And By ‘Coins,’ We Mean Money Transfers on Messenger
Facebook Messenger just thought of a new way to remind you when you owe someone money. According to the The Verge, the social network is testing out what we’re calling a new ‘pay back feature.’
Here’s how it works: Let’s say you’re chatting with your friend about a recent night out. During the convo, someone drops words like ‘IOU’ or ‘ you owe me.’ Facebook’s feature with the help of chat assist and machine learning will pick up on those words or similar phrases. The feature will then prompt you or your friend to make a payment right then and there. While the feature does this automatically, it’s up to each party to decide whether they want to settle their debts right there on Messenger or keep their ‘IOU’ status a bit longer.
Just another sign that Facebook’s trying to get deep into the payments game. The company didn’t stop there. It’s also introduced group chat polling to help planning nights out with friends a bit easier. Turn all the way up tonight or do something more chill and low-key? That could be the question.
U.S. Facebook users are in luck because both features are only available Stateside – for now.
What do you think? Good move by FB or completely unnecessary? Tell us what you think in the comments or take our poll!
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.
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.
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…
Good to Know: Anything is possible on the Internet! Stay-at-home mom Candace Payne just wanted to have a little fun and prove that she was the proud owner of an electronic Chewbacca mask. She posted a Facebook Live video wearing the mask, and the rest is history. In no time, her video racked up over 141 million views making it the most watched video via the feature. She’s landed guest spots on late night talk shows and paid a visit to the Zuck at FB HQ.
THE SKINNY
When Something Is No Longer A Thing …
Car ownership may likely become a thing of the past. Thanks to tech companies, it’s becoming easier and cheaper to get from Point A to Point B without owning a car. Automakers can’t beat tech companies so they’re joining them.
The future of auto is all about “mobility services” aka car-sharing and ride-sharing. Industry analysts say we’re not quite there yet. But in the meantime, Toyota wants to be all in on mobility (e.g., Toyota’s planning to create in-cars for Uber drivers). Volkswagen is trailing behind Toyota as it deals with its emission-cheating scandal, but the German automaker plans to release what it’s calling “Strategy 2025,” a plan for its mobility efforts, this summer.
QUICK POLL – BY THE NUMBERS
WHAT ELSE IS GOING ON?
Keeping It As Local as possible…
Ever tried to access content online only to get hit with the “this video is not available in your country” message? The formal term for that message is called “geo-blocking.” And, the European Union (EU) has had enough of it and other barriers to online shopping across its 28 Member States. So, it’s come up with a new proposal for the Netflix, Amazon, and iTunes of the world: Get more European content up on your services. At least 20 percent of each catalog to be exact. This is all according to a proposal put out by the EU this week. Only problem is Netflix and a European tech industry group DigitalEurope say that setting a quota for European content production won’t help protect local content. But instead, could hurt biz models. Meanwhile, European screenwriters and authors want even higher quotas. In a nutshell, no one is happy with the idea.
ICYMI: Peer-To-Peer (Money) Petty
Is peer-to peer money transfer app making its users petty? Check out our post on this from earlier this week, and share your Venmo petty story in the comments!
THE STREETS ARE TALKIN’
Is investor Peter Thiel for free press or not? Word on the street is that Thiel (on the low) bankrolled Hulk Hogan’s lawsuit against media company Gawker. Hogan beat Gawker and was awarded US $140 million in damages. Thiel has history with Gawker. The company publicly outed Thiel in a piece called “Peter Thiel is Totally Gay, People.” We’ll let you draw your own conclusions.
Twitter is planning to ditch its 140-character word limit. Also, tagging people in replies, adding pics, GIFS, or video won’t count towards the tweet limit. Times are ah-changing …
French investigators paid a visit to Google’s Paris office over tax payments. France is claiming the Google machine owes it 1.6 billion euros (US $1.79 billion) in back taxes.
The level of FitBit’s accuracy depends on who you ask. Studies have shown mixed results in whether the wearable devices are accurate in tracking users’ activity.
Dr. Craig Wright had the Interwebs abuzz. But at this week’s Consensus 2016 conference in New York City, execs said yawn. Newsflash: They don’t care about bitcoin.
When You’re TRENDING…
Bitcoin is out. But, the blockchain (bitcoin’s underlying technology aka a huge public ledger that records all bitcoin transactions) is in.
When You’re Not Sure What To Do …
For now, bitcoin as a virtual currency is the only application that works across the globe via the blockchain. But, we could see other applications popping up as fintech startups and major tech companies like IBM and Microsoft are working on different apps for the blockchain. How fast these experiments turn into something real comes down to one question: Small scale projects or moonshots? In other words, do companies want to take on a major project all at once or take their time with small-scale stuff?
When You’re Curious …
What’s the better approach? Working on small, achievable applications or taking the risk and shooting for the stars? Tell us in the comments!
CBS 60 Minutes Lesley Stahl talked fintech on this past Sunday’s episode. She sat down with John and Patrick Collison, Irish brothers and co-founders of payments company Stripe. The whole point of the company is to allow small businesses to get their online payments from anywhere in the world hassle-free. Check it out here.
QUICK POLL – RUN THOSE NUMBERS …
Young people are into their Venmo app, and the numbers prove it. It’s grown 154 percent from last year.
THE STREETS ARE TALKIN’
Young people may heartVenmo, but the U.S. Federal Trade Commission won’t be saying “Venmo, me.” The agency, which is responsible for making sure businesses are on the up and up with their practices, is looking into the PayPal-owned, peer-to-peer payment service for “unfair and deceptive” practices. BTW, Venmo would appreciate if U.S. users stayed clear of using words like “Syria” and “Cuba” on Venmo on account of it’s still illegal to send money to those countries.
San Francisco startup Varo Inc. is building mobile banking app complete with deposit accounts, budgeting tools, and other services. For now, it’s looking to partner with banks but eventually wants to be a bank of its own. New U.S. bank these days? Don’t see that every day.
Android Pay is now an official payment options for your Uber rides.
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.
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.
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…
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.
Good to Know: Spread the word! The Virtual Skinny’s weekly FinTech is here. Tell your peeps to sign up here.
THE SKINNY
When Everyone’s Talking About You …
At last week’s World Economic Forum in Davos, Switzerland, “fintech” was all the rage. Apparently, the term is no longer just for startup companies using technology to shake up the financial services industry. Traditional banks are saying they are about that “fintech” life too.
When You’re Not Quite Part of the Convo …
Though fintech was the talk of the town and startup execs made their first trip to Davos, incumbents were still running things and led discussions about the “Fourth Industrial Revolution” and “The Transformation of Finance.” It’s an interesting time, especially since old-school financial firms have as much as US $150 billion of revenue to lose to fintech startups according to consulting company Oliver Wyman.
European officials like Dutch Finance Minister Jeroen Dijsselbloem aren’t shying away from fintech. Turns out that Dijsselbloem thinks European economies are way too reliant on traditional banking. He says alternatives are a good thing, and regulators should embrace that. Financing options are good for people and small- and medium-sized businesses.
WHAT ELSE IS GOING ON?
Belle of the Ball…
Also at Davos, ex-JPMorgan Chase exec Blythe Masters just pulled US $52 million to fund her blockchain technology startup Digital Asset Holdings (DAH). Where’d the money come from? A bunch of banks including Masters’ former employer forked over cash to help fund the new company, but it took longer than expected. Some banks opted out all together. Literally everyone is talking about “blockchain this” and “blockchain that,” but the technology’s real world uses haven’t quite caught up to talk of its potential. But, Australia’s main stock exchange, ASX, is on board. It inked a deal with DAH to settle trades and transfer money faster.
THE STREETS ARE TALKIN’
Peer-to-peer money transfer app Venmo is looking to make some money this year, and it plans to use its new feature “Pay with Venmo” to do just that starting today. Think of it as an alternative to paying for stuff online with your credit card.
Alternative lending startup Social Finance (SoFi) wants you to know who they are so it’s willing to shell out 20% of its annual budget for an ad spot during this year’s Super Bowl. In case you’re wondering, SoFi’s main jam is refinancing student loans and personal loans for qualified millennials.
When it comes to FinTech, London, Silicon Valley, Hong Kong, and Singapore are the usual suspects, but Mexico and South Africa are right on their heels.
Tech companies and banks are banding together to build their own version of the blockchain, the underlying technology behind virtual currency bitcoin. The project is called the Open Ledger Project. Think alternatives to the blockchain like the Ripple network.
Tell Us More…
Nonprofit Linux Foundation is overseeing this alternative-blockchain movement. And, IBM, Intel, Cisco, the London Stock Exchange Group, JP Morgan, Wells Fargo, and State Street are in. The goal is to build something similar to the blockchain that will help increase transparency and automation across the business world. Think stock exchanges and financial markets, specifically.
If You Build It, They Will Come …
Yes, improving services in the business world is good and all. But, this move seems to be a lot about control. Currently, the current bitcoin network is decentralized just like the Internet. In other words, no one person or entity can claim the bitcoin network. With the Open Ledger Project, the participating companies can have a say in how the technology is built and operated. Word on the street is companies involved in the project want to ultimately keep this new blockchain-type technology open and non-proprietary.
WHAT ELSE IS GOING ON?
Starting Things Off Right …
In what will be a relatively light week on Wall Street on account of the holidays, things are looking up for tech and the financial sector. Not so much for energy stocks, which are trailing behind.
If It’s Broke, Fix it …
Global nonprofit organization Kiva is re-working its playbook for the U.S. market. The organization’s lending platform, kiva.com, has been a hit in when it comes to helping finance small biz in emerging markets, but it’s not so popular in the U.S. One reason? It’s just easier and cheaper to access capital. So, what’s the new angle? Kiva’s offering what it calls the Kiva Zip platform so small biz owners can bank on their friends and family to help fund their operation. We’re talking – raising $10k with 0% interest and zero fees and terms for three years. Not bad …
By Any Means Necessary …
We all heard about the massive data breach at JP Morgan earlier this year leaving 76 million homes vulnerable. Now, banks are shaking in their boots and are spending racks on racks on racks of cash to secure their systems. They’re also sending fake “phishing” aka “spear phishing” emails internally to see how employees react. Turns out employees are falling for it. In addition to training employees on what to do if they receive “phishing” emails, banks are also doing things like banning employees from using their work email address for play, using “out of office” emails or voicemail message, and from using portable devices like USBs. Anything for security. Speaking of … this year, entities dropped $75.4 million in the cybersecurity market.
THE STREETS ARE TALKIN’
UK mobile wallet app Yoyo has gone stealth mode in the U.S. The mobile wallet is quietly entering the market via a few chosen partners. It hopes to make things official during Q1 2016.
Investors are looking to Israel’s fintech market, which is hot, Hot, HOT! Turns out the country’s progression in cybersecurity makes it ripe for a fintech boom.
First Walmart, now Target. The retailer is getting into the mobile payments biz. Things are all very early stages, and the company says that it’s keeping its options open.
Breaking into the Chinese market. That’s top of the list on Apple and Samsung’s list of New Year resolutions. Both companies are looking to check that off their list with Apple Pay and Samsung Pay by collaborating with UnionPay. Chinese Internet company Alibaba’s already got a strong hold on the market with AliPay so we’ll see how this goes.
U.S. Senators Chuck Grassley (R-IA) and Dick Durbin (D-IL) are throwing in a bill of their own to heat up the U.S. immigration reform debate. It’s called the H-1B and L-1 Visa Reform Act of 2015. Grassley and Durbin want American employers to focus on hiring U.S. citizens first and forget about outsourcing certain jobs. Houston, we have a problem.
Back it up …
Quick background: This isn’t exactly what tech and Internet companies had in mind for immigration reform. These companies want the ability to bring in more foreign-born high-skilled workers like engineers to keep their businesses competitive. After all, there’s been talk about the U.S.’s shortage of STEM (Science, Technology, Engineering and Math) workers. So, tech and Internet companies often have to look elsewhere to bring in talent.
What Do You Want From Me?
These companies want to up the available number of H-1B visas, which are work visas for foreign, high-skilled professionals. The demand for these visas is currently so high that the U.S. government resorts to a lottery system for H-1B applicants. In other words, qualifications don’t matter, it all comes down to luck. Groups like FWD.us, backed by Facebook CEO Mark Zuckerberg, are pushing for “common sense” immigration proposals that focus on high-skilled immigration and immigrant rights.
Taking the Good with the Bad …
The bill wants to limit job outsourcing by targeting companies such as Indian outsourcing firms. But, it also has some redeeming points for the broader tech industry. For one, the legislation would make it easier for H-1B employees to switch employers without fear of losing their visa status. Win! The bill will likely go nowhere, but it’s putting immigration back on the map. With an election year coming up in the U.S. and campaigns moving full steam ahead, expect more immigration chatter.
WHAT ELSE IS GOING ON?
Is IT OR ISN’T IT?
Sports fantasy sites FanDuel and DraftKings will finally get their day in the New York Supreme Court tomorrow. On the agenda? Whether FanDuel and DraftKings’ services qualify as gambling. Since the alleged insider trading involving a DraftKings’ employee a couple of months back, the federal government and states have been on the companies’ backs. Tomorrow’s hearing is key because whatever comes out of New York on this issue could influence how other states deal with FanDuel, DraftKings, and other fantasy sports sites.
THE STREETS ARE TALKIN’
Social media company Facebook is in the business of giving away free Internet access. The company’s Internet.org initiative offers basic Internet access to emerging markets via a program called Free Basics. India’s got next.
Microsoft(MSFT) put out a report on the company’s diversity numbers. Slight improvement in racial and ethnic diversity within the company but not so much for gender diversity. The percentage of women at MSFT dipped 7.6% in the past year.
Apple’s mobile payment and digital wallet service Apple Pay will be in China by February 2016. Chinese services like WePay and AliPay are already dominating the market. We’ll see if Apple Pay even stands a chance.
Lady Gaga’s ex manager Troy Carter helped her to stardom. Now, Carter wants in on tech talent. He’s launched an LA-based incubator called Smashd Labs.
“Financial tech (FinTech) and the payments landscape is changing – and fast. For years, reputable entities such as McKinsey & Co. have documented the industry’s evolution. Recently, in its monthly global payments report, McKinsey determined that the industry will continue its growth after “an extraordinary year in 2014.” If 2014 was an “extraordinary year” for payments, then 2016 will be monumental. There is no better indicator of this than this year’s Money 20/20, an annual financial services conference, held in Las Vegas, NV last week…”
