von Brockdorff, who presided over the event, the Director of Educational Mission at De La Salle College, Mr Stephen Cachia, and Ing. Cremona.

In his speech, Minister Zrinzo Azzopardi praised this initiative which is being financed by the private sector and called for more sustainable alternatives to be found for the utilization of our country’s natural resources such as fresh water. The Minister said: “The environmental goals of our country are all our responsibility, and projects of this kind are very encouraging for our society because we are also seeing the private sector contributing to the work of the Government to conserve rainwater.” Minister Zrinzo Azzopardi also spoke about the Government’s commitment regarding Green Stormwater Infrastructures (GSI) with the aim of achieving the European Union’s environmental targets for carbon neutrality by 2050.

Addressing the event, Atlas Insurance CEO Matthew von Brockdorff explained that: “Atlas Insurance is very pleased to be supporting a project that addresses one of society’s most pressing issues, the sustainability of resources, and in this particular case water resources. The GEO-INF project, that is aligned with the Sustainable Development Goal 6 – Clean Water and Sanitation, is purposely being installed in schools in order to contribute to the personal and educational growth of students, and also to have a broader positive impact on communities, the environment, and society as a whole by shaping responsible, informed, and engaged citizens.”

The Director of Educational Mission at De La Salle College, Mr Stephen Cachia, spoke about the significance of the environmental principles that the College aims to impart to its students. He also referred to the active involvement of students in hands-on approaches, such as their participation in initiatives like “Eco Champions” and “Eko Skola.”

The event came to an end with a presentation delivered by Ing. Cremona during which he explained the operating principles and technology behind the GEO-INF project, followed by a visit to the site of the installation where rainwater from the College’s roofs is gathered in a tank connected to a gravel filter and an infiltration borehole that channels water into the aquifers. Students were also given the opportunity to ask questions to Ing. Cremona.

BOV Announces Interim Cash Dividend Of €0.0462 Gross Per Share

Dividend subject to regulatory approval

Bank of Valletta announced an interim cash dividend of €0.0462 Gross per share (€0.03 net of tax), subject to Regulatory Approval. This dividend which amounts to a gross payout of €26.9 million is the result of the financial performance of the BOV Group for the six months ending June 2023, where the Bank reported a profit before tax of €105.1 million, compared to a pre-tax loss of €72.1 million (restated) during the first half of last year.

BOV Chairman Dr Gordon Cordina expressed his satisfaction at this announcement. He explained that this dividend is the result of an in-depth analysis carried out by the Bank on forward-looking data. The Bank’s decision regarding the distribution of a dividend to its shareholders meets important risk and other regulatory criteria, which focus on the strength and viability of the Bank’s future business. This is essential to safeguard the best interest and expectations of shareholders and other stakeholders.

Corroborating Dr Cordina’s comments, the Bank’s CEO Kenneth Farrugia stated that this dividend is evidence that the Bank is on the right track and is delivering solid financial performance. The Bank is committed to continue strengthening its position as a leading financial institution in Malta, focused on customer-centricity, excellence and innovation, in an ever-evolving industry landscape.

Subject to regulatory approval, the dividend is planned to be paid on Wednesday 6 December 2023 to those Members appearing on the Bank’s Register of Members, as maintained at the Central Securities Depository at the Malta Stock Exchange, as at the close of business of Tuesday 21 November 2023.

Key stakeholder BNF Bank shares its vision at EY’s annual conference

BNF Bank once again joined thought leaders and influential industry experts in Malta’s economy at EY’s Malta Future Realised Conference 2023, participating as a key stakeholder in the discussion about the country’s future. Over the years, BNF has built a fruitful working relationship with EY, acknowledging the strength that lies in sharing similar visions and values.

The prestigious Conference analysed the issues, concerns and challenges faced by businesses, offering a wide discussion on possible solutions and alternative directions that can positively shape the future of business in Malta.

David Power, Chief Executive Officer of BNF Bank expressed his views during a breakout panel titled ‘Unlocking long-term value through effective transformation’, highlighting the Bank’s leadership commitment to its digital transformation, through advocacy, clear communication, training and empowerment of staff. “We have defined clear and measurable goals and objectives for the transformation, that are regularly assessed,” he explained. “Most importantly, we celebrate our achievements and discuss improvements as a team.”

When discussing the agile mindset, Mr Power emphasised that culture change is one of the biggest challenges faced by the Bank when shifting to a structure that embraces flexibility, adaptability and rapid change. “Effective communication is essential in the shift to agile frameworks,” he said. “Whilst training is key, the positive impact from key employees is imperative in extending the acceptance of change.”

BNF enjoys a reputable position in the country’s financial landscape, and the conference provided the ideal platform from which it could showcase its expertise and commitment to businesses. Through a branded stand, the BNF team could network, showcase and engage with participants whilst strengthening its already solid relationship with local entrepreneurs.

The Malta Chamber President’s address during the EY Malta Future Realised Conference

The following is the speech given by Chris Vassallo Cesareo, The Malta Chamber President, during the EY Malta Future Realised Conference 2023

We are living in times of persistent inflation. This is unfamiliar territory for businesses, consumers and policymakers because we have enjoyed many years of price stability. Price volatility is impacting supply chains in all sectors and in all geographic locations. It is a major concern for businesses everywhere, not least here in Malta where our policy response to inflation has focused on maintaining energy price stability while labour costs have run out of hand. The long-term implications of major hikes in labour costs without matching productivity gains on our competitiveness as an exporting economy, is likely to be a major topic of future attractiveness conferences.

Today, we face a very particular global reality. Markets are not adjusting fast enough in terms of supply. Prices are sticky downwards, and demand is not responding to interest rate hikes in a predictable manner. These weak responses to policy interventions are a post-Covid legacy. Consumer behaviour has been significantly altered by the Covid experience, as has people’s relationship with employment. It is not yet clear whether we are experiencing  a delayed response to policy actions, or a complete rewrite of the rules of the game. Policymakers are therefore hesitant as, if it is a case of delayed reaction, there is a risk of overshooting. The prospect that markets will eventually react suddenly to an accumulation of factors and come tumbling down lurking in the background. The same dilemmas are faced by businesses everyday. There is greater global uncertainty about everything from pricing, to recruitment, to consumer behaviour, to taxation.

Images- Rene Rossignaud

Geopolitical tensions are providing an increasingly more complex landscape. We are seeing the end of globalisation as we knew it. This brings with it more uncertainty, less confidence, and more spending on defence and security instead of investment in upgrading productive capabilities in countries that have a major impact on global trade.

Then there is climate change: new challenges of extreme weather that pose significant risks of disruption, loss of assets and even loss of lifes in unprepared territories. These events are impacting supply chains as well. Businesses have parallel derisking challenges. On the one hand there are the long-term decolonisation targets, while on the other there are the immediate supply chain risks that necessitate more prudent approaches to restricting procurement to cleaner sources.

Yet, businesses want to do more. New technologies are inspiring entrepreneurs to develop new ideas and venture into new markets. A major limiting factor is the availability of skilled human resources. So it is opportune to talk about the empowerment of people.

Critical for our future is the empowerment of young people through a better preparation for  more productivity and inspiring life. This is achieved by providing quality hands-on education that is really for the future, that enables our young people to be life-long learners and enterprising at whatever they do.

The empowerment of the existing workforce is also becoming a pressing issue. This can be achieved through facilitation of life-long learning and the promotion of a better quality of life by prioritising the environment, healthcare, and a more promising future for their children.

Images- Rene Rossignaud

We also need to seriously think about the empowerment of people who come to work here from other countries. We need to ensure that their capabilities match our requirements, that their expectations are congruent with our employment policies, and that they are treated fairly.

Ultimately, what will make things happen is the empowerment of businesses.

It is imperative that we ensure that all the key enablers are in place, and constantly being upgraded to meet rising standards over time. At the Malta Chamber of Commerce, Enterprise and Industry, this is what we do every day: through our constant communication with the business community, we identify the key enablers and specify the standards for need to aspire for as a country in tangible ways. Our 250 recommendations for Government ahead of the presentation of the National Budget for 2024 in a few days time constitute a comprehensive list of empowerment measures for businesses, the economy and society as a whole. Not surprisingly, they reflect many of the points of concern that come out of this year’s attractiveness survey.

The Malta Chamber’s recommendations are to address skills shortages with sharper policies for education reform, the recruitment of third country nationals and retention of both local and foreign talent; to invest heavily in our infrastructure for energy generation and distribution, transport, and waste management; to have a more efficient public service; and to tackle inflation with greater sensitivity to our competitiveness, by keeping a close eye on productivity and curbing locally-induced inflation.

Bank of Valletta Explains Financial Wellbeing to MUMN Healthcare Practitioners

‘The role of health care practitioners and Banks can be closely linked to one another, as we both serve important roles in society. Nurses in particular play a pivotal role in the community caring for patients. Furthermore, they promote healthy lifestyles, advocate for patients and provide health education. In contrast, the purpose of a Bank’s core services is to help customers lead financially healthy lives.’ This was stated by Dipak Chouhan, Head of Business Development, Retail Banking at Bank of Valletta during the Malta Union of Midwives and Nurses’ (MUMN) annual conference, this year held in Gozo.

Whether it is saving for your first car, dream home, marriage, children’s future or retirement, financial planning is critically important for someone who wants to realise these important life milestones.

‘Bank of Valletta can provide financial solutions for any stage of one’s life, helping its’ esteemed customers through a wide range of products and services, backed by digital solutions, solid customer service and expertise,’ continued Mr Chouhan. ‘BOV can help promote saving for the future, responsible borrowing, provide insurance and investment products to suit your needs and risk profile, which in turn can contribute to financial peace of mind that should lead to a better and less stressful life.’

‘Nurses and midwives can have long gruelling schedules, and it can be difficult for them to devote the required time to assess, track and take the necessary steps to improve financial wellness. It is therefore more important to trust your finances in good hands. BOV provides tailored solutions to suit your unique needs through a diverse range of products and services that can be managed digitally anytime and anywhere,’ concluded Mr Chouhan.

Bank of Valletta is a long-term partner of the MUMN and supports its members’ who provide high standard professional services to the Maltese community. Through this alliance BOV seeks to extend the necessary assistance to MUMN members, helping them develop a closer more enduring relationship with the Bank.

Curb Inflation, Increase Competitiveness & Productivity

The Malta Chamber of Commerce, Enterprise and Industry believes that with the persistently high inflation that the country is experiencing, it is imperative to find ways of improving the purchasing power of lower income groups without fuelling a wage inflation spiral across the board.

The discussion that should be taking place with social partners at the moment and given top priority is how to, tangibly, counter inflation. For as long as a large enough portion of the population can still afford to pay more for services, any increases in costs, including wages, will result in an increase in prices, and low income earners will find it even more difficult to keep up. Worse still, increasing wages across the board without corresponding increases in productivity, will see our competitiveness on exports being eroded and lost. The effect of this will be seen over the course of a couple of years, as larger exporters will gradually shift part of their operations to more competitive locations and shed jobs in the process. Make no mistake here – the first jobs to go are always the lower level ones, the ones of the very same people some naively think they are helping by artificially increasing minimum wages.

The Cost-of-Living-Adjustment (COLA) is there specifically to protect the purchasing power of minimum wage earners. The minimum wage has increased by €9.90 in 2023 and is expected to increase by another €13.00 in 2024. These are significant increases that are not being matched by productivity increases. There is also another mechanism that was introduced in 2017 in agreement with the social partners that provides for increases of an additional €3.00 per week per year in the minimum wage payable to employees in the first two years of employment. The 2017 mechanism together with COLA have safeguarded the income of minimum wage earners in steady employment and ensured that they do not stay on the minimum wage for long. In fact, Malta has the lowest percentage of full-time workers on minimum wage in the EU.

Performance-based pay, in the form of commissions, production bonuses and performance bonuses, is also a significant component of pay packages in the private sector. This incentivises improvements in productivity which we so badly need to remain competitive – this is what policy makers should be focusing on. Basing policy considerations strictly on basic pay grossly underestimates both labour costs for employers and take home pay.

Our inflation rate has been kept at compatible levels to the EU average through a blanket, full subsidisation of energy costs. It must be noted that our inflation rate, excluding energy, is substantially higher than the EU average, particularly in services. This is a reflection of our very tight labour market which is demanding higher wages to employ and retain capable workers, and where the employer cannot afford the premium, necessitating the employment of people in jobs for which they lack the desired skills and qualifications. The latter effectively translates into wage inflation as well, because the employer ends up getting much less value for the same pay. Piling more artificial increases in wages on top of all this will fuel the inflation spiral even more.

Therefore, it comes as no surprise that while other countries express hope that inflation is being tamed, our own Finance Minister says that it will remain with us for longer. It certainly will if policy makers and decision takers ignore fundamental economic principles and put our country on the path of implosion.
Increasing minimum wages is not a silver bullet. The risks of fuelling higher and more persistent inflation are high. Some countries in Europe have rushed to increase the minimum wage in 2022, only to be faced with a painful recession in 2023 that is pushing struggling companies in many sectors to cut down jobs. The world is extremely unsettled, and we need to proceed with extreme caution because we can never guess what the next adverse development will be. In such circumstances, committing to a series of wage hikes over the next few years will accelerate inflationary expectations and restrict our policy responses to potential future developments. It is naive at best, suicidal at worst.

What Government can do to help low-income earners and avoid fuelling inflation further is to revise the lower income tax bands so as to ensure that the increases in minimum wage that came into force since the start of the inflation crisis in 2022 are fully tax exempt. It does not make sense to compensate people for increases in the cost-of-living through COLA, only to divert part of those increases to the Government coffers. All social partners, whether representing employers or employees, are in agreement on this.