financial inclusion

Virtual Skinny FinTech: Stick the Landing

Posted by The Virtual Skinny on in FinTech Edition, Newsletter 0 Comment

8.14.2016

THE SKINNY

When You Stick to the Plan …

Even though Britain said yes to Brexit, it’s still got lofty goals to be the center of all things fintech. (BTW, Brexit means that time Britain voted to leave the European Union then immediately regretted it).

When You Keep On Keeping on…

Two years. That’s how long it’ll take for Britain to exit stage left (if it actually happens). It’s also the deadline that Britain’s Competition Market Authority (CMA) is giving British banks to stop being stingy with their customers’ data.

When You Know What’s Up…

CMA is very aware that bank fees can be…excessive. Customers are paying up but aren’t getting what they deserve. Enter fintech companies. CMA is drinking the ‘fintech koolaid’ and wants banks to share customer data with fintech startups and third party apps. Bank customers must approve first of course.

When ‘Many People Are Saying It…’

CMA thinks by 2018, fintech will not only help save British bank customers money and get them better services but also earn the economy the top spot in “fintech” around the world.

When You Need to Watch Your Back…

About that Brexit thing. No one knows exactly how Britain saying ‘bye’ to the EU will play out. But, Germany’s taking full advantage. It’s on a full on recruitment mode to get fintech companies based in London to hop on over to Deutschland. Do you blame them?

WHAT ELSE IS GOING ON?

Lies, Fairytales, and Fallacies…

Chip and pin cards (we’ve covered this; those cards you dip instead of swipe) were supposed to protect us from thieves. But, it’s not as safe as you think. Payment technology company NCR just unveiled a way for fraudsters to still get at your money. Apparently, they’ve used their genius for evil to figure out how to make chip cards seem cardless. Then, it’s off to the races. Retailers are thinking, ‘more reason not to buy those EMV card reader machines.’ But, it’s not all a lost cause, even with this security flaw, chip and pin cards are still slightly safer than regular ole swipe cards. 

promises

THE STREETS ARE TALKIN’ 

Thanks to Square Capital aka Square’s lending business, the company’s stock is wayyy up. It should feel blessed. Square Capital doles out loans to the company’s existing merchants in exchange for a piece of merchants’ sales. It’s all love all around (for now). Merchants love that they can get loans fast (within a few days) and low default rates. Investors love it too. But, to keep growing, Square Capital will have to do something else (e.g., handing over $$$ to non-Square merchants). 

The war on cash in Boston is on its way. Boston area eateries like Sweet Green, Amsterdam Falafelshop, and Clover Food trucks want to go cash-less. They’ve picked up on the trend that young people are choosing plastic over paper when it comes to payment.cashless But, a little known law in Massachusetts makes it illegal to turn down cash. The law and how it’s enforced is all very wishy-washy. But, seems like shops are willing to take the risk. 

Been Around the World, Uh Huh 

India’s mobile phone game is strong (smartphones are up 220 million making it the second largest market in the world). Should be good news for financial inclusion but not so much. Not many rural and underbanked folks are using their phones for banking or payment. And, taxes for use aren’t helping. But, the Indian government won’t be giving up on this. 

The Nigerian Central Bank likes to walk the road less traveled when it comes to remittances (transferring money across borders from one country to another). The rest of the world wants to cut down costs on remittances. But, no. Not Nigeria. It’s going the opposite way. No secret that Nigeria’s economy is struggling. So to ‘maintain the exchange rate’ it’s up-ing the price on remittances. 

In other news dealing with the continent, the Brookings Institute (U.S. think tank) says more regulations protecting consumers will help grow financial inclusion and innovation in countries like Kenya, South Africa, Uganda, Rwanda and Nigeria. Interesting since, a lack of banking regulations is a major reason money transfer service M-PESA is a success in Kenya … 

Australia’s postal service is looking to the future. It’s looking into applying blockchain technology to the mail – mainly for identity reasons. 

8.3.2016 – Virtual Skinny FinTech: Move It or Lose It

Posted by The Virtual Skinny on in FinTech Edition, Newsletter 0 Comment

8.3.2016

Good to Know: We want to get your thoughts. Take our poll below! 

THE SKINNY

When You Can’t Beat ‘Em …

Join ‘em. Wells Fargo, JP Morgan, Bank of America, and US Bank are all jumping on the instant cash bandwagon.

When You Don’t Really Have A Choice …

Their hands have been forced. In the U.S., moving money between bank accounts is slow AF. Mobile services like PayPal’s Venmo and Square Cash handled the issue…Customers love it … Now U.S. banks don’t want to get left behind. 

When Your Age is Showing …

Banks have tried to pull an Instagram by offering their very own money transfer apps. Think Chase QuickPay. But, it isn’t quite the same ‘copy and paste’ job Instagram just pulled on Snapchat (read more on that later this week in our Internet & Tech edition).  They want customers to believe that their apps are just as ‘hip and cool’ as the Venmos of the world with the help of star-power ads. But, some people aren’t buying it.

When You’re Not Leading From Behind…

The U.S. is playing ‘follow the leader’ with the rest of the world when it comes to faster payments. Note to self: The U.S. is doing the following. So, the Federal Reserve Board’s ‘Faster Payments Committee’ is telling banks to ‘pick up the pace’ on money transfers.

When You Need to Make A Move …

Meanwhile everyone and their moms in the financial ecosystem (including financial OGs like Mastercard and Visa) are in an arms race to build the “payments network of the future.” Mastercard snatched up a huge chunk of Vocalink, a UK biz with a mobile and internet payment network, and Visa’s strategically linked up with Paypal.

When You’re Just Happy to be Here …  

Since people are still using the cash money and writing checks, there’s lots of opportunity to get in on the instant payments action. It won’t be easy for banks to catch up with Venmo and other peer-to-peer apps that are hybrid payment and social platforms. But, at least U.S. banks are making moves.

PENNY FOR YOUR THOUGHTS?

Now that banks are stepping up their instant payments game, are you willing to give up your current money transfer app (i.e., Venmo, Square Cash, etc) and give your bank’s app a go?

WHAT ELSE IS GOING ON?

Ain’t Nobody Got Time for That …

The U.S. is still trying to get consumers to dip their credit cards rather than swipe them. Turns out chip and pin cards aka EMV cards aka cards that keep us waiting at checkout for life are way more secure and help cut back on fraud. That’s great and all, but we hear that making just two purchases daily for a year with an EMV card adds up. It’s literally 85 minutes of our lives that we’ll never get back just waiting to check out. No bueno! Even retailers want to avoid installing EMV card readers because long lines aren’t good for biz. Only 28% of all U.S. merchants require dips v. swipes. Shopping at places that take Apple, Android, or Samsung Pay may be a better, faster option. Meanwhile, some of us will continue to struggle with the process.

Screen Shot 2016-08-03 at 10.32.34 AM

And The Winner Is…

We hope China’s been practicing it’s surprise face and pageant wave. The U.S. Department of Commerce just crowned Asia’s largest economy as the 2017 Fintech Leader. Expect China to lead the world in payment exports. 

Sorry Seems To Be The Hardest Word …

Banks in Africa are are like that ex who took you for granted but now wants to make things right. Sure, they did the basics like setting up infrastructure but didn’t go the extra mile to take care of everyone’s needs. Banks on the continent dropped the ball on figuring out mobile money services and left potential bankers out of the loop. Now that fintech startups have stepped in to offer way better services that can help way more people, the banks are seeing the error of their ways. To right their wrongs, banks are teaming up with startups like MFS Africa and Nomanini to reach untraditional young consumers.

THE STREETS ARE TALKIN’

Hong-Kong based Bitcoin exchange Bitfinex told us its system had been compromised. Like thieves in the night, hackers allegedly made off with a cool US $65 million in real money. The exchange is looking into the breach. In the meantime, Bitcoin’s value dropped by 7.8 percent earlier this week.

China’s got a trust problem with its charity organizations. Alibaba’s CEO Jack Ma wants to use blockchain technology to make sure charities are using donations for the right purposes. Alibaba’s Ant Financial is leading the effort on this. Transparency FTW …

The charity world is pretty old school when it comes to donations. It’s all about those cash money donations. But, you can only give what you have. So, if people are short on dolla bills, charities are SOL. DipJar wants to change that up by allowing people to donate with credit or debit cards for “impulsive, on-the-spot giving.”

While Alibaba’s trying to figure out this blockchain situation, IBM seems to be way ahead of them. The tech company is all set to kick off the first major implementation of the technology for its business. IBM’s figured out how to use the technology to settle financial disputes between partners and customers. #NBD

One last thing on the checkout process, Venmo’s no longer for just easily reimbursing your friends. It’s branching out into checkout services for retail apps. Buying things you probably don’t need just got easier…

Virtual Skinny FinTech Ed: Back At It Again With The …

Posted by The Virtual Skinny on in FinTech Edition, Newsletter

3.30.2016
deadline

Good to Know: Calling all FinTech social entrepreneurs! If you’re working on solving the financial inclusion problem, Village Capital’s: US FinTech 2016 business-training program is for you.  Learn more here and apply here. Hurry! You’ve got until April 3, 2016. 

THE SKINNY

When It’s Time To Regulate On ‘Em …

The Office of the Comptroller of the Currency (OCC), a top U.S. banking regulator, thinks it’s time for some rules around the growing financial technology (fintech) industry. Traditional banks and fintech startups are here for it.

When You’re For It, Just For Different Reasons …

Traditional banks have long been regulated and want competing startups to join the regulatory party. Startups don’t mind because they actually want to play by new rules so they create and innovate without having to watch their backs like no one’s biz. Could be a win-win?

When It’s Hard to Lead From Behind …

Other countries like the UK have already made moves to put in place a more fintech-friendly regulatory framework (e.g., the UK now allows what it calls the “sandbox model” aka a fancy way to say it lets startups experiment under the government’s watch).  U.S. regulators now want to get on their level…

When You’re Finna Do Something …

Other U.S. regulators have published papers and conferenced on fintech, but the OCC is taking it one step further. On Thursday (Mar. 31), it’ll publish its very own white paper on “responsible innovation” intended to get people running their mouths on the best way to put together new rules and processes. Top issue for discussion? A more systematic way for consumers to complain about new products and services.

WHAT ELSE IS GOING ON?

What’s HIGER Than Being #1?

Japan thinks Asia needs to be the top dog when it comes to blockchain technology.  So, the country is doing its part to get there.  Japan’s got some strict banking laws, but it’s willing to dial things back to encourage more investment in its fintech sector.  The country’s banking regulator, the Financial Services Authority, are putting new laws re virtual currency exchanges on the table. Authorities think that changing the laws will be a good look for its fintech industry.  More collabos between banks and fintech ventures are on deck with these changes (e.g., giving banks the go-ahead to buy stakes in non-finance related companies).

When You’ve Been Traded In For A Younger (FinTech) Model …

Bitcoin could be so yesterday.  The virtual currency and its network are about to be replaced by Ethereum aka Bitcoin 2.0.  Ethereum is taking advantage of the ongoing fight over software within the Bitcoin community.  Things are looking up for the new virtual currency on the block.  Its price is up 1000% just in the past three months, companies like IBM, Microsoft, and JP Morgan Chase are drinking the Ethereum Kool-Aid, and people think it’s better than Bitcoin.  Apparently, it’s not just about its virtual currency network. It can do things like execute smart contracts or programmable transactions. Oh, and not to mention, people have already created applications for it (e.g., managing and paying for electricity, betting on sports, and not so legit things like Ponzi schemes).  It’s not all sunshine and rainbows. There’s some concern about Ethereum’s potential security problems.

QUICK POLL – RUN THOSE NUMBERS …

FinTech brought in the doll-ah doll-ah bills in Feb. 2016. We’re talkin’ $1.5 billion in financing…

fintech chart

THE STREETS ARE TALKIN’

How do you reach millennials during tax season? Get Instagram star Pierce Thiot, responsible for the “Will It Beard” trend, to stick money in his beard. Just the latest attempt for small companies (Fishback Tax) and larger ones to reach millennials and their cash. #TaxSwag

Speaking of millennials, roboadvisor company Betterment just raked in US $100 Mill to bulk up on new products and services (retirement guides and account aggregation), which it thinks will attract young peeps.

Will Facebook soon let us make in-app purchases? Potentially. Code has been discovered within Facebook Messenger that’s got people talkin’.

Swiss banks want a mobile payments platform for the country. They’re chatting with retailers on how to make it happen.

Startup Purse wants to be the Bitcoin marketplace version of Etsy. Introducing Purse Markets. Sell anything on the platform in exchange for some virtual coins.

MIT’s Digital Currency Initiative is offering up $100k in scholarship to boost under-repped minorities and women at Consensus 2016, NY-based conference on virtual currency and blockchain technology.

Virtual Skinny FinTech Ed: When It Rains, It Pours …

Posted by The Virtual Skinny on in FinTech Edition, Newsletter

2.3.2016

Keep Spreading the Word:  We’d appreciate if you’d tell your friends to get in on our FinTech weekly action.  They can sign up here! 

THE SKINNY

When People Are Coming For You … 

The European Union (EU) wants to do more to track how funds are transferred among terrorists.  Looking at you, Bitcoin (and prepaid cards).

Please Tell Me More …

After the Paris terrorist attacks in November 2015, the European Commission (being pushed by France) is focused on Bitcoin and prepaid cards for one main reason: identity. Using these services is a good way for bad guys (or anyone really) to hide financial transactions because it’s hard to uncover people’s identities.

When You’ve Already Got Summer Plans … 

The Commission plans to pitch some new rules by the end of June 2016 that would make users reveal their true identity.  We’ll have to wait and see how that turns out.

WHAT ELSE IS GOING ON? 

When It’s Your Time … 

Peer-to-peer (P2P) lending had a pretty good 2015 and looks like 2016 may be even better. New companies like Lending Club, OnDeck, Prosper, etc. popped up post the 2008 financial crisis to give people the loans they couldn’t get from banks. P2P lending startups will likely be on the rise this year thanks to things like an increase in interest rates, regulation, market size, and competition. Who knows? Internet companies like Facebook, Google, and Amazon have probably got next in the p2p lending game.

THE STREETS ARE TALKIN’ 

Stellar, an open-source payment network based in Silicon Valley, wants in on the instant money transfer situation in Nigeria.  It’s teaming up with fintech company Oradian that deals with microfinance systems in the name of financial inclusion. Transferring money may just get a lot easier for underbanked rural Nigerians.

While we’re on Nigeria, fintech startup Interswitch is about to make it big! It’s CEO isn’t talking, but we have it on good authority that the digital finance infrastructure (think platforms used for processing payments) may soon make its debut on the London Stock Exchange and become Africa’s first tech unicorn (meaning its worth at least a billion dollars). Kind of a big deal…

Ex-JPMorgan Chase exec Blythe Masters is keeping it in the family. Masters’ startup Digital Assets and the bank are playing on the same team for a blockchain trial run on how to make trading faster and more efficient. Oh, and Goldman Sachs and IBM also want a piece of the company for about $8 million combined.

Bitcoin and blockchain are blowing up in Asia. Here’s the rundown: Japanese VC firm SBI Investment pours money into bitcoin exchange Kraken; Bank of Tokyo-Mitsubishi UFJ, Tokyo’s largest bank, has got its own digital currency, “MUFG coin.” Add South Korea’s Central Bank to the growing list of entities looking into blockchain technology.

 

 

 

The Virtual Skinny: Hello, It’s Me

Posted by The Virtual Skinny on in Internet & Tech, Newsletter

11.4.2015

Good to Know:  Former Daily Show Host Jon Stewart is coming back to TV but only via the Interwebs. He has a four-year deal to do shows for HBO’s online platforms.  

THE SKINNY

 When You Give No Types of “Effs…”

San Francisco (SF) residents gave the city’s Proposition F, otherwise known as the AirBnB Initiative, a big thumbs down.  Prop F would’ve limited short-term rentals in the city to only 75 nights/year.  Also, it would’ve encouraged people to dime out their neighbors and companies violating the law.

This Is NOT A Fire Drill …

To defeat the proposal, AirBnB launched an $8 million full court press called the Anti-F campaign.  The rental platform unleashed seasoned organizers and volunteers (including 138,000 members of the AirBnB community) to pound the SF pavement to turn voters against Prop F. Unofficially, about 55% of voters checked no on their ballots.

When You Pull Off The “W…” 

AirBnB is happy because the proposition would’ve caused issues for the $25.5 billion company both in the U.S. and abroad. And, residents are happy because they can continue to freely rent out their homes to supplement their incomes.  After all, prices for SF housing are no joke, partly thanks to the technology boom in the city. This year’s average rent for a studio apartment in the city is $2,828.month, and the median home price is $1,097,000 (up 17% from last year). Yikes!

Taking A Victory Lap …

AirBnB plans to brief reporters on the results today.  But, the company can’t celebrate for too long. It’s hit roadblocks in Santa Monica and Berlin, and the company has attempted to compromise with authorities by saying yes to paying taxes in cities like Paris. If the company wants to go public, it’ll need to sort out all of the legal and policy stuff first.

WHAT ELSE IS GOING ON? 

It’s Better To Give Than To Receive … 

For Internet companies these days, that’s the motto.  Marc Benioff, CEO of cloud computing company Salesforce, says including corporate giving into your business strategy is a must.  Salesforce takes the 1-1-1 approach, meaning the company annually donates 1% of its equity, 1% of employee time, and  1% products to communities where Salesforce employees live. Benioff had a lot to tell the New York Times, but the key takeaways for businesses and its leaders? Do good in your community, have a heart, stand up for equality, and try not to stress too much.  Other companies that are taking this to heart? Google.org is gifting San Francisco organizations fighting for racial justice in the U.S. criminal, prison, and educational systems with $2.35 million in grants to help the cause. And, Kickstarter’s CEO Yancey Strickler is still sounding off on staying true to the crowdfunding sites’s core and “not selling out” on its values by going public.

A FEW OF Your FAVORITE THINGS… 

Yesterday, Twitter changed things up on us and decided it preferred hearts over stars. The social platform replaced the star intended for users to “favorite” tweets with a heart. Turns out this change happened because the star was confusing for folks new to Twitter. Apparently you can’t have more than one favorite thing (tell that to Oprah and Maria von Trapp). We’ll see if the heart brings in the new blood Twitter hopes to see.

Not All Hearts Aflutter… 

In other news, former Twitter Engineer Manager Leslie Miley left the company and then wrote about his less than diverse experience.  He says he’s happy to have been part of a platform that gives a voice to underrepresented groups but takes many … and we mean many issues with how the company handled increasing its low diversity numbers (3% of engineering and product personnel at Twitter are African-American/Hispanic and less than 15% are women). From a lack of communication with the company’s black employee resource group to a questionable suggestion for a name analysis tool to track job candidates, Miley uses examples to show how Twitter leadership just doesn’t get it. But, Miley thinks CEO Jack Dorsey is the man to fix the problem.

who’s the boss? 

Ride-hailing app Uber has a lot on its plate. Ready? First, the company’s still in the midst of the employee v. contractor battle.  Uber drivers say they should be considered employees, but CEO Travis Kalanick insists that Uber isn’t their direct boss. Kalanick is giving the “boss” title to its algorithmic software that matches drivers and riders. New York University Data and Society research team begs to differ.  The team says the algorithm manages drivers the same way a human would.

Second, Uber wants regulators and policymakers to ease off on the company because it gives people jobs (1.1 million around the world) and puts money in their pockets ($3.5 billion this year for U.S. drivers alone).

Third, competition is getting tough in the ride-hailing app game so Uber is reportedly exploring the idea of luring new drivers with promises of bank accounts and same day payments.

Fourth, Chinese regulators have a proposal that would be hugely problematic for Uber, but the company’s still full steam ahead on its plan to be in 100 Chinese cities in 2016. Speaking of expansion, Uber’s putting up $250 million to get into North Africa and the Middle East.

THE STREETS ARE TALKIN’

Who has time to reply to e-mails anymore?  No worries, Gmail’s got it handled. Through machine learning, Gmail will generate responses on your behalf via “Smart Reply.”

Pinterest Shop is coming to your phone soon.

Don’t be scurred. Netflix CEO Reed Hastings is letting media execs know that they shouldn’t worry about what his company’s doing but should instead focus on themselves. Industry’s ‘TV Anywhere,’ which lets users watch network TV shows online, isn’t catching on with folks.

OfferUp, an online classifieds apps aka the potential ‘Craigslist Killer,’ just put $90 million in its bank. The currently free app has seen consistent user growth over the past three years and processed $2.9 billion worth of transactions this year alone.

Facebook’s really getting into artificial intelligence and is trying to build software that works like our brains.  If its software can beat the strategy game Go, then FB is headed in the right direction.

Eric Lefkofsky, co-founder of daily deals site Groupon, is no longer the company’s top guy effective immediately. Lefkofsky is now chairman. He’s been replaced by its Chief Operating Officer Rich Williams.

Social video game provider Zynga keeps losing users, and its Chief Financial Officer David Lee just dipped out.