I have written earlier about problems in banking security and credit card security issues. But what about some other banking issues?
Banking is Broken: A Financial Revolution is Coming article tells that a trio of startups are seeking to change the way we manage our money, by focusing on the customers traditional banks are ignoring. Banks have been slow to embrace new technology.
Finland’s Holvi, Sweden’s iZettle and Estonias TransferWise all took the stage at the Slush startup conference in Helsinki last week, and while they all offer completely different services, they are share a similar goal – to empower the customers that they believe traditional banks are ignoring.
Holvi offers customers an alternative type of current account, integrating bookkeeping and money management in a clean, simple online interface. TransferWise, founded by the first ever Skype employee Taavet Hinrikus, is looking to bring the essence of Skype’s ethos of offering cut rate international phone calls to the money exchange market. Speaking at Slush last week de Geer said that iZettle was “effectively about democratising card payments.”
Keep in mind that Holvi, TransferWise and iZettle are just three of the hundreds of companies looking to cash-in on the revolution that is coming to the banking industry.
What made the article really interesting to me is that I happen to know one of the Kristoffer Lawson, Founder and CEO of Holvi. I have personally heard the story of how the company was put up, that they were applying the needed license and when they got it. But the article includes some a bold new statement: traditional banks are ignoring 80% of their customers.
Lawson believes that Holvi’s new type of account is “the future of banking” and his company is rethinking what it means to be a bank: Holvi offers customers an alternative type of current account, integrating bookkeeping and money management in a clean, simple online interface. It is designed for use by groups and organisations so they can collaborate, making it ideal for events such as Slush, which used the Holvi system for all its budgeting and ticketing operations this year.
And I have also heard of some other events in Finland do the same. The reason why such events have actively started to use the system is that Lawson had been earlier active on organizing different computer events, so he knows the needs of this type of organizations.
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Tomi Engdahl says:
mPOS to Make Up 46% of All POS Terminals in Circulation in 2019 as iZettle and POWA Gain Investment
https://www.abiresearch.com/press/mpos-to-make-up-46-of-all-pos-terminals-in-circula
The installed base of mPOS devices is set to increase fivefold over a five-year forecast period, reaching the 51 million mark in 2019, or 46% of the overall POS, finds ABI Research. The increase in uptake is not just being driven by micro-merchant adoption, as mPOS vendors are increasingly focused on mPOS penetration higher up the value chain. Other mid-sized merchants and even large retailers are looking towards mPOS to provide new acceptance capabilities, enablement or extension of added value services, while improving in-store mobility levels.
Questions remain around the business viability of mPOS and if it can be a profitable and sustainable business.
Despite market uncertainty market belief remains and investment continues to flow. iZettle is the most recent vendor to attain a $56 million financial injection with POWA, another vendor who in 2013 received $76 million in outside funding.
”The mPOS market does present a substantial opportunity for not only the expansion of point of sale solutions by those vendors already active but also by new OTT players who could come into the payments space using mPOS as an entrance point. There has been much said about the cannibalization of the traditional POS market, but ABI Research believes that both traditional POS and mPOS can grow together in tandem, co-existing”
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Tomi Engdahl says:
Online financial transactions services to small businesses offering Holvi has received a license from the Financial Supervisory that allows the enlargement of Europe.
Holvi service can take care of small business e-commerce, billing and other money management. The intention is that the client company does not have to use any traditional banks.
Holvi received a million Euros investment from the Austrian SpeedInvest Fund.
Source: http://www.tietokone.fi/artikkeli/uutiset/verkkopankkitulokas_holvi_sai_miljoonan_laajentumiseen
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Tomi Engdahl says:
‘The Harvard Business Review is running a fascinating article on how finance is increasingly abstracting itself — and the gains it makes — away from the creation of value in the real world, and how High Frequency Trading is the most extreme version of this phenomenon yet:
High Frequency Trading and Finance’s Race to Irrelevance
http://blogs.hbr.org/2014/06/high-frequency-trading-and-finances-race-to-irrelevance/
John Maynard Keynes very famously proposed that the actions of rational agents in a market were akin to a fictional newspaper contest, where entrants were asked to pick who, out of a set of six women, was most beautiful. Those who successfully picked the most popular face would be eligible to win a prize. Keynes asserted that a naive strategy in such a game would be for an entrant to pick based on their own personal opinion of beauty; and that a much more sophisticated strategy would be to make a selection based on the broader public perception of what beauty is.
It delves into the world of high frequency trading (HFT), detailing the lengths that firms have undertaken to get a speed edge of only tiny fractions of a second. The effect of that edge? Well, to continue with Keynes’s analogy, it allowed the high frequency traders to peek at the ballots others were sending in to the newspaper before they arrived, in turn giving them the ability to cast their votes using information not yet available to the rest of the market.
The broader point that has been missed in the discussion around HFTs is that they actually have very little impact on how companies are run.
In terms of the real world of building businesses and creating value, basically, HFTs don’t matter.
But that, in turn, is exactly what makes them so interesting.
This pressure poses a problem for people who are trying to build something. It’s hard to create something truly valuable — it takes a lot of time. A lot of patience. Many mistakes are made along the way.
Now, there are some rockstar CEOs — who oftentimes happen to be founders, such as Bezos, Steve Jobs, Reid Hastings — who have the ability to resist the pressure that the markets put on them. But what about everyone else? Well, it’s becoming increasingly hard to resist that pressure. The financial markets put pressure on you to generate the type of returns they’re looking for: quarterly results. If you’re an executive and your job lives and dies on those results, then you begin to realize that that’s what you need to deliver.
Tomi Engdahl says:
Bitcoin VC Investment This Year Already 30% Higher Than 2013’s Total
http://www.coindesk.com/years-vc-funding-bitcoin-startups-already-beaten-last-years/
The amount of venture capital raised by bitcoin startups this year has already surpassed the total amount raised in 2013 by more than $27m.
So far in 2014, $113.2m has flowed into bitcoin businesses, which is 29% greater than the total amount for last year, which stands at $88m. In 2012, bitcoin startups raised just $2.1m, according to CoinDesk statistics.
Topping the fundraising table so far this year is payment processor BitPay, which raised a record-breaking $30m in May, following a seed round of $2.7m last year.
Perhaps as a sign of the rapidly maturing bitcoin ecosystem
Bitcoin may be a global, decentralised digital currency, but the United States remains the clear favourite for startups operating in the bitcoin ecosystem.
It’s clear from the data that bitcoin startups are gaining traction among venture investors. As financial and human capital continues to pour into the digital currency space, bitcoin bulls will continue to find reasons to cheer.
Tomi Engdahl says:
Amazon expands middleman role in latest online payments push
http://www.reuters.com/article/2014/06/09/us-amazon-com-payment-idUSKBN0EK0HW20140609
Amazon.com Inc will start managing subscription payments for start-ups and other companies – the latest in a series of quiet moves the e-commerce giant has made into PayPal’s turf over the past year.
The service, which launches on Monday, allows the company’s more than 240 million active users to use credit card details stored on Amazon.com to pay for services such as a monthly phone bill or a digital music subscription. Amazon then charges a fee on each transaction.
EBay Inc’s PayPal has long dominated online payments services but Amazon sees plenty of scope to push into new areas.
Tomi Engdahl says:
How Bitcoin Empowers Global Peer-to-Peer Lender BTCJam
http://www.coindesk.com/bitcoin-empowers-first-global-peer-peer-lender-btcjam/
San Francisco-based startup BTCJam is taking peer-to-peer lending to a global audience, and is using bitcoin to achieve its vision.
Bypassing the restrictions of fiat currencies, the company says, allows any individual in the world to receive a loan via its platform.
While traditional wire transfers are costly and not always easy to set up, bitcoin allows approved BTCJam borrowers to receive funds almost instantly, wherever they may live and whether or not they have a bank account.
However, Pitta reached his first stumbling block when he discovered the penalty for starting an unlicensed money-lending service in Brazil.
“I noticed that if you do [lending] in Brazil, you will go to jail for 10 years,”
this potential roadblock is what led Pitta to make the decision to conduct the company’s business in cryptocurrency, rather than trying to become licenced as a bank
In peer-to-peer (P2P) lending, investors team up to provide loans to individuals without going through a traditional financial body such as a bank.
BTCJam believes that P2P lending is at least a $1tn market globally and, for bitcoin holders who start lending out their funds, the concept is a great value proposition.
Tomi Engdahl says:
Jersey group in campaign to create ‘Bitcoin Isle’
http://www.bbc.com/news/world-europe-jersey-27921445
A campaign has been launched to make Jersey a world leader in digital currencies.
Bitcoin payments are already accepted in a handful of places but an industry expert says, if the States allow banks to accept and trade with it, Jersey could become a magnet for new business.
Treasury Minister Senator Philip Ozouf said he wanted Jersey to be an early leader in the field.
Tomi Engdahl says:
US trading, energy watchdogs asked: Does Google’s Skybox slurp pass the sniff test?
Public Citizen challenges sat firm deal
http://www.theregister.co.uk/2014/06/25/public_citizen_us_regulators_google_skybox/
Consumer advocacy group Public Citizen has asked US energy and trading regulators to probe Google’s acquisition of satellite firm Skybox Imaging, which it claims could give big players in commodities trading an unfair advantage.
In a letter to the authorities, Public Citizen said that banks and hedge funds already used the intel from Skybox’s satellite images of oil and gas infrastructure to help them trade in these commodities, but coupling that info with data from Google could hugely increase what they characterised as an unfair edge.
Obviously, any trader can use real-time information about power structures to make informed decisions about commodities like oil and gas futures.
“In fact, Skybox has already played a role in revolutionising aspects of commodity trading markets, which is precisely why it was an attractive purchase,”
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Tomi Engdahl says:
business > Financial News
Today’s get-rich-quick scheme: Build your own bank
It’s about time someone did it properly
http://www.theregister.co.uk/2014/06/18/get_rich_quick_scheme/
Here’s a great get-rich-quick idea: Go build a bank. No, really, it’s an industry that’s ripe for the plucking at present.
One way to think about banking is to divide it into four different types: transaction, savings, commercial and investment.
transactional banking, is what we should concern ourselves with here today.
This sort of banking, transactional banking, is essentially a girt big computer system with a packet of licences attached to the side of it. Those licences make it difficult and expensive to enter the business, but rather like castles, the higher the walls to entry, the greater the plunder if you can actually manage to break in.
“A simple transactional online bank, where all deposits are placed as reserves with the central bank, making them completely safe, free of costly capital requirements, and immune to loss and panic, cries out to be invented.”
There’s a thought that someone coming in with a completely blank sheet, able to write a clean and efficient system from the ground up, could very well have a competitive advantage.
But the genius in Warner’s idea is that insistence that the new bank will simply deposit the cash from everyone’s accounts at the central bank. This does, as he says, hugely reduce the amount of capital that must be held.
This means that in order to operate as a bank, it’s not necessary to do that commercial banking stuff. You don’t need to work out whom you can lend the money to in order to be able to make a turn on it. You can just stick in the Bank of England at the end of each day and get paid for having done so. Which also means, obviously, that you don’t need lots of highly paid people working out whom you should lend the cash to either.
Quite simply, you need to be able to make that computer system work.
This is more than just a silly idea, it’s actually halfway serious.
Tomi Engdahl says:
Lending Club Has Started Process of Going Public
Peer-to-Peer Lender Has Tapped Banks Including Morgan Stanley and Goldman Sachs to Work on IPO
http://online.wsj.com/news/article_email/lending-club-has-started-process-of-going-public-1403890688-lMyQjAxMTA0MDIwNzEyNDcyWj
Lending Club Corp. has started on its anticipated process for going public, tapping banks including Morgan Stanley MS -1.07% and Goldman Sachs Group Inc. GS -0.73% to work on an initial public offering later this year, people familiar with the matter said.
The offering could come by the end of the year and could raise more than $500 million, depending on market conditions and other factors, some of the people said. Lending Club was valued at nearly $4 billion in a recent fundraising and could seek a higher valuation in the IPO, they added.
The peer-to-peer lending platform, which connects investors to small individual borrowers and, increasingly, small businesses, has facilitated more than $4 billion in loans since its inception seven years ago.
Tomi Engdahl says:
California law removes ban on alternative currencies
The law paves the way for legal use of community currencies, bitcoin and other U.S. dollar alternatives
http://www.itworld.com/it-management/425046/california-law-removes-ban-alternative-currencies
June 29, 2014, 9:40 PM — A new California law removes a ban on using currencies other than the U.S. dollar, which is intended to accommodate the growing use of alternative payment methods such as bitcoin.
The law, signed by state Governor Jerry Brown on Saturday, is likely to boost confidence around bitcoin, as regulators and tax authorities worldwide examine how to handle the popular virtual currency.
Tomi Engdahl says:
Newegg Accepts Bitcoin as Form of Payment Via BitPay
Customers can pay via a local wallet, smartphone wallet, or web hosted wallet for any item on site
See more at: http://www.dailytech.com/Newegg+Accepts+Bitcoin+as+Form+of+Payment+Via+BitPay/article36154.htm#sthash.s8AlgnXr.dpuf
Tomi Engdahl says:
Speech Analytics for Collections: Let’s Talk About Consumers’ Debt Hangover
http://subscribe.fico.com/Speech-Analytics-for-Collections?CID=70180000000eJXq&utm_source=outbrain&utm_medium=content%20syndication&utm_campaign=collections%20and%20recovery
Every New Year, millions of people resolve to lose weight, exercise more and pay down debt. According to the January 2014 Country Financial Security Index, 37 percent of US consumer survey participants expect their personal debt to decrease this year.
This global phenomenon is what I call the “debt hangover,” and here’s why it matters to any company that gives credit, but especially to collections and recovery professionals: delinquency rates are actually expected to increase in 2014.
In the US, credit card delinquencies are projected to rise from 1.51 percent in the fourth quarter of 2013 to 1.66 percent in the fourth quarter of 2014. That’s not surprising, since the average number of cards per US consumer is up to 2.19, from 1.96 in 2012, and 1.83 in 2011.
As American consumers rev up their automobile purchases, delinquencies are accelerating too. The national auto loan delinquency rate is projected to rise to 1.19 percent by the end of 2014 from an estimated 1.10 percent at year-end 2013.
In the UK, personal debt is “wreaking havoc with mental health” as UK households are “pushed over the edge” by personal debt reaching a record £1.4 trillion – almost the same amount as Britain’s economic output. UK consumer debt has tripled since 1993 and now stands at £158 billion.
US consumer complaints under the Telephone Consumer Protection Act (TCPA) are on the rise. In the UK, new regulations being considered by the UK Financial Conduct Authority (FCA) will drive up collection costs and hurt collection rates.
While there is no “hair of the dog” remedy for consumers’ debt hangover, speech analytics software is making a measurable impact on the worldwide collection and recovery marketplace.
Tomi Engdahl says:
Coinbase Announces High-Security ‘Vault’ Bitcoin Accounts
http://www.coindesk.com/coinbase-announces-high-security-vault-bitcoin-accounts/
Coinbase is launching a new account that offers additional security features for storing large amounts of bitcoin.
Called ‘Vault’, the new account was designed in response to demand for a more secure type of wallet from Coinbase’s growing customer base of institutions and wealthy individuals, according to company CEO Brian Armstrong
Vault accounts include security features that are common among enterprise bank accounts, such as requiring multiple approvals for a withdrawal.
They also include other extras, like a time-delay feature on withdrawals, which will push a withdrawal back by 48 hours while Coinbase uses a variety of communication channels to contact the account holder to verify the action.
Tomi Engdahl says:
Ebay in talks to take bitcoins at payments unit : WSJ
http://www.reuters.com/article/2014/08/14/us-bitcoin-ebay-idUSKBN0GE2D420140814
Ebay Inc’s (EBAY.O) PayPal is in talks with Coinbase Inc and other bitcoin transaction providers to integrate the virtual currency within its Braintree payments system, The Wall Street Journal reported on Thursday.
Tomi Engdahl says:
To Simplify Mobile Shopping, PayPal Wants To Eliminate Filling Out Billing And Shipping Info
http://www.fastcompany.com/3034415/most-innovative-companies/to-simplify-mobile-shopping-paypal-wants-to-eliminate-filling-out-
The PayPal subsidiary is releasing a set of developer tools that reduce mobile shopping to one touch.
In the age of smartphones and tablets, it may seem odd when a company that sells its goods online isn’t optimized for mobile devices. But shopping on such gadgets remains so fraught with clumsiness and confusion that 68% of mobile carts are abandoned.
“If I have to do a bunch of typing on a tiny touch screen, that’s painful for me, and I’m less likely to complete my purchase,”
The release of OneTouch PayPal comes shortly after Visa debuted Visa Checkout, a layer that lets customers purchase products online without having to re-enter their payment information on new sites.
The authentication experience takes a few seconds and aims to reduce shopping to a single tap, but customers might be asked for more information if they are shipping to an address that isn’t on file or if the transaction is flagged for potential fraud.
Tomi Engdahl says:
Chain raises $9.5 million to build Bitcoin development platform
http://fortune.com/2014/08/20/chain-launches-as-a-bitcoin-development-platform/
Chain raises $9.5 million from Khosla Ventures to help companies build on Bitcoin.
Chain today is launching as a startup that hopes to become the definitive development platform for Bitcoin, whether the ultimate application relates to financial services or to some other sort of decentralized service.
“Our thesis is that we’re in an era where people are looking for services to simplify very technical infrastructure so that they can build on-demand services,” explains Adam Ludwin, Chain’s founder and a venture partner with RRE Ventures. “The blockchain is this mammoth network that is quite difficult to build on…. It’s like telecom or credit card processing or web hosting where certain people at the beginning tend to do it themselves but, over time, it matures and bigger companies start accessing it. So what you need is reliability and real service-level agreements. When a big bank wants to connect to the blockchain, they want an expert to help them. We want that to be us.”
Tomi Engdahl says:
Wall Street woes: Oh noes, tech titans aren’t using bankers
Get out your hankies: Facebook, Google use in-house teams
http://www.theregister.co.uk/2014/08/20/wall_street_woes_tech_companies_are_not_paying_the_bankers/
There was much astonishment over at the New York Times as it explained that the big Silicon Valley tech firms, the Googles, Apples, Facebooks, aren’t using the traditional services of the Wall Street bankers as they make their acquisitions.
There are a number of reasons for this. As to whether this is all a good idea or not, some point one way, some another. The balance is hard to measure: except, of course, that the vampire squids are getting less blood out of the economy, which is obviously A Bad Thing.
The article states:
Deals with unadvised buyers are increasing rapidly. The acquiring company did not use an investment bank in 69 per cent of American technology acquisitions worth more than $100m this year, according to Dealogic. That number was 27 per cent 10 years ago.
And looking at how the deals are currently being financed, we can see that that side, the important side, of Wall Street just isn’t needed. Microsoft can splash out $8.5bn in cash for Skype.
The same is true at Google and others. Even Facebook is using a mix of cash and new stock issued to sellers (rather than floating new stock in the market and then using the cash to buy a company). There’s just no need to trouble the public markets, so why hire those gatekeepers of those public markets?
We might wonder a little about how these companies are controlled: Amazon is definitely controlled by Jeff Bezos, Google by Sergey Brinn and Larry Page, Facebook by Mark Zuckerberg, so it’s not all that surprising to see them acting like private companies, even though they’re publicly listed.
Tomi Engdahl says:
PayPal’s Braintree Embraces Bitcoin, One-Touch Payments
http://techcrunch.com/2014/09/08/paypal-braintree/
Nearly a year after PayPal acquired it in an all-cash $800 million deal, online and mobile payments platform Braintree is unveiling one-touch payments and is integrating Bitcoin.
Bill Ready, who led the company through its sale, says that mobile conversion rates are still far off from where they are on the desktop web. That’s partially because it’s a lot more tedious to enter or re-enter credit card information on mobile devices. Ready says that more than half of e-commerce shopping experiences happen on mobile devices, but only 10 to 15 percent of purchases occur on smartphones.
“The reason for that gap is that there’s a two-thirds to 75 percent fall off in conversion,” Ready said. “People just bail out.”
“This is PayPal making a move to embrace Bitcoin,” Ready said, pointing out that Braintree is the go-to developer platform for PayPal.
Tomi Engdahl says:
PayPal Finally Embraces Bitcoin
This integration will allow Braintree customers to accept bitcoin as a payment method.
http://www.fastcompany.com/3035430/fast-feed/paypal-finally-embraces-bitcoin
For PayPal, it was a question of when. The payments company has long hedged on its stance on bitcoin
On Monday, PayPal finally came to embrace bitcoin, with its subsidiary Braintree integrating the cryptocurrency into its vzero.sdk tool released in July. Braintree is using Coinbase to process bitcoin payments.
“This will be PayPal’s first foray into bitcoin,” said Braintree CEO Bill Ready, who sold his startup to the payments giant last fall for $800 million. “We think both the One Touch mobile payments that we announced as well as bitcoin will be high interest to merchants.”
This update will allow its customers–including Uber, Airbnb, TaskRabbit, and HotelTonight–to easily accept bitcoin as a payment method.
Tomi Engdahl says:
Apple Said to Reap Fees From Banks in New Payment System
http://www.bloomberg.com/news/2014-09-10/apple-said-to-reap-fees-from-banks-in-new-payment-system.html
Apple Inc. will reap fees from banks when consumers use an iPhone in place of credit and debit cards for purchases, a deal that gives the handset maker a cut of the growing market for mobile payments, according to three people with knowledge of the arrangement.
Tomi Engdahl says:
Apple Could Get A Cut Of Every Transaction When People Use The New iPhone Payments System
During its mega-presentation Tuesday, Apple announced a new mobile payments system called Apple Pay. which will let owners of the new iPhone or Apple Watch ditch physical credit cards and instead pay for things with a simple tap of their device.
Although Apple made it clear that it won’t charge users, merchants, or developers to use this new service, sources with knowledge of the arrangement told Bloomberg’s Elizabeth Dexheimer that Apple will charge banks a fee.
Read more: http://www.businessinsider.com/apple-could-charge-a-fee-for-apple-pay-2014-9#ixzz3D0Y59JiP
Tomi Engdahl says:
Here’s Everything You Need To Know About Apple’s New Payments System, Apple Pay
http://www.businessinsider.com/apples-payments-system-facts-2014-9#ixzz3Cvn0qcus
Apple just announced a new mobile payments system called Apple Pay.
Apple Pay will work with an NFC (near field communication) antenna that will be built into every new iPhone as well as the new Apple Watch.
To get started with Apple Pay, you can simply add a credit card from your iTunes account. You’ll also be able to add new credit cards to Apple Pay just by using the iSight camera on your phone — no need to type in card numbers. Each card will get a device-only account number, so the actual credit card number is never stored on either your phone or Apple’s servers.
The service is starting in the U.S. and will work with American Express, Mastercard, and Visa, as well as several major banks, like Capital One, PNC, and Chase.
With Apple Pay, you’ll pay for something with a touch of your finger using TouchID.
Apple has partnered with a bunch of stores
Tomi Engdahl says:
Apple Pay Details: Apple Gets 0.15% Cut of Purchases, Higher Rates for Bluetooth Payments
http://www.macrumors.com/2014/09/12/more-apple-pay-details/
Apple’s ambitious new mobile payment initiative, Apple Pay, was announced on Tuesday during the company’s iPhone event. Many questions still linger about the service, but information is beginning to trickle out from various sources as retailers, banks, and credit card companies prepare for the service’s October launch.
According to a new report from The Financial Times, Apple stands to make quite a bit of money from its payments service. Banks and payment networks will be forking over 0.15 percent of each purchase to Apple, which equates to 15 cents out of a $100 purchase.
According to bank executives, Apple was able to negotiate with so many partners and receive choice deals because the industry didn’t see anything threatening in Apple Pay.
Along with the cryptogram generated between a standard debit or credit card and a point of sale terminal, Apple Pay takes advantage of a token system that encrypts every step of the payment process. Tokenization is already built into the standard NFC specification, so what Apple is really doing is utilizing existing technology and further securing it with its own Touch ID fingerprint authorization system.
Every card added to Apple Pay (and located in Passbook) is assigned a token, which Apple calls a Dynamic Account Number. Each Dynamic Account Number is stored in the secure element of the iPhone and accompanied by a unique cryptogram for each transaction.
The token system essentially provides an extra layer of security to payments made through NFC, which, as mentioned earlier, allows merchants to pay a lower “card present” rate for NFC purchases. Merchants still pay the higher “card-not-present” rate when payments are made over Bluetooth LE rather than NFC, however, or when a purchase is made in-app using Apple Pay.
Tomi Engdahl says:
The ATM and the Battle for Bitcoin’s Physical Interface
http://www.coindesk.com/atm-battle-bitcoins-physical-interface/
The Harveys have parlayed that prototype into Lamassu Bitcoin Ventures, the bitcoin ATM manufacturer with the largest share of an exploding, and perhaps the most visible, segment of the cryptocurrency economy. While Lamassu may be on top now, its early rival Robocoin and well-funded new entrants are piling into this rapidly changing sector.
The first bitcoin ATM to be used commercially was a unit by Las Vegas-based manufacturer Robocoin. It was installed in Vancouver’s Waves coffee house at the end of October 2013, lending the place a sci-fi vibe as customers lined up to buy cryptocurrency.
A month had barely passed before the news got out that the machine had already grossed more than $1m Canadian dollars, breaking even for its operator after just 17 days. The bitcoin ATM gold-rush had begun.
At the start, ATM manufacturing was dominated by two firms, Robocoin and Lamassu, each with seemingly opposing approaches to the business.
ATMs outside the bitcoin bubble
Even as the two incumbents were locked in a battle for market-share and to hit shipping deadlines, strong new competitors have entered the space, and no wonder, because the global ATM industry is a multi-billion dollar business.
There are 2.6 million ATMs in operation around the world, according to consulting firm Retail Banking Research (RBR). That number is accelerating, driven by huge demand from Asia. India, for example, grew its installed base of ATMs by 44% in 2012 compared to a year earlier, RBR has found.
You only need to look at the revenues of the handful of giant companies that dominate traditional ATM manufacturing to see the size of the opportunity for bitcoin’s fledging makers.
The biggest of these is Ohio-based NCR Corporation, which commands 30% of the global installed base, according to RBR. Last year, the NYSE-listed company reported revenues of $3.1bn for its financial services segment, which includes ATM hardware, software and installations.
Two of the most ambitious new entrants in the bitcoin ATM world are BitAccess, a Canadian outfit that recently exited the prestigious Silicon Valley incubator Y Combinator, and Skyhook.
The fiat ATM industry takes notice
The fiat ATM industry is starting to take notice of the cryptocurrency space. The ATM Industry Association released a position paper on bitcoin ATMs this month, calling for greater regulation and welcoming bitcoin ATM operators into the fold.
Bitcoin companies are biting. Michael Lee, who heads the association, said he expects several bitcoin ATM firms to become members in the coming weeks, following outreach efforts by his organisation.
Tomi Engdahl says:
Amazon Is Killing Off Its Free P2P Money-Transfer Service WebPay On October 13
http://news.slashdot.org/story/14/09/13/0043249/amazon-is-killing-off-its-free-p2p-money-transfer-service-webpay-on-october-13
Amazon WebPay, a free online money-transfer service, is shutting down October 13, 2014. This means you’ll no longer be able to send, receive, or request money using just your email address and the Amazon Payments webpage.
Tomi Engdahl says:
Did Apple just become a big bank?
http://thehill.com/policy/finance/217624-did-apple-become-a-big-bank
Apple’s move into mobile banking could bring the tech giant under the same federal regulations as financial institutions.
At a product launch event this week, Apple CEO Tim Cook made waves by unveiling a new mobile banking system that allows consumers to wave their iPhones for purchases instead of swiping debit and credit cards.
The product has generated tremendous buzz in the tech community, with some analysts predicting a revolution in the way people shop.
Apple is putting its considerable muscle behind the product, promising to work with more than 222,000 merchant locations in America. Visa, MasterCard and American Express are already onboard, as are Whole Foods, Macy’s and Disney.
But by moving into the mobile payment space, Apple might soon find itself subjected to new oversight from federal regulators.
“Rules that apply to plastic card payments also apply to payments with a phone,” said Moira Vahey, a spokeswoman for the Consumer Financial Protection Bureau (CFPB).
Telephone companies such as Verizon Wireless, retailers such as Starbucks and tech giants such as Google have already tapped into mobile banking in recent years, offering consumers more opportunities to use their phones like a wallet, whether in line for a latte or a shirt at the Gap.
But Apple’s move into the arena could spur millions of customers and stores to switch out the plastic in their wallet for the chip in their phone.
Lawmakers and regulators are racing to catch up with the change.
Tomi Engdahl says:
Why Apple Pay Will Hurt PayPal
http://recode.net/2014/09/10/why-apple-pay-will-hurt-paypal/
Apple’s new payment system hopes to change the way people make purchases both in stores and in apps, and that could become a big problem for the Web’s biggest digital payment network, PayPal.
In addition to allowing people to pay in stores, Apple Pay will also let owners of the newest iPhones buy things within participating apps by using the credit or debit card they have on file with iTunes or the App Store. This means they don’t have to go through the annoying process of typing in payment information on small screens.
When it comes to e-commerce, Apple Pay can have an impact on PayPal just focusing on app payments as it is now. If it extends Apple Pay into the mobile Web, things could get even worse.
Tomi Engdahl says:
Bonking with Apple has POUNDED mobe operators’ wallets
… into submission. Weve squeals, ditches payment plans
http://www.theregister.co.uk/2014/09/16/apple_bonking_kills_weve_wallet/
Weve, the bonk-tastic joint venture between EE, O2 and Vodafone to “create and accelerate the development of mobile marketing and wallet services in the UK”, has abandoned plans to launch a digital wallet.
The belief was that the operators could use their marketing muscle to make sure that all the smartphones they shipped came with the Weve wallet and then to get the customers to use it.
NFC has struggled. At the start of the month NFC World broke the news that Barclays had closed its QuickTap payments programme which it had launched with Orange.
One of the reasons for the constant failure of NFC has been the internecine wars between the operators and financial institutions between where the secure element should be with operators wanting it in the SIM card using the Single Wire Protocol so that they could take a rake off on every transaction and the financial institutions wanting the secure element in the device using Host Card Emulation so that the operator subsidies effectively paid for banking infrastructure.
The mobile payments world has hailed Apple Pay as the start of the mobile payments revolution, something which happens about as often as Voyager 1 “leaves the solar system”, but it could be the death of the technology. Apple Pay is (surprise!) an Apple-only system and doesn’t offer any way in for the operators.
Tomi Engdahl says:
Stripe Lands Apple in Quest for $720 Billion in Payments
http://www.bloomberg.com/news/2014-09-17/stripe-lands-apple-in-quest-for-720-billion-in-payments.html
Apple Inc. (AAPL)’s list of partners for its new Apple Pay service reads like a Who’s Who of the payments world, including Visa Inc. and First Data Corp.
Then there’s Stripe Inc.
Getting included on Apple’s list was a coup for the five-year-old startup, which will enable mobile applications to work with Apple Pay. It’s the latest success for Stripe, which is also powering an e-commerce feature for Twitter Inc., working with Alibaba Group Holdings Ltd.’s Alipay, and helping thousands of other companies process online and mobile payments.
The challenge for San Francisco-based Stripe is fending off EBay Inc.’s PayPal and traditional financial companies that are barreling into mobile payments. The burgeoning market — with global spending on commerce via handheld gadgets set to reach $720 billion in 2017, up from $300 billion this year, according to IDC — has brought on a crowded field of competitors.
“We’re hugely excited about the Apple announcement, but this is just another step along the way,” said Patrick Collison, 26, who along with his brother, John, 24, founded Stripe in 2009.
Tomi Engdahl says:
Bitcoin gets an industry-backed advocacy group
http://www.washingtonpost.com/blogs/the-switch/wp/2014/09/18/bitcoin-gets-an-industry-backed-advocacy-group/
The cryptocurrency Bitcoin — and the technologies around it — has a newly organized group of advocates behind it, headed by someone with deep experience in translating technologies for political consumption.
Jerry Brito, a law professor who was until recently the head of the technology policy program at George Mason’s Mercatus Center, announced in August that he was leaving for “a new adventure.” On Thursday, Brito announced that he will be heading an organization called Coin Center, what he describes as a “new non-profit research and advocacy center focused on the public policy issues facing cryptocurrency technologies.”
“Our mission is to build a better understanding of these technologies and to promote a regulatory climate that preserves maximum freedom of action for digital currency innovation,”
Tomi Engdahl says:
How Bitcoin’s Banking Crunch is Holding Back US Startups
http://www.coindesk.com/bitcoins-banking-crunch-holding-back-us-startups/
Following its May launch, QuickCoin captured attention with its novel integration of Facebook’s ubiquitous social media platform and simple bitcoin wallet technology – and the wider tech world took notice.
Lands alleges that weeks of uncertainty ensued, and that in the end, QuickCoin’s bank account was closed.
The result is that ultimately, the San Francisco-based company was forced to explore other options, including looking offshore, for its banking needs. QuickCoin claims it now has a working solution in place for its banking needs
Lands, however, asserts that his story is not unique, framing it as indicative of a broad failure in the US banking system to accommodate the bitcoin industry and companies like his own that want to support domestic businesses.
What may be most interesting about Lands’ case, however, is what he learned when he went searching for answers to his banking issues.
The CEO, who wished to remain unnamed, said he would be willing to assist QuickCoin, but that the help would not be free.
“Banks are all shutting off bitcoin companies. If I can find one, will let you know,” another investor wrote.
“With banks, there are three camps. One is banks who are completely not open to bitcoin, that’s the majority. Then you have a small tier of fairly well-known banks that are not working with bitcoin companies, but they reach out and say ‘We’ll get there’, and that’s pending licensing. Then, there are a very small number of banks that will bank a company like ours.”
“Most of the major banks have set policy to suspend operations with bitcoin-related companies until they understand it all better,”
Vinny Lingham, bitcoin enthusiast and CEO of mobile gift card provider Gyft, explained that, in his personal view, the current environment favors bitcoin companies backed by leading VC firms.
Wells Fargo told CoinDesk it is “learning more about virtual currencies and the potential rewards and risks.”
Still, other commentators framed the banking industry’s reluctance as due to regulatory factors.
Though recent news stories suggest otherwise, there is a broad perception that bitcoin businesses are better off banking abroad.
Pierce painted European countries as more favorable to bitcoin businesses
Despite the challenges US bitcoin startups are facing, VCs agree that bitcoin’s banking situation in the US remains a short-term problem.
Tomi Engdahl says:
PayPal Integrates Bitcoin Processors BitPay, Coinbase and GoCoin
http://news.slashdot.org/story/14/09/23/227251/paypal-integrates-bitcoin-processors-bitpay-coinbase-and-gocoin
PayPal today announced partnerships with three major Bitcoin payment processors: BitPay, Coinbase and GoCoin. The eBay-owned company wants to help digital goods merchants accept Bitcoin payments, although it is starting with those located in the U.S. and Canada first
PayPal integrates Bitcoin processors BitPay, Coinbase and GoCoin for merchants in the US and Canada
http://thenextweb.com/insider/2014/09/23/paypal-integrates-bitcoin-processors-bitpay-coinbase-gocoin-merchants-us-canada/
PayPal says it chose to integrate the third-party functionality directly in the PayPal Payments Hub because the aformentioned trio already offers its customers protections when dealing with the virtual currency. The company envisions anything that can be obtained digitally, such as video games and music, being sold in Bitcoin.
This is important to emphasize, because PayPal isn’t adding Bitcoin as a currency to its own digital wallet. It also won’t be processing Bitcoing payments on its secure payments platform: everything is being handled by one of the three third-parties.
Merchants who pre-sell products, meaning asking for money up-front for a product or service that will be delivered in the future, will also not be supported.
In other words, the company is starting to accept Bitcoin, but very slowly and very cautiously.
Tomi Engdahl says:
Circle opens its global bitcoin service to the public in 7 languages
https://gigaom.com/2014/09/29/circle-opens-its-global-bitcoin-service-to-the-public-in-7-languages/
Circle, one of the giants of the bitcoin world, is finally allowing the general public to try out the service. Its offering is tailored to the global market.
Tomi Engdahl says:
Hacked Screenshots Show Friend-To-Friend Payments Feature Hidden In Facebook Messenger
http://techcrunch.com/2014/10/05/pay-with-facebook-messenger/
Why Facebook chose to poach Marcus is now obvious: Facebook Messenger payments could compete with Venmo, PayPal, Square Cash, and other peer-to-peer money transfer apps.
He urged analysts and investors to revise their estimates of Facebook’s revenue if they expected this to come quickly. “To the extent that your models or anything reflect that we might be doing that, I strongly encourage you to adjust that, because we’re not going to. We’re going to take the time to do this in the way that is going to be right over multiple years” Zuckerberg concluded.
Tomi Engdahl says:
Overstock.com Assembles Coders to Create a Bitcoin-Like Stock Market
http://www.wired.com/2014/10/overstock-com-assembles-coders-build-bitcoin-like-stock-market/
Overstock.com is building software, based on the bitcoin digital currency, that could allow the big-name etailer to issue corporate stock over the internet, sidestepping traditional stock exchanges such as the NASDAQ and the New York Stock Exchange.
Code-named “Medici,” the project aims to democratize Wall Street in much the same way bitcoin seeks to democratize currency and payments. By operating separate from traditional stock exchanges and the big corporate banks, it could eliminate certain loopholes in the system and reduce the costs associated with issuing and juggling stock.
Tomi Engdahl says:
PayPal’s Incentive Problem
http://stratechery.com/2014/paypals-incentive-problem/
Last week eBay announced that PayPal would be spun out into a separate company, fixing two big problems for PayPal:
While PayPal grew big by being the payment method of choice for eBay transactions,1 off-eBay transactions have since become the majority of PayPal’s revenue, meaning management’s need to prioritize eBay’s needs was misaligned with PayPal’s growth opportunities
PayPal also had an individual-level incentive problem because they didn’t have their own stock. Stock options and/or grants are the incentive tool of choice for everyone from the CEO down to new hires in the tech industry, which meant any new PayPal hire was necessarily hitching their wagon to eBay
Still, I understood eBay’s previous argument that there were tremendous synergies between the businesses, and there’s no question that the loss of PayPal and the insight gained from being party to every transaction on the eBay marketplace is going to hurt the core business. Moreover, I think it’s highly likely that much of PayPal’s recent (impressive) growth was paid for with cash thrown off by eBay’s marketplace. There is a lot of logic to staying together.
That’s the thing with most big company endeavors, though: they almost always look good on paper.
And yet, Silicon Valley is in many way premised on the idea that big companies can be beaten by, as the myth has it, a founder in a garage with little more than an idea. On paper it doesn’t make sense, and yet the examples are legion.
Tomi Engdahl says:
Plastc wants to replace your entire wallet with a single card
…but have we already left cards behind?
http://www.theverge.com/2014/10/7/6926669/plastc-wants-to-replace-your-entire-wallet-with-a-single-card
How much technology can you fit into a 0.8-millimeter-thick credit card?
Last November, Coin offered a first taste of what was possible. The device promised to digitally hold eight credit or debit cards and let you choose between them at will. You could swipe Coin in any conventional card reader, and it would notify you if it had been lost or stolen using Bluetooth. Coin would have a two-year battery life, and a companion app that could hold your coupons and ID cards. But Coin still hasn’t shipped.
Today, we’re getting a second take at the “card tech” category with Plastc, which manages to bundle twice as many features into the same svelte form factor. Like Coin, Plastc syncs with your phone using Bluetooth. It lets you swipe between 20 cards or barcodes using an E-ink touchscreen, and offers NFC (like the iPhone 6) for contactless transactions, an EMV “chip” for the latest card readers, and RFID so you can replace your office building’s ID card. Even if you don’t know all the acronyms by heart, Plastc already sounds impressive. But there’s more.
You can put your wallet on top of an included charging mat to charge up Plastc overnight.
And like Coin, Plastc includes various security measures, like a PIN code you must enter on its E-ink screen, and a requirement that you can only add cards with your name on them, which makes it more difficult to use for card skimming.
So, how much tech can you fit into a 0.8-millimeter-thick credit card? A lot, it turns out. But in the year since Coin was announced, the discourse in the mobile payments space has changed. Apple has announced Apple Pay, the first truly consumer-friendly NFC payments scheme that has both banks and carriers on board. According to some, Apple Pay is nothing short of a business miracle, and more “revolutionary” than either of the new iPhones. Pundits speculate that Apple Pay could even revive Google Wallet, which failed to convince both carriers and banks of its own plans years ago. Even Bill Gates sees it coming.
“Ultimately a cloud-based digital wallet will be the winner,” says Marquis, “but with our technology, we can allow consumers to build a digital wallet using a form factor that they’re used to today.” Marquis says there are still many use cases where we need physical cards like subway ticketing machines, ATMs, and gas pumps. “I will utilize Apple Pay because it’s simple and easy, but there are so many use cases in our world where I’m still going to need a physical card,” he says. “There are so many things that point-of-sale machines just aren’t ready for yet.”
Tomi Engdahl says:
Etsy Introduces Credit Card Reader to Go Beyond the Web
http://recode.net/2014/10/23/etsy-introduces-credit-card-reader-to-support-sellers-in-physical-world/
Online marketplace Etsy will start offering free credit card readers to some of its U.S. sellers as part of an effort to extend its reach beyond the Internet.
The dongles, which can be plugged into a smartphone or tablet, will be used in conjunction with an Etsy app to allow sellers to accept credit card and debit card purchases while hawking their wares at craft fairs and in other retail settings. Etsy says more than a third of the people who sell goods on its online marketplace who are based in the U.S. also sell their products at craft fairs.
With the launch, Etsy will for the first time start earning a cut of transactions that happen away from its digital platform. Sellers using the credit card reader will pay Etsy 2.75 percent of each transaction. The readers are only available to sellers who use Etsy’s own payments platform, called Direct Checkout, to accept credit and debit card purchases on Etsy.com and on the Etsy app. Etsy declined to provide information that would be helpful in figuring out how many of its current sellers would qualify to receive the free reader.
The new product will pit Etsy against other reader providers such as Square, PayPal and Amazon. Square charges the same 2.75 percent fee as Etsy while PayPal charges 2.7 percent. Amazon is taking just a 1.75 percent cut on purchases through the end of 2015, but will raise the fee to 2.5 percent after that.
Tomi Engdahl says:
Why CurrentC will beat out Apple Pay in the end
http://www.itworld.com/article/2839251/why-currentc-will-beat-out-apple-pay-in-the-end.html
Apple pay was released to the public just over a week ago and it’s stumbling out of the gate. Reports of technical issues like double charging are spreading, and retailer participation is low. If you’re lucky enough to have found a place to use your iPhone 6 for payment, chances are you were pretty impressed with the process. Unfortunately the payment system may be doomed to fail.
By all accounts, Apple has created the smoothest, most technically advanced payment solution yet. Working closely with VISA, Apple has solved many complex security issues making in person payments safer than ever while simultaneously making mobile payments easier than ever. No small feat.
Lurking in the shadows however is a competing solution called CurrentC which has recently gained a lot of press as backers of the project moved to block NFC payments (Apple Pay, Google Wallet, etc.) at their retail terminals.
The strength of the merchants designing or backing CurrentC is enormous.
It reads like a greatest hits list of retail outfits and leading the way is the biggest of them all, Walmart. The retailers have joined together to create a platform that is independent of the credit card companies and their profit-robbing transaction fees.
CurrentC will use good old ACH to transfer money from your account to the merchant’s bank account at little to no cost (fees can vary but are generally flat-rate pennies rather than a percentage of the transaction).
This is huge for the merchants who are losing a significant amount of money on every credit card transaction. The biggest players like Walmart, Target, Exxon, CVS, Lowes, RiteAid, Kmart etc. (all backers) operate on huge volume at low margins which makes the fees crippling to their profits. If you don’t think that credit card processing fees can have that much of an impact, read the first section of this post. Walmart for instance has a profit margin or 3% – 3.5%, imagine what saving 2% on credit card fees would mean to their bottom line.
What it boils down to is the fact that one technology is designed for the users (Apple) and the other is designed for the merchants (CurrentC). Normally I’d say that the product with the most user appeal will win but the power and size behind the CurrentC group is too big to ignore. People aren’t reliant on mobile payments at this point so stopping Apple Pay out of the gate is a strong move as almost nobody will miss it.
At the same time, the CurrentC backers can roll out proprietary incentives through their platform that a shopper can only take advantage of by paying with CurrentC.
Apple Pay has the better technology but they lack the retail support to dominate.
Tomi Engdahl says:
3 things no one tells you about online credit card processing
http://www.itworld.com/article/2832831/it-management/3-things-no-one-tells-you-about-online-credit-card-processing.html
Now that you know how to get started with online credit card processing, here are 3 things you should know before you dive in that nobody tells you about.
The fees, my god the fees!
For starters, prepare to pay 2 sets of fees. One to the credit card processor, and another to the gateway. The credit card processor fees will include the fees from the credit card companies along with per-transaction fees and service fees. The gateway will have another per-transaction fee and a service fee.
There are typically setup fees involved as well which can run you about $100 to get rolling.
So you’re looking at $20/month + $0.40 per transaction + ~2.9% per transaction.
Chargebacks (boom you’re dead)
As a consumer you most certainly take for granted how much credit card companies have your back.
When fraud occurs, you’re covered. When you’re unhappy about a purchase, they will help you out. When you simply make a mistake, they’re there for you. Who they’re not there for is the merchant.
When a chargeback occurs, the credit card processor will immediately seize the funds in dispute from the merchant.
These chargebacks can happen for legitimate reasons, like a stolen card, but it’s likely that you will have already fulfilled the fraudulent order by the time you’re made aware and you will now be out the full cost of the product and the shipping with $0 to show for it.
It can also happen for illegitimate reasons, such as a disagreement with a customer who knows they can hurt your business by disputing the charge on an item they’ve received.
PCI Compliance
Payment Card Industry Compliance has gone from a mostly disregarded guideline to a serious regulation over the past couple years. Basically all of the credit card companies got together to make a set of rules that all merchants must comply to in order to remain a valid merchant. Starting in 2011 they became very serious about auditing and enforcing this compliance, and starting in 2012 online merchants must even have their site threat-tested by a verified third party each year in order to maintain compliance.
PCI compliance is very complicated
Tomi Engdahl says:
Wal-Mart’s Answer To Apple Pay Has Already Been Hacked
http://www.businessinsider.com/currentc-hacked-2014-10?op=1
Here’s a bad sign for CurrentC, the fledgling mobile payment system in development by a consortium of retailers.
CurrentC is sending emails to people who signed up for the beta version of the app warning them “that unauthorized third parties obtained the e-mail addresses of some of you.”
It doesn’t sound as if it’s the worst breach in the world, but it’s definitely not good for CurrentC, which is just getting started.
Tomi Engdahl says:
Coinbase Launches ‘One-Click’ Bitcoin Tipping Tool
http://www.coindesk.com/coinbase-launches-one-click-bitcoin-tipping-tool/
Coinbase has officially launched a new micropayments tool that aims to provide websites and blogs with the ability to bolster revenue through online donations.
Called Coinbase Tip, the feature enables the bitcoin services provider’s wallet users to send micropayments to web publishers with just one click.
To begin, the feature will be added to a host of popular blogs, including those penned by television personality Adam Carolla and bitcoin VC Fred Wilson.
Armstrong said that Coinbase Tip is just one way that his company is seeking to move bitcoin closer to the mainstream, asserting his belief that the tip buttons will help consumers become gradually more aware of bitcoin.
Armstrong chooses to see these events as part of a broader trend, one he hopes will encourage the wider online community to adopt new behaviors that allow for more sustainable content production.
“Instead of giving them a thumbs up or emoji icons, it will be more like a thumbs up with a tiny cash payment along with it,” he explained.
Tomi Engdahl says:
Behind PayPal-owned mobile payments app Venmo, which processed $700M in payments in Q3 2014 — Mobile Payment Startup Venmo is Killing Cash — Kristen Geil, a writer for an Internet marketing firm in Chicago, heard about Venmo for the first time two summers ago.
Cash Is for Losers!
http://www.businessweek.com/articles/2014-11-20/mobile-payment-startup-venmo-is-killing-cash
Kristen Geil, a writer for an Internet marketing firm in Chicago, heard about Venmo for the first time two summers ago. Her new roommate, who had just arrived in town from New York, was raving about this app that allows users to send and receive payments over their smartphones. There was also a social media component to the app that made the mundane act of splitting bills kind of fun. She assured Geil that it was safe and reliable. Plus, there was no waiting around for checks to clear and no trudging to an ATM for cash. Geil agreed to give it a try.
After downloading Venmo onto her iPhone, she hooked it up to her bank account, synced it with her existing network of contacts from Facebook (FB), and got started.
Geil now hops on Venmo several times a week. The app allows the user to hang on to a balance in her digital wallet and, at any time, cash it out to her bank account. Geil typically keeps a small amount of money in her Venmo wallet, which she uses to settle debts with friends for restaurant checks, bar tabs, gas station charges, wedding gifts, and all the other money-changing situations she finds herself in, which, as a twentysomething who hangs out with friends whenever possible, is a lot. Venmo doesn’t cost her anything unless she uses a credit card, which she never does. “The only reason I even have checks now is to pay my rent,” she says.
Tomi Engdahl says:
My experience with Coin Beta in the real world
It worked, but then my unit stopped functioning
http://www.theverge.com/2014/11/24/7259907/coin-digital-credit-card-beta-hands-on
I preordered a Coin Beta because I was intrigued by the technology, and I’m always looking for ways to simplify things and diminish clutter. I thought, “Could I slim my wallet down even further with this device?” After many months of delays, I finally got Coin in the mail. I had actually forgotten about it, and when it showed up in my mailbox I was desperate to try it out.
Setting up Coin involves using your phone and the company’s app. You can input your cards into the app via a Square-like card reader or by taking a picture of the card à la Apple Pay. I found the set-up process to be a bit confusing: you have to first pair your Coin to your phone, then swipe a credit or debit card. You then verify that card by confirming a temporary charge from your bank statement. Next, you put your Coin in sync mode and sync the cards from your account. The whole process took about 10 minutes for just the first card (my debit card), but the second two — an American Express card and a Crisp restaurant loyalty card — gave me no trouble.
About 36 hours into owning and using Coin Beta, my unit stopped functioning. I cannot get it into sync mode, though the button still cycles through the cards I have programmed, but they don’t scan. I’ve since contacted Coin’s support, and I’m in the process of getting a new one. Understandably, Coin is a beta product, but I didn’t think it’d break after just a day and a half.
Overall, Coin works as well as you’d expect it to, but it’s clearly limited in its beta form. Remember: it can only store credit / debit cards, gift cards, and membership cards. Coin lacks support for transit cards, which is a huge downer for someone like me who rides the subway every day.
Tomi Engdahl says:
Coinbase claims to have a recipe for a Bitcoin breakthrough, “If you mention cryptography, then the game is lost”
American Coinbase growth company believes that bitcoin will rise into the mainstream as long as the business is put in place confidence and ease. They therefore Coinbase cooperates with authorities and banks.
Virtual Currency Bitcoin is the dawning of a new era. The new generation of companies are raising the Bitcoin Internet shady side alleys of exchange means and the gamblers investment from your armchair currency other breast.
One of the most rapidly growing and most successful growth companies Coinbase is an American, who now aspire to a foothold and new growth in Europe. Coinbase has opened its services this fall, inter alia, Finland.
Coinbasen amenities include a browser-used bitcoin wallets or bank accounts and companies referred to in the system, which can be received bitcoin payments. If necessary, Coinbase manage Bitcoin conversion into local currency and the company has to take the risk of exchange rate fluctuations in. The service will be charged a commission of Coinbase, it is, however, cheaper than the fees charged by credit card companies.
In addition, Coinbasella has its own interface targeted at developers, which allows to services such as receiving payments is easy to build in new applications and services.
Coinbasella has 1.7 million customers in the United States. When the number of users exceeded the million mark, the sellers have gone by. Now the company has nine corporate customers with a turnover in excess of one billion dollars. The same is planned to be carried out in Europe.
Armstrong believes that attracting users are key features of the trust and ease of use. Bitcoin is traditionally perceived as complicated, but Coinbase wants to hide the actual users of technology.
“If the service is mentioned private key cryptography, then the game is already lost.”
Confidence in the aim of building users assets acquired insurance. Insurance is Armstrong, the first of its kind and ensures that if the security is broken, a total of hundreds of millions of dollars Coinbasen accounts stored users are not left with nothing.
It happened in the early 2014 MtGox, which lost users’ funds up to 360 million euros.
“Coinbase is to bridge the traditional financial world and the new virtual currencies of the world. We have a foot in both worlds, “Armstrong says.
The difference between the old is big, because Bitcoin has strong roots in anarchy. Bitcoin creator Satoshi Nakamoto wanted to develop a specifically states control policy and an independent monetary system.
Armstrong, the anonymity and freedom can be useful, for example to political activists. Most of the users of the matter is, however, little interest.
Most of the Coinbasen corporate customers take payments account in local currency. According to critics, it is a fundamental problem throughout the bitcoin economy. When companies do not deal with Bitcoin, and they in turn pay their own bills, decent economy will not occur.
Armstrong acknowledges the problem, but keep the current situation a good first step.
In addition to the Bitcoin free money transfers to save money compared to traditional payment systems, they also enable completely new ways to spend money.
Source: http://summa.talentum.fi/article/tv/uutiset/114125