Raphael Stevens

Online payment processor Stripe has signed a five-year deal with Ford aimed at bolstering the auto giant’s e-commerce strategy.
Ford will also use Stripe to route a customer’s payments to the correct local Ford or Lincoln dealer.
The tie-up marks one of the biggest client wins yet for Stripe, and forms part of Ford’s turnaround plan under CEO Jim Farley.

A Ford F-150 pickup truck is offered for sale at a dealership on September 6, 2018 in Chicago, Illinois.
Scott Olson | Getty Images

Online payment processor Stripe has signed up Ford Motor Company as a customer, in a five-year deal aimed at bolstering the automotive giant’s e-commerce strategy.
Ford Motor Credit Company, the carmaker’s financial services arm, will use Stripe’s technology to process digital payments in markets across North America and Europe, the companies said in a statement Monday.

Stripe will handle transactions for consumer vehicle orders and reservations, as well as bundled financing options for Ford’s commercial customers. The automaker also plans to use Stripe to route a customer’s payment from its website to the correct local Ford or Lincoln dealer.
The tie-up marks one of the biggest client wins yet for Stripe, and forms part of Ford’s turnaround plan under CEO Jim Farley, who took the helm in October 2020.
Founded in 2010 by Irish brothers Patrick and John Collison, Stripe is the most valuable start-up in Silicon Valley, with a $95 billion valuation. The company sells software that makes it simple for businesses of all shapes and sizes to accept payments over the internet.
The firm, which makes money by taking a small cut on each transaction it processes, counts the likes of Shopify, Salesforce and Deliveroo as customers. But it faces growing competition from rival fintechs such as Adyen and Checkout.com, which was valued at $40 billion in a $1 billion funding round last week.
“We are making strategic decisions about where to bring in providers with robust expertise and where to build the differentiated, always-on experiences our customers will value,” Marion Harris, CEO of Ford Motor Credit Company, said in a statement.

Ford expects to start rolling out Stripe’s technology in the second half of 2022, starting with North America.
“During the pandemic, people got comfortable paying online for groceries, health care, even home haircut advice from barbers,” said Mike Clayville, Stripe’s chief revenue officer. “Now, they expect to be able to buy anything and everything online.”  
Ford’s market capitalization topped $100 billion for the first time last week, as investors cheered the firm’s electric vehicle strategy and its Ford+ restructuring plan. The company was the best-performing auto stock in 2021, beating the likes of Tesla and General Motors.
Stripe, meanwhile, is still privately held. There’s long been speculation about when the company will go public. A Bloomberg report in September said Stripe had held talks with investment banks about going public as soon as 2022. But John Collison, Stripe’s president, told CNBC a month later that the company is “very happy” staying private.
Stripe hired Dhivya Suryadevara, the former chief financial officer of General Motors, as its finance chief in August 2020.
– CNBC’s Michael Wayland contributed to this report

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Horta-Osorio took over as chairman of Switzerland’s second-biggest lender in April last year, with a mission to clean up its corporate culture after its damaging involvement with collapsed investment firm Archegos Capital and insolvent supply chain finance company Greensill Capital.
These came on the back of a bizarre and protracted spying saga which ultimately led to the resignation of former CEO Tidjane Thiam, who was replaced by Thomas Gottstein.
Horta-Osorio, who was found to have committed multiple breaches of Covid-19 quarantine requirements in the U.K. and Switzerland, will be replaced by UBS executive Axel P. Lehmann.

The logo of Swiss bank Credit Suisse is seen at its headquarters in Zurich, Switzerland March 24, 2021.
Arnd Wiegmann | Reuters

LONDON — Credit Suisse Chairman Antonio Horta-Osorio resigned on Sunday after violating Covid-19 quarantine rules, the latest in a series of high-profile scandals that have rocked the Swiss bank in recent years.
Horta-Osorio took over as chairman of Switzerland’s second-biggest lender in April last year, with a mission to clean up its corporate culture after its damaging involvement with collapsed investment firm Archegos Capital and insolvent supply chain finance company Greensill.

These came on the back of a bizarre and protracted spying saga which ultimately led to the resignation of former CEO Tidjane Thiam, who was replaced by Thomas Gottstein.
Horta-Osorio, who was found by an internal investigation to have committed multiple breaches of Covid quarantine requirements in the U.K. and Switzerland, will be replaced by UBS executive Axel P. Lehmann. Credit Suisse has insisted that its strategic overhaul, announced in November and which includes a scaling back of its investment banking business, will continue undeterred.
Analysts told CNBC Monday that the bank had made the right call in removing Horta-Osorio, and that Lehmann was a wise appointment as the firm looks to deliver stability.
Bruno Verstraete, managing partner at Zurich-based asset manager Lakefield Partners, said Lehmann was a choice that represented the stability the bank needs, given his wealth of experience in risk management.
“One can only hope that the scandals will fade over time, and that they will be able to turn the nose of the ship in the right direction, away from the storm. It is about time, that is clear,” Verstraete told CNBC.

However, some emphasized that the problems run deeper than one individual, with the bank facing a litany of legal issues.
“I think the job at hand for Credit Suisse over the coming months and year is frankly to repair its risk management, to repair its reputation, and obviously one factor that needs to be looked at carefully is, can it retain its talent?” said Bob Parker, investment committee member at Quilvest and former senior advisor at Credit Suisse.
“One thing that happened after Archego was that a number of talented people in the investment bank left the firm.”
Share price woes
Credit Suisse’s share price has taken a substantial hit over the past 12 months, and analysts have pointed to the divergence from the performance of its domestic rival UBS as an indication that investors remain skeptical about the turnaround.
Credit Suisse is down more than 24% over the past year and was last trading at 9.37 Swiss francs ($10.25) per share on Monday morning, while UBS has gained more than 31% in the past 12 months to trade at around 18 Swiss francs per share.
“I think the performance of the share price in recent months clearly reflects the view by investors that a number of these legacy issues are going to take time to repair, and I think that is probably right,” Parker said.

Beat Wittmann, chairman of Zurich-based Porta Advisors, told CNBC that Credit Suisse will need to rebuild its reputation over time through changing its business practices and demonstrating leadership by example, rather than seeking quick PR victories or “culture-washing.”
“The price performance difference between Credit Suisse and UBS is 50% — not five, 50% — and therefore the shares are cheap, but for many reasons cheap,” Wittmann said.
However, he suggested that if the new chairman and management team can deliver stability and a strategic redirection with “discipline and focus,” then Credit Suisse shares are a “big buy” at their current valuations.
“Key shareholders like Harris Associates, Dodge & Cox etc., have suffered for many years, and the general public as well, so it’s all in the hands of management and the board to get this done. It’s absolutely possible to get it done,” he said.
What does the future hold?
Credit Suisse’s third-quarter revenues were strong and the bank beat profit expectations despite a hit from charges related to settling allegations of corruption in Mozambique, along with several other legal issues.
Wittmann highlighted that along with sound financial fundamentals, Credit Suisse is operating against a very supportive macro backdrop.
“For banking businesses, the last year was one of the best years on record in terms of rising risk assets, record M&A activity, basically all factors aligned and in favor of such a bank,” he said.
Given the potential that could be unlocked should the revamp go as planned and the low share price, Wittmann said he would not be surprised to see strategic buyout efforts being launched for Credit Suisse, noting that “the European landscape is overdue for consolidation,” as several regulators have pointed out.

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Amazon was expected to prevent Brits from using a Visa-issued credit card on its platform from Jan. 19.
In a statement Monday, the firm said the change “will no longer take place.”
The move was interpreted by experts as a way for Amazon to get some bargaining power over Visa to lower its fees.

An Amazon warehouse in Warrington, England.
Nathan Stirk | Getty Images

LONDON — Amazon has scrapped plans to stop accepting Visa credit cards in the U.K.
The e-commerce giant was expected to prevent Brits from using a Visa-issued credit card on its platform from Jan. 19. But in a statement Monday, the firm said the change “will no longer take place.”

“We are working closely with Visa on a potential solution that will enable customers to continue using their Visa credit cards on Amazon.co.uk,” an Amazon spokesperson told CNBC by email.
Amazon initially made the shock announcement in November, citing “high fees Visa charges for processing credit card transactions.” Visa at the time said it was “very disappointed” in the move and would work toward a resolution with Amazon.
The two companies have locked horns in the past, with Amazon announcing plans to introduce a 0.5% surcharge on Visa credit cards in Australia and Singapore last year.
It’s not yet clear why Amazon made the U-turn on its plan to ditch Visa credit cards in the U.K., nor whether the decision is final or temporary.
“Amazon customers can continue to use Visa cards on Amazon.co.uk after January 19 while we work closely together to reach an agreement,” a Visa spokesperson told CNBC by email.

Following Brexit, Visa and rival payment processor Mastercard have hiked interchange fees, the cut they take on digital transactions between the U.K. and European Union. Card networks were allowed to raise their charges after an EU cap on interchange fees ceased to apply in Britain.
However, Amazon and Visa say the dispute is not related to the U.K.’s withdrawal from the EU. Instead, the move was interpreted by experts as a way for Amazon to get some bargaining power over Visa to lower its fees.
David Ritter, a financial services strategist at IT firm CI&T, said the about-face from Amazon “comes as no surprise.” He argues the move would have proven difficult given that customers’ Visa credit cards may be tied to digital wallets like Apple Pay, Google Pay and PayPal, as well as Amazon’s own Prime subscription service.
“Amazon is a retail giant so it has some leverage, but there’s no way it won’t accept Visa cards,” said Ritter. “It’s more likely that Amazon has been applying pressure tactics. Major players in the retail space tend to have bespoke rates with payment firms, rather than paying published rates. The move by Amazon is likely a way to negotiate a longer-term agreement on rates, or even to push for a freeze to its current rates.”
Amazon is not the only company complaining of the high costs associated with major card networks — another notable example was grocery chain Kroger’s, which temporarily banned Visa credit cards at a number of its stores.
Meanwhile, Visa and Mastercard are facing growing pressure from financial technology upstarts like Klarna and Afterpay, which offer “buy now, pay later” services that let shoppers split the cost of their purchases over a period of monthly installments.
“This latest twist in the saga certainly shows the power of the Amazon brand,” said Roger De’Ath, head of U.K. at fintech start-up TrueLayer. “Irrespective of the final decision or the solution offered, its initial announcement has now pushed the debate around card fees for merchants into the mainstream.”

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China’s central bank unexpectedly cut loan rates on Monday — a move that will likely put more downward pressure on the Chinese currency, one analyst said.
“What has happened this morning won’t help the [Chinese yuan’s] case. And should contribute to further downward pressure on CNY,” Gareth Berry, Macquarie Group’s foreign exchange strategist, told CNBC on Monday, adding that it could push up the range toward 6.55 yuan per dollar.

Banknotes of Renminbi arranged for photography on July 3 2018 in Hong Kong.
S3studio | Getty Images News | Getty Images

China’s central bank unexpectedly cut loan rates on Monday — a move that will likely put more downward pressure on the Chinese currency, one analyst said.
“What has happened this morning won’t help the [Chinese yuan’s] case. And should contribute to further downward pressure on CNY,” Gareth Berry, Macquarie Group’s foreign exchange strategist, told CNBC on Monday, adding that it could push up the range toward 6.55 yuan per dollar.

The Chinese yuan is currently trading at about 6.34 to the dollar on Monday.
In an attempt to boost the economy, the Chinese central bank said it will cut the interest rate on 700 billion yuan ($110 billion) worth of one-year medium-term lending facility (MLF) loans to 2.85% — 10 basis points lower, according to Reuters.
This was the first time People’s Bank of China cut the MLF rate since April 2020.
While the rate cut was in line with market expectation, it also shows Chinese policymakers are concerned about economic growth, said Zhiwei Zhang, chief economist at Pinpoint Asset Management, in a note.
“Economic growth is clearly under pressure, recent omicron outbreaks in China exacerbated the downside risk. The lower inflation opened policy room. We think China is at the early stage of a rate cut cycle,” he said.

The central bank also cut the seven-day reverse repurchase rate, another lending measure. The PBOC also injected another 200 billion yuan of medium-term cash into the financial system.
Zhang predicted there will be more cuts in the reserve requirement ratio and interest rate in the first half of the year. The reserve requirement is the amount of money banks must hold as reserves with the central bank.
“The omicron outbreak has become the top risk in China,” he said.
“We think risk to Q1 GDP growth has shifted to the downside. The rate cut itself is a small step in the right direction,” he added, referring to Monday’s policy loan rate cut — “but the economic outlook largely depends on how effectively the outbreaks can be contained.”
On Monday, China reported that its economy grew by 8.1% year-on-year in 2021, according to official data from the National Bureau of Statistics. GDP in the fourth quarter rose 4% from a year ago, faster than analysts expected.

… policymakers now are much more concerned about growth and we should see concerted action going forward.

Johanna Chua
Citi Global Markets Asia

China’s zero-Covid policy, aimed at limiting the virus outbreak, prompted renewed travel restrictions within the country including the lockdown of Xi’an city in late December. 
The larger than expected 10 basis points MLF rate cut rate seems to suggest China is concerned about its economic slowdown, Johanna Chua, head of Asia economics and strategy at Citi Global Markets Asia, told CNBC’s “Street Signs Asia” on Monday.
“Which really suggests, I think, policymakers now are much more concerned about growth and we should see concerted action going forward.”
She said the country is not likely to abandon its zero-Covid policy anytime soon.
— CNBC’s Evelyn Cheng contributed to the story

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Fourth-quarter GDP rose by 4% from a year earlier, according to China’s National Bureau of Statistics. Analysts polled by Reuters had expected China to report fourth-quarter GDP growth of 3.6%.
However, retail sales missed expectations, growing by 1.7% in December from a year ago. Analysts polled by Reuters had predicted a 3.7% increase.
For the full year, China economists had expected an average of 8.4% growth in 2021, according to financial data provider Wind Information.

Volunteers wearing personal protective equipment (PPE) arrange food deliveries on Nov. 26, 2021, for a Shanghai residential area that’s under restrictions to halt the spread of Covid-19.
Yin Liqin | China News Service | Getty Images

BEIJING — China’s economy grew by 8.1% in 2021 as industrial production rose steadily through the end of the year and offset a drop off in retail sales, according to official data from China’s National Bureau of Statistics released Monday.
Fourth-quarter GDP rose by 4% from a year ago, according to the statistics bureau. That’s faster than the 3.6% increase forecast by a Reuters poll. For the full year, China economists expected an average of 8.4% growth in 2021, according to financial data provider Wind Information.

Industrial production rose by 4.3% in December from a year ago, the bureau said, also beating Reuters’ forecast of 3.6% growth. Notably, auto production grew for the first time since April, up by 3.4% year-on-year in December.
Fixed asset investment for 2021 grew by 4.9%, topping expectations for 4.8% growth. Investment in real estate rose by 4.4%, while that in infrastructure rose by 0.4%.
Investment in manufacturing grew by 13.5% in 2021 from a year ago, with that in special purpose machinery rising the most, up by 24.3% year-on-year, according to data accessed through Wind.
However, retail sales missed expectations and grew by 1.7% in December from a year ago. Analysts polled by Reuters had predicted a 3.7% increase.
“We must be aware that the external environment is more complicated and uncertain, and the domestic economy is under the triple pressure of demand contraction, supply shock and weakening expectations,” the bureau said in a statement.

The urban unemployment rate in December matched the average for the year of 5.1%. The unemployment rate for those aged 16 to 24 remained far higher at 14.3%.
“The better-than-expected GDP data doesn’t change the big picture: China’s economy is under multiple headwinds for now and a policy easing cycle is underway,” Larry Hu, chief China economist at Macquarie, said in a note.
Hu pointed to how the People’s Bank of China on Monday cut the borrowing cost of medium-term loans for the first time since April 2020. He expects the central bank to lower the benchmark loan prime rate on Jan. 20.

China’s zero-Covid policy hits spending

China’s zero-Covid policy aimed at controlling the pandemic prompted renewed travel restrictions within the country — including the lockdown of Xi’an city in central China in late December.
In January, other cities were also locked down in full or partially, to control pockets of outbreaks tied to the highly transmissible omicron variant. Analysts have started to question whether the benefits of China’s zero-Covid strategy outweigh the costs, given how contagious and potentially less fatal the omicron variant is.
Goldman Sachs cut its forecast for China’s 2022 GDP growth based on expectations the zero-Covid policy will cause increased restrictions on business activity. However, the analysts said the greatest impact would be on consumer spending.
Retail sales dropped 3.9% in 2020 even though China’s overall economy grew amid the pandemic. Consumer spending has since remained sluggish, partly as travel restrictions have kept a damper on tourism.
In 2021, overall retail sales grew by 12.5% from the prior year’s contraction, and also topped 2019 levels.
However, only urban areas saw an increase in retail sales last year versus 2019 levels. Consumer spending in rural areas last year remained 1.8% below 2019 levels, according to CNBC analysis of Wind data.

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Business employees’ incomes generally went up between 2020 and 2021, especially in labor-intensive industries like catering and manufacturing, Christine Peng, head of the Greater China consumer sector at UBS, said during a media call last week.
But she noted that rising uncertainty has resulted in consumers delaying purchases of discretionary goods, such as new air conditioners. Peng said consumers were also thinking longer term, and that within households, female consumers were more willing to buy insurance or other financial management products.
Within December’s retail sales data, autos saw the greatest decline — down by 7.4% year-on-year —followed by a 6% drop in home appliances and a 3.1% decline in furniture. Sales of daily necessities saw the greatest increase last month, up 18.8% from a year ago.
“The pandemic could continue to be a drag on the revival of consumer spending – although the situation in China remains relatively under control … compared with other large economies,” Bruce Pang, head of macro and strategy research at China Renaissance, said in a statement. He expects consumption will remain under pressure in the first quarter.
“We think China has the option to ease COVID restrictions, which could boost consumption and market confidence; but it would be highly unlikely for it to abandon the no-tolerance approach before the Beijing Winter Olympics and the Two Sessions [annual parliamentary meeting in March], in our view.”
China’s gross domestic product grew by 2.2% in 2020 from the prior year. That’s according to the latest figures from the National Bureau of Statistics, which in December released an annual data revision that reduced 2020 GDP growth by 0.1 percentage point.
Compared with the initial release earlier in 2021, real estate, transport industries and accommodation and restaurants saw the greatest downward revision. Renting, leasing activities and business services saw the greatest increase, followed by manufacturing.
Correction: This story was corrected to reflect that Goldman Sachs revised its 2022 forecast for China’s GDP. A previous version misstated the year.

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