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:
Bitcoin Arrives At NYSE, Startup Aims To Tackle Micropayments and Easy Mining
http://news.slashdot.org/story/15/05/19/192200/bitcoin-arrives-at-nyse-startup-aims-to-tackle-micropayments-and-easy-mining
A startup company whose backers include Qualcomm, Cisco Systems and a former ARM executive, and which reportedly has raised “well north of $116 million” has just come out of stealth mode. The first thing to know about the company, which calls itself 21, is that it has designed an embedded chip for bitcoin mining. The details aren’t entirely clear, but the plan seems to be to get its bitcoin mining chip embedded into millions of smartphones and tablets, and for those devices to work collectively to mine new currency.
This well-funded startup could turn bitcoin mining – and the chip industry – on its head
http://www.itworld.com/article/2923815/this-wellfunded-startup-could-turn-bitcoin-mining-and-the-chip-industry-on-its-head.html
startup company with some very big-name backers has just come out of stealth mode and revealed a business plan that could turn bitcoin mining—and even the economics of selling chips and smartphones—on its head.
The first thing to know about the company, which calls itself 21, is that it has designed an embedded chip for bitcoin mining—the process of running complex algorithms that are required to solve an equation to generate, or mine, new coins in the digital currency.
Bitcoin mining initially was done by individuals on home PCs, but the work has gradually been taken over by mining collectives and large compute clusters that are now needed to solve the increasingly complex Bitcoin algorithms.
For starters, it sees its chip as a way to solve the problem of micropayments, or payments that are too small to make it worth the hassle or cost of using a credit card to process them. If each device containing 21’s chip generates a small stream of digital currency, that currency could be used to pay for services, as well as for cloud applications like online storage.
“Because this technique can replace or augment traditional methods for silicon monetization (namely chip sales and IP licensing), it has the potential to revolutionize the way chips are built and sold,” he said.
In other words, a chip maker such as Qualcomm could embed 21’s mining technology in a smartphone processor, collect some of the digital currency generated by the device, and use it to offset the cost of the chip.
In a similar way, a smartphone maker could use the currency generated to subsidize the cost of a device—an alternative to the carrier subsidies that helped smartphones get off the ground in the first place.
Tomi Engdahl says:
Facebook acqui-hires and shuts down payment startup Tugboat Yards
http://venturebeat.com/2015/05/19/facebook-acquires-and-shuts-down-publishing-payment-startup-tugboat-yards/
Facebook has acqui-hired Tugboat Yards, a startup with a tool that publishers and other groups could use to let fans make contributions in exchange for subscriptions and other services.
The Tugboat Yards service will stop accepting purchases and renewing subscriptions on July 1, although publisher account creation has already been turned off, according to a blog post the startup published today.
Anker suggested that the site’s users check out alternatives such as Memberful, Patreon, and TinyPass.
Tomi Engdahl says:
Jason Del Rey / Re/code:
Stripe is in talks to raise at a $5B valuation, just seven months after its last round that valued the company at $3.5B — Stripe to Land $5 Billion Valuation in New Investment — In Silicon Valley, the rich keep getting richer. — Stripe, the online payments company …
Stripe to Land $5 Billion Valuation in New Investment
http://recode.net/2015/05/20/stripe-to-land-5-billion-valuation-in-new-investment/
In Silicon Valley, the rich keep getting richer.
Stripe, the online payments company, is in talks to raise new investment dollars at around a $5 billion valuation, according to multiple sources familiar with the deal. The exact amount of the investment could not be learned. The talks come less than seven months after the San Francisco-based company announced a $70 million investment that valued it at $3.5 billion. Stripe has raised $190 million in total in previous financing rounds.
Stripe, run by 20-something brothers Patrick and John Collison, makes software that startups and other companies use to accept online payments on websites and apps. Stripe typically charges businesses 2.9 percent, plus a 30-cent fee, on each transaction, though larger businesses are often able to negotiate lower rates. Stripe is known in the software developer community for its ease of setup.
Payments companies like Stripe typically pass along at least half of their cut of each transaction to payment card networks and other financial institutions.
Tomi Engdahl says:
PayPal’s Instant Checkout “One Touch” Now Works With Bigcommerce, No Longer Requires PayPal’s App
http://techcrunch.com/2015/05/21/paypals-instant-checkout-one-touch-now-works-with-bigcommerce-no-longer-requires-paypals-app/
PayPal’s instant checkout service called OneTouch is now being extended to support all merchants using the e-commerce platform Bigcommerce, as well as on mobile devices – even in cases where the consumer doesn’t have the PayPal native application installed. The service, which allows customers to check out from an online merchant without having to enter their username and password, launched publicly last fall on mobile devices then expanded to the web in April.
The news of its expansion to Bigcommerce and elsewhere was one of several announcements made at an event today in San Francisco today where PayPal detailed its strategy as an independent, public company.
One Touch was originally designed to improve the conversion rates for online transactions. On mobile in particular, consumers tend to abandon purchases simply because of the challenges associated with entering in their personal information payment card details on mobile’s small screen. PayPal’s move to counter this trend was OneTouch for Mobile, which allows a customer’s information to be stored and shared between supported apps.
Today, PayPal is extending OneTouch again through a partnership with Bigcommmerce, a company powering the e-commerce storefronts used by 90,000 online merchants. With the added support, these merchants will now be able to offer OneTouch functionality to their own customers via Braintree’s v.zero SDK.
Despite being an older player in the ever-changing payments industry where newer contenders including Stripe, and now Apple Pay, are finding their ways into mobile apps and online stores, PayPal’s payments business is still growing.
Tomi Engdahl says:
Be Your Own Bank
http://techcrunch.com/2015/04/03/be-your-own-bank/#.b5imzi:0xGw
Digital currencies have come and gone, and despite the astonishing rise of bitcoin’s popularity over the past 18 months, the majority of the population has yet to board the bitcoin bandwagon.
One of the things that has plagued digital currencies in the past has been the perception that they are a solution in search of a problem. Does anyone really need digital currencies like bitcoin? Who are they intended for, and what purpose do they really serve?
Banks are focused on growth
As the recession recedes into a distant memory, banks have begun to shift strategy – moving from containing costs and mitigating risks to focusing again on growth.
The underbanked as a source of growth
The success of the M-Pesa mobile banking initiative operated by Safaricom in Kenya, which helped reduce the percentage of those underbanked in the country from 60 percent to 25 percent, highlights the role that technology can play in serving the underbanked. But the underbanked are critically important to more developed markets, too. A staggering 68 million U.S. citizens do not use a bank. Meanwhile a survey by Goldman Sachs just last week found that 33 percent of American millennials thought that they would not need a bank in five years.
It’s this alliance of the underbanked, millennials, and “the next billion” to come online over the next 10 years who will drive adoption of mobile payments and digital currencies. If banks do not support them, they risk missing out on a vital source of revenue.
Next-generation tech
Faced with disintermediation, traditional financial institutions are starting to think about how they can integrate next-generation technologies to serve the underbanked.
Now some fintech startups are offering the ability to load bitcoin on prepaid debit cards, without providing a guaranteed income to get set up. If an underbanked person uses these services with a bitcoin wallet, they then have a way of managing their money without needing a bank account. Their funds can be spent anywhere that cards are accepted.
Tomi Engdahl says:
Here’s the good news: banks will be obsolete in 10 years
http://www.sovereignman.com/trends/heres-the-good-news-banks-will-be-obsolete-in-10-years-16688/
Every few centuries or so, an amazing new technology comes along that fundamentally changes human civilization.
There are so many other examples throughout history. The Agricultural Revolution. The Industrial Revolution. The invention of the printing press.
The printing press changed everything.
In Europe, the number of printed books went from millions to literally billions.
Suddenly information became extremely difficult for governments to control. Ideas became unconstrained. Antiquated political regimes were brought down. And intellectual achievement flourished.
We are now in the early stages of a brand new transformation brought about by yet another technological advancement—the Digital Revolution.
And it’s changing everything, from how we do business to how we meet and engage with one another.
Most importantly, the Digital Revolution has created the ability to bring together literally millions of people and spread ideas quickly and efficiently. Information cannot be controlled.
This has the power to make entire industries obsolete. And banking is one shining example.
‘Modern’ banking is still based on the same system that has been in existence for at least a century.
Yeah, sure, they all have websites now. But this doesn’t make them high-tech.
At their cores, banks are still 19th-century fractional reserve institutions that take in money from depositors, make irresponsible loans and investments, keep razor thin margins of safety, and beg for bailouts when the system breaks down.
And along the way they find every opportunity to screw consumers.
Tomi Engdahl says:
Coin, The One Credit Card To Rule Them All, Is Finally Shipping
http://techcrunch.com/2015/04/17/coin-the-one-credit-card-to-rule-them-all-is-finally-shipping/#.b5imzi:DcX3
The Coin (promising to let you combine all your credit/debit/loyalty cards into a single piece of tech) has delayed for so long that you might have forgotten that you ordered one. In November of 2013, the YC-backed company blew past its $50,000 pre-order goal in forty minutes, but despite a promise of summer 2014 shipping, the company has yet to ship a product that wasn’t in beta. Until today.
After a six-month beta program, Coin is finally ready to ship a finished product to the 350,000 people who have pre-ordered in the first two months of pre-order.
Tomi Engdahl says:
Non-Linux FOSS: All the Bitcoin, None of the Bloat
http://www.linuxjournal.com/content/non-linux-foss-all-bitcoin-none-bloat
One of the frustrations with using Bitcoin, however, is that the blockchain has gotten so large. It currently weighs in at a little less than 20GB, and it takes about a week to download the first time you do so. There are ways to jumpstart the download with a bootstrap file, but still, it’s a huge undertaking to run the standard Bitcoin client.
Enter MultiBit.
Although it doesn’t have the entire blockchain, MultiBit does have all of the security and encryption the standard Bitcoin client does. Because it reads the Bitcoin network in real time, it takes seconds to sync up as opposed to days. Sending and receiving Bitcoin with MultiBit is fast, efficient and secure. Oh, and it’s open-source, multiplatform and under constant development!
download the entire blockchain, check out MultiBit at http://multibit.org
Electrum, a Python-based alternative at http://electrum.org
Tomi Engdahl says:
Europe remained the nearby paying off the train – the cause of premature progressiveness
The Nordic countries and the rest of Europe have been left behind on the contactless or proximity payments. The reason that sounds strange: “Here was updated a few years ago based on the size of the chip and pin code payment infrastructure. It was very expensive, and an investment payback period is long,”
Europe were not met to ponder, why should once again make a big investment in new technology, the benefits of which receivables are limited.
“The chip and pin code are based on the technology works very, very well,”
The United States, which is not in use chip and PIN technology, the situation is quite different.
Not to mention Europe have been inactive. Rasmussen estimates that five years after the contactless payment infrastructure is operational across Europe. According to him, in 2017, each new payment terminal is an antenna system that can be used to make local payments and by the end of 2019, each terminal accepts contactless payment cards in Europe or in the nearby mobile payment.
Source: http://summa.talentum.fi/article/tv/uutiset/eurooppa-jai-lahimaksamisen-junasta-syyna-liian-aikainen-edistyksellisyys/165220
Tomi Engdahl says:
Android Pay’s debut means Google Wallet will live on as a P2P payments app
http://venturebeat.com/2015/05/29/android-pays-debut-means-google-wallet-will-live-on-as-a-p2p-payments-app/
Google yesterday announced Android Pay, a new payment feature coming to Android 4.4 KitKat and above. It’s supposed to be the successor to Google Wallet, but the company also announced yesterday that Google Wallet would be relaunching for both Android and iOS. We talked to Google spokesperson Anaik Weid to explain how these two will coexist.
Here’s the short story. Android Pay will be for users to make online, in-app, and retail purchases using their Android device. Google Wallet will be for friends and family with a U.S. debit card to send money using their Android and iOS device.
Here’s where it gets confusing. All current Google Wallet users will be upgraded to Android Pay. Weid explained that a future update will essentially replace the Google Wallet app with the Android Pay app.
Because mobile payments are still very much a new type of system, at least in the West, this may all end up changing again. Google isn’t the only player in the game
Tomi Engdahl says:
Google’s Android payment system got a great ally
Large companies’ race for mobile payment of intensifying.
Google’s recently announced a new mobile payment system on Android operating system. Now, the credit card company Visa says it will start co-operation with the Android Pay payment system.
Android payment system programming interface is built on Google’s (HCE) Host Card Emulation platform, which enables close-up payment.
Source: http://www.tivi.fi/Kaikki_uutiset/2015-06-02/Googlen-Android-maksuj%C3%A4rjestelm%C3%A4-sai-mahtavan-liittolaisen-3322099.html
Tomi Engdahl says:
Sajith Pai / INMA:
How the blockchain could affect media: micro-payments, programming content, advertising — Beyond bitcoin to the blockchain: What it means for news publishers — Blockchains could cause major disruption in many industries. In media, this means an opportunity for securing micro-payments …
Beyond bitcoin to the blockchain: What it means for news publishers
Read more: http://www.inma.org/blogs/tech-trends/post.cfm/beyond-bitcoin-to-the-blockchain-what-it-means-for-news-publishers#ixzz3c4cfBI68
Tomi Engdahl says:
This code can hack nearly every credit card machine in the country
http://money.cnn.com/2015/04/29/technology/credit-card-machine-hack/index.html
Get ready for a facepalm: 90% of credit card readers currently use the same password.
The passcode, set by default on credit card machines since 1990, is easily found with a quick Google searach and has been exposed for so long there’s no sense in trying to hide it. It’s either 166816 or Z66816, depending on the machine.
With that, an attacker can gain complete control of a store’s credit card readers, potentially allowing them to hack into the machines and steal customers’ payment data (think the Target (TGT) and Home Depot (HD) hacks all over again). No wonder big retailers keep losing your credit card data to hackers. Security is a joke.
This latest discovery comes from researchers at Trustwave, a cybersecurity firm.
Trustwave examined the credit card terminals at more than 120 retailers nationwide.
The vast majority of machines were made by Verifone (PAY). But the same issue is present for all major terminal makers, Trustwave said.
A spokesman for Verifone said that a password alone isn’t enough to infect machines with malware. The company said, until now, it “has not witnessed any attacks on the security of its terminals based on default passwords.”
Just in case, though, Verifone said retailers are “strongly advised to change the default password.” And nowadays, new Verifone devices come with a password that expires.
Trustwave, which helps protect retailers from hackers, said that keeping credit card machines safe is low on a store’s list of priorities.
“Companies spend more money choosing the color of the point-of-sale than securing it,” Henderson said.
This problem reinforces the conclusion made in a recent Verizon cybersecurity report: that retailers get hacked because they’re lazy.
Why was your credit card number stolen? Retailers are lazy.
http://money.cnn.com/2015/03/11/technology/security/credit-card-hack/index.html?iid=EL
Tomi Engdahl says:
Everett Rosenfeld / CNBC:
Why more than a dozen big banks and tech firms are investigating blockchain technology
Why financial firms are investigating bitcoin tech
http://www.cnbc.com/id/102726305
The technological innovation behind bitcoin has the potential to empower the existing financial world, not just disrupt banks out of existence as some have foretold, according to a former Wall Street exec.
“The blockchain is the financial challenge of our time,” said Blythe Masters, CEO of Digital Asset Holdings, on Tuesday at the Exponential Finance Conference hosted by CNBC and Singularity University. “It is going to change the way that our financial world operates.”
Arguing that bitcoin’s underlying technology has the opportunity to improve settlement latency and system security for firms, Masters said the market for financial blockchain applications will ultimately be “measured in the trillions.”
While promoting her own firm—which she said bridges the gap between the blockchain development world and financial services—Masters said that major financial firms “have all begun to dedicate a significant amount of time and effort” to learning about the technology. She previously served as an executive at JPMorgan Chase.
Blockchain is what makes bitcoin tick: It serves as an unalterable record of all bitcoin transactions. To instill faith that no one can double-spend their currency (one of the chief concerns about a digital token as opposed to physical bills) this ledger needs to be completely secure from tampering. It achieves this feat—and has so far proven unhackable—by regularly syncing with servers across the globe.
It is that unalterable—and transparent—record-keeping function that makes blockchain the potential foundation of any number of other technologies.
On the finance side of the equation, Nasdaq launched an “enterprise-wide initiative” to leverage the blockchain. This is expected to begin later this year by using the technology to build out the equity management ledger on the Nasdaq Private Market platform, the company said.
The financial community was slow to come around to this technology—which promises to provide security for money and information transfers without a trusted middleman—but they are beginning to embrace it as a cost-saving tool, Kelly said.
“Even as far along as we are, it’s still the early days,” Garzik said. “It’s still the pre-web, pre-1990 Internet.”
“You don’t have a conversation today about TCP/IP: This is the lowest layer of a money network,” he said. “You’re not going to say ‘Let’s adopt bitcoin,’ you’re going to say ‘Let’s use this money layer infrastructure.’ You’ll talk about the money web, or something of that nature, you won’t talk about the blockchain itself.”
Will bitcoin survive?
It’s a common refrain among a portion of the business community that they love blockchain, but not bitcoin—implying the notoriously volatile currency is an unsound investment at the same time its technology could change the world. Bitcoin enthusiasts, however, emphasize that you cannot have one without the other.
Although that’s technically untrue—a new blockchain could be based on a new currency—nearly every conception of the technology requires some sort of token to function. And bitcoin is unlikely to be overtaken: Its mass adoption and comparatively lengthy history mean it would be several orders of magnitude more secure than any upstart coin.
Tomi Engdahl says:
Millennials Are Destroying Banks, And It’s The Banks’ Fault
http://techcrunch.com/2015/05/30/millennial-banks/
Millennials are rejecting home ownership across the land. Millennials aren’t buying crap anymore, destroying businesses that, well, sell crap. Millennials are changing the workplace to be, I kid you not, more friendly to “millennial values.” Millennials this, millennials that, and those are just some of the stories published this week on this critical, hot-button issue.
My generation witnessed 9/11 and the wars in Afghanistan and Iraq at a very formative age, and we were hit with the global financial crisis right as we were expected to get started in the workforce. That colors your worldview.
Few industries will face a greater struggle targeting these new consumers than banks, who seem wholly unprepared with what to do with us.
The banks aren’t ignorant. Jamie Dimon, the head honcho of JPMorgan Chase, told shareholders this year that “Silicon Valley is coming” with “hundreds of startups” providing alternatives to traditional banking services.
Banks are here to stay – for now. It is clear though that startups, often led by millennials and ushering in millennials as early adopters, are coming for the heart of the banking industry. How it responds will determine who owns the capital of the most important capitalist country in the world.
Every generation has its financial goals.
Not surprisingly, banks have catered to these desires with a bevy of products, including vastly increased mortgage lending (in fact, increasing to the point of catastrophe as we recently witnessed) along with home-equity loans, investment and retirement advisors, and a customer service relationship centered on local branches.
Millennials have entirely different life goals, and yet, financial institutions have yet to respond with the kinds of products needed to satiate them. Just to start, this generation has the greatest levels of student debt in the country’s history. That means that almost all the products currently offered by banks are mostly irrelevant, since major purchases like homes will be pushed back, perhaps indefinitely.
Amazingly, we have seen almost no innovation in student loan lending from the traditional banks, while there has been tremendous innovation in the market from startups like SoFi, Earnest, CommonBond, among others.
That said, big banks have been a bit more engaged around improving investment advising.
That Said, Please Don’t Talk With Us
Yes, we want banks to engage with us, but no, please don’t talk with us. I have only once ever walked out of a bank branch as a completely satisfied customer (this trip may also have involved free candy). Automated investment platforms are not just popular due to their lower fees and balanced risks, but also because traditional investment advisors had no fricking idea what they were selling (yet somehow still became rich in the process).
Traditional banks have moved many of their banking functions online or at least to ATMs, since every in-person transaction has a significant cost attached to it. But so far, none of them has developed the user experience and product quality necessary to really take full advantage of mobile and the web for banking.
I want a bank where absolutely everything can happen through my phone, and if I need help, I can ask a banker about something instantly through the click of a button. I want a concentrated set of services designed just for me, and not a menu with more than fifty options for services that aren’t even relevant for me.
I want to transfer money in ten seconds – not ten screens.
Along that simplicity theme, part of shedding all of these human touch points is also reducing the complexity of banking products.
The Future Bank For Everyone
Yes, millennials are annoying customers, but here is the irony: everyone wants these features. Consumers want to be able to manage their finances from their phones and tablets while limiting their visits to bank branches and bank tellers. Plus, everyone hates bank fees, particularly their complexity and lack of transparency.
The difference today is that millennials are willing to shop elsewhere, because we are simply not going to accept that these are the only products on the market.
Tomi Engdahl says:
Christopher Mims / Wall Street Journal:
Payment startups disrupt traditional cash-transfer firms by offering nearly instantaneous, zero-cost services
Money Isn’t Free, but Moving It Is Now Cheaper
Payment startups disrupt traditional cash-transfer firms by offering nearly instantaneous, zero-cost services
http://www.wsj.com/article_email/here-comes-almost-free-money-1433715790-lMyQjAxMTA1MzAyODkwMTgxWj
One day last year, at the height of the Ukrainian revolution, Mark Howard spotted something interesting on television. In the background, a protester was holding up a poster with an instantly recognizable logo: A “B” with two vertical bars, the symbol for the digital currency bitcoin.
Mr. Howard is an American IT specialist and a self-described bitcoin enthusiast. He surmised that the poster’s QR code, which is a kind of square bar code, must contain the address of a bitcoin wallet belonging to the protesters. On a whim, he froze the frame, scanned the code with an app on his phone, and sent $10 worth of bitcoin to a country whose banks were paralyzed but whose protesters needed money to continue their fight.
It happened instantly, and the total cost of the transaction was $0.02.
If using unregulated cryptocurrency to crowd-fund foreign revolutions sounds like a quintessentially 21st-century edge case, here’s a thing you need to know: The same fundamental technologies that enabled Mr. Howard’s impromptu act of foreign aid are being used by hundreds of other companies, in many countries, to do something that has never happened in the history of money: Exchange it at any distance, nearly instantaneously and for near-zero transaction fees.
We are just at the start of understanding what this will mean. The safe bet is that the easier it is to exchange money, the more of it will be exchanged, with obvious implications for economies that successfully integrate these technologies.
Take Venmo, for example. Venmo is the Snapchat of money in that it’s wildly popular with 20-somethings and on college campuses, and yet it is so unlikely to be used by people older than 30 that internally, the company calls that age the “Venmo line.”
The cost of using Venmo is zero.
Like countless other newfangled payment services, including competitors Square Cash, Google Pay and even payments in Facebook Messenger, the reason Venmo can charge nothing is that payments within its network are just data bits moving around in a database somewhere, rather than dollars being moved between bank accounts.
All of these companies have to make money somehow, of course, and for companies like Venmo that means integrating with merchant services that do charge a small fee. Others, like Facebook Inc.’s offering, are simply features of larger enterprises interested in keeping us on their sites and in their apps, the same way Google can afford to give away productivity software services free.
Aside from convenience, the way Venmo and these other services are better than cash is that it costs money to transact in cash.
Existing electronic-payment networks aren’t much better
Things get even more expensive when you want to send money overseas.
TransferWise, for example, matches pools of people in two different countries who want to send money to the opposite country, thus eliminating the need to actually transfer money at all.
A Filipino startup called Rebit takes a different approach, exchanging dollars for bitcoin, which can then be transmitted and cashed out for Philippine pesos so quickly that the service avoids losing money on the volatility usually associated with bitcoin
These trends have forced traditional banks to take notice
It’s important to note that disruption in this industry isn’t going to progress in the same way that, say, Netflix killed Blockbuster.
We are at that transition point in which most of us own checkbooks and wallets as well as smartphones.
Tomi Engdahl says:
Ant Financial valued at $45bn after fundraising
http://www.ft.com/cms/s/0%2Fdcd9fc62-1638-11e5-a58d-00144feabdc0.html#axzz3dbHQSPvH
Ant Financial, Alibaba’s online payments affiliate, has completed a fundraising that values the company at $45bn-$50bn, according to people close to the Chinese ecommerce group.
The valuation would place Ant Financial among the world’s most valuable private technology companies, alongside smartphone maker Xiaomi and US car hailing app Uber.
Alibaba’s first large-scale financial product, Yue Bao (Leftover Treasure), a money market fund, has been distributed to users of Alipay. It functions like a bank deposit but pays higher than state-regulated interest rates.
Tomi Engdahl says:
How Silicon Valley and Wall Street arrived at a new gold rush called Bitcoin
A new book, Digital Gold, explores all of Bitcoin’s big players across the globe.
http://arstechnica.com/business/2015/06/how-silicon-valley-and-wall-street-arrived-at-a-new-gold-rush-called-bitcoin/
For the last few years now, non-tech-oriented friends and family occasionally ask me: “So what do you think of Bitcoin?” My answer is nearly always the same: “It’s intellectually interesting, but not really practical.”
Yes, the blockchain is a neat idea. But unless you’re regularly buying stuff on Silk Road copycats, or if you live in a country with currency controls, or if you’re a hardcore libertarian, I’ve yet to hear a good reason why Bitcoin makes practical sense for most people in everyday life. Put another way: it doesn’t yet have a clear killer app.
Will Bitcoin ever reach that level? I don’t know. But I do know that today there’s a lot of very smart and very rich people who seem to think so. A few lines towards the end of Nathaniel Popper’s new book Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money cogently articulates this sentiment.
Tomi Engdahl says:
Gillian Wong / Wall Street Journal:
Alibaba affiliate Ant Financial launches online bank MYbank to challenge Tencent’s WeBank in China — Alibaba Affiliate Launches Online Bank Despite Regulatory Hurdles — MYbank offers microloans for businesses and consumers but users can’t open bank accounts yet
Alibaba Affiliate Launches Online Bank Despite Regulatory Hurdles
http://www.wsj.com/article_email/alibaba-affiliate-launches-online-bank-despite-regulatory-hurdles-1435230003-lMyQjAxMTA1MDIwNjcyMTYxWj
MYbank offers microloans for businesses and consumers but users can’t open bank accounts yet
A financial affiliate of Chinese e-commerce giant Alibaba Group Holding Ltd. began operations of an online bank Thursday, though its limited services indicate the challenges it faces in China’s tightly regulated banking sector.
Alibaba affiliate Ant Financial Services Group said MYbank, which has registered capital of 4 billion yuan ($644 million), is ready to issue loans of under 5 million yuan to small businesses, entrepreneurs and consumers. Still, people can’t open accounts with MYbank yet because of regulatory concerns over facial-recognition technology it wants to use to verify account holders’ identities.
Tomi Engdahl says:
Bitcoin fans eye potential in Greek crisis
http://www.theguardian.com/technology/2015/jun/29/bitcoin-fans-eye-potential-in-greek-crisis
Proponents hope cryptocurrency could soar in value as Greeks try to find ways to keep their money safe and avoid currency controls
The world is watching with bated breath as the Greek people consider how to vote in the country’s upcoming referendum. A yes vote on Sunday will see Greece accept the terms of the troika’s bailout, and commit itself to further austerity; a no vote will see the country taking the first step towards exiting the Euro entirely.
But not everyone is afraid of the prospect of “Grexit”. For proponents of Bitcoin, the cryptocurrency, a shaky Mediterranean economy implementing capital controls amid the prospect of full-blown exit from the euro recalls halcyon days gone by.
In theory, when the conventional financial system is experiencing turbulence, alternative currencies such as bitcoin should have their time to shine. The decentralised nature of the currency means that it’s impossible for any central bank to impose controls on it, while the pseudonymity at its core could make it the perfect vehicle to get money into and out of the country while avoiding legal reprisals.
Tomi Engdahl says:
Eugene Kim / Business Insider:
PayPal to acquire international money transfer service Xoom for $890M — Xoom shares skyrocket more than 20% after PayPal bid — PayPal is acquiring digital money transfer service Xoom for roughly $890 million. PayPal is paying $25 per share, about a 32% premium Xoom’s 3 month weighted average price.
Xoom shares skyrocket more than 20% after PayPal bid
Read more: http://uk.businessinsider.com/paypal-acquiring-money-transfer-service-xoom-for-roughly-890-million-2015-7?op=1?r=US#ixzz3eihVzLVO
Tomi Engdahl says:
These Entrepreneurs Can Help Manage Your Money
http://www.politico.com/magazine/sponsor-content/2015/06/can-an-app-improve-your-financial-health/?cmpid=ww1506readmore#.VZpMKUZLZ4A
Rapid change has become an everyday part of life for Americans. Whether it is new and emerging technology, or the various shifts that happen in today’s interconnected world, people experience uncertainty everyday. According to a new report from the JPMorgan Chase Institute, this volatility extends to their finances, affecting both their income and spending, and often not in tandem. Households often experience a drop in income while also having a necessary increase in expenses, such as health care bills or a major car repair. And most households have not set aside enough money to weather these unexpected changes. The same report found that this is not just a low-income issue. Americans across the income spectrum are having difficulty managing their financial lives.
However, new technology is being developed to help address this mismatch between household income and expenses.
The Lab just announced the first class of winners who developed new technology-enabled tools to help people manage their daily finances on a tight budget. The nine winning solutions are designed to help people save, manage their bills, access short-term credit and reduce debt. These innovators will each receive $250,000 in capital and technical assistance, including cutting-edge consumer and design insights, and industry expertise and mentorship.
While we know one app isn’t going to solve financial insecurity in America, technology provides a tremendous opportunity to help us improve the efficiency and effectiveness of new products and services that promote financial health.
Jennifer Tescher: Financial health is when consumers have a functioning day-to-day financial system that allows them to build resilience and opportunity. Following the financial crisis and the recession, the state of financial health in America is relatively weak.
Tomi Engdahl says:
Lloyds Bank looks to NFC technology to end automated security calls
125 Android smartphone users trialling ‘tap to bank’ authentication
http://www.theinquirer.net/inquirer/news/2416457/lloyds-bank-looks-to-nfc-technology-to-end-automated-security-calls
LLOYDS BANK has been trialling new mobile banking technology that could bring and end to automated security calls and chip and pin readers.
The company announced that it has been experimenting with new technology called ‘tap to bank’ that allows owners of NFC-equipped Android smartphones to set up mobile banking by tapping a debit or credit card against the handset.
Lloyds said that this technology, which is being tested by 125 customers, could bring an end to tedious automated phone calls when it launches in the ‘coming months’, if the trial is well-received.
The firm added that tap to bank could also be used in the future for tasks such as authenticating new payments, perhaps sounding a death knell for chip and Pin readers.
Tomi Engdahl says:
Codename Citicoin: Banking giant built three internal blockchains to test Bitcoin technology
http://www.ibtimes.co.uk/codename-citicoin-banking-giant-built-three-internal-blockchains-test-bitcoin-technology-1508759
Citigroup, the global advisor of multi-nationals and governments, has been using its scale and reach in some surprising ways, such as conducting transactions on mobiles without bank accounts in Kenya, and developing blockchains within the bank and test-coins to run across them.
Ken Moore, head of Citi Innovation Labs told IBTimes UK during a technology briefing that the bank has been looking at distributed ledger technology for “the last few years” and has amassed a skilled team.
They have constructed three blockchains and a test currency to run across them.
“We also have an equivalent to bitcoin up and running, again within the labs, so we can mine what we call a ‘Citicoin’, for want of a better term. It’s in the labs, but it’s to make sure we are at the leading edge of this technology and that we can exploit the opportunities within it.”
Tomi Engdahl says:
Greece’s Cash Crisis is Bitcoin’s Boost
http://www.bloomberg.com/news/articles/2015-07-08/greece-s-cash-crisis-is-bitcoin-s-boost-ibuhh68t
At a coffee shop on a beach in Athens sits Thanos Marinos. The forty-something Greek prides himself on being the first to bring bitcoin, a digital currency, to his cash-strapped country a year ago.
“I didn’t see it as much as a business case back then,” says Marinos. “The main reason was to bring awareness about bitcoin and blockchain technology to Greece.”
Demand has never been stronger, he says, up by 500 percent in four weeks.
When starting from zero though, even 500 percent doesn’t go far. Greece is a country of more than 10 million and an average age of 43.5. A quick and un-scientific survey of 10 people on the street showed just two people had heard of bitcoin.
Tomi Engdahl says:
Michael J. de la Merced / New York Times:
PayPal Closes Up 5% on Nasdaq as It Splits From eBay
http://www.nytimes.com/2015/07/21/business/dealbook/paypal-gains-nearly-7-on-nasdaq-as-it-splits-from-ebay.html?_r=0
PayPal has returned to the public stock markets for the first time in more than a decade in a rousing start.
Shares in the payments giant closed up more than 5 percent, to $40.48, giving the company a market value of nearly $50 billion. The company trades on the Nasdaq stock market under the ticker “PYPL.”
The move, prompted in part by investor pressure, separates PayPal from eBay. PayPal is now free to pursue its own corporate strategy, unencumbered by potential conflicts with its onetime parent. Its stock value is now more than eBay and several other technology firms.
Tomi Engdahl says:
Inside the tech divorce of the decade: PayPal and eBay start a new life without each other
http://mashable.com/2015/07/19/ebay-paypal-divorce/
Tomi Engdahl says:
Bloomberg Business:
Sources: MCX’s CurrentC mobile payment app to begin limited trial in stores next month as exclusivity deals to keep Apple Pay out of stores said to expire — Retailers’ Answer to Apple Pay Is Said to Hit Stores in August … After almost three years in development, the retail industry’s answer …
Retailers’ Answer to Apple Pay Is Said to Hit Stores in August
http://www.bloomberg.com/news/articles/2015-07-23/retailers-answer-to-apple-pay-is-said-to-hit-stores-in-august
After almost three years in development, the retail industry’s answer to Apple Pay is finally getting off the ground.
A mobile payment application developed by Merchant Customer Exchange — a company founded in August 2012 with funding from Wal-Mart Stores Inc., Target Corp. and Best Buy Co. — has been tested by employees of the retailers and will get a limited trial run next month in stores, according to three people familiar with the situation. That means shoppers will soon be able to use the technology, called CurrentC, to pay for items with their phones.
The challenge for CurrentC now is playing catch-up against established apps from Apple Inc., Google Inc. and others, as well as explaining to customers why they should bother using it. When Apple Pay rolled out last year, CurrentC was derided by critics as a lower-tech alternative that retailers supported because it would give them tighter control over shoppers’ transactions.
Tomi Engdahl says:
Are E-commerce Retailers Facing an EMV Armageddon?
http://pro.whitepages.com/blog/are-e-commerce-retailers-facing-an-emv-armageddon/
Depending on what type of business you operate, whether brick and mortar, e-commerce or both, the rapidly approaching deadline to implement EMV-enabled payment processing systems either couldn’t come fast enough or it’s happening too soon.
On one hand, there’s obvious motivation to embrace more robust payment security systems. An article for Multichannel Merchant explained retailers saw $32 billion empty from their coffers as a result of fraud in 2014. The figure for the previous year was roughly $23 billion, which gave weight to the argument to President Obama and commercial organizations that something must be done, and carried out fairly quickly.
The massive breaches at Target and Home Depot only added fuel to the fire. Additionally, retailers got a reminder of the extensive damage that the fraud can have with Apple Pay’s troubles earlier this year.
An expected spike in e-commerce fraud
Multichannel Merchant highlighted the fact that e-commerce merchants in countries that switched to EMV payment cards experienced a sharp increase in fraud subsequent to the change. For instance, online fraud jumped 21 percent in Europe in 2012, which has been associated with the implementation of PIN-and-chip cards.
Because it’s more difficult to use counterfeit cards in a brick-and-mortar location, there’s a much greater incentive for fraudsters to put their efforts into online channels. There’s still an opportunity for cybercriminals to use stolen credentials to apply for a PIN-and-chip credit card. Being a card-not-present transaction, purchases through e-commerce storefronts present fewer barriers for these individuals to carry out their schemes.
The fact that card fraud is expected to double to $6.4 billion by 2018, according to PYMNTS.com, may be frightening enough to force e-tailers to reduce the speed at which they clear orders.
Tomi Engdahl says:
Paul Carsten / Reuters:
People’s Bank of China publishes draft regulation, says Alibaba, Baidu, Tencent, others can’t lock users into their payment services, exclude rivals
China mulls forcing Tencent, Alibaba to offer rivals’ online payment services
http://www.reuters.com/article/2015/07/31/us-china-internet-idUSKCN0Q51FN20150731
China proposed new regulations on Friday that could force Internet companies such as Alibaba Group Holding Ltd, Tencent Holdings Ltd and Baidu Inc to offer their rivals’ online payment services as well as their own.
China has the world’s largest Internet population and Beijing is trying to better regulate the country’s rapidly-changing Internet sector, drawing up rules for everything from censorship to cybersecurity and e-commerce.
Companies which own payment systems can reap huge profits by charging transaction fees.
“Payment institutions should fully respect customer’s right to choose, and must not force customers to use the internet payment service they provide, and also must not stop customers using other Internet payment services provided by other institutions,” said draft regulations posted on the People’s Bank of China’s website.
Tomi Engdahl says:
Zac Hall / 9to5Mac:
CurrentC-backer Rite Aid to reverse its stance, start accepting Apple Pay, as well as Google Wallet and Android Pay — CurrentC backer Rite Aid will soon start accepting Apple Pay after initially blocking it
CurrentC backer Rite Aid will soon start accepting Apple Pay after initially blocking it
http://9to5mac.com/2015/08/11/rite-aid-apple-pay-currentc-blockade-over/
When Apple Pay launched in the US late last year, Apple’s mobile payment system was officially accepted by several launch partners and unofficially supported by even more retailers and vendors. Then a small number of retailers banded together as members of the Merchant Customer eXchange actually disabled mobile payment support at checkout in favor of an upcoming CurrentC payment system. Drug store chains CVS and Rite Aid were among the first to block Apple Pay support after initially accepting it and even prompting a response from Apple. Now Rite Aid is ending that blockade as it announced today that it will officially accept Apple Pay starting this weekend.
Tomi Engdahl says:
Jason Del Rey / Re/code:
Apple Pay Competitor CurrentC May Not Launch Until Next Year — Google and Samsung are gearing up to join Apple Pay in the battle to replace your wallet later this year, but another payments app backed by big retailers like Walmart may wait a little longer before entering primetime.
Apple Pay Competitor CurrentC May Not Launch Until Next Year
http://recode.net/2015/08/12/apple-pay-competitor-currentc-may-not-launch-until-next-year/
Google and Samsung are gearing up to join Apple Pay in the battle to replace your wallet later this year, but another payments app backed by big retailers like Walmart may wait a little longer before entering primetime.
CurrentC, the payments app being created by a consortium of big retailers known as MCX, may not launch widely this year as originally planned, MCX CEO Brian Mooney told Re/code in an interview on Tuesday. The company will begin a public pilot of its app in Columbus, Ohio, in a few weeks and will not rush a wider rollout if the product is not ready, he said.
“This is a long game,” Mooney said. “Certainly going faster is always better — that’s not necessarily a debatable point. But we’re going to do it right.”
CurrentC — backed by several dozen big merchants including Walmart, Target, Kohl’s, Dunkin’ Donuts and Exxon — is designed to work on all types of smartphones and let shoppers pay with the app instead of a physical payment card or cash. But while Apple Pay and soon-to-launch services Android Pay and Samsung Pay let users pay using account information from traditional credit cards like Visa, MasterCard and Amex, CurrentC does not.
Instead, CurrentC’s beta users can only pay using one of three options: Gift cards, a store’s private-label payment card or direct hookups with their checking accounts. Mainstream credit cards carry higher transaction fees than these options, which is a big reason why they aren’t currently part of the offering.
Tomi Engdahl says:
Want branchless banking? Live in the developing world? Oops
Mo(bile) money, mo(bile) problems, says Florida team
http://www.theregister.co.uk/2015/08/19/branchless_banking_apps_developing_world/
Branchless banking apps targeted at customers in the developing world are rife with vulnerabilities, according to security researchers.
A study by computer scientists from the University of Florida focused on seven of the more high-profile apps, uncovering flaws that created a heightened risk of fraud as well as “unfair” terms of service.
The findings were based on a manual analysis of Airtel Money, Money-On-Mobile, Oxigen Wallet (all from in India); Thailand’s mPay, the Philippines’ GCash, Brazil’s Zuum, and mCoin from Indonesia.
The five researchers – Bradley Reaves, Nolen Scaife, Adam Bates, Patrick Traynor and Kevin R.B. Butler – came to their unfavourable assessment after what’s billed as the first comprehensive analysis of its type.
Smartphone apps provide an electronic payment infrastructure in the local absence of alternatives such as credit cards, and the technology provides much-needed financial services to the unbanked people in the developing world.
Although billed as a more secure option to cash, branchless banking apps are dangerously insecure, according to the team of five.
After carrying out an automated analysis of all 46 known Android mobile money apps across the 246 known mobile money sites, an exercise that “fails to provide reliable insights”, the researchers turned towards a “comprehensive manual teardown of the registration, login, and transaction procedures of a diverse 15 per cent of these apps”.
Mmmm, well, the results weren’t pretty.
“We uncovered pervasive and systemic vulnerabilities spanning botched certification validation, do-it-yourself cryptography, and myriad other forms of information leakage that allow an attacker to impersonate legitimate users, modify transactions in flight, and steal financial records,” according to the University of Florida team.
“These findings confirm that the majority of these apps fail to provide the protections needed by financial services,” they added.
Liability shift
Leaving aside alleged security shortcomings, the University of Florida said the terms of service for branchless banking apps tends to push the liability for fraudulent or disputed transactions towards consumers.
Credit card firms are jointly liable alongside vendors if something goes wrong with a product or a service purchased by credit card for purchases over £100 in the UK. Visa USA offers consumers “zero liability” for unauthorised purchases.
Similar protections exist for the majority of credit cards issued by banks in Europe, whereas users of branchless banking apps are generally held liable for transactions made using their credentials in a way not unlike European banking customers deemed responsible for ATM cash withdrawals.
“Through inspection of providers’ terms of service, we also discover that liability for these problems unfairly rests on the shoulders of the customer, threatening to erode trust in branchless banking and hinder efforts for global financial inclusion,” the team concluded.
Tomi Engdahl says:
Fight for mobile payment begins: Tomorrow with start of Samsung’s strong asset
Samsung’s mobile payment service will start on August 20 in Korea, and is expanding to the United States on 28 September. Samsung Pay is to be spread to Korea and the United States to Britain, Spain and China.
Samsung Payllä has one major advantage over competitors: It works with NFC terminals, but also with ordinary magnetic stripe readers. It uses the company’s own “magnetic secure transmission” (MST) technology.
Payment application transfers data line reader by touching it. This allows the use of Samsung Pay in the millions, even in small shops which have not been willing to pay for new terminals.
Samsung says that it had agreed on cooperation in, inter alia, American Express, Discovery, MasterCard, Visa, Bank of America and Chase.
Source: http://www.digitoday.fi/mobiili/2015/08/19/taisto-mobiilimaksamisesta-alkaa-huomenna-aloittavalla-samsungilla-vahva-valtti/201510552/66?rss=6
Tomi Engdahl says:
Ruth Reader / VentureBeat:
PayPal’s One Touch checkout service now available across Europe and Australia
http://venturebeat.com/2015/08/25/paypals-one-touch-checkout-service-now-available-across-europe-and-australia/
There’s no argument that mobile is the most promising frontier for commerce. Delivering on that potential, however, very much depends on making payment as fluid as possible.
Today PayPal One Touch is launching in 13 new markets including Australia, Austria, Belgium, Denmark, France, Germany, Netherlands, Norway, Poland, Spain, Sweden, Switzerland and Turkey. Already the feature is available in the U.S., Canada, and the U.K.
One Touch is based on a product initially created for Venmo called Touch, a button in native mobile apps and browser checkout carts that allows users to pay for goods without the hassle of filing out billing information. One Touch is important for PayPal as a whole, because it helps its 152 million users to purchase more products in more marketplaces and takes advantage of the mobile commerce boom.
To use One Touch, you’ll need to opt-in with your PayPal account.
Tomi Engdahl says:
Chris Welch / The Verge:
Samsung Pay US beta launches for all carriers except Verizon
http://www.theverge.com/2015/8/27/9214905/samsung-pay-us-beta-now-available
Samsung Pay will formally launch in the United States late next month, but if you want to try it before that, there’s now a beta you can register for. It’s open to anyone who owns a Galaxy S6, S6 Edge, Note 5, or S6 Edge+ on all major carriers except for Verizon. If you’ve got AT&T, T-Mobile, Sprint, or even US Cellular, you’re eligible to take part. Unfortunately, the nation’s biggest mobile provider is only willing to say that it’s “evaluating” Samsung Pay at this time, and Verizon could very well miss the September 28th launch.
You’ll also need a debit or credit card from Bank of America (Visa / MasterCard) or US Bank (Visa only) for the beta; Samsung is obviously hoping to add more financial partners in the coming weeks.
Tomi Engdahl says:
Beyond Bitcoin: How Business Can Capitalize On Blockchains
http://tech.slashdot.org/story/15/08/31/2230259/beyond-bitcoin-how-business-can-capitalize-on-blockchains
Bitcoin’s widely trusted ledger offers intriguing possibilities for business use beyond cryptocurrency, writes InfoWorld’s Peter Wayner. “From the beginning, bitcoin has assumed a shadowy, almost outlaw mystique,”
“the mathematical foundations of bitcoin create a solid record of legitimate ownership that may be more ironclad against fraud than many of the systems employed by businesses today”
Beyond bitcoin: 7 ways to capitalize on blockchains
http://www.infoworld.com/article/2976358/encryption/beyond-bitcoin-7-ways-to-capitalize-on-blockchains.html
Bitcoin’s widely trusted ledger offers intriguing possibilities for business use beyond cryptocurrency
From the beginning, bitcoin has assumed a shadowy, almost outlaw mystique. The technology’s origin and founder remain shrouded in mystery, even to this day. Add to that the Silk Road scandal, in which anonymous users traded bitcoins to buy drugs, landing its pioneer in prison for life, and it’s easy to see why many initially viewed bitcoin as a funding mechanism for the underworld. Even the mathematics of the technology are inscrutable enough to believe the worst.
The irony is that the mathematical foundations of bitcoin create a solid record of legitimate ownership that may be more ironclad against fraud than many of the systems employed by businesses today. Plus, the open, collaborative way in which bitcoin processes transactions ensures the kind of network of trust that is essential to any business agreement.
Bitcoin’s true value: The blockchain
A currency’s viability depends in large part on its ability to guard against counterfeiting and to eliminate potential ownership disputes. Bitcoin tackles these problems by establishing a clear chain of ownership for each coin in circulation through a shared public ledger known as the blockchain. The blockchain — and the process by which it is updated and maintained — has been so successful that it is fast capturing the interest of researchers and entrepreneurs looking to create systems that nurture trust between competitors in realms beyond cryptocurrency.
The blockchain’s function is simple: To log every bitcoin transaction ever conducted. When one person transfers ownership of a specific denomination of bitcoins to another person, that transaction is confirmed by the bitcoin network (via a process known as mining) as an entry in a block of transactions that is then added to the long chain that goes back to the beginning of the project. This chain of blocks is more powerful than a table of owners because it allows everyone in the network to follow any given coin’s trail of ownership all the way back to when it was first created.
Another important wrinkle in the blockchain is that it employs public key encryption for identifying owners in the ledger, recording one half of the public key pair rather than names or Social Security numbers. Only the person who holds the corresponding private key can decide what happens next to their coin.
This layer of cryptography offers a certain amount of privacy because no names are recorded. But the cryptography offers a greater value in that it ensures transactions are endorsed only by the person who controls the private half of the key pair. Enterprises thrive on trust and assurance, and the cryptography built into the blockchain offers a great foundation for fostering trust among vested parties.
Tomi Engdahl says:
Jason Del Rey / Re/code:
European Payments Power Klarna Launches in the U.S. With Overstock.com as a Customer
http://recode.net/2015/09/01/european-payments-power-klarna-launches-in-the-u-s-with-overstock-com-as-a-customer/
Klarna has become a household name in Northern Europe. Now it’ll try to do the same in the U.S.
The Sweden-based payments company, which gives online shoppers nearly a month to pay off their web purchases, is launching in the U.S. with e-commerce site Overstock.com as its first big merchant customer. The company is backed by Sequoia, DST and Atomico, and has signed up about a dozen other merchants too, including online men’s apparel startup Chubbies.
Tomi Engdahl says:
Sarah Perez / TechCrunch:
PayPal Launches PayPal.Me, A Simpler Way To Request Money Using Your Own Personalized URL
http://techcrunch.com/2015/09/01/paypal-launches-paypal-me-a-simpler-way-to-request-money-using-your-own-personalized-url/
PayPal today is launching a new take on peer-to-peer payments with the debut of a platform it’s calling PayPal.Me. For the first time, PayPal customers will be able to set up their own user profiles which are associated with a personalized URL (e.g. paypal.me/username), which can then be shared with others via text, over email, on instant messenger, via social media, or anywhere else, as a way to request money.
This is not PayPal’s only entry into the peer-to-peer payments space, of course. In addition to offering a “request money” feature on its website, the company also operates Venmo. That social app is especially popular with a younger, highly mobile demographic who uses it as a way to do things like pay back friends for money borrowed, or split a check at a restaurant, for example.
Tomi Engdahl says:
Pali Bhat / Official Android Blog:
Android Pay begins rolling out at over 1M locations in the US today — Tap. Pay. Done. — Today, we’re beginning to roll out Android Pay — the simple and secure way to pay with your Android phone at over one million locations across the US. Android Pay also stores your gift cards …
Tap. Pay. Done.
http://officialandroid.blogspot.fi/2015/09/tap-pay-done.html
The choice is yours
Android Pay works with all NFC-enabled Android devices (running KitKat 4.4+), on any mobile carrier, at every tap and pay ready location across the US. Android Pay will support credit and debit cards from the four major payment networks: American Express, Discover, MasterCard and Visa. These cards are issued by many of the most popular US banks and credit unions
Tomi Engdahl says:
Bradley Hope / Wall Street Journal:
Visa, Nasdaq, Capital One, Citi, others invest $30M in Chain, a startup developing ways to trade assets like stocks via blockchain technology
Visa, Nasdaq, Others Invest $30 Million in Bitcoin-Related Startup
Chain Inc. works with banks to develop a new system of trading and transferring assets
http://www.wsj.com/article_email/visa-nasdaq-others-invest-30-million-in-bitcoin-related-startup-1441827120-lMyQjAxMTE1NTEzMDkxMzAwWj
Wall Street is putting more money behind a technology it once dismissed as a fad.
Some of the biggest companies in the financial sector have invested $30 million in Chain Inc., a San Francisco-based company that works with banks and other institutions to develop ways to trade and transfer financial assets using the system that underpins the virtual currency Bitcoin.
Investors include Visa Inc., Nasdaq Inc., Citi Ventures, Capital One Financial Corp. , Fiserv Inc. and Orange SA .
The investment is the latest sign of Wall Street’s about-face with Bitcoin, which banks and other financial firms initially said was unlikely to transform commerce. These financial companies don’t have any interest in using the actual currency. But they see the “blockchain” technology that lets Bitcoin users instantaneously make and record transactions as a potential replacement for what they say is a cumbersome, costly and less-secure process.
Tomi Engdahl says:
Nine of the World’s Biggest Banks Form Blockchain Partnership
https://recode.net/2015/09/15/nine-of-the-worlds-biggest-banks-form-blockchain-partnership/
Nine of the world’s biggest banks, including Goldman Sachs and Barclays, have joined forces with New York-based financial tech firm R3 to create a framework for using blockchain technology in the markets, the firm said on Tuesday.
It is the first time banks have come together to work on a shared way in which the technology that underpins bitcoin — a controversial, Web-based “cryptocurrency” — can be used in finance.
Over the past year, interest in blockchain technology has grown rapidly. It has already attracted significant investment from many major banks, which reckon it could save them money by making their operations faster, more efficient and more transparent.
The new project, the result of more than a year’s worth of consultations between R3, the banks and other members of the financial industry, will be led by R3 CEO David Rutter, formerly CEO of electronic trading at ICAP Electronic Trading, one of the world’s largest interdealer brokers.
Those that have signed up for the initiative so far are JP Morgan, State Street, UBS, Royal Bank of Scotland, Credit Suisse, BBVA and Commonwealth Bank of Australia.
The blockchain works as a huge, decentralized ledger of every bitcoin transaction ever made that is verified and shared by a global network of computers and therefore is virtually tamper-proof. The Bank of England has a team dedicated to it and calls it a “key technological innovation.”
The data that can be secured using the technology is not restricted to bitcoin transactions. Two parties could use it to exchange any other information, within minutes and with no need for a third party to verify it.
Rutter said the initial focus would be to agree on an underlying architecture
“These new technologies could transform how financial transactions are recorded, reconciled and reported -– all with additional security, lower error rates and significant cost reductions,”
Tomi Engdahl says:
Your finger is about to replace your bank password
http://money.cnn.com/2015/06/05/technology/bank-fingerprint-reader/
We already use our fingerprint to unlock our phones, and one day soon your finger could replace your bank password.
Over the past year, U.S. banks have been ramping up efforts to incorporate biometric technology (iris scanners, fingerprint readers and facial recognition) into their systems.
Biometric scanners could let you log in to you bank account on your phone or PC, letting you transfer money or send cash without entering a password. That could potentially be safer than using a password, since your fingerprint is unique to you. Passwords can be easily guessed or hacked.
Bank of America Introduces Fingerprint and Touch ID Sign-in for Its Mobile Banking App
http://www.marketwatch.com/story/bank-of-america-introduces-fingerprint-and-touch-id-sign-in-for-its-mobile-banking-app-2015-09-15
Bank of America today announced a series of improvements to mobile and online banking to better meet customers’ changing needs and make it easier for users to manage their finances digitally. The new updates include the introduction of fingerprint and Touch ID sign-in, in addition to the launch of an Apple Watch mobile banking app, streamlined “Accounts Overview” page and new Security Center for more than 31 million active digital banking customers.
Bank of America adds fingerprint logins to its Android and iOS apps
http://www.engadget.com/2015/09/15/bank-of-america-adds-fingerprint-logins-to-its-android-and-ios-a/
Bank Of America Apps For Android And iOS Now Support Fingerprint Sign-In
http://www.ubergizmo.com/2015/09/bank-of-america-apps-for-android-and-ios-now-support-fingerprint-sign-in/
Bank of America today released updated apps for iOS and Android with support for fingerprint and Touch ID sign-in, this means that users will be able to access their finances by simply authenticating their identity with a fingerprint. Fingerprint sensors have gradually become common on smartphones with Google going so far as to add support for sensors right into Android 6.0 Marshmallow whereas Touch ID has been open to third-party developers for over a year now so it’s about time that BoA embraced this technology.
Fingerprint and Touch ID sign-in is going to enable users on Android and iOS devices to log into the mobile app using their fingerprint, it will allow access to the most common functionality of the app without requiring users to punch in a passcode.
Tomi Engdahl says:
Bitcoin is an official commodity, says US gummint
Rogue traders told to do their paperwork if they want to sell BTC options
http://www.theregister.co.uk/2015/09/17/bitcoin_is_an_official_commodity_says_us_gummint/
The Commodity Futures Trading Commission (CFTC) has declared that Bitcoin, and indeed all virtual currencies, are officially commodities.
The ruling arose after the CFTC ordered two outfits, Coinflip, Inc. d/b/a Derivabit (Coinflip), to stop their Bitcoin-trading activities.
The order telling Coinflip to do its paperwork from now on shows that “… the CFTC for the first time finds that Bitcoin and other virtual currencies are properly defined as commodities.”
In other words, the Bitcoin crowd may think they’re virtual currency pioneers who don’t have to play by the rules, but Uncle Sam intends to treat the market for Bitcoin just like it treats the markets for pork bellies or frozen concentrated orange juice. Those who don’t do the paperwork will get visits from folk in suits pointing to legislation and mentioning substantial fines.
On the upside, the definitive definition of Bitcoin as a commodity gives those who would trade it certainty. It also gives established traders, who have CFTC regulations tattooed on the inside of their eyelids, a bit of an advantage as the market for virtual currencies mature. Wall Street wins again!
Tomi Engdahl says:
Robert McMillan / Wall Street Journal:
IBM is developing its own blockchain tech, plans to open source it in the next few months
IBM Adapts Bitcoin Technology for Smart Contracts
http://www.wsj.com/article_email/ibm-adapts-bitcoin-technology-for-smart-contracts-1442423444-lMyQjAxMTA1MjEzNjExODYyWj
Tech giant developing its own version of blockchain technology, plans to release open source software within next few months
International Business Machines Inc. thinks the technology that underpins the bitcoin digital currency can do a lot more than support cash 2.0. Within the next few months, the venerable tech giant plans to release open source software that could be used to create digital contracts that—like bitcoin transactions—would be recorded publicly and securely on a world-wide computer network.
IBM is zeroing in on a technology called blockchain, which serves as bitcoin’s online ledger. Blockchain allows the bitcoin network to track the currency’s movement from one online wallet to another. But it could be used to log other types of transactions.
“Blockchain, as a technology, is extremely interesting and intriguing,” said Arvind Krishna, senior vice president of IBM Research.
Tomi Engdahl says:
Paul Vigna / Wall Street Journal:
21 Inc. announces first product, $400 computer with bitcoin protocol as part of its Linux OS, enabling developers to easily build services monetized via Bitcoin
21 Inc. Releases First Product, a ‘Bitcoin Computer’
http://blogs.wsj.com/moneybeat/2015/09/21/21-inc-releases-first-product-a-bitcoin-computer/
21 Inc., a bitcoin startup backed by venture-capital firm Andreessen Horowitz, is releasing its first product, a computer that seeks to make bitcoin a standard feature of web services and encourage developers to build products that integrate the digital currency.
The 21 Bitcoin Computer, which goes on sale Monday, is a small, bare bones, Linux-based piece of hardware in which the bitcoin protocol is a feature of the operating system. Any products or services built with it – games or music or any online content – would have bitcoin built in as a component.
“I’m very excited about it,” said Ben Horowitz, a co-founder of Andreessen Horowitz, which led the startup’s funding earlier this year. “The thing that’s completely missing that I think would make the Internet better would be machine-to-machine payments. It’s just amazingly hard to do right now.”
The 21 computer is aimed at developers rather than consumers, and is part of the company’s wider goal of turning bitcoin into an Internet protocol, a common language shared between connected devices. The computer will sell for about $400 and will be available to order beginning on Monday, and will ship in November.
With this computer, 21 CEO Balaji Srinivasan explained, users can build a service or site in which conceivably every page view can be monetized. “The utility of bitcoin up until this point has been the speculation value,” Mr. Srinivasan said. “We have a new, pretty strong use case for bitcoin.”
Machine-to-machine payments could be a solution to any number of problems today, Mr. Horowitz said. He mentioned services like Netflix, or media companies. “If I could read stuff on the web for a small amount of money, and didn’t have to open myself up for repeated charging or subscriptions I didn’t want? That’s a relatively straightforward application if you have machine-to-machine payments.”
Tomi Engdahl says:
Megan Geuss / Ars Technica:
Samsung Pay launches in US, only on 2015 Galaxy flagships, no Verizon support, works with major credit cards issued by Bank of America, Citi, Amex, U.S. Bank
Samsung Pay launches in the US today—can it challenge Apple and Android?
Tap-to-pay service will be a year late to the game, but it has a secret weapon.
http://arstechnica.com/business/2015/09/samsung-pay-launches-in-the-us-today-can-it-challenge-apple-and-android/
It’s been a little over a month since Samsung Pay’s launch in South Korea, and today the mobile payment service is available to owners of select Samsung phones in the US. But a year after Apple Pay launched, and without the broad reach of Android Pay, which launched earlier this month, does Samsung have a product that anyone will use?
First, let’s start with the restrictions: at launch, Samsung Pay will only be available on Galaxy S6 edge+ and Galaxy Note 5 devices, as well as Galaxy S6 and S6 edge devices. In addition, Samsung still hasn’t brokered a deal with Verizon to allow compatibility on that network, so it will only work if your select Samsung device operates on AT&T, Sprint, T-Mobile, or US Cellular. When it comes to card networks, Samsung Pay is at least playing with a full deck here: both MasterCard and Visa, the two biggest card networks in the US, are on board. But Samsung Pay needs the approval from card issuers as well, and so far only people with cards at US Bank, Citi, Bank of America, and American Express will be able to use Samsung Pay.
Tomi Engdahl says:
Card payments boom across the world, led by Finland
http://www.streetinsider.com/Reuters/Card+payments+boom+across+the+world,+led+by+Finland/10948521.html
Payments made with debit and credit cards and other non-cash methods jumped 9 percent last year to 390 billion transactions, according to a study published on Tuesday.
The 2015 World Payments Report gave an estimate for transactions last year and detailed numbers for the year before.
It showed people in Finland made an average of 450 non-cash payments in 2013, more than any other nationality, thanks to innovations in payments system, and a strong economy and private spending. Its cold winters also encourage the use of e-commerce.
The report said people in the United States were next most active, making 390 non-cash transactions on average in 2013, followed by the inhabitants of the Netherlands, Australia, Denmark, South Korea and Sweden.
Payments by cards, direct debits and credit transfers are booming as people turn to mobile banking, contactless cards and other innovations rather than cash.
“Blockchain has the potential, in a simple way, to disrupt a lot of the payment infrastructure and the way we conduct business,”
Tomi Engdahl says:
Chase and MasterCard Jump Into Mobile Payments
http://mobile.slashdot.org/story/15/10/27/0311229/chase-and-mastercard-jump-into-mobile-payments
JP Morgan Chase said Monday that it plans to launch its own smartphone payment platform in mid-2016. ‘Chase Pay will be based on CurrentC, a retailer-led mobile payment system that has largely been written off by Silicon Valley techies for its reliance on barcodes rather than the more sophisticated NFC (near-field communications) technology adopted by its competitors
Meanwhile, MasterCard announced a program that aims to turn any type of gadget into a payment device, from car keys to fitness trackers.
Chase takes aim at Apple, Google with new mobile payments service
https://www.yahoo.com/tech/chase-introduces-its-own-mobile-payments-service-to-take-on-apple-212355699.html
JPMorgan Chase (JPM), one of the world’s biggest banks, on Monday announced a new mobile payments service meant to compete with similar offerings from tech giants Apple (AAPL), Google (GOOGL) and Samsung.
The new service, called Chase Pay, will be available by the middle of next year. And unlike its competitors, Chase’s service will work at almost all leading retailers, including Walmart (WMT) and Target (TGT). Chase Pay will also work at the most popular pharmacy, gas station and grocery chains that have lagged in adopting Apple and Google’s pay services.
Consumers are just getting started with mobile payment services, but analysts expect usage will grow quickly over the next few years as more stores accept smartphones at the register alongside traditional plastic cards for payments. Consumers spent only about $16 billion in stores with mobile payments last year, according to research from eMarketer. But the total is expected to grow to almost $70 billion by 2019.
Chase’s new service will rely on relatively low-tech bar codes displayed by the Chase pay app on any smartphone. Apple and Google are using a more modern wireless technology that relies on a Near Field Communications, or NFC, chip which is only included in some phones.
But Apple doesn’t allow any other company’s apps to access the NFC chips in iPhone, putting would-be competitors in a tough position. Google chose to use NFC for its Android Pay, but the service can’t work on iPhones. Capital One’s (COF) recently introduced NFC-based mobile service also works only on Android phones.
Chase wanted its service to work on both Android and Apple phones, so it must rely on older bar code technology. Making a consumer scan the code for a purchase is slower and more cumbersome that the “tap and pay” enabled by NFC chips.
MasterCard wants to turn every gadget into a credit card
http://www.theverge.com/2015/10/26/9615746/mastercard-enabling-wireless-payment-through-iot-devices
MasterCard wants to let every new gadget turn into a credit card. It’s launching a new program today that’ll allow tech companies to make gadgets like smart rings, car keys, and fitness trackers that can also be used to make credit card payments in stores, just like most new smartphones can with programs like Apple Pay and Android Pay. MasterCard is starting out with a few partners, who have already put together prototype units. GM has made a key fob with MasterCard’s wireless payments tech built in; Ringly has done the same with a version of its smart ring; and Nymi has created a smart wristband.
The goal is to make paying — and, of course, paying with your credit card — as easy as possible. Rather than needing to have a specific device on you and at the ready, MasterCard wants you to simply swipe the keys that are already in your hand or the ring that’s already on your finger. In doing so, it’s starting to get ahead of the boom in connected gadgets. MasterCard is imagining a world in which its tech even allows connected clothing to make payments.
Tomi Engdahl says:
Deutsche Bank’s creaking IT systems nervously eyeing bins
Teutonic finance firm is Cryan over tech woes
http://www.theregister.co.uk/2015/10/27/deutsche_bank_it_infrastructure/
Deutsche Bank is the latest financial institution to announce plans to rip out its creaking IT, according to reports.
Deutsche Bank has already begun to make noises about modernising its IT. In February it announced a 10-year, multi-billion deal with HP to migrate to a cloud infrastructure.
“Historically Deutsche Bank had one of the more centralised approaches to IT, suggesting that other banks are in an even worse mess,”
Certainly most banks are struggling with their legacy IT.
RBS is the most notable example, having been whacked with a £56m fine following its major IT cock-up in 2012.
Co-op Bank which is splashing £500m on its IT infrastructure