No Cash and No Branch? Nah! Young Consumers Want Bricks and Mortar Services.

The rush to close high street bank branches may be premature, according to the latest research from digital product agency, Somo. Young adults (18-24) starting out on their banking journey claim to use a bricks and mortar branch more than 25-44 year olds.

A staggering 41.7% of the 18-24 year age group surveyed state that a branch is the main place for them to do their banking. This is at odds with the record rate that bank branches are closing around the country; more than 60 a month, according to Which?.

In contrast to their younger peers, the 25-44 year-old group prefer to manage the majority of their banking online or via mobile, despite having more numerous and more complex banking needs.

The disparity in behaviours between the two groups so close in age speaks to the need for financial services to recognise the different life-stages and needs of customers and thus offer a blended approach, by fusing digital and physical products and services.

This desire for combining digital in-branch is echoed in the research. All age groups wanted shorter queues while better self-serve options like kiosks came second. Face time with advisors was most valued by the 25-34 age group which was prioritising budgeting and were the most likely to seek personalised advice.

The new research which surveyed 1000 UK adults also revealed:

  • The majority (63%) of UK banking customers prefer to interact with their bank(s) online, but a further 23% still want to visit a branch.
  • Contactless payments is preferred by 38% of Brits, but 33% would use card or cash and another 27% would prefer to use cash only.
  • Over half (56%) of Britons still use bank branches to deposit cheques while 44% use it to deposit or withdraw large sums. Over a third (35%) said it was the main place that they banked.
  • 43% of Brits are either very or somewhat negative about a cashless society.

Access to digital banking is more important than ever, providing convenience as well as actively helping people understand and manage their money better. But there is growing evidence to suggest that it is important to offer consumers choice, and that a move to the so-called ‘cashless’ society may be too rapid for some groups of customers, and will have a negative impact on communities and other businesses.

Which? found that cash machines were disappearing at a rate of nearly 500 a month between June and December 2018. The Labour Party has proposed a publicly-owned banking network, Post Bank, to be based within the Post Office network, providing up to 3,600 branches nationwide. The Party’s shadow chancellor, John McDonnell, said: “Poor access to local bank branches hurts our town centres and local communities, particularly affecting elderly and more vulnerable customers, as well as damaging the ability of local small businesses to invest.”

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Study Finds One in Five UK Businesses Loses Revenue and Customers Due to Inaccurate Data

A new report from Dun & Bradstreet reveals businesses are missing revenue opportunities and losing customers due to bad data practices. Almost 20 percent of businesses have lost a customer due to using incomplete or inaccurate information about them, with a further 15 percent saying they failed to sign a new contract with a customer for the same reason.

Nearly a quarter (22 percent) said their financial forecasts have been inaccurate, while 17 percent of organisations offered too much credit to a customer due to a lack of information about them – and lost money as a result.

The report, which surveyed over 500 business decision makers in the US and UK, also found stark discrepancies between both countries: compliance has been nearly twice as big of a concern in the UK than the US (31 percent vs. 16 percent), which may reflect the challenge of meeting the requirements of the GDPR. Already, over 10 percent of organisations report having been fined for data issues.

The way that data is structured appears to be a significant barrier in many organisations, with indications that data is often poorly structured, difficult to access and out of date. Nearly half of business leaders (46 percent) say that data is too siloed to make any sense of it, with the biggest challenges to making use of data being:

  • protecting data privacy (34 percent)
  • having accurate data (26 percent)
  • analysing/processing that data (24 percent).

This lack of structure may reflect the fact that 41 percent of business leaders say that no one in their organisation is responsible for the management of data. This absence of ownership may also be why 52 percent of business leaders said they haven’t had the budget to implement data management practices within their organisations.

“Businesses must make data governance and stewardship a priority,” said Monica Richter, Chief Data Officer, Dun & Bradstreet. “Whether leaders are exploring AI or predictive analytics, clean, defined data is key to the success of any programme and essential for mitigating risk and growing the business.”

The study does reveal a growing recognition that responsibility for data should be a priority for the C-suite. However, business leaders are divided as to who in the leadership team owns the data and what that will look like in the future. One thing all business leaders agree on is that the CEO has had, currently has and will have ultimate responsibility for data – more so than even the CTO or CIO.

The report also shows that two thirds (65 percent) of respondents say data will be vital to their organisation’s future success. However, under a quarter of organisations (22 percent) have staff that are dedicated to the management of data and less than one-fourth say that they have the right talent to implement effective data management.

Commenting on the findings, Anthony Scriffignano, Ph.D, Chief Data Scientist at Dun & Bradstreet, said: “Information has always been critical for businesses, but over the past decade, the volume of data, the types of information available and the ability to do new things with that data have expanded enormously. It’s not surprising that many business leaders feel they are still catching up and their organisations are yet to make the most of data – and some have even been fined or lost customers due to incomplete or ‘dirty’ data.”

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Happy 5th Birthday Daily Fintech


I am a bad parent who does not celebrate each birthday. I celebrated the first birthday of Daily Fintech with this post on 30 June 2015. I am happy with what I wrote then, except for the last sentence where I clearly did not “report back on the second anniversary.” Nor on the 3rd or 4th anniversary. I am trying to correct that by celebrating the 5th anniversary properly today.

Although I have failed with birthday celebrations, I am happy with one thing I wrote on that first anniversary:

“Like any startup, it is an experiment to find product fit to market and I can only promise to keep iterating on that journey.”

According to the legendary investor and blogger Fred Wilson,  the data shows that “It takes seven to ten years to get to real liquidity”.  As he puts it:

“I am not sure why seven to ten years and not five to seven or not ten to fifteen. It’s seven to ten. That’s how it has always been and seemingly always will be. “

So Daily Fintech is 50% there if it is 10 years and 71% there if it is 7 years

“Liquidity” is the definition of success for an investor. If you have external investors (we do not yet at Daily Fintech), that also needs to be your definition of success as an entrepreneur.  If you have bootstrapped and self funded, you also have the option of running a business with the old fashioned objective of what Warren Buffet calls the “owners reward’ of profits.

Either way, it takes seven to ten years to build sustainable business value.

I am happy that in our first 5 years we have done two things well.

  • High quality original content. Daily Fintech now has 6 very talented and experienced people who write once per week, so that we get original Fintech insight every day (M-S). I dislike the word “content”; it implies fodder for the advertising beast. I like to call what we offer “insightful original research that is presented well in good writing to smart people who want more signal and less noise”, but I do recognise that is a bit of a mouthful, so I will use the word content here. Given our focus on high quality original content, it made sense that the first person on our advisory board, in 2018, was Paul Conley and that during 2019 we engaged the services of Triumvirate Content Consultants.
  • Not pulled into blind monetisation alley ways. I knew that traditional online advertising, the obvious content monetisation answer, was failing; I knew this from my earlier work as a digital entrepreneur and while this was not obvious in 2014 it is obvious now in 2019..  I could see a few other blind alleys and am happy to say that we did spend long in these blind alleys. We do have a sense now about how to create sustainable monetisation that fits our high quality original content, but we are still in the early days of this journey so yes it is a “seven to ten years” journey.

I was asked recently in a meeting about targets and I replied that I was much more comfortable with direction and process than with targets. I know where we are going (direction) and I know what it takes to go on a long arduous journey (process), but cannot anticipate all the twists and turns in the journey, so I can only end with what I said on the first birthday:

“I can only promise to keep iterating on that journey.”

  Bernard Lunn is a Fintech deal-maker, investor, entrepreneur and advisor. He is CEO of Daily Fintech and author of The Blockchain Economy.

I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

Subscribe by email to join the other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

FCA’s New Advertising and Social Media Rules Extend to e-Money and Payment Institutions

By James Borley, Director of fscom

The payments industry seems constantly awash with new regulation. The last two years alone have seen the advent of the 4th Money Laundering Directive (4MLD), the Second Payment Services Directive (PSD2) and GDPR. In addition, firms are currently preparing for the open banking and strong customer authentication requirements coming into force on 14 September.

Given the pace and extent of regulatory change, you might be forgiven for having missed the FCA’s planned extension of its Principles for Businesses, and certain other communication rules, to payment and e-money institutions. Nevertheless, this extension will take effect from 1 August, giving firms just over a month to finalise preparations.

What’s driven this change?

Historically, the high-level Principles for Businesses have not applied to payment and e-money institutions. This was largely because it was easier to implement the first Payment Services Directive (PSD1) in the form of standalone Treasury regulations (the Payment Services Regulations 2009), rather than implement the directive through the Financial Services & Markets Act and the corresponding FCA Handbook.

In recent years however, the FCA has been concerned that some payment and e-money institutions have been communicating with customers in a misleading manner, such as:

  • misleading use of the interbank rate on firm websites;
  • unsubstantiated comparisons with competitors;
  • lack of transparency in charging structures; and
  • a tendency for some e-money institutions to use language in their marketing materials indicating that they are offering “bank accounts”.

In light of these concerns, the FCA was granted new powers in the Payment Services Regulations 2017) to apply Handbook rules to payment institutions (PIs), e-money institutions (EMIs) and registered account information service providers.

After a period of consultation, the FCA issued new rules in February, which can be broken into the following categories.

  1. Extending the Principles for Businesses to PIs and EMIs.
  2. Extending communication rules in Chapter 2 of the Banking Conduct of Business Sourcebook (BCOBS) to PIs and EMIs.
  3. Introducing new rules and guidance on communication and marketing of currency transfer services.

Extending the Principles for Businesses

The Principles for Businesses (“the Principles”) are high level principles governing the conduct of firms. While the Principles will not have technically applied previously to PIs and EMIs, most firms will already seek to apply them to their business. For example, no firm would currently say that they do not seek to fulfil Principle 6 on treating customers fairly.

Rather, the import of the extension of the Principles is that it provides the FCA with a wider net for enforcement action. One only needs to peruse the enforcement notices on the FCA website to see how many FCA enforcement actions are based upon breaches of the Principles.

While the FCA’s Policy Statement does state that “the Principles should be applied in a way which is appropriate and proportionate to firms”, their extension nonetheless increases the FCA’s supervisory and enforcement powers.

Carphone Warehouse’s recent breach of the Principles

A recent example of enforcement action for breaches of the Principles is the case of Carphone Warehouse. The FCA issued a “Final Notice” in March and fined the firm over £29 million for breaches of Principle 3 (management and control), Principle 6 (customers’ interests) and Principle 9 (customers: relationships of trust) in relation to the sale of mobile phone insurance.

Among other things, sales consultants failed to give suitable advice to customers as to whether the insurance product met their needs. This failing was compounded by inadequate management oversight.

Examples such as this illustrate the wide enforcement net provided to the FCA by the broad-based descriptors in the Principles. Therefore, while the Principles largely represent best practice that most firms will already follow, the potential supervisory impact of this extension should be noted.

Clear, fair and not misleading – extending BCOBS 2 communication rules

In contrast to the broad-based Principles, the extension of BCOBS 2 applies very specific communication related rules to PIs and EMIs. For example:

  • Certain words are singled out in relation to product descriptions, including the words “guaranteed”, “protected” or “secure”. Where such words are used, they must be presented with all necessary information to make the use of the word fair, clear and not misleading.
  • An exchange rate will be misleading if it gives the customer the impression that they can avail of a rate not actually available to them. A disclaimer will not necessarily prevent this exchange rate being misleading.
  • Specific rules in relation to what needs to be included in communications or promotions. For example, a firm must not emphasise potential benefits without indicating relevant risks.

One implication here is for use of the interbank rate on firm websites or social media. In response to FCA concerns, many firms have simply removed reference to that rate altogether from their websites. While this is not a requirement, firms should review any display of indicative rates on their websites, or advertisements (including social media), along with corresponding disclaimers. Any disclaimer will have to be clear and prominent to ensure that customers will not be misled and, even then, it is not certain that the FCA will approve of it.

New rules on cost comparisons of currency transfer services

The FCA has also introduced new rules within BCOBS 2 regarding cost comparisons with competitors, in relation to currency transfer services. Where comparing costs with a competitor or group of competitors, the comparison must be based on sufficient research to make that comparison substantiable.

Furthermore, the comparison must consider the following elements.

  1. Charges relating to the currency conversion.
  2. Charges related to the e-money issuance or payment service.
  3. Margin between the rate that would be offered to a majority of persons in the class to whom the promotion is directed, and the interbank rate.

It is therefore not acceptable under the new rules to make a comparison with your competitor simply based on the FX margin, when after taking into consideration other fees, your service is not in fact cheaper.

Next steps for PI and EMI firms…

Firms are advised to conduct a thorough review of their communications with customers prior to 1 August. This review should cover:

  • Firm website.
  • Other promotional material and social media.
  • Charging structure.
  • Terms and conditions.
  • Customer sales calls.

Communication is an area that has seen increased focus by the FCA in recent years, and with the increased supervisory and enforcement powers provided by the new rules, a thorough review is recommended to avoid falling foul of the FCA’s payments supervision team.

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Privacy at lower levels of the Bitcoin & Internet stack is not good news for tokenomics funded privacy coins


TLDR Privacy was not part of Satoshi Nakamoto’s white paper. This gives credence to the idea that the author was a fallible human being. Nor was privacy built into the Internet, as Facebook, NSA and others have taught us. Privacy is now being  built into the lower levels of the Bitcoin stack and into the Internet stack; this is not good news for tokenomics funded privacy coins such as Monero and ZCash. Read on to learn about Freenet, I2P, Tor, Nym, Confidential Transactions & MimbleWimble.

This update to The Blockchain Economy digital book covers:

  • Tokenomics Funded Privacy Coins
  • Independent Bitcoin Mixers
  • Confidential Transactions
  • MimbleWimble
  • Context & References

Tokenomics Funded Privacy Coins

The two best known tokenomics funded Privacy Coins are Monero and ZCash

The market has not been kind to them compared to the recent market price action for Bitcoin BTC.

This is one of 5 reasons why I am an economic Bitcoin maximalist – any single feature of an Altcoin can be copied:

“Altcoins as a sandbox for experiments and a donation to the community is cool, but it is not compelling as an investment thesis.”

This is one reason why BTC dominance is so high in this bull market. 

Independent Bitcoin Mixers

Before we get to Freenet, I2P, Tor, Nym, Confidential Transactions & MimbleWimble, lets look at the independent Bitcoin mixer (or tumbler)  services; these are something that you add onto Bitcoin if you want a bit more privacy. There are so many of these that there is now a site dedicated to them.

This is now an arms race, with governments and companies paying well funded analytics vendors to track transactions. This is why many think this was a design error in Satoshi Nakamoto’s white paper, which some of the lower level privacy solutions aim to overcome.

TOR (The Onion Router)

TOR, the first anonymity network, uses a volunteer overlay network to conceal a user’s location and usage.

You can see that somebody is using TOR even if you cannot see who it is; so some websites restrict access through TOR.

TOR uses “onion routing”, which uses encryption in the application layer of a communication protocol stack, nested like the layers of an onion. TOR encrypts the data, including the next node’s IP address and sends it through a  randomly selected set of TOR relays.

In the arms race, those seeking to de-anonymize the user may do so using vulnerable software on the user’s computer.

TOR was funded initially through the Office of Naval Research and DARPA.

I2P (Invisible Internet Project)

I2P aims to overcome TOR’s big problem, which is speed,  by loading dark web services faster.

In many cases it is not TOR or I2P. It is TOR and I2P.Some dark web service hidden by TOR have I2P mirrors.

I2P is peer-to-peer friendly. TOR  discourages heavy downloading, but many I2P users are also BitTorrent users.


Unlike Tor and I2P, Freenet is totally decentralized across thousands of hard drives. Freenet users store encrypted files on their hard drive without knowing the contents of the file.

In the most secure/private mode, Freenet users can choose to only connect to explicitly trusted friends of the user.

Freenet is widely used as an anti-censorship tool in China.


Nym’s CEO, Harry Halpin, is clearly going after the privacy coins such as Monero and Cash with this quote:

“peer-to-peer traffic is actually capturable/recordable by any enemy who is watching the network”

Nym has been added to TOR to as Halpin puts it to protect against big cyber savvy governments and corporation, as opposed to those “which can only see a small portion of the internet” .

Nym uses the mixing/tumbling technology mentioned above bu adds it to TOR and Halpin asserts that Nym does not take grants from the US government. Like most of the privacy solutions profiled here, Nym is open source software, run by volunteers on a non-profit basis.

Confidential Transactions.

Confidential Transactions is a mixer in Bitcoin Core that lets senders encrypt the bitcoin amounts in transactions with random strings of numbers called “blinding factors.” This is decrypted by the receiver.

Mimble Wimble

Mimble Wimble (named after a Harry Potter curse) is another mixer in Bitcoin Core that does the opposite to Confidential Transactions as the the receiver (not the sender) generates the blinding factor. Although primarily designed for privacy, MimbleWimble also enhances scalability (because it gets rid of the need to track transaction history per coin).

Context & References


Bernard Lunn is a Fintech deal-maker, investor, entrepreneur and advisor. He is CEO of Daily Fintech and author of The Blockchain Economy.

I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

Subscribe by email to join other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

How Facebook’s Libra Looks from Latin America; Indian Neobank Raises $30 Million

As Finovate goes increasingly global, so does our coverage of financial technology. Finovate Global: Fintech News from Around the World is our weekly look at fintech innovation in developing economies in Asia, Africa, the Middle East, Latin America, and Central and Eastern Europe.

Sub-Saharan Africa

  • Capetown, South Africa-based digital lender Lulalend raises $6.5 million in Series A.
  • Techpoint Africa looks at how fintechs are “democratizing investment opportunities” for Nigerians across the income spectrum.
  • The Catalyst Fund announces that three Africa-based fintechs – Turaco, Chipper Cash, and Salutat – will join its accelerator program.

Central and Eastern Europe

  • Estonia’s Tallinn Business Bank (TBB) partners with Icefire and Token to deliver PSD2 compliance.
  • Cointelegraph profiles Warsaw, Poland’s Alior Bank leverages Ethereum blockchain to authenticate client documents.
  • Polish Netflix subscribers will soon be able to pay for their viewing via the country’s Blik payment system.

Middle East and Northern Africa

  • Bahrain’s Bank ABC partners with Jumio, making it the first bank in the MENA region to offer biometric-based, digital KYC.
  • Egypt’s Banque du Caire to deploy omni-channel banking technology from Temenos.
  • Wamda interviews Elie Nasr founder of Lebanese fintech startup FOO.

Central and Southern Asia

  • The Bank of Mongolia will implement Intellect Design Arena’s Quantum Central Banking Solution as part of its digital transformation.
  • Indian SME-based neobank Open raises $30 million in Series B funding.
  • India’s Wizely introduces a new mobile savings account.

Latin America and the Caribbean

  • Contxto looks at the current fintech landscape of Mexico.
  • How will Facebook’s Libra project impact Latin America?
  • BBVA announces major changes to mortgage portfolio, including a rate reduction.


  • U.K. regtech firm ClauseMatch teams up with Singapore-based consultancy Ingenia, the company’s first client in the country.
  • Axinan to work with PT Sompo Insurance to provide on-demand insurance options to Indonesian millennials.
  • The Monetary Authority of Singapore to issue as many as five new digital bank licenses.

Top image designed by Freepik

Digital Licenses To Shake Up Singapore Banking

The central bank in Singapore has announced that it will issue five digital bank licenses to eligible applicants, according to a report by Reuters

The move could significantly alter the financial landscape for the first time in 20 years, as the space is currently controlled by traditional banks. 

“The new digital bank licenses mark the next chapter in Singapore’s banking liberalization journey,” said Tharman Shanmugaratnam, senior minister and chairman of the Monetary Authority of Singapore (MAS). “We welcome firms with innovative value propositions to apply for the digital bank licenses, even if they have not yet established a track record in banking,” 

The top banks in Singapore are DBS Group Holdings Ltd, Oversea-Chinese Banking Corp and United Overseas Bank Ltd.

Ride-hailing company Grab, which also does food delivery and payments, is rumored to be one of the firms being looked at for a license. Others in consideration are global FinTech companies, some of which may form ventures together. 

The invite applications are expected to go out in August. 

“The far-reaching effects of digitalization are stimulating a fundamental re-think of the role of banks, in most advanced financial centers,” Shanmugaratnam said. “We are starting with two digital full bank licenses, so as not to fragment Singapore’s small domestic retail banking market.”

The first digital banks will be restricted in what they can do, so they have time to build up and grow both in terms of business practices and standards of operations. Eventually, they will act as fully formed banking institutions. 

In Hong Kong, digital banking licenses were issued earlier this year, and the two markets are strong competitors. Alibaba and Xiaomi related companies were given licenses, as well as a group venture led by Standard Chartered PLC and BOC Hong Kong Holdings Ltd.

In a statement, the MAS said that it was going to issue up to two licenses for digital banks that are headquartered in Singapore and that are also controlled by citizens of the country. 


Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The June 2019 PSD2 Tracker Report, is the go-to resource for monthly updates on the trends and changes regarding PSD2 and other privacy and data protection regulations.

Goldman Sachs CEO eyes crypto entry, expansion of Marcus

Goldman Sachs CEO David Solomon told Les Echos, a French newspaper, that the investment bank is pursuing its own plan in cryptocurrency and pursuing plans to expand digital bank Marcus into new markets. 

Soloman told Les Echos that the bank is looking at the potential for “tokenization” and frictionless payments, following plans by rival JPMorgan Chase and social media giant Facebook to launch Libra. 

Solomon also said that the bank is more and more looking at personal services, beyond just an investment bank, and said the bank has great ambitions beyond its existing Marcus presence in the U.S. and U.K., but would not elaborate. 

Topics: Bitcoin, Mobile Banking, Mobile Payments, Region: EMEA

Companies: Goldman Sachs

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Latest Content

Can the US can draw lessons from Czech contactless card adoption?

As contactless payments gain wide adoption in Europe, there are questions around how quickly the technology will scale to U.S markets.

The Czech Republic, for example, has seen wide adoption based on infrastructure upgrades from both payment providers and retailers. According to a report released today by data analytics firm GlobalData, increased adoption of contactless cards by Czech Republic consumers drove the annual number of card payments to 1.1 billion in 2018, up from 483.7 million in 2014. The number of card payments made each year is expected to reach 1.9 billion by 2022.

“The technology has been supported by wide merchant acceptance and improved payment infrastructure, with around 90% of the country’s point-of-sale terminals now supporting contactless payments,” Nikhil Reddy, payments analyst for GlobalData, said in a statement.

Around 70% of all card payments in the Czech Republic already are contactless, according to the European Payments Council. Meanwhile, GlobalData said the number of contactless cards in the Czech Republic is expected to increase from 10.3 million in 2018 to 11.8 million by 2022.

Jamie Topolski, director of payment card products at Fiserv, told Bank Innovation he would expect to see more contactless cards hitting the market in the U.S. by the beginning of 2020. However, he doesn’t expect it to reach the massive wave of adoption seen with the U.S. rollout of EMV chip technology in 2015.

“There no set deadline in this case that everyone’s striving to meet,” Topolski said, noting that the rollout of contactless will depend more on factors like card re-issuance cycles. “Chip expirations are starting to hit just now and will accelerate into 2020, so this is a perfect opportunity to make the investment in contactless,” he added.

Topolski said the U.S. is actually “right on track” when it comes to contactless adoption, as other markets typically have pushed the technology out with the second generation of EMV-enabled cards. “The U.S. was late to the EMV game, but that was because of relatively low fraud rates,” he explained. “We’re equally fast on contactless.”

Topolski said contactless will enable incremental transaction volumes, opening up revenue opportunities for banks and other financial institutions that are able to win the fight for top of the wallet. The staying at the top of the wallet, however, is a matter of convenience and effective marketing, he explained.

The physical card is still the most common way a customer interacts visually with their financial institution, Topolski noted. “People don’t tend to walk into branches much anymore, but the card still gets pulled out quite often,” he said.

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Inside Citizens Bank’s point-of-sale lending strategy

As checkout loan startups like Affirm, Klarna and Bread garner funding and grow relationships with retailers, banks are putting up a formidable line of defense. Their pitch to retailers is their resources, data and brand recognition. Over the past two years, Providence, R.I.-based Citizens Bank has built up its presence in the point-of-sale loan arena. …Read More

Digital Debit, Libra And The Roaring 2020s Top Week’s News

Facebook’s Libra cryptocurrency plans continued to dominate the week’s news, but Visa and Bank of America both made big news, and new PYMNTS research dug deep into the problems of HBO and Netflix subscriber churn and PSD2 challenges. Meanwhile, P2P payments are seeing a new area of growth. All that and more in this latest edition of the PYMNTS Weekender.

Top News

Visa Buys Rambus Payments To Tokenize Any Transaction On Any Network

Visa has inked a deal to buy the token services and ticketing business of chipmaker Rambus The assets acquired were formerly known as Bell ID and Ecebs Ltd. Financial terms were not disclosed.

Mastercard On Facebook’s Libra Crypto Payments Future

For Mastercard, one of the founding members of the Libra project, what is happening now is both extremely new and somewhat familiar.

Visa Launches Installment APIs For Issuers and Merchants

This offering is the latest set of APIs made available to issuers and FinTech firms via the Visa Next “digital-first” platform offering.

BofA Debuts Digital Debit Card

Bank of America is launching a digital debit card. It’s also making other additions to its banking app to help customers handle their finances while they’re on the move.

Payments Execs Weigh In On Innovation For the Roaring 2020s

A decade is a nice, round number — a convenient marker for what has come and what is coming. We as humans tend to measure our lives in decades, referring to ourselves as children of the ’60s, perhaps, or pining wistfully for the synthesized pop sounds of the ’80s.

Trackers and Reports

How Netflix and HBO Reduce Subscriber Churn

In late May, millions of fans streamed the finale of the popular fantasy series Game of Thrones (GoT). When the series ended, however, HBO faced a different kind of battle: how to keep millions of fans subscribed to its streaming service in the post-GoT era.

In the PSD2 Age, Banks Must Think Like FinTech Firms

With the Strong Customer Authentication (SCA) compliance deadline less than four months away, banks are still underprepared. While banks continue to open their application programming interfaces (APIs) to third-party providers and FinTech firms, many are still in the dark when it comes to SCA. Merchant partners are also scrambling, with just 40 percent of merchants within the EU currently stating they will be ready by September 2019.

Fun, Cool and Otherwise Interesting

Hotels, and India’s Middle Class, Show Path For Online Travel

It’s a fool’s errand to predict what will interest historians decades or centuries from now, but the scribes here at PYMNTS don’t pull back from such challenges. When it comes to retail, general commerce and online payments, the increasingly powerful middle class in India will probably get major credit in future textbooks for shaping the global digital economy.

P2P Payments Find Fans In the Black Market

Peer-to-peer (P2P) payments continue to gain popularity among consumers, with two of the biggest providers, Zelle and Venmo, reporting ongoing and significant gains. But amid that growth is a fresh trend that could present challenges for law enforcement — the use of such payment methods for illicit transactions, including drug deals.

Delivering Regional Flavor With State-Specific Subscriptions

To offer shoppers a curated selection of local products ranging from décor to local flavors, eCommerce innovators are assembling subscription boxes around different U.S. states.


Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The June 2019 PSD2 Tracker Report, is the go-to resource for monthly updates on the trends and changes regarding PSD2 and other privacy and data protection regulations.

Italy Fines Facebook $1.1M For Mishandling Data

An Italian data protection regulator hit Facebook with a fine of  €1 million ($1.1M) for violating local privacy laws in relation to the Cambridge Analytica scandal, according to a report.

The scandal concerned the misuse of the personal data of 87 million Facebook users, whose info was collected by the political data company Cambridge Analytica through Dr. Aleksandr Kogan’s “thisisyourdigitallife” quiz app.

The fine is relatively small, because the offense happened before Europe’s stringent data protection initiative, the General Data Protection Regulation (GDPR), which can fine companies as much as 4 percent of their annual global turnover.

“We have said before that we wish we had done more to investigate claims about Cambridge Analytica in 2015. However, evidence indicates that no Italian user data was shared with Cambridge Analytica. Dr Kogan only shared data with Cambridge Analytica in relation to U.S. users,” Facebook said in a statement. “We made major changes to our platform back then and have also significantly restricted the information which app developers can access. We’re focused on protecting people’s privacy and have invested in people, technology and partnerships, including hiring more than 20,000 people focused on safety and security over the last year. We will review the Garante’s decision and will continue to engage constructively with their concerns.”

The U.K.’s Data Protection Act (DPA) also hit Facebook with a fine regarding the scandal, to the tune of £500K. Facebook is appealing that decision, saying that no U.K. user data was given to Cambridge Analytica.

The regulator in Italy said that 57 users downloaded the quiz app, and 214,077 Italians’ info was processed without permission. The app was also able to access data of users’ friends.

The regulator previously approached Facebook about the issue, and the company said it would pay €52,000 to settle it. The Italian DPA eventually decided that it wasn’t enough.

“The sum takes into account, in addition to the size of the database, also the economic conditions of Facebook and the number of global and Italian users of the company,” the DPA said in a press release.


Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The June 2019 PSD2 Tracker Report, is the go-to resource for monthly updates on the trends and changes regarding PSD2 and other privacy and data protection regulations.

The Amazon Walmart Whole Paycheck Tracker: Powering Up In-Store Pickup

The Prime Day countdown clock is ticking down, and with all the media reports about what Amazon is doing to prepare (and what everyone else in retail is doing to prepare for those preparations), it might be hard to believe that there is news to be had outside of the Amazon-invented shopping holiday.

But while the big show is revving up, the race to bring more consumers into the fold is always running, and this week both Amazon and Walmart had some big moves in beefing up (or in Amazon’s case, creating) their in-store pickup operations.

As it passes into the history books, this was yet another busy week and clearly an on-ramp to a very lively retail sector for the next two weeks.

So where were the highlights?


Big Play of the Week: TayTay To Play Prime Day 

In what looks to be a case of continuing to crib from the Alibaba Singles Day Playbook, Amazon Prime Day will not only be the summer’s answer to Black Friday — it will also apparently be a star-studded multimedia event.

And so Amazon is hosting a Prime Day Concert on July 10 in the lead-up to the fifth run-through of the now misnamed (Prime “Day” is two days long this year) shopping extravaganza.

Taylor Swift will be the headliner — but she won’t be alone. Fellow pop stars Dua Lipa, SZA, and Becky G will round out the lineup, while actress Jane Lynch hosts.

This isn’t Amazon’s first Prime Day concert — last year featured Ariana Grande, Alessia Cara, Kelsea Ballerini and Julia Michaels in the  lineup. But with all possible props to Ms. Grande, Taylor Swift is a much bigger star and draw. Her Reputation stadium tour is the highest-grossing U.S. tour in history — a spot Swift had to bump the Rolling Stones to capture. She’s also a proven streaming commodity, having in the past presented a full length concert documentary for a New Year’s Eve release from Netflix.

It is move, analysts noted, that indicates Amazon is getting more sophisticated at building out the non-commerce parts of its empire — particularly its content streaming services.

“Amazon knows how to run a store,” Fred Seibert, founder of the production company Frederator Networks, told CNBC. “They’re walking toward how to make media work. If they can marry the two, everyone else in the media business will start to scramble.”

Speaking of getting others to scramble? Amazon’s ongoing war with counterfeiters carries on …

Securing the Shop: Amazon Takes Counterfeiters To Court 

Amazon has been fighting a long, and difficult, battle with counterfeiters that set up shop in its marketplace, and this week it seems that battle is going to a courtroom.

In partnership with Boulder-based company Nite Ize, a maker of specialty lights and phone mounts under the Steelie brand, Amazon has filed suit in a Seattle federal court, accusing a group of counterfeiters of selling fraudulent Nite Ize products.

According to the filing, the issue was brought to Amazon’s attention in October 2018 after a tip from the U.S. Customs and Border Protection agency, which had seized a shipment of 300 counterfeit Steelie brand car mounts. The agency alerted Nite Ize, which then alerted Amazon.

“Defendants have deceived Amazon’s customers and Amazon, infringed and misused the IP rights of Nite Ize, and harmed the integrity of Amazon’s store, and tarnished [Amazon] and Nite Ize’s brands,” the lawsuit said, according to reports.

All in, the suit names 11 individuals and businesses accused of selling the fake goods. The people were listed as living in Minnesota, Maryland and Ontario, while the businesses were based in China.

The lawsuit represents Amazon’s latest effort to take on the rampant counterfeit trade taking place in its online marketplace. In fact, the company even launched a suite of new tools this year to help brands and manufacturers go after counterfeiters.

“Each day, millions of consumers use Amazon’s store to purchase a wide range of products, across dozens of product categories, from Amazon and third-party sellers,” the company said. “Amazon recognizes that consumer trust is hard to win and easy to lose, so Amazon invests significant resources and effort into building and preserving its customers’ trust.”

In-Store Move: Amazon Joins Forces with Rite Aid

On might assume it would be difficult for Amazon to offer in-store pickup as part of its eCommerce offerings, since these days it operates a rather small number of shops.

But Amazon is all about thinking outside the box — and this week, the eCommerce giant announced it is adding a Counter option to make it easy for  customers to walk into a store and pick up a package. Amazon is getting a little help from its friends at Rite Aid in this attempt: the new counter option will roll out at 100 Rite Aid locations.

“Overall, we want to give every Amazon customer the option of an alternative delivery location,” Amazon Hub World Director Patrick Supanc said, according to the report. “This will become an extensive network.”

Consumers will have a pretty standard eCommerce experience using this service, with the exception that when checkout time comes, they can choose to have their goods shipped to a store instead of their home. Once the items are in, the consumer gets an email with a barcode that lets them walk in and retrieve their items from staff. The service will be free for consumers.

Jocelyn Konrad, a Rite Aid executive, said in a statement per reports that the offering in addition to the eCommerce retailer’s Rite Aid store lockers make “a stronger in-store experience for existing customers and new customers that come in to pick up their packages.” Not to mention the chance to drive foot traffic.

According to the report, Supanc said the two firms were “not sharing any retail data with each other.”

The move comes shortly after announcements by Amazon that it is developing a similar counter pickup service in the U.K. and Italy in partnership with local merchants.


Big Play of the Week: SNAP Comes To All Online Grocery Pickup

Walmart has been experimenting with letting consumers who are part of SNAP (Supplemental Nutrition Assistance Program, formerly known as food stamps) use its online grocery ordering system since October of 2017.  As of this week, Walmart has announced that it will be accepting SNAP at all of its approximately 2,500 pickup locations.

To use SNAP in combination with online grocery is much like the experience using any payment card. SNAP recipients place their order for the store nearest them, and at checkout click the EBT box for payment. When they arrive to pick up their groceries, customers present their EBT card to an employee, who swipes it and sends them on their way.

Walmart has long been an adamant advocate for serving low-income customers, saying that online shopping is not a luxury. The retailer aims to eventually expand the SNAP option to more than 3,100 stores by the end of 2019.

This Walmart’s second big SNAP-related move in 2019 — in April Walmart (along with Amazon, Dash Market and Safeway) took part in in a USDA pilot program to make it possible for consumers use snap cards in online payments.

Automated Investments: Walmart Buys Big Into Warehouse Robo-Vans 

Self-driving cars get lots of space in this column — usually in the context of how Amazon or Walmart hope to deliver goods to consumers — but this week Walmart put autonomous tech to a different type of use.

Walmart will reportedly be partnering with Gatik, a self-driving vehicle startup, to test out a self-driving vehicle that will travel the two-mile route in Bentonville, Arkansas between two stores. If it works out, the robo-vans could be used to make deliveries between warehouses.

“We are working with city and state officials to obtain the approval we need to operate and plan to start the pilot program this summer with the aim being to learn about the logistics of adding AVs into our ecosystem, operation and process changes, and more opportunities to incorporate this emerging technology,” Spokesperson Molly Blakeman explained.

The move to bring automation to inter-Walmart deliveries, is critical, because it is often where the most inefficiency in the supply chain lives.

“This middle mile is the most expensive part of the whole supply chain; it’s a huge pain point,” said Gautam Narang, CEO of Gatik, according to Bloomberg. “This fills a big gap in the market.”

In fact, analysts predict that the market for transporting goods on a fixed route from warehouse to warehouse using driverless vehicles could reach $1 trillion.

What’s in a Name: Walmart and JetBlue Scuffle

In the last few weeks, Walmart’s Jetblack delivery service has gotten a lot of positive airplay. Customers love it, use it often and spend heavily with it. What’s not to love?

Well if you happen to be JetBlue — the thing not to love is the name. In fact, JetBlue is taking Walmart to court in an attempt to force the retailer to change the name. The airline said the name is a “transparent attempt” by the retailer to take advantage of the goodwill of the firm, and would probably cause “significant consumer confusion” with the service’s United States expansion, Reuters reported.

“We respect the intellectual property rights of others. We take this issue seriously, and once we are served with the complaint will respond appropriately with the court,” said Randy Hargrove, a spokesperson for Walmart. JetBlue has offered no further comment.

The airline also noted that the retailer intended more infringements through the use of other names that include “jet,” including colors like Jetsilver and Jetgold, while getting closer to its core business through travel services. JetBlue also argues it has 43 federal trademark registrations dating back to before the company started offering transportation services.

The company is now one of the biggest airlines in the United States.

So what did we learn this week — other than the team at JetBlue is very, very sensitive to copyright infringement?

There is no such thing as a slow week in the race for the consumer’s whole paycheck — no matter how hot, hazy or busily preparing for Prime Day the world is, there is always a lot more going on.


Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The June 2019 PSD2 Tracker Report, is the go-to resource for monthly updates on the trends and changes regarding PSD2 and other privacy and data protection regulations.

Ping Identity and TIBCO Partner to Provide Advanced API Security Solutions

A just-announced partnership between TIBCO Software and Ping Identity will provide companies with new AI-powered defenses against emerging API threats. The collaboration will integrate TIBCO’s API Management Platform, TIBCO Cloud Mashery, with Ping Identity’s PingIntelligence for APIs to extend and enhance the platform’s API security with AI-enabled threat mitigation and decoy API deception.

TIBCO Cloud Mashery provides a wide variety of API security features including advanced authentication, bot detection, white and blacklisting, and access controls. The integration of PingIntelligence for APIs is designed to provide companies with a comprehensive API security solution that enables them to confidently pursue digital transformation goals and open banking initiatives.

Vice President for Product Marketing and Strategy for TIBCO Rajeev Kozhikkattathodi noted that the growing reliance on APIs can be a problem for companies that fail to take a standardized approach to securing data that is exposed by APIs. “As the API attack surface continues to expand due to the strategic value of APIs,” he said, “a new generation of threats will similarly continue to emerge. We’re excited to partner with Ping Identity to improve security measures for enterprises with sensitive corporate data.”

Ping Identity CTO Bernard Harguindeguy echoed Kozhikkattathodi’s emphasis on the connection between the opportunity and risk of the API Age. “Companies’ most sensitive digital assets, including their customer data, are increasingly made accessible via APIs, and protecting this infrastructure from abuses and cyber attacks must be the top priority for CISOs and CIOs everywhere,” Harguindeguy said. “Our partnership with TIBCO brings AI-powered protection to boost the security of API infrastructures and help organizations everywhere secure their data and applications behind APIs.”

TIBCO is a two-time veteran of our FinovateAsia conference, most recently demonstrating Innovative Payment Solutions for temporary, “in the moment” payment contexts at FinovateAsia 2013. In April of this year, the company appointed a new CEO, Dan Streetman, and in June, TIBCO introduced a set of enhancements to a variety of solutions – including TIBCO Cloud Mashery – to help developers negotiate common pain points in mixed cloud environments. Named a leader in iPaaS and hybrid integration platforms by Forrester for Q1 2019, the company is headquartered in Palo Alto, California.

Founded in 2003 and based in Denver, Colorado, Ping Identity demonstrated its PingFederate enterprise-grade authentication and single sign-on authority at FinovateEurope 2012. Earlier this month, the company unveiled a new framework and guidance to help companies adopt Zero Trust security strategies. In May, Ping Identity announced a partnership with Citrix Analytics and in March, the company was recognized at the 2019 SC Awards, winning the Best Identity Management Solution category. Ping Identity began the year noting that 12 of the biggest U.S. banks by assets use its Intelligent Identity Platform for identity and access management.

Both TIBCO and Ping Identity are recent acquisitions of Vista Equity Partners. TIBCO was taken private in 2014 in a deal valued at $4.3 billion. Ping Identity was purchased by the same Austin, Texas-based private equity firm in 2016 for $600 million.

Big US Mall Operators Look To Sports Entertainment For Growth

Malls are not exactly the hotspots of coolness and retail activity they once were. But operators of some of those shopping destinations continue to wield investment power as malls undergo remakes for the 21st century. Among the latest examples of that trend comes from Simon Property Group, the largest mall operator in the United States, which, according to Reuters, “will invest $5 million in Allied Esports.”

Allied Esports describes itself as “a premier esports entertainment company with a global network of dedicated esports properties and content production facilities.” How exactly the investment will be used was not immediately clear on Friday (June 28).

According to that Reuters report, “Simon Properties’ unit Simon Equity Development LLC will make the equity investment through Black Ridge Acquisition Corp – a company formed to take over Allied and its sister company, World Poker Tour.” As well, according to Reuters, “the investment announcement comes days after Mexican broadcaster TV Azteca agreed to form an alliance with Allied Esports and Black Ridge Acquisition Corp to create a digital channel broadcasting electronic sports.”

Vacancy Rates

Simon is doing its best to protect its interests. While mall vacancy rates rose during the first quarter to 9.3 percent from 9 percent in the fourth quarter of 2018, Simon has been adding new types of tenants to its malls. The company plans to open at least five Marriott International hotels at its properties in the coming years, and at its Phipps Plaza mall in Atlanta, there will be a Nobu Hotel and a 90,000-square-foot Lifetime Fitness complex.

Earlier this year, Simon Property Group CEO David Simon told analysts that while he thinks retail store closures will slow down this year, he “can’t guarantee it.” Those latest comments come after Simon admitted in February that he was “nervous” about additional retail bankruptcies happening during the first quarter. Later in that month, teen apparel retailer Charlotte Russe, personalized gift company Things Remembered and shoe retailer Payless filed for bankruptcy. In fact, there have been more store closures announced by U.S. retailers so far this year than in all of 2018.

The new investment from Simon Property Group comes as many malls are getting remakes for the 21st century. Digital technology and lifestyles are playing a part in those efforts.

New Life

Indeed, some malls are finding new life as offices for tech companies, as developers are repurposing spaces formerly held by retail tenants into workplaces with high-end amenities for firms like Google. In Los Angeles, part of the Westside Pavilion is set to be redeveloped into a 584,000-square-foot office for the tech company, in a project that is slated to finish in 2022.

The mall, which is owned by Hudson Pacific Properties Inc. and Macerich Co., is still operating, but renovations will start later this year. After the office is finished, it will include open spaces, a rooftop garden deck and large terraces. In order to make those amenities happen, the spaces will have to be reconfigured. “Walls will be taken down,” Hudson Pacific Properties Chairman and Chief Executive Victor Coleman told The Wall Street Journal.

And as this new Simon investment suggests, entertainment could also play a part in helping mall operators survive or perhaps even find growth. Immersive destinations that give consumers an experience they can’t get anywhere else could be just the thing to save those retail spaces. “Mall tenancy has changed,” said Alexander Goldfarb, a senior REIT analyst at the investment bank Sandler O’Neill + Partners. “What hasn’t changed is the human desire to socialize.”

And now some developers, retailers and entertainment producers believe that immersive destinations could potentially fill millions of square feet of empty retail space.

“There’s a ripe opportunity for this thing to go big and change the future of retail,” said John Feins, vice president of communications at Meow Wolf, a Santa Fe, New Mexico-based company that creates immersive art installations. It is leasing 50,000 square feet at AREA15, a 200,000-square-foot “immersive bazaar” of restaurants, shops and event space set to open in October 2019.

Malls might never regain their 20th century glory, but as all these developments show, they are not quite dead yet.


Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The June 2019 PSD2 Tracker Report, is the go-to resource for monthly updates on the trends and changes regarding PSD2 and other privacy and data protection regulations.

Poland’s BLIK Partners With Mastercard, Netflix And Uber For Payments

People who use Polish payment system BLIK will soon be able to pay for things like Netflix and Uber with it, according to a report by Reuters

The chief executive of the Polish Payment Standard (PPS), Dariusz Mazurkiewicz, shared the news on Friday (June 28). PPS was created by a tie-up between six Polish banking institutions, and it’s embedded BLIK into banking apps so customers can transfer money, use ATMs and use it pay online or in stores.

“Enlarging the scope of our activity with this kind of player … means that we are building a very interesting acceptance network, not only for Polish bank customers, it might be any other bank customer,” Mazurkiewicz told the news outlet. “The next step will be to invite banks from other countries and this is why we want to concentrate our efforts right now on our region, central Europe.” 

PPS also wants to sell software to other countries, but not under the BLIK name, and also wants to sell the whole system to companies that operate in Latin America and Africa.

PPS also partnered with Mastercard with plans to offer users a contactless payment option for the latter half of next year. 

In a press release, the companies said that Mastercard and BLIK will provide consumers and merchants with contactless payments for BLIK users at all Mastercard-branded payment terminals across the globe. BLIK is taking advantage of Mastercard virtual debit cards tokenized by the Mastercard Digital Enablement Service (MDES) to make it happen. That will enable BLIK customers to access what Polish Payment Standard said is the most convenient point of sale payment experience throughout the world.

The company is not, however, considering going public, according to Mazurkiewicz.

BLIK is popular in Poland, with around 91 million transactions in 2018, which is up from 2 million. 

“It’s just tripled from one year to another and … we think that we will stick to this triple growth from one year to another in 2019,” Mazurkiewicz said.


Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The June 2019 PSD2 Tracker Report, is the go-to resource for monthly updates on the trends and changes regarding PSD2 and other privacy and data protection regulations.

Alphabet-Owned Drone Co Fuels Expansion With Hiring

Alphabet-owned drone company Wing is looking to hire at least 24 people to expand the company in an increasingly competitive field, according to a report by CNBC.  

Wing wants to expand its delivery service in the United States and other countries as well. The company started as part of Alphabet’s experimental research arm called Google X, and it has fewer than 200 people working for it. 

The company wants to hire people to help it grow into new regions, help with the regulation of air delivery and find new business partners. 

To fill these needs, Wing wants to expand its legal team by hiring a product counsel and a regulation lead to help foster company agendas with air regulators. There are specific issues with privacy and other regulations that drone companies have to deal with while they grow. 

The company also posted listings for a chief pilot, engineers and operations managers. 

Wing wants to deliver things like medicine, food and coffee in as little as minutes, and it’s also trying to create software that can handle multiple drone deliveries for other parties.

Wing is also notable for being the first drone company to get Federal Aviation Administration (FAA) approval, which means the company was allowed to deliver to some cities in Virginia. 

Wing partnered with Virginia Tech and the Mid-Atlantic Aviation Partnership as a part of the Transportation Department’s Unmanned Aircraft Systems Integration Pilot Program, which was created to speed up drone integration and aid with the drafting of FAA rules around drones. 

However, competition in the space was recently heightened when Amazon also got FAA approval for its own drones for Prime delivery, less than two months after Wing. Amazon said its drones could be ready in as soon as a few months. 

Wing wants to expand delivery too but it hasn’t released a timeline or a concrete plan to do so.


Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The June 2019 PSD2 Tracker Report, is the go-to resource for monthly updates on the trends and changes regarding PSD2 and other privacy and data protection regulations.