Google implements new policy to safeguard Pakistani consumers from fake loan apps

Morning! Hope you all had a very happening Barbenheimer weekend (except for our friends in Punjab who missed out on all things pink and fantastic due to the Punjab censor board).

In this week’s edition:

💸 FedNow to feed faster payments

🚂 Hogwarts Express, who?

🤝🏻 AI firms to play nice

🚨 Google’s loan police

- The Itla Squad 💼

Business

Global 🌎️

FedNow if you are fed-up with waiting

FedNow will now feed quicker money transfers to Americans as the Federal Reserve launched its FedNow instant-payments service on Thursday.

What is FedNow? It is a new service from the Federal Reserve that allows banks to send and receive money instantly. It's like popular payment apps like Venmo and Cash App but works directly between banks, making transactions faster and more convenient.

Who's on board? Many major banks, like JPMorgan Chase and Wells Fargo, have already joined FedNow. The American Bankers Association supports the initiative.

Benefits for US citizens: With FedNow, they can get immediate access to their paychecks, pay bills instantly, and receive government payments faster. For businesses, it enables real-time invoice payments, making financial operations smoother and more efficient.

What FedNow is not:

• It is not a new currency, and it won't replace the dollar. It's simply a faster and more secure way to transfer money between banks, offering the convenience of popular payment apps within the banking system.

• It is not meant to replace existing money transfer options like Venmo, Cash App, or Zelle. Instead, it's designed to work alongside these systems, providing an additional secure and faster option for banks and their customers.

Next steps: FedNow is already live in a soft launch as of July 20, 2023. While it won't dominate the global payments system immediately, it's expected to gain adoption among financial institutions over time. The Federal Reserve aims to make the system accessible to more than 10,000 banks and credit unions operating within its network.

TLDR: FedNow launched by the Federal Reserve enables instant money transfers between banks, benefiting Americans with faster payments and real-time invoice transactions. It's not a new currency and won't replace existing apps like Venmo, but it's a secure addition to the banking system. Major banks, including JPMorgan Chase and Wells Fargo, have joined, and it aims to expand to over 10,000 institutions.

What else is new in news

✶Johnson & Johnson revealed that it will be selling a significant portion of its ownership in Kenvue, a consumer health business that was spun off as an independent company earlier this year. The sale, which will be done through a stock exchange offer, will reduce Johnson & Johnson's stake by at least 80%.

Local 🇵🇰

A Trilateral Trade Tango

Hogwarts Express, who?

The governments of Uzbekistan, Afghanistan, and Pakistan (UAP) recently signed a joint protocol, outlining their plan to construct the UAP Railway, spanning 760km and linking three countries together.

All about UAP:

• The railway will run from Termiz in Uzbekistan, passing through Mazar-e-Sharif and Logar in Afghanistan, and finally reaching the border crossing at Kharlachi in Pakistan.

• Once completed by the end of 2027, the railway is expected to transport up to 15 million tonnes of freight (cargoes) annually by 2030. Uzbekistan estimates that the new railway will reduce transit times for freight moving to Pakistan by about five days, while cutting transport costs by at least 40%.

That’s not all: In addition to the UAP Railway, in February 2021, the three nations agreed on a strategic plan to build a 573km railway from Uzbekistan's capital, Tashkent, through Kabul in Afghanistan, to Peshawar in Pakistan. This ambitious project is estimated to cost $US 4.8 billion.

Big picture: Pakistan hopes that completing these railway projects will not only bring Central Asia closer to its 230 million population but also open up new trade opportunities with countries on the Arabian Sea.

TLDR: Governments of Uzbekistan, Afghanistan, and Pakistan have joined forces to build the UAP Railway, spanning 760km and linking the three countries. The railway is expected to reduce transit times and facilitate the transportation of up to 15 million tonnes of freight annually by 2030. A strategic plan for a 573km railway from Tashkent to Peshawar was also agreed upon.

News Flash

✶ In June 2023, the overall electricity generation cost in the country dropped considerably by 35%, reaching Rs9.63 per KWh. This is a substantial decrease from the Rs14.72 per KWh recorded during the same period last year.

Tech

Global 🌎️

AI firms agree to play nice

The White House has reached an agreement with major AI developers, including Amazon, Google, Meta, Microsoft, and OpenAI, to prevent harmful AI models from being released into the world. The deal, termed a "voluntary commitment," requires these companies to take action to ensure the safety of their AI models before public release.

What is in the deal?

• As part of the commitment, the companies have pledged to conduct internal tests and allow external testing of their new AI models.

• These tests aim to identify potential issues, such as biased or discriminatory output, cybersecurity vulnerabilities, and risks of broader societal harm.

• Ben Buchanan, the White House special adviser for AI, emphasized the companies' duty to ensure the safety and capability of their AI systems before introducing them to the public.

• Companies will develop watermarking systems to distinguish AI-generated content from real content. This step comes in response to concerns about the spread of deepfakes and misinformation, especially with the upcoming US elections in 2024.

Big picture: While the agreement is a positive step, some experts argue that it may not be sufficient for holding companies accountable for potential AI risks. They call for wider public deliberation and more specific assessments of high-risk AI use cases.

TLDR: White House teams up with tech giants to ensure safer AI models. Companies will conduct tests, address biases, and use watermarking to combat deepfakes. Experts call for further measures for AI accountability.

What else is new in news

✶Spotify is raising its premium service price by $1 to $10.99, the first increase since 2011. This move comes shortly after YouTube's announcement of price hikes for its Premium plans, with individual plans going up by $2 and Premium Music by $1.

Local 🇵🇰 

Google’s loan police on the hunt for fraud 🚨

Google is stepping up to protect Pakistani consumers from fake and unregistered loan apps with a fresh policy for personal loan applications. The new rules, effective from May 31, aim to put an end to shady practices in the digital lending space.

New rules:

• Non-Banking Finance Companies (NBFCs) can only publish one Digital Lending App (DLA). Any NBFC attempting to publish multiple DLAs will face termination of their developer account and associated accounts.

• To launch personal loan apps for Pakistani users, developers must complete the Personal Loan App Declaration form and submit the necessary documents.

• They also need approval from the Securities and Exchange Commission of Pakistan (SECP) to offer digital lending services.

• Loan apps without proper declaration and licensing will be kicked out of the Play Store. If the submitted license or registration is no longer valid, developers have to remove the app immediately.

• DLAs won't get their hands on sensitive data like external storage, media images, contacts, and fine location, adding an extra layer of security.

• Say goodbye to loan apps demanding full repayment within 60 days from the issue date, as they won't be allowed on the Play Store anymore.

Rewind: The recent development follows the Federal Investigation Agency's (FIA) crackdown on illegal finance companies engaged in short-term online lending. The FIA's move came in response to a heartbreaking incident in Rawalpindi, where an unemployed man tragically ended his life due to the stress of loan repayment.

TLDR: Google introduces strict rules in Pakistan to curb fake loan apps. Non-Banking Finance Companies (NBFCs) can have only one Digital Lending App (DLA). Developers need to submit a Personal Loan App Declaration and approval from SECP. Unauthorized loan apps will be removed from the Play Store. DLAs won't access sensitive data, and short-term repayment apps won't be allowed.

Tech tour of news

✶ Swich, a fintech firm headquartered in Karachi, has won the Pakistan Innovation Hub Award, resulting in a grant of PKR 20 million, provided by the Ministry of Planning.

More interesting Itla (اطلاع) we consumed:

📧 Internal Tech Emails has become one of our top picks on Twitter lately. In case you are not aware: Every now and then, there's a government investigation, hacker revelations, or insider leaks that spills the beans on tech companies' internal communications. Usually, the stuff is too long to read through but some brilliant mind is breaking them down into bite-sized tweets for our convenience.