Case Study #2: Fintech, Payments Innovation, and the Acquisition of Worldpay
http://store.darden.virginia.edu/fintech-payments-innovation-and-the-acquisition-of-worldpay
This case uses the Vantiv, a US credit-card-processing company, acquisition of Worldpay, Britain’s largest
payments processor, to discuss broader themes in the payment space. Payments are a crucial function of
financial institutions because of their sheer volume and revenue potential. Fintech has enabled more ways
for financial institutions and consumers to make payments and has the potential for significant disruption.
Without doubt, the imperative of globalization has forced a focus on the importance of payments. In
particular, growth in emerging marketsõch as India, which in 2016 rendered some of its high-value
currency banknotes useless in an effort to foster electronic payments/inted to the need to capture the
global shift away from cash and checks toward credit, debit, account-to-account online, and other means of
digital payment. Yet there are risks to financial globalization and payments, including security, changing
regulatory environments, and unpredictable technology shifts.
My Learning Objectives for FIN464 students:
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Explore the uses, types and importance of payments for financial institutions
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Assess the role of fintech relative to and as part of banks regarding payments
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Consider how less regulated entrants are disrupting the payment market
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Understand risks (e.g., security and regulatory) underlying the payment ecosystem
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Introduce digital currencies
https://www.wsj.com/video/the-us-in-the-digital-currency-race-why-its-so-far-behind/C4B914484FD9-4B66-97EA-282237229CE8.html?mod=mhp
In preparing your presentation and write-up, use the case material as background for your research,
including the caseàfootnotes and references. You may need to do additional research on the topic. In
answering some questions, your group must take a position and express an opinion. You must support your
opinion with facts, theory, and empirical evidence. I want to see numbers! Be aware: numbers alone do not
tell a story. You must analyze the numbers and tell a story around them. In the previous assignment on DB,
I often felt that you did not explicitly support your claims with numbers and empirical evidence.
Use original sources, for instance reports from international organizations (IMF, WB, BIS, etc), or academic
research such as peer-reviewed papers. Do not use blogs, Wikipedia, Investopedia, or press articles outside
the FT, WSJ or the Economist as sources for your research and when expressing your opinion. I will deduct
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points if: 1) you do not support your answer with empirical evidence/data; and 2) you use sources such as
blogs, Wikipedia, Investopedia, or press articles outside the FT, WSJ or the Economist.
Your sources must be properly cited in the bibliography. Using someone elseàwording without quotation
marks is considered plagiarism.
In general, I expect that each answer is supported by data analysis. Show your work and clearly refer to the
numbers used in your analysis to support your opinion and statements. Please clearly identify in the writeup the question that you are answering (Q1, Q2, Q3n
Prepare a short write-up: at most 2 pages of discussion/analysis plus at most 1 page of bibliography, charts,
tables, appendix (if any), etc., typed in 12 pts with one-inch margins and 1.5 spacing. The write-up must
address ALL questions listed below and it MUST include a cover page (see below).
QUESTIONS
(Reminder: I will deduct points if you do not support your answer with empirical evidence/data.
Make clear references to the information contained in the reading)
Q1. If you were a professor, after reading the case what would be your first question to ask students? Why?
Note: it must be a different question from the ones listed below.
Q2. Why has the payment sector attracted so much attention from fintech and why?
Q3. What are the main risks facing the sector?
Q4. After reading the Darden case, read the case of Brazil https://www.bis.org/publ/bisbull52.pdf
and the latest recommendations in the US https://home.treasury.gov/system/files/136/FactSheet-TreasuryReport-Future-Money-Payments.pdf
What are the factors that likely account for Pixàrapid growth? Based on the Brazil experience,
what are broader lessons for the roll-out of central bank digital currencies (CBDCs)? What does all
this mean for advanced economies, especially the US?
Q5. Reflect on the recent events in Russia and Ukraine. What could be the implications for the globalization
of payment systems? Why? Note: You may want to read the FT.com for background information before
answering this question.
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So, to wrap up:
Write-up inclusive of ALL 5 questions ll groups
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