Visa received preliminary approval to prepare a wholly owned domestic card clearing institution in China. India postponed fees on selected Unified Payments Interface (UPI) merchant transactions until after Diwali, easing retailers’ payment costs during the festive season but leaving the system’s funding model unresolved. US earnings season brought contrasting retail banking results. J.P. Morgan’s consumer banking profit rose as card spending increased and credit quality improved. Citi’s card revenue stalled as rewards and partner costs offset higher net interest income, while Wells Fargo benefited from lower costs and expanding auto lending. Read more on the week’s key developments: 1. Visa gains preliminary approval to compete in China’s domestic card market Visa received approval from the People’s Bank of China (PBOC) on 13 October 2026 to prepare a domestic bankcard clearing institution through Visa Information Technology (Beijing). The unit has one year to complete preparations before applying for an operating licence. Mastercard and American Express already clear domestically through joint ventures with local partners, while Visa’s entity would be wholly owned. China recorded 146.7 billion bankcard transactions in the second quarter of 2025 alone, including purchases, transfers, deposits and withdrawals, according to the PBOC. Clearing access does not guarantee adoption. China UnionPay holds established issuing-bank and merchant relationships, and Alipay and WeChat Pay dominate everyday mobile payments. Among Visa’s peers, Mastercard’s joint venture took nearly four years to move from preparatory approval in February 2020 to an operating licence in November 2023. The test is whether international schemes can win domestic spending rather than remain concentrated in cross-border transactions. 2. India postpones UPI merchant fees as retailers resist higher payment costs The National Payments Corporation of India (NPCI) postponed the introduction of a merchant discount rate (MDR) on selected Unified Payments Interface (UPI) transactions on 13 October, two days before scheduled implementation. The rollout was deferred until after Diwali, with a new implementation date to be announced. The framework provides for a 0.4% fee on eligible payments above INR 2,000 ($21.0), capped at INR 300 ($3.2). Selected essential services would incur a flat INR 5 ($0.05) fee on transactions above INR 2,000, while person-to-person transfers and qualifying small merchants remain exempt. The delay eased pressure on retailers during the festive season but left UPI’s funding model unresolved. Banks have been advised to ensure merchants do not pass MDR charges to customers, while an amount equivalent to 5% of total MDR collections would support small-merchant acceptance. Shares in Indian payment fintechs Paytm and MobiKwik initially fell following reports of the delay, before recovering after NPCI clarified the revised timetable. The challenge is to generate sustainable revenue for payment providers without undermining UPI’s low-cost appeal. 3. JP Morgan’s consumer bank grows profit 13% as card spending rises JP Morgan Chase reported on 13 October 2026 that Consumer & Community Banking net income rose 13% to $5.7 billion in the third quarter, on revenue up 9% to $21.2 billion. Debit and credit card sales volume increased 10% to $539.5 billion, while average Card Services loans rose 7% to $250.1 billion. The card net charge-off rate declined to 2.91% from 3.15% a year earlier. Active mobile customers grew 7% to 64.9 million. The results showed JP Morgan expanding card lending and customer relationships while maintaining credit quality. It added more than 650,000 net new checking accounts, average deposits in Consumer & Community Banking rose 4% and client investment assets increased 15% to $1.4 trillion. The bank expected a full-year card charge-off rate of approximately 3.2%. Competition for deposits remained a concern, as higher rates could encourage customers to move funds into higher-yielding products, increasing funding costs. 4. Citi’s card revenue stalls as rewards and partner costs rise Citigroup reported on 13 October 2026 that third-quarter net income rose 40% as reported to $5.2 billion, on revenue up 8% to $23.8 billion. US Consumer Cards revenue remained flat at $4.7 billion, as the unit’s 6% growth in net interest income to $5.4 billion was offset by higher partner payments and rewards costs, which reduced non-interest revenue by 62%. General-purpose card spending grew 13% while private-label activity declined, but card net income fell 8% to $851.0 million and credit loss provisions rose 4% to $1.9 billion. Citi’s push into general-purpose cards drove spending growth, while rewards costs tied to growth investments and higher partner payments weighed on card revenue. Jane Fraser, Citi’s chair and chief executive officer, said the bank had held or was holding discussions with several private-label partners about shifting towards co-branded cards, in line with consumer behaviour. The card business still generated a 21.8% return on tangible common equity. Elsewhere, Citigold and Retail Banking revenue increased 16% to $2.3 billion on higher deposit spreads, while the broader Wealth division attracted $38 billion in net new investment assets. 5. Wells Fargo’s consumer banking profit rises as lending grows and costs fall Wells Fargo reported on 13 October 2026 that third-quarter Consumer Banking and Lending net income rose 21% year on year to $2.8 billion, on revenue up 5% to $10.7 billion. Expenses declined 3%, improving the segment’s efficiency ratio to 58% from 63%. Auto loan originations increased 15% to $10.1 billion, while the bank opened approximately 661,000 credit card accounts. Charlie Scharf, chairman and chief executive officer, said consumers were spending more and loan delinquencies remained low despite mixed consumer sentiment. Lower costs helped profit grow faster than revenue, while Scharf said stronger branch-generated card openings reduced reliance on third-party acquisition channels. This suggests the existing franchise is contributing to growth alongside new lending. Performance nevertheless varied across products. Auto revenue rose 33% on higher balances and wider loan spreads, while home lending revenue fell 15% despite higher mortgage originations, reflecting lower servicing income and loan balances. Higher auto balances also required additional credit loss allowances. Scharf said underwriting accounted for an eventual weakening in consumer credit, although the bank had not yet seen signs of it. 6. Crédit Agricole expands into German everyday banking to challenge established lenders Crédit Agricole announced on 8 October 2026 that it would launch Crédit Agricole Deutschland, a digital retail bank, at the end of the month. Building on approximately one million existing customers and its Creditplus subsidiary, the bank would offer digital services supported by 20 branches, with credit, wealth and advisory products to follow from 2027. On 12 October, the group also agreed to acquire IKB Deutsche Industriebank, a corporate lender with EUR 14.3 billion ($16.1 billion) in assets at end-2025. Crédit Agricole aims to double its customer base across its German businesses to two million by the end of 2028. It faces competition from digital entrants including JP Morgan’s Chase, BBVA and N26, alongside established lenders such as ING, Deutsche Bank and Commerzbank. Its existing customer base provides a starting advantage, but success will depend on converting customers into primary banking relationships, measured by salary deposits and active current accounts rather than sign-ups. 7. Upgrade seeks US bank charter to fund consumer lending and reduce partner-bank reliance US consumer lender Upgrade announced on 12 October 2026 that it had applied to Nevada regulators and the Federal Deposit Insurance Corporation (FDIC) to establish Upgrade Bank, an industrial loan company (ILC). The proposed bank would complement its existing partners, Cross River Bank and Celtic Bank, and loan buyers. Upgrade said it had extended more than $53 billion in credit to over 8.5 million customers. Virginia Varela, who previously led Golden Pacific Bank before its acquisition by SoFi, was named proposed chief executive. Deposit funding could reduce Upgrade’s reliance on partner banks and loan buyers, although it would bring capital requirements and prudential supervision. Unlike Nubank and Revolut, which pursued US national bank charters, Upgrade chose the contested ILC route. Banking groups have opposed the model, while US senators called for a moratorium on commercially owned ILC deposit insurance applications in 2025. The FDIC’s comment period runs until 8 November, with approval still uncertain. 8. Mastercard requires European cards to support payments during network outages Mastercard announced on 8 October 2026 that newly issued cards across Europe, including the UK, must support offline payments from February 2027, followed by new and replacement terminals from May. Cards would store issuer-set spending limits on their chips, allowing chip-and-PIN purchases of up to EUR 200 ($224.6) per transaction during network outages, with clearing once connectivity returned. The capability would help consumers continue buying essentials such as food, fuel and medicine. The requirement makes payment resilience a network-wide standard rather than an issuer choice. Mastercard had already introduced offline payments in Denmark, Sweden, Estonia and Latvia. The wider rollout followed the April 2025 blackout in Spain and Portugal, which disrupted digital payments for millions. Banks would need to manage transactions approved without real-time authorisation, while merchants may face terminal upgrade costs. 9. Australia funds tax office card costs to delay withdrawal of direct credit card payments The Australian government announced on 9 October 2026 that it would fund the Australian Taxation Office’s (ATO) card acceptance costs, allowing direct credit card payments until 30 June 2027. The ATO had planned to stop accepting them after 30 November following the Reserve Bank of Australia’s surcharge ban. It estimated that absorbing card fees would cost almost AUD 200 million ($139.7 million) annually. Treasurer Jim Chalmers intervened after businesses objected to losing a payment method used to manage tax bills and cash flow. The reversal exposed a consequence of the surcharge ban, requiring merchants to absorb card fees or recover them through pricing, an option the ATO lacks. Although credit cards accounted for a small share of ATO payments, some businesses rely on them for short-term financing. The ATO said card companies had declined to offer a sufficiently low rate. Credit card payments through third parties would remain available after 30 June 2027. Large acquirers must disclose by 30 January 2027 how much lower interchange they pass on. 10. UK lenders reduce mortgage availability as household borrowing demand weakens The Bank of England’s Credit Conditions Survey, published on 8 October 2026, showed that lenders reduced mortgage availability in the three months to end-August. Demand for house purchase loans and remortgaging also fell. Separate central bank data showed house purchase approvals declined to 54,900 in August, from 55,900 in July, below the previous six-month average of 60,100. Lenders expected availability and house purchase demand to recover slightly over the following three months. The pullback did not reflect a sharp rise in risk aversion. Lenders cited market share objectives as the main factor reducing availability, while their appetite for risk increased slightly and credit scoring criteria eased slightly. Availability fell more for borrowers with loan-to-value (LTV) ratios above 75% than for lower-LTV borrowers, and approval rates declined. Spreads narrowed, indicating that reduced availability coincided with more competitive pricing relative to benchmark rates.
