Toys R Us May Return With Smaller Stores

https://www.pymnts.com/news/retail/2019/toys-r-us-brick-and-mortar-stores-2/

Ahead of this year’s holiday season, defunct toy chain Toys R Us could be making a comeback: The remnant of the company will reportedly open a shopping website along with roughly six U.S. stores, Bloomberg reported, citing unnamed sources.

Tru Kids Inc. CEO Richard Barry, who is an ex-Toys R Us executive, has been putting forward a vision for toymakers to bring the chain back, said sources. The stores could be about a third of the size of the big-box stores that closed in 2018 at roughly 10,000 square feet. The locations would reportedly offer more experiences, such as play areas.

The report also noted that startup costs could be kept lower through a model that has toymakers ship goods but not receive payment until shoppers purchase the products. However, a Tru Kids spokesperson said the firm was not ready to offer public details on its strategy in the U.S.

The original national toy chain left behind a gaping hole: Toys R Us has been bringing in roughly $7 billion in yearly sales in the U.S. via over 700 stores, including its Babies R Us brand, Bloomberg reported. Last year, news surfaced that major retailers were stepping in to fill the void.

In August, Walmart said it was expanding its toy assortment by 40 percent online and by 30 percent in its brick-and-mortar stores. The retailer was rolling out “thousands” of additional items to provide shoppers with more options. In a press release at the time announcing the move, Walmart’s VP of Toys Anne Marie Kehoe said the retailer has always been a place to find toys, but was “making even bigger investments in the category to ensure [it has] the widest selection of toys at the best prices.”

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

https://www.pymnts.com/news/retail/2019/toys-r-us-brick-and-mortar-stores-2/

Perfecting Perfumery For The Instagram Era

https://www.pymnts.com/news/retail/2019/ormaie-luxury-perfume-dtc-ecommerce/

When Baptiste Bouygues joined forces with his mother, Marie-Lise Jonak, to create a line of perfumes called Ormaie, they quickly learned that selling all-natural luxury perfume directly to consumers was much harder in practice than it would appear to be on paper.

Prior to his efforts at entrepreneurship, Bouygues had worked a few luxury labels, notably LVMH. While there, he became somewhat disenchanted with the process by which luxury scents are created.

“In perfumery today, what’s interesting is that the director of marketing basically leads everything. It’s not at all how it should be. It should be creation that comes first,” Bouygues told Quartzy.

While the packaging for perfume comes complete with images of natural scenes and floral displays, the actual formulation of most scents is a very synthetically driven process. Bouygues and Jonak were looking to create something that has almost entirely disappeared from the luxury perfume business: products made entirely from natural materials and ingredients.

In fact, Bouygues noted in an interview, when they were starting out, it was a challenge to find perfumers who could even work with such things, as most people plying the trade these days are used to working with petrochemicals, synthetic fixatives and dyes. When they were first talking up the idea, 27 out of 30 other perfume houses advised them that the task was futile and couldn’t be done in the modern world.

Synthetics are so intrinsic to the process of modern perfumery, that leaving them out of the mix is a bit like “making cookies without the eggs, flour and milk,” Marie-Lise Jonak explained to The New York Times.

It took the firm two full years to roll out a line of seven fragrances late last year. The scents were instantly well-reviewed, with glowing media reports commenting on the scents that evoke “the scent-memory of old-fashioned carbon paper sheets, libraries and licorice,” or “the delirium of being in a tropical jungle.”

But as a DTC brand, Ormaie faced a challenge unique to digital perfumers. However wonderful the perfume smells – and at an average cost of $270 for a 100 ml bottle, one would expect pleasant and luxurious aromas – it is a digital good, which most consumers cannot smell before buying.

That means when Ormaie was in the early phase of designing the business and sketching out their scents profile, they realized they had bigger design work ahead of them. They couldn’t just be great perfumers – they also had to be luxury bottle-makers.

“As a child, I remember how much my mother loved the bottle of Chanel No. 5,” Bouygues told Fast Company. “Now, more than ever, making perfume is just as much about creating a physical object as it is about olfactory alchemy.”

The final design was a 12-sided recycled glass bottle for each scent, and a custom-designed topper to match the “feel” of the perfume. The labels are all hand-designed and hot-stamped on Italian paper in old Heidelberg machines to further create the all-natural, handmade aesthetic the brand is working so hard to build. And while one might question the idea of pouring so much visual design into a product primarily purchased for how good it smells, Bouygues believes the separation isn’t quite that clear. The love of the look feeds the love of the smell, he said, and vice versa.

“From the start, I have only encountered two people who loved the fragrance, but not the bottle,” said Bouygues. “It’s the exception that proves the rule.”

And the exception that proves – or at least underscores – the rule is not a bad way to describe Ormaie as a brand. It doesn’t want to get big – the goal is to stay small. Their teams are spry and nimble by design, so they can experiment more and stay open to new ideas, as opposed to what is possible with large, dedicated teams.

“Financially, our model may sound absurd, but we’re a small maison and we have low [operational] costs,” Bouygues said. “We wanted to be happy with what we’ve done, and we hope people like it.”

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

https://www.pymnts.com/news/retail/2019/ormaie-luxury-perfume-dtc-ecommerce/

Retailers Show The Path Forward On AI Innovation

https://www.pymnts.com/news/retail/2019/artificial-intelligence-walmart-adidas/

Retailers are getting smarter about artificial intelligence (AI), and the latest example of that innovative effort comes from Walmart.

According to a new report, the retail chain, hoping to reduce checkout theft, is turning to cameras powered by AI, with deployments underway in some 1,000 stores. “The retailer began investing in the surveillance program, dubbed Missed Scan Detection, several years ago in an effort to combat shrinkage — loss due to several causes including theft, scanning errors, waste and fraud,” the report stated. “The AI-powered cameras were rolled out to more than 1,000 stores about two years ago and the retail giant has seen positive results since then, according to Jenkins, who said shrinkage has reduced in stores where the cameras have been added.”

Artificial intelligence is moving from theory to reality, and that holds true for the world of retail as well.

By incorporating visual recognition technology and artificial intelligence into their business models, retailers such Neiman MarcusIKEAH&Mwest elm and more are leveraging mobile devices and AI to provide advanced customer services. Those services include visual searches, hyper-personalization and seamless omnichannel functionality — all to weave together online and brick-and-mortar to enhance the consumer experience.

In the wake of this “deep-learning” revolution in the retail industry, merchants are gathering and analyzing their customers’ online activities, purchasing histories and other data points to hyper-customize their customer service features across digital and brick-and-mortar channels.

Payments are also playing a role in retail AI efforts and goals. From 7-Eleven to H&M, retailers are adopting digital payments and artificial intelligence technology to bring more convenient experiences to customers. These are just some of the ways merchants are evolving to meet the commerce and payments needs of the modern-day connected consumer.

In fact, PYMNTS research has found that the share of customer interactions projected to be handled by AI in 2023 is 80 percent.

Take Adidas as another example of that trend. The company teamed up with AI platform provider Findmine for product recommendations. By using AI technology, the sportswear brand was able to offer suggestions to online shoppers. In the past, Adidas merchants would have to manually put together outfits for the “Complete the Look” feature, which could take 20 minutes — and 27 steps — to finish. With the rollout of the new feature, however, Adidas has seen a 95 percent decrease in the time merchandisers spend on the process. At the same time, the company has noted that the number of items featured in the outfits spiked by 960 percent.

Walmart also has said it wants to us AI to enable workers to fix problems and restock items efficiently. The technology will detect when shopping carts run low, when spills occur and when shelves have to be restocked. In one specific example, the cameras can even determine the ripeness of bananas. Workers can be notified by a phone alert when items need replaced.

As PYMNTS research has documented, artificial intelligence and machine learning are blurring the divide between online and in-store shopping, and — ironically enough — bringing an all-new human element into retail. This is happening at a time when retailers are working to create lucrative consumer experiences to stand out from their competitors and to gain increased loyalty from consumers, especially younger ones such as millennials.

The AI revolution is slowly unfolding, and retail will play a big part in that.

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

https://www.pymnts.com/news/retail/2019/artificial-intelligence-walmart-adidas/

Delivering Regional Flavor With State-Specific Subscriptions

https://www.pymnts.com/news/retail/2019/ecommerce-subscription-boxes-california-found/

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. California Found, for instance, is essentially a boutique gift box of artisanal goods from the Golden State. In lieu of a big-box store or Amazon, the box aims to provide shoppers with opportunities to purchase gifts for friends or loved ones through a different channel, with a differentiated experience.

“This is like going to a small boutique with unique items” they will not find elsewhere, Founder and Owner Beth McClure told PYMNTS in an interview.

The company curates items ranging from home décor to spa and beauty products for hair care and skincare. It also features jewelry and gourmet food selections like jam, hot sauce, granola and packaged foods. The company packages the items and sends them once a month.

McClure noted that the items work as a whole collection or can be broken apart. All of the items—such as hand-blended hair serum and handmade fruit spray—are made by California artisans, with no big corporate brands included in the boxes.

The company offers both month-to-month and three-month subscriptions. Consumers can also choose to buy gift subscriptions for either a single, one-time gift box or a three-month subscription.

California Found is not alone in offering consumers choices with its subscriptions: Nearly all – or 95 percent – of the top performers in Q4 2018 offered plan options, according to the PYMNTS Subscription Commerce Conversion Index. For payments, the company accepts credit cards and debit cards.

The Curation Process

As the curator of the box’s selections, McClure aims to offer a broad spectrum for each of its collections. However, the company does assure suppliers that it won’t include competing products in the same box. Some other beauty boxes, for instance, might provide a lip gloss, lip balm and lip scrub from three different competing artisans. But McClure is sensitive to the fact that California artisans are small and mighty. Consumers may get one skincare item, one gourmet item, one stationery or fine art item, one home décor item and one jewelry item.

California Found’s target market is almost nearly all women between approximately 35 and 65 years old. McClure also pointed out that “they are women who pride themselves on being creative gift givers.” These consumers are interested in supporting local, small and women-owned businesses who are California fanatics, whether they live in the Golden State or not. They are also curious shoppers and take pride in finding the perfect eye serum or Paleo granola for their friends.

The Brands

When McClure first started her company, she went to many shows to pitch the concept and to get to know people, while also talking about the brand and its marketing strategy. However, over time, previous vendors have referred current vendors. Instead of McClure going out to reach vendors, they are now reaching out to her to find out when the next collection is available and to offer samples of their products.

When vendors partner with California Found, McClure releases a blog post in which she talks about them in detail, and she also includes in-box inserts that talk about them and their products. The company also takes professional photos of their products and shares them on social media. They also send products to their community of reviewers and review platforms, who sample and write about the boxes. That strategy expands the reach of its suppliers through what McClure calls “an exponential communication vehicle.”

McClure noted that California is sort of a land of dreams, and many consumers have a passion for the place. They want to understand what people in California are eating and wearing, as well as their beauty rituals. McClure added that there are many lifestyle brands coming out of the Golden State, and she doesn’t think they are coincidental. As for the subscription box itself, she thinks it’s a good opportunity to “expose folks to California brands and that California lifestyle in a really unique and personal way.”

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

https://www.pymnts.com/news/retail/2019/ecommerce-subscription-boxes-california-found/

Bitcoin hits $11K

https://www.mobilepaymentstoday.com/news/bitcoin-hits-11k/

Bitcoin’s value is on a kick recently, as it soared above $11,000 this morning, a 15-month high for the cryptocurrency, according to a report by CNBC.

The cryptocurrency’s value has been steadily rising since February. This recent burst of energy may be due to Facebook’s announcement of its new cryptocurrency Libra.

“The price surge is due to two major factors, one is an increasing consensus among the investment community that bitcoin is a legitimate store of value for the digital age, and two Facebook’s Libra cryptocurrency launch has forced every CEO to take crypto seriously,” Jehan Chu, co-founder of Kenetic Capital, a blockchain investor, said in the report.


Topics: Bitcoin


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https://www.mobilepaymentstoday.com/news/bitcoin-hits-11k/

US Bank, Inworks team on automating health care payments

https://www.mobilepaymentstoday.com/news/us-bank-inworks-team-on-automating-health-care-payments-2/

U.S. Bank entered an agreement with Inworks, a firm that specializes in accounts payable automation, in an effort to help streamline health care payments between insurance companies, doctors, patients and suppliers, according to a press release.

The companies plan to bring Inworks Intelligent Pay platform with U.S. Bank’s Virtual Pay Visa card payments platform, which will create new efficiencies in processing payments between the parties.

“U.S. Bank has a long history of serving the banking and finance needs of healthcare organizations,” Nicole Tackett, senior vice president at U.S. Bank Corporate Payment Systems, said in the press release. “We understand the complexity that our customers in healthcare must manage.”

The Inworks Intelligent Pay platform helps companies electronically submit, manage and track payments using a range of options, which now includes U.S. Bank Virtual Pay.

 

 


Topics: Card Brands, Mobile Payments

Companies: U.S. Bank


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https://www.mobilepaymentstoday.com/news/us-bank-inworks-team-on-automating-health-care-payments-2/

Visa, Razer to partner on prepaid payment integration in Southeast Asia

https://www.mobilepaymentstoday.com/news/visa-razer-to-partner-on-prepaid-payment-integration-in-southeast-asia/

Visa Inc. entered an agreement with Razer to create a partnership between the gaming firm’s financial technology arm, called Razer Fintech, with Visa’s fintech fast track program, to create a prepaid service that will be embedded in Razer’s e-wallet, according to a press release.

The service will allow up to 60 million Razer users to be able to make payments in any location where Visa is accepted, which includes 54 million merchants around the world.

“We are pleased to partner with such a forward looking and innovative company that understands the value and importance of expanding access to digital payments,”  Chris Clark, regional president, Asia-Pacific at Visa, said in the press release. “This announcement reaffirms Visa’s commitment to the fast growing and digitally savvy Southeast Asia region.”

Clark said such a program could transform the gaming sector and also many of the region’s underbanked and underserved populations.

The companies said they plan to progressively roll out the services in selected countries in Southeast Asia in the coming months before expanding globally.
 


Topics: Card Brands, In-App Payments, Mobile Payments, Region: APAC

Companies: Visa, Razer Inc.


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https://www.mobilepaymentstoday.com/news/visa-razer-to-partner-on-prepaid-payment-integration-in-southeast-asia/

Blend raises $130 million in Series E funds to expand staff, lending product lines

https://www.mobilepaymentstoday.com/news/blend-raises-130-million-in-series-e-funds-to-expand-staff-lending-product-lines/

Blend, a digital lending platform, said it raised $130 million in Series E funding, led by Temasek and General Atlantic.

Existing investors 8VC, Founders Fund, Greylock Partners and Lightspeed Adventures also participated in the funding round. The company has now raised $310 million in funding.

Blend said it plans to continue adding to its team of 400 employees, will invest in new technologies, grow its list of partners and expand into a wider array of lending products, according to a company release.

“Blend’s technology platform is driving an evolution in how lenders do business and interact with their clients,” Paul Stamas, managing director of General Atlantic, said in the release. “Blend’s approach of partnering with financial institutions to reimagine consumer finance has proven highly successful thus far, and we’re thrilled to assist them in their next phase of growth.”

The company also named former Pixar CFO Ann Mather to Blend as an independent member of the board of directors. She currently serves on the boards of Alphabet Inc., Airbnb and Netflix.


 


Topics: Mobile Banking, Mobile Payments, Technology Providers


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https://www.mobilepaymentstoday.com/news/blend-raises-130-million-in-series-e-funds-to-expand-staff-lending-product-lines/

Macy’s, JCPenney Push Back Against 25 Pct Tariffs

https://www.pymnts.com/news/retail/2019/macys-jcpenney-tariffs-merchandise/

Letters filed by department store retailers Macy’s and JCPenney, along with other companies, asked the U.S. Trade Representative to remove many footwear and apparel items from an expansive list of products set for the new 25 percent tariffs, Retail Dive reported.

The tariffs that have been put forward would negatively impact JCPenney’s core customers, per an attorney for the retailer. That audience includes middle-class females who buy products for their families and have a household income that is “marginally” more than the median in the United States. At the same time, the merchants noted that tariffs for footwear and apparel are high compared to other items, and that the new tariffs would fall on consumers in the United States.

Macy’s and JCPenney also noted that it is not easy to move supply chains away from manufacturers in China, with only 2 percent of shoes sold in the U.S. created in the country.

In addition, the escalating United States-China trade war could cause many Amazon merchants scrambling to keep their businesses. Those retailers operate on a model of purchasing inexpensive goods in China and selling them for a higher price in the United States. They are now faced with the decision of whether to place factory orders and determine pricing in time for the holiday shopping season.

Potential tariffs would impact retailers of all sizes, but these merchants lack negotiating power to transfer the tariff costs to their suppliers. U.C. San Diego Supply Chain Management Institute Managing Director Joel Sutherland said, according to Bloomberg earlier this month, “The smaller companies have a significant problem. We have an administration that says one thing today and does something else tomorrow, which poses tremendous risks.”

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

https://www.pymnts.com/news/retail/2019/macys-jcpenney-tariffs-merchandise/

Real-Time Payments Have Numerous Real-World Applications

https://www.pymnts.com/news/faster-payments/2019/rtp-gig-economy-ach-flexwage-wagestream/

Everyone seems to want faster payments — from gig workers to B2B suppliers to parents splitting expenses — but with not all major financial institutions on board, real-time payments stand at lower chance for mass adoption.

According to an earlier Faster Payments Tracker, it was projected that more than 56 real-time payment rails will be live by 2020. The demand for faster payments is strong in the U.S., but not all financial players agree on how to achieve it, especially within that timeframe.

The Clearing House, a banking association, launched its Real-Time Payments (RTP) network in November 2017. According to the organization, the RTP network currently reaches over 50 percent of U.S. transaction accounts.

Adoption depends greatly on partnerships to make RTP more accessible. Earlier this month, payment company PayFi and The Clearing House (TCH) partnered to bring real-time payments technologies to the community banks. And payment system testing solutions provider Iliad is trying to encourage uptake with its new virtual testing platform to help FIs and gateway service providers design for RTP.

The June Faster Payments Tracker looks at the latest from the global real-time payments space, including efforts to develop new systems, as well as facilitate and advance the adoption of existing instant rails.

According to the tracker, there was a 24 percent year-over-year increase in same-day ACH payment volume between Q1 2018 and Q1 2019, and the global real-time payments market is projected to increase by a 30.6 percent CAGR between 2018 and 2025.

The gig economy’s functionality is tied to real-time payments. And past studies have shown that many (85 percent) gig workers say they would do more work if they were compensated faster.

According to the Gig Economy Index, freelancers comprised 32.6 percent of the U.S. workforce in Q4 2018, a number that’s expected to tip over to a majority share by 2027.

There are still barriers to seamless, real-time payments, though. Just over half (51 percent) of gig workers report being paid within a week of completing a job. Additionally, only 17 percent of freelancing platforms offered real-time payments.

The flip side of the above-mentioned stat that 85 percent of freelancers would work more if they were compensated quickly is that 73.7 percent of gig workers would leave freelance marketplaces over payment issues.

Even though most (82 percent) businesses say real-time payments resolve current payment challenges, according to the Faster Payments Tracker, a lot of the disconnect stems from invoice processing using legacy methods, coupled with the fact that many U.S. businesses operate on two-week pay periods. In the U.K. employees often get paid once per month.

Third-party providers (TPPs) like FlexWage and Wagestream have sprung up to fill this gap and shorten the time that workers need to wait to access their earnings.

Frank Dombroski, founder and CEO of FlexWage, told PYMNTS that faster access to funds can boost both morale and productivity, though he cautions about necessary limits for how much or how often a full-time employee requests. Gig workers are a different matter, however. “Gig workers are a little different [from full-time] — as [are] some part-time and young workers who maybe don’t have a mortgage or insurance to pay To attract and retain those workers — especially younger millennials [who are] used to instant gratification … like mobile [and] gamification — the model is more of a direct payment,” he said.

Large gig economy platforms like Uber and Lyft have built their own payout systems, which enable drivers to access instant funds up to five times per day. There are opportunities for FinTechs in this space to facilitate on-demand wages where that service is prohibitive for many employers because of the increased administrative burden of payroll.

Peter Briffett, CEO of U.K. FinTech Wagestream told PYMNTS, “Uber realized quite quickly that unless they pay their drivers every day with daily cash-outs, they had an issue with staff retention and the ability to get drivers to do more rides. Flexible payments for gig workers are fundamental. Paying people in lump sums every 30 days is not necessarily going to work for every worker.”

Faster, real-time payments don’t always apply exclusively the employer/employee relationship. This month’s tracker featured an interview with Laura MacMahon, co-founder and president of Family Plan, an app that facilitates expense sharing between divorcees.

The app is intended to reduce transactional and emotional friction around recurring alimony and child support payments, as well as sudden expenses like medical bills by using bank transfers or PayPal. The app has a value added service of custody calendar tracking and keeps a comprehensive record of users’ messages, payments and other information.

“[We focus on] making data entry very easy and seamless … and the fact that something can happen almost immediately — a request comes through and you’re able to pay it, and the other parent receives that payment in a really timely manner — that reduces all of that friction,” MacMahon said.

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

https://www.pymnts.com/news/faster-payments/2019/rtp-gig-economy-ach-flexwage-wagestream/

Fiverr’s Local Market Challenges

https://www.pymnts.com/platform-payments/2019/fiverr-local-marketplace-freelancers/

Gig workers and freelancers with a host of talents can utilize today’s highly-connected environment to offer their services to employers around world, rather than being limited by their geographies. Digital platforms fuel these connections by matching workers — graphic designers, translators, photographers and others — with prospective employers, while also helping them boost their professional profiles on a global stage. Employers can benefit from job marketplaces as well, as they are increasingly helping companies address their talent gap problems. Freelance job platforms are being used by more workers and employers alike and are expected to contribute $2.7 trillion to global GDP by 2025.

These marketplaces may have opened doors for millions of freelancers and companies, but there are still challenges that must be overcome. The parties rarely meet in person, presenting a trust issue that can become an even bigger problem when employers have to make payments across borders as payment preferences vary between regions. An employer based in the United States, for example, will most likely want pay for a job in U.S. dollars, while a remote worker in India would prefer to receive payment in rupees. One thing both groups can agree on is that they do not want to be surprised about the amount owed or the value of the payment received, which can erode trust.

Maintaining and building that trust is something that hiring platform Fiverr addresses by enabling payouts to freelancers (known as “sellers” on the platform) in their preferred currencies — something that is particularly important as the platform offers its services in 160 countries. Andy Schabelman, Fiverr’s vice president of international expansion, stated that boosting trust between both parties and the platform is an essential part of the company’s strategy.

“We want to facilitate trust and do whatever it takes to meet the [needs] of our users,” he said.

A Global Roadmap for Trust

Delivering on this trust is essential to Fiverr’s success as a company, Schabelman explained. Employers and freelancers are often located in different markets and operating using their own local currencies, meaning that both parties must be confident that they will connect with the correct parties and have smooth payment experiences.

Fiverr provides this by studying and understanding local markets’ preferences. The company ensures that payments are available to workers in the currencies they want most, resultantly providing it with insights into its users’ most valued operations, products, features and payment methods.

“In almost all of our markets, payment is one of the main mechanisms that … shows we care about the local market, and one of the initial ways to build trust with the local market,” Schabelman noted.

Employers (known as “buyers” on Fiverr) need to be treated with the same respect on the platform as freelancers. They need to trust that their needs will be met and that they will also have seamless payment experiences.

“The thing we also have to keep in mind is that we have a two-sided marketplace,” Schableman said. “We also have intricacies that involve being able to offer the [buyer’s] local currency, which can [sometimes] be different than the [seller’s].”

Addressing each group’s specific needs is key to Fiverr’s approach.

Building Trust From the Ground Up

Fiverr needed to obtain deeper knowledge of different communities and their preferred services to build a digital hiring platform that buyers and sellers can trust, Schabelman explained.

“Generally speaking, we take great care in trying to understand what our users’ needs are,” he said.

Fiverr took a boots-on-the-ground approach that enabled the company to better appreciate the frictions local users encounter. Schabelman believes companies that attempt to solve these cross-border problems without going to the market in question run the risk of overlooking significant issues and failing to deliver solutions their users need.

“If you work from a remote location, you might not fully understand the needs of users on the ground,” he said. “We take great care in trying to understand what our users’ needs are by getting deep into the community where the pain points are.”

Delving into its users’ communities help the company develop solutions that benefit users worldwide. A lesson the company learned about Germany’s invoicing problems was applied to the platform on a global scale. Fiverr’s invoices previously listed descriptions of gig assignments, but the service could not enable invoice organization by categories and subcategories.

“For users in Germany, this wasn’t sufficient [enough] to work [with] their invoicing systems,” he said.

Fiverr’s community approach will be vital for other companies and platforms as they pursue their own international expansion plans.

“The best way to understand a local market’s needs is to get in there, ask questions and listen to users and put people in the room who are prospective users,” Schabelman said. “Any great international expansion project has to have a component of listening deeply to user insights.”

Platforms need their users to trust them to be successful, and the most effective way to establish trust is to first take the time to listen.

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

https://www.pymnts.com/platform-payments/2019/fiverr-local-marketplace-freelancers/

Crypto Regulation To Tighten Scrutiny On Money Laundering

https://www.pymnts.com/news/security-and-risk/2019/cryptocurrency-regulation-money-laundering/

Amid the announcement of a new cryptocurrency – that would be Libra – the Financial Action Task Force (FATF), which operates as global regulatory firm based in Paris with a membership roster of countries such as China and the United States, has said it will boost its examination of digital currencies with an eye on money laundering. That may lead to draft rules and greater oversight than has been seen to date. The FATF has also said crypto companies and exchanges will be registered and will be required to report suspicious transactions, and to perform checks on customers.

As reported, Simon Riondet, who serves as the head of financial intelligence at Europol, has said that money laundering through the use of cryptocurrencies has become more widespread. Europol has found evidence of money laundering at cryptocurrency ATMs. And, as reported by Reuters, at least one cryptocurrency, Monero, has been able to hide all details of a transaction.

This means Libra is likely to see more scrutiny from regulators as the project takes shape and eventually launches. That sentiment was reflected in part by the Bank for International Settlements (BIS), which said this past weekend that there should be coordinated regulations on cryptocurrencies. The BIS pointed to Facebook’s move into the space, where privacy and competitive concerns must be addressed.

BIS Economic Adviser and Head of Research Hyun Song Shin said, according to reports, “To make that coordination possible, I think there would need to be more of a concerted effort on the part of our political leaders to take that forward.” The adviser continued that “the role of Big Tech in finance introduces many new and very unfamiliar elements, which pushes us to take a fresh look at some of the activities that international policymakers engage in. This is something that needs attention sooner rather than later.”

The BIS remarks came on the heels of Bank of England Governor Mark Carney’s statements that Facebook’s announcement shows digital currency cannot be unregulated like social media. “The Bank of England approaches Libra with an open mind but not an open door,” Carney said, as quoted in Reuters. “Unlike social media … the terms of engagement for innovations such as Libra must be adopted in advance of any launch.”

Beyond Cryptocurrencies

Separately and beyond the confines of cryptos, regulators have pointed to other risks within financial services, stating that cyberattacks are among the biggest risks to banks, but there are also complications and challenges tied to financial institutions as they grapple with regulation and testing procedures centered on cybersecurity. As the Financial Times reported, some regulators are pointed toward a multi-agency approach to cybersecurity that would test banks through a coordinated effort.

There is some precedent here, as in assessing credit risk, regulators spanning the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency work together through the Shared National Credit Program. JPMorgan Chase CEO Jamie Dimon has remarked that all of the different testing from multiple agencies makes it “very complicated” to comply with requests.

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

https://www.pymnts.com/news/security-and-risk/2019/cryptocurrency-regulation-money-laundering/

Research Shows How 5G Can Help Start-ups Compete Against More Established Rivals

https://thefintechtimes.com/research-shows-how-5g/

A new report from Vodafone reveals how 5G could pave the way for a new wave of start-ups, with 60% of those surveyed believing the technology will help them compete against more established rivals.

The report – launched at the official opening of the Vodafone Digital Innovation Hub at MediaCityUK, Salford – sought the views of start-up leaders across six industry sectors. Almost six-in-ten (58%) said 5G would enhance their competitiveness within two years, and more than half (56%) added that they expect it to change the way they operate their business.

There is growing anticipation for 5G among start-ups. 60% are eagerly anticipating its roll out and 54% are more excited by 5G than any other new enterprise technology.  A fifth (20%) also think 5G represents the single biggest opportunity of all current and developing technologies, followed by cloud computing and cyber security.

Financial service companies in particular believe 5G will bring significant business benefits with respondents scoring higher than those in any other industry.

Anne Sheehan, Business Director, Vodafone UK said: “5G will change the way we live our lives. The creation of cleaner, smarter cities, improved digital healthcare services, automated manufacturing and cloud-based gaming are just some of the areas that will receive a boost from 5G’s improved mobile data speeds, responsiveness and greater capacity. We are committed to helping entrepreneurial small businesses and start-ups take advantage of this technology by making it widely available across the UK. This is why we have ambitious 5G roll-out plans for 19 towns and cities this year and are the only UK company to offer 5G roaming this summer.”

Financial service companies in particular believe 5G will bring significant business benefits with respondents scoring higher than those in any other industry.

71% believe 5G, over and above any other technology, will help their business, and 76% think it could help newer businesses close the gap on established rivals.  81% reported they had to keep pace with technological change in order to be successful, compared with 67% across all industries.

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In The UK, Fines May Loom For Big Firms That Pay Late

https://www.pymnts.com/news/b2b-payments/2019/in-the-uk-fines-may-loom-for-big-firms-that-pay-late/

In the U.K., some sweeping changes may be on the horizon for large firms that are perennial late payors.

News reports came this week that large businesses in the U.K. may be liable for fines if they pay smaller suppliers late. That’s part of a series of proposals on offer from Minister of Small Business Kelly Tolhurst, and comes in the wake of well-documented damages suffered by small businesses (SMBs), where it is estimated that 50,000 firms close down annually as a result of late payments and resultant cash flow crunches.

As reported in Accountancy Daily, there is no change suggested to the 60-day payment terms set out in the Prompt Payment Code, which is voluntary. However, the oversight of that code is slated to move to the office of Small Business Commissioner Paul Uppal. The office will be given broader powers to tackle late payments — where, for example, it will be able to issue fines. Other proposals include mandatory reports on information and disclosure of when payments are rendered — and whether they are timely. There can also be binding payment plans for late payers, said the site, and payment practices would have to be listed in annual reports.

Under current practices, the Prompt Payment Code is administered by the Chartered Institute of Credit Management for the Department of Business, Energy and Industrial Strategy, and has logged 2,000 members so far.

Next steps involve a consultation period. As reported, the government will work with the Financial Reporting Council (FRC) to improve transparency tied to supply chain finance. There will also be directives to increase the use of accounting and invoicing software — £1 million ($1,273,940 USD) in funding has already been allocated to that effort.

In a statement, Tolhurst said, “The majority of businesses pay their bills on time, with the amount owed in late payments halved over the last five years. But, as a former small business owner, I know the huge impact a late payment can have on the ability of a small business to plan, invest and grow. These measures will ensure that small businesses are given the support they need and ensure that they get paid quickly, ending the unacceptable culture of late payment. I intend to establish a ministerially led group to bring together key government departments to act on improving prompt payment across both the public and private sectors.”

As reported, research from the Association of Independent Professionals and the Self-Employed (IPSE) has estimated that two-thirds of self-employed workers in the region have lost as many as 20 days of time trying to get late payments satisfied.

“We are pleased that the government has listened to the U.K.’s smallest businesses, and is strengthening their carrot and their stick. This must now end the late payment culture that so many big businesses get away with,” said IPSE Deputy Director of Policy and External Affairs Andy Chamberlain.

Separately, SmallBusiness.co.uk reported that the shifts, as mentioned above, mean that company boards will be held responsible for supply chain payments — a broadening of responsibility that reaches well beyond finance directors.

Mike Cherry, chairman of the Federation of Small Businesses (FSB), said, “Small businesses will be delighted with today’s announcement. FSB has worked very hard with [the] government to create a whole-board approach to late payment within the U.K.’s large companies, and empower audit committees to look after the supply chain.

Creative Agencies And Late Payments

Separately, in the ad and creative agencies vertical, Digiday reported that “the long-simmering issue of agency payment windows has been brought to a boil.” That statement comes as General Mills said it was looking for a new creative agency, with a payment window of 120 days. The site reported that larger consumer brands, and consumer packaged goods (CPG) companies, are stretching payment terms. Among them is Chrysler, which boosted payment terms to 180 days. Mondelēz, in another example, has a 120-day payment window.

“There’s somehow become this desire to keep one-upping the previous deal,” said 4A President Marla Kaplowitz. “We’ve reached that point where you’ve pulled as much as you can,” according to the site, which also noted that publishers and ad tech companies are seeing a ripple effect from late payments.

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

https://www.pymnts.com/news/b2b-payments/2019/in-the-uk-fines-may-loom-for-big-firms-that-pay-late/

SMBs May Get More Time To Adopt New Accounting Standards

https://www.pymnts.com/news/b2b-payments/2019/smbs-may-get-more-time-to-adopt-new-accounting-standards/

Financial regulators are considering allowing smaller businesses (SMBs) more time to comply with sweeping changes in lease accounting standards, which experts have said will place a significant burden as organizations work to comply with the requirements. Reports in Accounting Today last week said Financial Accounting Standards Board (FASB) Chairman Russell Golden revealed that it is considering extending the compliance deadline for small and private firms by as much as two years.

“At a public meeting next month, the FASB will consider whether we should extend implementation timelines for private companies and not-for-profit organizations, as well as for smaller public companies — and, if so, how we should define a ‘small public company,’” he said during the annual Institute of Management Accountants conference in San Diego last week. “As part of this process, we’ll look at the effective dates of certain standards that are not yet effective to determine whether they should be amended to reflect a new philosophy. We’ll ask you for input on this as well.”

The FASB is leading sweeping changes to accounting standards, affecting the ways companies report on lease, hedging and current expected credit loss data. These changes are already in effect for the public sector, and, during a Q&A after his speech, Golden noted that “private companies could reduce their costs by learning from public companies.”

“They could learn from the accounting policies at public companies,” he said, adding that the FASB is now considering whether it makes sense to broaden the time between the rules taking affect for public versus private firms.

Separate reports in Bloomberg Tax noted that the FASB is considering both the benefits and drawbacks of pushing back the deadline for the private sector.

According to CPA Practice Advisor reports on Friday (June 21), researchers from Robert Half and Protiviti found that 18 percent of private companies have not yet begun the process of transitioning to the new accounting standards. The adjustment is more difficult for small businesses, with only 38 percent of companies with between 20 and 49 employees having completed the transition, compared to 61 percent of companies with 1,000 or more employees.

The Wall Street Journal reported last month that two professional groups requested a delay in the implementation of the new accounting standards to the FASB. The American Institute of Certified Public Accountants and the Associated General Contractors of America sent letters to the FASB, requesting additional time for the rules to take effect, reports said.

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

https://www.pymnts.com/news/b2b-payments/2019/smbs-may-get-more-time-to-adopt-new-accounting-standards/

How ACH Business Payments Pave The Way For US Open Banking

https://www.pymnts.com/news/b2b-payments/2019/how-ach-business-payments-pave-the-way-for-us-open-banking/

In B2B payments, corporates’ continued use of paper checks confounds FinTech firms working to give businesses more affordable, faster and more efficient payment options. Yet, for many business payers, the reason for using checks can be quite straightforward: It’s simply the way payments have always been made.

However, new small businesses (SMBs) being launched by a new generation of entrepreneurs aren’t bogged down by decades-old processes and systems that limit flexibility and evolution. These professionals are entering the market with a demand for digitization, and it’s driving the emergence of digital- and mobile-first banks built for small businesses.

Among this community is Novo, a mobile-first bank connecting entrepreneurs with bank account and debit card services. According to the company’s Co-founder Tyler McIntyre, the breed of entrepreneur that flocks to a digital-first bank is the type of business owner who uses digital payments over checks.

“The majority of our customers are using ACH,” he told PYMNTS in a recent interview. This important discovery lends more weight to the prediction that paper checks are being phased out in B2B payments, not only as a result of FinTech encouragement, but as a result of a new generation of business payers.

However, progress is gradual. McIntyre explained that checks remain a reality, even for the youngest, most tech-savvy businesses. One reason is a lack of awareness that ACH is even an option — an understandable scenario, when the vast majority of businesses that entrepreneurs look to for examples of how to start a successful business have been operating with checks for decades.

“People don’t know what ACH is, and people don’t know what their options are,” he said. “When they need to move money same day or next day, their minds go straight to wire.”

Another reason, he added, is that some vendors, particularly the larger ones, prefer checks because it’s an easier reconciliation process — again, likely the result of operating in a check-heavy business environment for decades. The issue of reconciliation remains one of the largest challenges for companies of all sizes. Yet, the small firms and entrepreneurs embracing ACH payments from the get-go are opening doors for themselves, bringing automation to reconciliation and accounting as a result of access to higher-quality transaction data.

FinTech firms are opening doors, too, finding new ways to use that payments data. For banks like Novo, the biggest opportunity is in application programming interface (API) integrations with third-party solution providers — the firm’s latest interconnectivity initiative was recently announced with cloud accounting platform Xero.

New SMBs’ rising preferences for ACH, and new banks’ emergence as digital-first financial service (FinServ) players, are ushering Open Banking into the U.S., even without regulatory mandates as seen in areas like the U.K. and Europe. It’s a trend that emphasizes a few major differences in how legacy financial institutions (FIs) and young digital banks position themselves in the small business FinServ market, too. According to McIntyre, API integrations with third-party platforms are of growing importance, as some traditional banks turn away from legacy bank data feeds.

He pointed to Capital One, which, in late 2017, discontinued its Direct Connect service that had enabled the FI’s bank feed to connect into third-party platforms. Traditional bank feeds and data scrapers are “constantly breaking,” McIntyre said, often leading to missed transaction data aggregation, failing to provide a complete view of payments.

The embrace of APIs has also introduced a shift in banks’ customer acquisition and product strategies.

“In five to 10 years, [banks] will look around and find it’s not about the cross-sell. It’s all about the integrations,” McIntyre predicted, explaining that, historically, banks have used data integrations to bundle and white-label a range of services for their clients as part of their customer retention efforts. Increasingly, though, satisfying customers means allowing them to use the products and services they want in a seamless manner, even if it’s not coming from the bank.

“Why make it more difficult for a customer to get information into your bank feed, when we’re really not even trying to compete in the accounting space?” he asked. “The difference between new-age companies versus, say, a JPMorgan is that we’re not trying to sell 20 different types of solutions packed into one, and call them best-in-class.”

Promoting cross-platform data integrations enables small business owners to access those best-in-class solutions seamlessly, promoting customer retention by allowing entrepreneurs to use what they want. It’s part of the small business financial service industry’s approach toward a holistic ecosystem of products and services that “just work,” added McIntyre.

As the industry makes progress toward that goal, Novo has more integrations planned in the areas of payments, payroll and cross-border payments. With ACH use on the rise, small businesses are driving the growth of the data pool in the financial services market. Now, banks and FinTech firms must drive the integration of that data between each other to further fuel SMB FinServ innovation, and change the role of the bank with SMB customers.

“It’s about being that platform as a bank, and trusted advisor where people go. It’s about giving them what they want,” McIntyre said.

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

https://www.pymnts.com/news/b2b-payments/2019/how-ach-business-payments-pave-the-way-for-us-open-banking/

Americans Eager to Adopt 'Tap and Go' Payment Solutions Over Cash as Cashless Systems Evolve I Cash I Wearables I Smartwatch I Contactless

https://www.mobilepaymentstoday.com/whitepapers/americans-eager-to-adopt-tap-and-go-payment-solutions-over-cash-as-cashless-systems-evolve-i-cash-i-wearables-i-smartwatch-i-contactless/

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A Third of Companies Adopt AI in the Past Year

https://thefintechtimes.com/adopt-ai-past-year/

More than a third of companies have adopted some form of AI in the past year, according to an MHR Analytics poll.

The poll revealed 38 per cent of companies have made the leap to AI or machine learning by adding the technology to their analytics approach in the past 12 months.

Almost a fifth (19 per cent) of the 500 professionals polled on Twitter said their company had made ‘significant’ progress with adopting AI, and a further 19 per cent said their company had ‘steadily’ been adding the technology to their analytics strategy.

“We are now seeing a clear shift in focus in the way companies operate their analytics, with AI capabilities like NLP (natural language processing), machine learning and conversational analytics becoming a reality,” said MHR Analytics’ SVP Nick Felton.

“With widespread awareness about advances in AI, we wanted to explore current levels of actual uptake as we approach the next decade. It’s unsurprising that a significant number of organisations have this year stepped up and begun to invest in AI or machine learning of some kind,” he said.

Jumping on the AI bandwagon, Andreas Burner, CIO of SmartStream Technologies, told TFT:

“In the banking sector, it’s quite new to use machine learning and AI, but it’s a great place to apply it. The reason why it is so great for banks is if you look at how much data is processed and stored it’s absolutely enormous. By law, banks must keep all data for audit purposes for many years. In that data there is a lot of knowledge, not only the application data but also the counterparties data.

Furthermore there are recorded user actions, for example, what is considered to be a regular situation or what is an exception and requires a manual intervention. Also there is data for how a user specifically reacted to a certain exception. And that’s great when applying AI to the banking sector as machine learning needs lots of data and it is stored and ready to use because of these audit requirements.”

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