American Payment Companies Paralyzed By Regulatory Concerns, International Payment Companies Take Advantage Of The Window Of Opportunity

Published

2 years ago

June 30, 2023

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PayPal and Stripe, the American leaders in payment gateway technologies, are feeling the chill put out by regulators suddenly focused on the cryptocurrency industry. The impact of which may be irreparable harm to PayPal, Stripe, and the greater payment innovation ecosystem in the United States.

Maneuvers by the United States government pertaining to cryptocurrency exchanges have induced a state of inaction among all American firms that are involved in cryptocurrencies or are crypto-adjacent including payment gateway groups. There is rampant speculation about whether there is a path to crypto product-integration which has the approval of the United States government, and whether theres a profitable business to be had within their future regulatory framework.

This uncertainty is reflected in price action by PYPL , down nearly 11% year-to-date with increasing concerns about managements ability tonavigate shrinking marginsand innovate. PayPal and other major American payment gateways like Stripe had a lukewarm approach to cryptocurrency to begin with so in many ways, recent regulatory concerns only validate their concerns.

When PayPal entered cryptocurrency in late 2020, it did so with a heavily-restricted product which merely enabled users to buy, sell, and hold major cryptocurrencies. Although the company eventually allowed off-platform asset transfer in mid-2022, the offering was broadly discredited as superficial involvement in cryptocurrency without a genuine embrace of its ethos.

Similarly, payments powerhouse Stripe has maintained an ambivalent stance towards cryptocurrency. Co-founder Patrick Collison's remarked, "(Bitcoin) may or may not be important in five years," as the company axed cryptocurrency-related initiatives in 2018. Only recently has the company reintroduced fiat-to-crypto services. Yet, amidst the fresh Securities and Exchange Commission enforcement actions, the blockchain community remains dubious about Stripe's commitment to the sector.

The result of an already-tepid approach being hit with regulatory concerns ahead of what some project may be a difficult macroeconomic environment is a perfect storm which has brought American crypto innovation to a halt.

The United States government's regulatory inaction risks not only stifling innovation in the domestic industry but is alsodamaging to the global perception of American policy regarding financial innovation. The government's focus on classifying cryptocurrencies as securities is driving away companies that could have been leaders in the sector. Its current regulatory stance might not serve or protect the end-user, and could, in fact, damage companies like PayPal and Stripe.

These companies are at risk of being left behind by emerging global players like NOWPayments, which have seized the opportunity to provide a crypto payment gateway with mass compatibility and which opts out of potentially problematic practices including custody.

It is time for the United States government to realize the potential damage it is doing to its profile as an innovation-friendly nation and take bold steps to encourage responsible growth. Failure to do so risks the loss of American leadership in a vital sector, with significant long-term consequences for the economy and society as a whole.

World

Mexico and Canada agree to bolster US border security in return for tariff pause

Published

60 mins ago

February 4, 2025

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Mexico and Canada agree to bolster US border security in return for tariff pause

Both Canada and Mexico have agreed to strengthen border security with the United States in return for a 30-day pause in tariffs.

President Trump announced on Sunday he was imposing 25% taxes on goods from his country’s northern and southern neighbours.

Mexico was first to reach a deal with the White House. Its president, Claudia Sheinbaum, said she was sending 10,000 National Guard troops to the US border immediately in return for a tariff delay.

Mr Trump said the Mexican soldiers would be “specifically designated” to stop the flow of the synthetic opioid fentanyl into the US, as well as illegal migrants. Further negotiations will now be carried out, he added.

Ms Sheinbaum said she had a “good conversation” with him lasting at least 30 minutes just hours before the tariffs were due to begin.

She also extracted a concession from Mr Trump – after explaining the “seriousness” of high-powered weapons coming over the border from the US and getting into the hands of criminal groups.

“It gives them firepower,” she said. “We asked that the US also help our country by helping stop this arms trafficking… he agreed.”

Canada made similar moves. Prime Minister Justin Trudeau said almost 10,000 frontline personnel “are and will be working on protecting the border”.

He added on X that his country was appointing a “fentanyl czar”, drugs cartels would be listed as terrorists, and there would be “24/7 eyes on the border”.

There will also be a Canada-US joint strike force to “combat organised crime, fentanyl and money laundering”, Mr Trudeau announced.

Both Trudeau and Trump will view the deal as a win – Trump for seemingly forcing the US’s northern neighbour to act, and Trudeau for heading off sanctions with measures that for the most part (with the exception of the fentanyl czar) had already been announced in December.

Donald Trump said he was “very pleased with this initial outcome” and work will begin see how a “Final Economic Deal” with Canada can be structured.

Analysis: Has it all just been theatre?

First Mexico, now Canada. In another whirlwind day, both of America’s closest neighbours appear to have capitulated to President Trump.
The 25% tariffs on all goods from both countries were due to come into effect at midnight US Eastern time. But after calls between all three leaders, suddenly the tariffs were paused.

So what’s going on? Is this a clear signal of the power Trump wields? His blunt tool of using the threat of tariffs as a negotiating tool has paid off? Bullying tactics work? Well, maybe. At least that’s how Mr Trump wants everyone to think. Dance to my tune, or else.

And it’s absolutely the case that Mexico and Canada were in panic mode this weekend. But surely Donald Trump was panicking a little too when he saw the stock markets on Monday. He claimed this afternoon not to be taking any notice of their sharp falls. But we know he cares deeply about market reactions.

Here’s what’s interesting: the statement from Canadian Prime Minister Justin Trudeau sounded at first glance like it was announcing something new.
“Canada is implementing our $1.3bn border plan… nearly 10,000 frontline personnel are and will be working on protecting the border…”

But it’s not a new announcement. Look at the language – “are and will be”. In other words, “we’re doing this already Mr President, but if you want me to reiterate it to placate you, then I will…” All that Justin Trudeau has done today is reiterate a border plan he announced last December.

Mexico too has been doing an increasing amount in the fight against fentanyl though it could and probably now will do more.

So has it all been theatre this past 24 hours?

A show of brinkmanship from Donald Trump, which could have had a cliff-edge ending, but instead ended with him looking strong (and freaking out much of the developed world in the process) and his closest neighbours forced to reiterate their existing plans.

Regarding China, a 10% tariff – in addition to those already in place – is still set to go ahead, though the White House said Mr Trump is due to talk to President Xi Jinping.

The US president has, however, said 10% could be just the start.

“China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher,” he said.

China has described fentanyl as America’s problem, and said it would challenge the tariffs at the World Trade Organisation, as well as taking other countermeasures.

But it also left the door open for talks.

What is the UK situation on tariffs?

President Trump hates trade deficits, and does not want to import more goods from another country than are sent there in return, says Sky’s economics and data editor, Ed Conway.

But Britain has bigger trade deficits than the US, Conway adds, and is one of the few countries in the world to import more goods from America than America imports from it.

In addition, because the UK is no longer part of the European Union, any tariffs imposed on Brussels will not affect London.

When asked about the UK, Mr Trump said: “I think that one can be worked out.”

Sir Keir Starmer said it was “early days”.

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