Virtual Skinny FinTech Edition: The Block Is Hot …

4.6.2016

Good to Know:  “ We are actively exploring these issues and their implications.”U.S. Securities and Exchange Chairwoman Mary Jo White putting everyone on notice that she gets that blockchain tech is en fuego and her agency’s got its regulatory eye out. 

watching

THE SKINNY


When You’re Not About Empty Threats …

Payments company PayPal had plans to set up shop (costing US $3.6 million) in North Carolina (NC). But, not anymore. It’s put the kibosh on that.

When You Need To Get Caught Up …

NC is pretty committed to what could be called its new LGBT discrimination law. Back in March, NC passed a law preventing cities from protecting the LGBT community and banning transgender people from using restrooms or locker rooms for the gender not listed on their birth certificates.

When You Don’t Listen …

The company’s CEO Dan Schulman joined a letter with over 80 other tech execs. The letter listed all the reasons why the then-bill was not a good look. The execs even warned that quality professionals would peace out of the state.

When You’re Back On the Market …

NC ignored the letter, passed the bill anyway, and now PayPal (and other projects) are back on the market and are looking for alternative locations.  NC, say goodbye to what would have been 400 new jobs and US $3.6 million, at the very least…

WHAT ELSE IS GOING ON?


Still DEL(ly) From The Block …

The U.S. state of Delaware is a fan of the blockchain.  State governor Jack Markell just let the cat out the bag on what the state is calling “the Delaware Blockchain Initiative.”  It’s the state’s way of saying to businesses incorporated there that they need to get up-close and personal with distributed ledgers and smart contract technologies. Kind of a big deal. BTW, if you want to hear more details on this from Markell, catch him giving the keynote at this year’s Consensus 2016 conference, which will be held from May 2- May 4, 2016 in the concrete jungle where dreams are made of…

QUICK POLL – RUN THOSE NUMBERS …


Check out all the fintech startups for all your banking needs …

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THE STREETS ARE TALKIN’


When money goes social … PayPal-owned Venmo is now a thing with young people.  And, it’s not all about the money. They just want to know what their friends are getting into on the app.

Owe your co-workers some coins? With the help of startup Current, workplace messaging app Slack will soon offer money transfer services to help you settle your office debt.

The British government just gave the go ahead to Boston-based startup Circle. In other words, for the first time, the government has given an electronic money license to a virtual currency company.  London … Building its Innovation Hub one fintech startup at a time.

Speaking of building empires … Amazon is looking to make some fintech-related purchases.

Virtual Skinny: Listen Up!

2.4.2016

Good to Know: The Super Bowl is coming up this weekend. Don’t have cable? No problem. CBS Network is streaming the game for free on more devices this year. There’s still time to get yourself a Roku set-top box, Apple TV, Google Chromecast, Amazon Firebox, etc. Even if you’re not into football, band Coldplay is the halftime entertainment; BUT, we hear Beyonce will be stopping by! #YASSSS

beyonce superbowl
SOURCE REBLOGGY.COM

THE SKINNY


Are You Ready For This?

And by this, we mean predictive policing. What it boils down to is using different data sources (e.g., past criminal activity, population density; census data; the locations of bars, churches, schools, and transportation hubs; schedules for home games, etc.) to pinpoint patterns for future crimes.  Trippy, right?

This Is Happening … 

We all saw what happened in Ferguson, Missouri (police officer Darren Wilson shot and killed unarmed black teen Michael Brown). Some people are looking for ways to improve law enforcement’s relationship with local communities.  Just so happens that some police officers think that relying on data could help them make better, more objective decisions. One community is working with HunchLab, a startup that offer the latest version of predictive policing. You should know that other companies like Predpol, IBM, Hitachi, and Lexis have been in on predictive policing for some time now.

We Call B.S. … 

Activists and academics think that this is a pretty terrible idea. They think it’s pretty simple to conclude that the data being used would only reflect a system that already targets young black men at disproportionate rates. Proponents for cops using predictive technology say that at least with HunchLab’s system it protects against racially disproportionate policing by only focusing on serious felonies and not low-level crimes (i.e., drug possession). Seem like most people think that’s a tough sell.

WHAT ELSE IS GOING ON?


Let’s Get Down to Biz … 

Mixing the old with the new. That’s pretty much Yahoo’s plan to do better in 2016. It’s a three-step plan. The first is something Yahoo’s already done – many times.Yahoo’s telling 1600 more of its employees that “they don’t gotta home, but they gotta get the heck outta there!” And in what seemed to be a crazy plan when we first heard of it, turns out not so crazy after all. Yahoo is willing to sell its core Internet business and also its stake in Yahoo Japan. Last on the list? They’re even willing to sell the whole shebang to the highest bidder. It’s an aggressive plan.  Only problem is … How do you motivate people who may not be around for much longer? Things to think about …

thinking
SOURCE WWW.REDDIT.COM
On That Note …

Speaking of selling to the highest bidder, Twitter is struggling and should probably be giving its next steps some serious thought. Otherwise, a hostile takeover may be in its future. Meaning the company could either be bought by or merged with another company whether Twitter’s board of directors likes it or not. The good news here is a hostile takeover probably won’t happen for now mainly because of how the company’s board is structured. But, things could change.

Signed, Sealed, Delivered … 

The U.S. and European Union (EU) finally struck a new deal on transferring people’s personal data across borders. In what seems like a Hail Mary-type move, both economies came together and signed off on what they’re calling the EU-U.S. Privacy Shield, intended to replace the previous agreement known as the U.S.-EU Safe Harbor.  The agreement is likely a huge relief for American companies that do business in Europe. Now, they can somewhat relax and get back to business as usual without having to jump through much legal and regulatory hurdles. Even though the EU and US shook it, an EU watchdog still wants to take a hard look at the new deal to see if it really protects Europeans’ data when it makes its way across the U.S. border.

THE STREETS ARE TALKIN’ 


Sometimes, running your mouth can get you into uncomfortable situations. Just ask CEO of shopping mall operator General Growth Properties Sandeep Mathrani. He said that Amazon plans to open about 400 physical bookstores. Not true!

Action camera maker GoPro has got some news for ya. Are you sitting? The year ahead will be a bumpy ride for the company. And by bumpy, we mean its sales will be taking a dip.

Messaging platform Slack wants to change the way people work. E-mails are a huge time suck, and you’d be hard pressed to find anyone who loves those “reply all” messages. The platform wants to push office convos via channels and figure out how to better manage those discussions.

Let’s get back to the big game … Tech companies are digging deep into their wallets for Super Bowl Sunday. We’re talking US $ 4.3 million for a 30 second spot. Yikes! Expect to see ads from the likes of Amazon, PayPal, Apartments.com, and Squarespace. Ride hailing app company Lyft is taking a different marketing approach. It involves ex-NFL pro Jerry Rice as an undercover driver.

There’s now a text generator emulating unlikely Snapchat star DJ Khaled’s “keys to success” messages. #BlessUp

dj khaled
SOURCE NOWTHISNEWS.TUMBLR.COM

Looking for new things to watch? YouTube’s out with its very own original content February 10.

The Virtual Skinny FinTech Ed: Checking In …

1.20.2016

Good to Know: Global political and business leaders are in Davos, Switzerland this week. In between ski runs, they’ll be at the 16th World Economic Forum Meeting talking things like robots, inequality, Europe, etc. Where do we sign up? 

THE SKINNY


Is That A Threat?

People in their 20s and early 30s (aka Millennials) would rather handle their finances via digital services and smartphones than deal with old school banks.  FinTech startups and services offered by Internet and tech companies like Apple, Amazon, Google, Facebook, etc. are giving banks a run for their money.

Just Look At the Signs … 

Well for one, in 2015 alone, retail banking saw about $6.8 billion in investments (up 4x from 2014). If that’s not enough, young people’s behavior is pretty telling. Some are ditching credit cards all together for alternatives offered by startups like Affirm. The appeal? A ridiculously easy sign-up/approval process and minimal confusion regarding its terms.

When You’re So good, You Can’t Be Ignored… 

You know what they say, imitation is the best form of flattery … Or, if you can’t beat ’em, join ’em.  Seems like a couple of cliché phrases, but that’s pretty much how banks are approaching competition in a FinTech world.  For instance, Citigroup is partnering with online lender Lending Club.  And just a few months ago, it created its very own group focused on becoming more innovative, appropriately named Citi FinTech.

It’s Not All Sunshine and Rainbows … 

FinTech startups and services are popping up pretty quickly. But, it’s not without any issues. Legal and regulatory challenges are at the top of the list. But, companies are working on that. Last November, Amazon, Apple, Google, PayPal, and Intuit got together to form a D.C.-based group called Financial Innovation Now. Its goal? “To promote policies to “foster greater innovation in financial services.”

WHAT ELSE IS GOING ON?


It Ain’t No Thing … 

Regulatory barriers are tough to break through, especially when it comes to moving money across borders. But, few Fintech startups (25 to be exact) have navigated the muddied, regulatory waters like champs to achieve global expansion and growth. Square, Payoneer, Stripe, Braintree, and Transferwise are just a few that made the cut. Congrats on figuring out how to strike the right balance on things like regulations, market opportunity, local ecosystem, competition, flexibility of business mode, etc.

When You’ve got a #@%$! problem … 

Bitcoin is going through it – again. Lately, there’s been not so positive chatter about the fate of the virtual currency and its network after one of its core developers Mike Hearn penned a pretty controversial blog post. In a nutshell, Hearn basically said Bitcoin is a major fail and announced that he was bowing out of the whole thing. Now, Bitcoin insiders and those on the outside can’t help but add in their two cents about the state of the Bitcoin network. See here and here.  Other developments? Russia plans to ban Bitcoin before it becomes a thing in the country. And, Bitcoin wallet and exchange company CoinBase’s main guy tasked with helping educate U.S. lawmakers is about to dip out for another gig with the bankers. No word yet on what this means for the company.

WHEN SOMEONE’S Not A Fan … 

Unlike Bitcoin, crowdfunding typically doesn’t get a bad rap. In fact, you’d think that everyone loves it, but no so much. Ian Russell, CEO of the Investment Industry Association of Canada, is not feeling crowdfunding – not even a little bit – particularly when small businesses use it to raise capital. Russell thinks TSX Venture Exchange (TSX), Canada’s stock exchange, is a way better option for early stage ventures looking for money. Russell isn’t just talking about it. The man is on a mission.  He is calling on Canadian regulators to forget about equity crowdfunding and focus on TSX instead. Naturally, the National Crowdfunding Association of Canada thinks that’s a terrible idea. Side bar: If you’ll remember the U.S. Securities and Exchange Commission signed off on rules allowing non-accredited investors to participate in equity crowdfunding.  Just something to think about …

THE STREETS ARE TALKIN’


The UK Government Office for Science wants other parts of the UK government to look into blockchain technology and figure out how it can work for them on things like government aid payment systems, tax monitoring, etc.

Commerce technology company First Data is going after mobile payments company Square with CloverGo, its new EMV card-reader.

 

The Virtual Skinny FinTech Ed: Reverse, Reverse …

1.15.2016

Good to Know: The Virtual Skinny is out with a weekly newsletter on what’s going on in financial technology aka FinTech. Sign up here! And, please don’t forget to tell you friends about us. Happy Friday!

THE SKINNY


Can’t We All Just Get Along?

Bitcoin, the virtual currency network, is going mainstream. And you know what they say: Mo’ money, mo problems.

What’s the Problem?

It really comes down to how many financial transactions the network can handle. Bitcoin’s creator Satoshi Nakamoto initially put a temporary limit on the number of transactions to protect computers on the system.  But, to compete in the big leagues along side companies like PayPal and Visa, the Bitcoin network would need to process more transactions. So, to increase the number of transactions on the network or not? That is the question.

Is It Really That Serious?

When the question came up last year, two camps quickly formed: One in favor of the increase and the other against it. Points of contention over technical capabilities and financial interests have added to the mounting tension between both groups. Some Bitcoin developers have even received death threats, ultimately leading them to bow out of the whole Bitcoin system all together.

GIVING THE PEOPLE WHAT WE THINK THEY WANT?

To settle the score, the group favoring the increase peeled off and created software allowing for more transactions called Bitcoin XT (XT). But shortly after XT’s release and endorsements of the software from the likes of CoinBase and others, a hacker released Bitkiller, a malicious software, to take down computers running XT. The hacker claims he was paid off to get rid of Bitkiller.

Where Do We Go From Here?

Since then, the Bitcoin community has gotten together twice to try to reach a better compromise but no answers yet. It’s pretty unclear where things are headed. Oh, the drams!

WHAT ELSE IS GOING ON? 


Party’s Over … 

China’s not the place if you’re trying to get your Fintech company off the ground.  The government’s taking “corrective actions” that’ll force Fintech startups to either consolidate or simply fold. This is a 180 from the Chinese governments initial outlook.  At one time, It was all about Fintech startups so they could compete with Chinese e-commerce companies like Baidu, Alibaba and Tencent. But, now China has changed its mind. Thanks to things like new regulations, unsustainable business models, and low return on investments (ROIs), these startups will struggle this year.  E-commerce companies aren’t safe either. But, you know who will be? The banks, of course. If things go as planned, banks in China should reclaim their power in no time.

When You’re All About It …

Wall Street is embracing Fintech companies with open arms. Fintech can mean a lot of things but basically covers services and apps that help make financial transactions happen. Banking vet and Silicon Valley Bank’s Head of EMEA & President of the UK branch Phil Cox thinks that Fintech “winners” will be companies that can offer solutions to major problems like improved customer service from banks. Seems like a no-brainer …

If Only We Knew What You Were Talking About …

Nasdaq, the New York Stock Exchange, and the entire capital markets crew wants to know how they can make blockchain technology work for them.  So, what’s stopping them?  According to one study, the talent just isn’t there.  In other words, there just aren’t people that understand both blockchain technology and the ins and outs of capital markets. Also, there’s the other issue that blockchain technology may not pair nicely with existing IT infrastructure of capital market firms.

THE STREETS ARE TALKIN’


Messaging app Snapchat wants to do more than just make sure that your sketchy pics don’t last.  It wants to help manage your funds by getting into the robo-adivsor biz.

Moneybox, a U.K. startup coming to us soon, wants to make sure that you save and invest some of your coins. It just pulled in US $3 Mill to help make its dreams a reality.

CoinDesk, an online publication about all things Bitcoin, just got bought out by the Digital Currency Group, an industry leader.

Is PayPal drinking the Bitcoin kool-aid? Likely story. The company just brought on bitcoin entrepreneur Wences Casares to join its Board of Directors.

It’s a good time to be in the payments biz.  The 10-year-old payment startup Adyen is worth about US $2 billion, but no one’s heard of it. The startup wants to change that and is looking to cause a media frenzy by taking its financial situation public (even though it’s still a private company). Interesting…

The Virtual Skinny: House of Cards Season 3 Recovery

3.3.2015

Good to Know:  We all know that eBay is a major e-commerce website but ever wondered how it got its name?  Turns out that the “e” doesn’t stand for electronic after all.  According to founder Pierre Omidyar, the company’s name has connections to Ebola. Omidyar had once populated the site with content related to Ebola. So, the “e” stands for ebola and the “Bay” is for none other than the Bay Area. #TheMoreYouKnow      


THE SKINNY.

Getting Things Done.

Last week, we gave you the heads up that the U.S. Federal Communications Commission would be voting on its Chairman Tom Wheeler’s net neutrality rules.  Well, the vote went down and in a 3-2 party line vote among the Chairman and his four Commissioners (2 Democrats and 2 Republicans), it was net neutrality for the win.  While the FCC Dems were all in, the two other Republicans on the other hand called out the rules’ flaws and even laid out ways that these rules could get overturned whether through a new Commission, Congress, or the courts system.  Republicans on Capitol Hill are not pleased either as they see this as big government seeking increased control over the Internet, but solutions to address this issue is causing some rifts in the party.  Outside of government, the usual lines of demarcation remain the same.  Internet companies are pleased with the rules approach to reclassify Internet providers as public utilities in efforts to ban blocking and paid prioritization while increasing transparency.  Cable companies/Internet service providers are not. Needless to say, a legal challenge of these rules is on the horizon.  #DejaVu But in the meantime, on March 18, the U.S. Senate Commerce Committee will hold a hearing featuring Wheeler. Fun Times.

When Do We Get To See It?

The public still hasn’t seen the 317-page Order, but Wheeler hopes it’ll be released soon.  The Commission’s General Counsel Jon Sallet recently penned a blog post explaining the agency’s process when it comes to adopting rules.  In a nutshell, Sallet explained that the Commission simply follows Congress’s “blueprints” through the Communications Act and the Administrative Procedure Act, which provides guidance on federal administrative action.  These blueprints are followed in order to make sure that the rule “reflects public input, permits internal deliberation, and is built to withstand judicial review.”  Sallet indicated that once statements and requests for clarity are incorporated into the rule, then it’d be ready for public release.


What Else Is Going On This Week?

Belle of the Ball … 

Chairman Wheeler’s timing is impeccable.  Approval of his net neutrality rule came just in time for this year’s Mobile World Conference (MWC) in Barcelona.  The MWC is an annual conference attended by the who’s who in the mobile space.  This year, the spotlight is on Wheeler and his decision.  According to media reports, telecom execs want Wheeler at their table to question him about his thoughts on the implications of the rules.

Can You Feel The Tension?

Tensions between tech and telecom may be at an all time high at MWC, particularly in light of the Commission’s adoption of net neutrality rules.  Around the globe, telecom companies use the same argument against Internet companies offering over the top services.  Their number one gripe is that they’ve invested so much dolla dolla bills into building their infrastructure, and Internet companies are essentially free riding and profiting off of telecom companies’ networks and are not sharing.  And as people move to mobile, carriers are concerned that they’ll remain cut out of the revenues enjoyed by Internet companies.

But, Why Can’t We All Be Friends?

Google and Facebook think that this doesn’t have to be the case and are approaching relationships with carriers through partnerships with carriers.  For instance, Google’s Sundar Pichai announced at the mobile conference that the company has plans to launch its own brand of wireless service this year (at a small scale) and is reaching out to several carriers for potential partnerships.  Both Google and Facebook are also focused on bringing Internet access to emerging markets.  Facebook’s chief Mark Zuckerberg mentioned that he’s tried to forge partnerships with carriers on Internet.org, an initiative intended to bring access to 2/3 of the world’s population currently offline.  Airtel Africa is one willing participant to work with Facebook, and as these companies develop new technologies to bring access to developing areas without infrastructure, perhaps the tides may change in terms of which carriers are willing to forge partnerships.  If you can’t beat ’em, join ’em.

While You Were Celebrating…

Though most of the attention last week was focused on the Commission’s Net Neutrality Order, the Obama Administration released its long anticipated consumer privacy bill.  This bill is intended to take a comprehensive approach to privacy rather than a sectoral approach.   Already, it does not seem that many people including the broader technology industry and privacy advocates are not fans of this proposal.  Even the Federal Trade Commission weighed in.   A commission spokesperson said, “we have concerns that the draft bill does not provide consumers with the strong and enforceable protections needed to safeguard their privacy.”  It’s unclear who will champion this bill in Congress, if at all.

In Other News…

President Obama is out publicly criticizing China’s plans to impose rules on U.S. technology companies.  In order to do business in China, these companies would be required to give the Chinese government encryption keys and passcodes intended to protect data.  Companies would also be required to create “backdoors” in their systems for surveillance reasons.


The Streets Are Talkin’

eBay/PayPal are acquiring Paydiant, a mobile wallet platform for retailers and companies.

Tinder is trying to generate revenue and is hoping that Tinder Plus is the answer.  The pricing of this premium service will depend on agenda and users’ location.  Sorry J.Lo, but turns out that love does cost a thing.