UK Lawsuit Against Mastercard Gains Court Support

A consumer lawsuit against Mastercard in the U.K. got approval to move forward after a court reversed a ruling by the Competition Appeal Tribunal.

According to a report in the Financial Times, the U.K. Court of Appeal rejected the tribunal’s ruling from 2017, which had blocked the claimants from pursuing the case led by Walter Merricks, the former financial ombudsman. Merricks is seeking £14bn from Mastercard on behalf of 46 million consumers in the U.K. The lawsuit contends the consumers suffered due to fees Mastercard charged them.

“I am very pleased with today’s decision,” Merricks told the news outlet. “It is nearly 12 years since Mastercard was clearly told that they had broken the law by imposing excessive card transaction charges, damaging consumers over a prolonged period.”

The lawsuit contends Mastercard’s interchange fees – the fees it charges for cross-border payments – were a big cost to retailers, which they then passed on to consumers in the form of higher prices. First launched in 2016, the lawsuit was borne out of the collective action rule that was introduced in 2015. Under that rule, consumers are allowed to sue for collective damages on behalf of people harmed under the competition laws, the report noted.

The ruling on Tuesday (April 16) doesn’t mean the suit can go forward, as it still needs certification before a trial can proceed. Mastercard plans to appeal to the Supreme Court. In a statement to the Financial Times, the payments company said the decision isn’t a final ruling, and that the court has decided a rehearing is necessary on some of the issues.

Mastercard continues to disagree fundamentally with the basis of the claim, and we believe U.K. consumers receive real value from the security, convenience and consumer protection of our payment services,” the company 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. Check out our April 2019 Unattended Retail Report. 

FinovateSpring Sneak Peek: Capsilon

A look at the companies demoing live at FinovateSpring on May 8 through 10, 2019 in San Francisco, California. Register today and save your spot.

Capsilon will demo Capsilon Digital Underwriter, the automated underwriting solution that helps mortgage lenders cut underwriting time and improve critical decision-making with clean data.

Features

  • Automatically calculates income, analyzes credit, and performs due-diligence checks
  • Standardizes the underwriting process, enabling consistent, unbiased decisions
  • Speeds up underwriting and improves the borrower experience

Why it’s great
Capsilon Digital Underwriter helps mortgage lenders and investors make rapid, informed loan eligibility decisions with perfected data.

Presenters

Steve Viarengo, Senior Vice President of Digital Mortgage Solutions
Since joining Capsilon in 2017, Viarengo has been instrumental in driving Capsilon’s evolution from an enterprise-wide document management platform to an end-to-end mortgage automation engine.
LinkedIn

Allen Boyce, Sr. Director Product Management, Digital Mortgage Solutions
Boyce spearheads a talented product and user experience team dedicated to making mortgage automation mainstream and eliminating unnecessary workload so underwriters can focus on underwriting.
LinkedIn

FinovateSpring Sneak Peek: Enova Decisions

A look at the companies demoing live at FinovateSpring on May 8 through 10, 2019 in San Francisco, California. Register today and save your spot.

Enova Decisions’ Enova Decisions Cloud is a complete decision management software-as-a-service that works with your existing infrastructure and is designed to scale with your business.

Features

  • Access the data you need, when you need it
  • Deploy machine learning models using any technique written in your language of choice
  • Auto retune and retrain your machine learning models

Why it’s great
By removing decisioning from the software development cycle and managing it on the Enova Decisions Cloud, businesses can adapt quickly to changes in the industry.

Presenters

Sean Naismith, Head of Analytics Services
Naismith has 18+ years of professional experience with unique insights into analytics, marketing, finance, and IT. He currently oversees strategy and development of decisioning solutions.
LinkedIn

Matt Richards, Senior Sales Executive
Richards has been in sales in the tech space since 2004, mostly in digital marketing. He currently is a Senior Sales Executive at Enova Decisions.
LinkedIn

FinovateSpring 2019 Sneak Peek: Lleida.net

A look at the companies demoing live at FinovateSpring on May 8 through 10, 2019 in San Francisco, California. Register today and save your spot.

Lleida.net is a digital witness operator providing a contracting solution as the vehicle for sending unstructured information to signatories in a time-saving, legally valid way.

Features

• End-to-end framework for reliable online contracting
• No hardware or software infrastructure to be deployed
• Digitally signed documentary evidence provided; available in a “durable media”

Why it’s great
Registered Email Contract is the solution to time consuming, structured contracting processes.

Presenters

Sisco Sapena, CEO
Sapena studied as a technical agricultural engineer and holds a postgraduate in Telematics. He is one of Spain’s internet pioneers and takes Lleida.net around the world always focusing on innovation.
LinkedIn

Alba Sapena, CEO Assistant
Blogger since she was 14, passionate about books and photography, she’s one of the Lleida.net Social Media managers.
LinkedIn

FinovateSpring 2019 Sneak Peek: Lleida.net

A look at the companies demoing live at FinovateSpring on May 8 through 10, 2019 in San Francisco, California. Register today and save your spot.

Lleida.net is a digital witness operator providing a contracting solution as the vehicle for sending unstructured information to signatories in a time-saving, legally valid way.

Features

• End-to-end framework for reliable online contracting
• No hardware or software infrastructure to be deployed
• Digitally signed documentary evidence provided; available in a “durable media”

Why it’s great
Registered Email Contract is the solution to time consuming, structured contracting processes.

Presenters

Sisco Sapena, CEO
Sapena studied as a technical agricultural engineer and holds a postgraduate in Telematics. He is one of Spain’s internet pioneers and takes Lleida.net around the world always focusing on innovation.
LinkedIn

Alba Sapena, CEO Assistant
Blogger since she was 14, passionate about books and photography, she’s one of the Lleida.net Social Media managers.
LinkedIn

FinovateSpring Sneak Peek: Finhaven

A look at the companies demoing live at FinovateSpring on May 8 through 10, 2019 in San Francisco, California. Register today and save your spot.

Finhaven is an end-to-end solution for the issuance, investment and trading of digital securities. For the first time, Finhaven will reveal its peer-to-peer private trading feature.

Features

  • Complete ownership of their securities
  • Ability to recreate boardroom negotiations via direct investor communications
  • Reduction of counter-party risk

Why it’s great
Finhaven’s private trading platform returns ownership to the investor in a back-to-basics trading experience while increasing security and reducing counter-party risk.

Presenters

Anna Dabrowski, Analyst, Marketing
Dabrowski leads marketing initiatives at Finhaven. With a background in corporate finance, sales and marketing, she is passionate about the disruption of financial services through new technologies.
LinkedIn

Edwin Chan, Product and Business Strategist
Chan is a Product and Business Strategist at Finhaven. His background is in technology implementation and product management in the finance and retail industries.
LinkedIn

Goldilocks and the Three Finovates

With three Finovate conferences this fall, find the one that’s just right for your new finech.

Finovates are for public companies, startups, and established leaders with new financial services innovations. Past demos have included technology focused on customer experience, regtech, insurtech, proptech, healthtech, wealthtech, security, identity, biometrics, blockchain, crypto, investment, onboarding, open banking, digital banking, lending, payments, and more.

Demoing companies are at the core of the conference series, which is designed to give them the best return on their demo investment with a 360 degree approach:

BEFORE

DURING

AFTER

So how do you know which conference is right for you this fall? By region — North America, Asia or Middle East.

Are you expanding services or solutions to one of these places? Announcing new partnerships or targeting key customers? Graduating from an accelerator with your sights set on raising funding or attracting clients? Apply to demo at the Finovate in the region where you want to do business.

The earlier you get on board the bigger the return on demo investment. So apply to an upcoming event now:

Poland country data-sheet

Poland country data-sheetPublication Type:
Special Report

Published / Updated:

This data-sheet gives a detailed look into the mobile payments landscape in Poland.

Poland has a population of 38 million people who all have mobile phones. Their smartphone penetration is as high as 70%. At the same time barely sixth of them have a credit card and the ownership is next to null for young adults.

In this report, we bring out data that helps navigate this region for digital merchants. We hope the report gives you a better understanding of the Polish digital ecosystem and helps you maximize the efforts of your payments strategy.

Fortumo is a digital enabling platform for app stores and digital service providers for user, acquisition, monetization and retention.

Visit Company Showcase »

FinovateSpring Sneak Peek: OnPointe Risk Analyzer

A look at the companies demoing live at FinovateSpring on May 8 through 10, 2019 in San Francisco, California. Register today and save your spot.

OnPointe Risk Analyzer creates tools and services to help financial professionals maximize their effectiveness with lead generation, marketing, client risk assessments, portfolio analysis, and sales presentations.

Features

  • First market-calibrated risk analysis platform
  • Accurately measures both client and portfolio risk
  • Robust financial analysis and portfolio comparison tools

Why it’s great
OnPointe Risk Analyzer is the first market-calibrated financial risk analysis platform.

Presenter

Rob Harbin,Co-Founder / CTO
Harbin is a veteran technology executive and innovator primarily focused on and serving the financial services industry over the past 10 years.
LinkedIn

Deutsche Pressured To Trim US Investment Bank

Deutsche Bank is reportedly being pressured by European regulators to trim its U.S. investment bank further after years of concerns that the unit is too large and too unprofitable.

Reports in the Financial Times on Sunday (April 14) said unnamed sources have revealed Deutsche’s own concerns about the lackluster performance of the unit, adding that informal discussions held last year within the bank put pressure on the FI’s Chief Executive Christian Sewing to cut back the unit’s operations.

One unnamed senior supervisory official told the publication that the watchdog “started to make our regulatory expectations clear about two years ago, and we continue to have the view” that Deutsche’s U.S. investment bank should shrink. The official added that this position would remain unchanged after a merger with Commerzbank, which Deutsche has been pursuing for several months.

According to reports, Deutsche is exploring whether that Commerzbank merger could potentially prop up its U.S. investment bank operations by quelling client concerns of counterparty risk at the unit. The merger would lead to an increase in retail deposits as well as a possible government investment in the combined entity, which reports said might lower funding costs at the investment bank as well.

Deutsche has already taken measures to reduce the size of the investment bank. Its debt levels dropped by 13 percent and the FI cut 7 percent of its staff, while resources have been reallocated to other key areas of the bank’s operations, including foreign exchange, transaction banking and secured lending, reports said.

In a statement, Deutsche said those actions “have already begun to yield results, and we believe they will lead to steady, sustainable improvements in our investment bank.”

But the bank’s EU watchdog is reportedly seeking further action, while unnamed sources have also noted that Deutsche Chairman Paul Achleitner is pushing to promote the bank as a viable alternative in Europe to U.S. investment banks, including Goldman Sachs.

——————————–

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. Check out our April 2019 Unattended Retail Report. 

Audrey Ottevanger Takes the Helm at ECOMMPAY APAC

Leading payment service provider ECOMMPAY is proud to announce the appointment of Audrey Ottevanger as Director and Head of APAC.

Audrey Ottevanger, Director and Head of APAC

“I’m excited to join ECOMMPAY to help grow and expand the business in APAC through acquisition and partnerships,” shares Audrey. “The offering of global payment services, which include alternative payment methods in APAC, Europe, and the CIS region combined with tailored solutions can help eCommerce players reach new markets and global buyers with ease.”

Audrey joins ECOMMPAY with more than 17 years of professional experience in brand marketing, business development, market expansion, and partner management under her belt. Having worked in senior management roles at global brands such as PayPal and Braintree, Audrey is a key talent in digital payments. She was with PayPal for nearly eight years, rising from managing sales and partnerships teams to Country Manager of Malaysia, the Philippines, and Thailand. Most recently, she was instrumental to Braintree’s expansion into Asia. She now turns her attention to solidifying ECOMMPAY’s presence within the region.

ECOMMPAY engineers bespoke online payment solutions for clients worldwide. The company’s advanced payment gateway facilitates an omnichannel payment process, combining acquiring capabilities, alternative payment methods, proprietary risk management, and technological innovation within a single, seamless integration.

Headquartered in London, the international payment service provider and direct bankcard acquirer opened its Singapore office in 2015 and now has seven offices globally, employing more than 500 payment experts, of which 200 are dedicated IT specialists. The Authorised Payment Institution is regulated by the Financial Conduct Authority (license 607597) and holds both Visa and Mastercard Principal Membership.

Funding Options Criticizes UK Approach To Late SMB Tax Payments

Alternative small business lending platform Funding Options has criticized U.K. tax authorities’ approach to small businesses that fall behind on tax payments.

Reports in AltFi said Funding Options argued that the approach by HM Revenue and Customs (HMRC) to late tax payments is “too aggressive,” citing the high number of applications HMRC submitted to shutter small businesses. The tax authority applied to close 4,160 businesses last year, reports noted.

That’s an 11.5 percent decline from 2017 levels, but still too high, the company said, adding that because of a slowing economy and late payment challenges, Funding Options said regulators should take a more “sympathetic approach” to small and medium-sized businesses (SMBs) that fall behind on tax payments.

“A key reason behind some businesses not being able to meet their tax payments on time is late payments by larger clients,” the company said, pointing to “tough trading conditions caused by Brexit uncertainty and slowing global economic growth” as additional points of pressure that may prevent a small business from being able to pay taxes on time.

The company is urging HMRC to allow small businesses more time to pay.

“HMRC continues to take a hard-line approach despite businesses facing touch economic headwinds,” said Funding Options Chief Executive Conrad Ford in a statement. “While HMRC has eased back from last year when they tried to shut down 4,700 businesses, it should be looking to give them even more leeway.”

At the same time, tax regulators are cracking down on tax avoidance as well. Reports noted that earlier this year, HMRC released a notice advising of its efforts to combat attempts to “avoid an income tax charge on distributions when winding up a company.” The regulator said it is also taking measures to target “phoenixism,” which involves a business owner’s attempt to use cash from a closing business as capital gains and not income tax, which is taxed at a higher rate. Those bosses then launch a new company that is similar to the previous one.

——————————–

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. Check out our April 2019 Unattended Retail Report. 

What Anonymous B2B Trade Means For The Buyer-Supplier Relationship

The buyer-supplier relationship is viewed as a strategic component of commerce, procurement, supply chain management and the overall success of a business. Yet, the needs of both buyer and vendor are changing as supply chains globalize, and as transactions become more complex — and those needs are often at odds with each other, risking the integrity of buyer-supplier ties.

Corporate buyers will want to stretch out their payment terms and adjust vendor contracts accordingly. Suppliers won’t want to accept cards because of interchange fees and implementation costs. There are many ways that buyer-supplier needs can conflict, presenting an opportunity for third-party marketplace platforms to step in.

One of the newest on the market is HUBX, which launched less than a year ago with a focus on vendor empowerment. However, a successful B2B eCommerce platform cannot emerge without also addressing customer needs. While HUBX is far from the only B2B eCommerce marketplace in operation today, its most unique attribute, perhaps, is the anonymization of buyers and suppliers.

HUBX Founder, CEO and CTO Derek Wall said anonymity is a crucial component of managing both buyer and supplier needs, and doesn’t necessarily mean the buyer-supplier relationship goes by the wayside.

Mitigating Risk

HUBX operates in the secondary distribution market, addressing the challenge of selling excess inventory that traditionally gets sold in a manual, fragmented fashion, according to Wall. Launching a platform through which buyers and sellers of that inventory can connect and transact streamlines many of the inefficiencies plaguing the space today. While buyers and suppliers can “connect,” the HUBX platform keeps both sides anonymous from each other so transactions stay digital.

“The problem with the market is, once a seller is connected with a buyer, they don’t need that [digital eCommerce] platform anymore,” Wall explained. “The first transaction happens online, and the second transaction happens offline.”

That progression adds further fragmentation to the market, and exposes both buyer and supplier to all kinds of risk.

Payments is one of the largest risks. Without a digital platform acting as a middle man, Wall said, vendors are at risk for delayed and late payments, paper check payments or another unideal payment process. Connecting with a buyer offline also means transactions must occur via a one-off basis (one purchase order per customer), whereas HUBX links vendors with a single, daily purchase order for a slew of orders, regardless of who placed them. Furthermore, the platform does not allow for returns, which cuts out the risk of chargebacks for vendors.

Corporate buyers, meanwhile, risk incorrect or delayed shipments, an occurrence that Wall said is not tolerated on the HUBX platform. The company can also provide customers with payment terms, while facilitating an ACH payment to a supplier upon delivery — addressing otherwise conflicting financial needs of each side of the transaction.

For both sides, fraud and regulatory noncompliance risks are rampant, from Know Your Customer (KYC) and anti-money laundering (AML) due diligence burdens, to payments or vendor fraud. According to Wall, B2B eCommerce platforms are an essential component of not only supporting the needs of both buyer and supplier (and, in some cases, finding a win-win situation for each side), but in keeping both buyer and supplier protected against these risks.

Retaining Connections

Even with a third-party middle man managing the risks and needs of buyers and suppliers, relationships between trading partners remain a critical component of B2B trade. Indeed, experts have said that the buyer-supplier relationship can have an immensely positive impact on both sides. Gallup analysis, published last June, pointed to opportunities in increased profit margins through vendor contract negotiations, coordination with suppliers on joint growth plans and a reinforced effort to meet end-customer demands — all of which cannot occur without a strategic buyer-supplier relationship.

However, research from Protiviti, published last week, found that, despite their potential, strategic buyer-supplier relationships are difficult to come by. Just under one-third of survey respondents said their vendor relationship programs are either ad hoc or non-existent, and more than one-third said it is somewhat or not at all likely that their organizations will move to de-risk their vendor relationships, despite rising external pressures and risks on global supply chains.

At the human level, despite reassurances from any platform to address issues of compliance and trade risk, trading anonymously may give corporate buyers and sellers a feeling of unease. To address this, Wall said HUBX is working on a patent that would integrate and facilitate anonymous communication between buyers and suppliers on its platform.

“It would allow our customers to communicate with [vendors] without knowing who each other are,” he said. “We think that is the future of commerce in general.”

——————————–

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. Check out our April 2019 Unattended Retail Report. 

Cambodia, Singapore In X-Border FinTech Pact

Cross-border FinTech efforts have seen increasing participation from central banks and monetary authorities.

Among the most recent headlines, in Asia this past week, the Monetary Authority of Singapore (MAS) and the National Bank of Cambodia have signed a memorandum of understanding (MOU), that Business Times said will boost partnerships on FinTech and financial services innovation. The banks have also agreed to share data on emerging markets. The MOU dictates that the banks will train FinTech startups with an eye on cross-border transactions.

Deputy Managing Director of MAS Jacqueline Loh said the relationship demonstrates a FinTech that may extend to other countries in the ASEAN region.

“This will also allow us to share experiences and information related to FinTech … and reap the benefits of the new innovation in financial technology, enhance payment systems and promote financial inclusion,” said National Bank of Singapore Deputy Governor Neav Chanthana of the partnership.

As reported, Singapore has been working on other cross-border initiatives as well. In one example, the Singapore FinTech Association inked a pact with FinTech Australia to further the development of FinTech across those nations.

The Cambodia front has also forged an alliance with Kookmin Bank, based in South Korea, focused on digital transactions, with an emphasis on mobile transactions (through Pi Pay, a mobile payment company).

The Fed And FinTech Firms

Elsewhere, Federal Reserve Governor Michelle Bowman said last week, as reported in ABA Banking Journal, that outsourced risk management guidance may need to be reworked, as complex regulations have been hindering community banks’ efforts to embrace innovation. Bowman remarked at an event, held at the Federal Reserve Bank of San Francisco, that the Fed could foster collaborative action between those smaller banks and FinTech firms.

“I think supervisors need to recognize and be thoughtful about how we might affect the way banks consider innovation,” said Bowman. “In particular, I think it’s important that we fulfill our responsibilities to ensure safety and soundness of banks and consumer protection, while also creating a regulatory framework that does not hinder the integration of responsible innovation into the strategic direction that a bank opts to pursue.”

In reference to outsourcing risk, she said management of that risk “appropriately reflects the present-day business realities of the banks we supervise.” According to the publication, the Federal Reserve is eyeing ways to engage more frequently with industry participants on innovation outside the purview of the outsourced risk process.

Separately, in India, API infrastructure firm Setu said last week that it had raised $3.5 million in Seed funding from Lightspeed India Partners, with participation from Bharat Inclusion Seed Fund. The money will be used to build engineering staff. The FinTech, reported YourStory, works with financial institutions to enable account creation and manage payments.

——————————–

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. Check out our April 2019 Unattended Retail Report. 

San Francisco May Be First City To Ban Facial Recognition

The city of San Francisco moved a little closer to banning facial recognition software after adding amendments to the Stop Secret Surveillance ordinance.

According to a report in VentureBeat, the amendments to the ordinance will be open to public comment before the County Board of Supervisors votes on it. If it passes, San Francisco would become the first city to ban the technology that is used to unlock mobile devices and make purchases.  “The propensity for facial recognition technology to endanger civil rights and civil liberties substantially outweighs its purported benefits, and the technology will exacerbate racial injustice and threaten our ability to live free of continuous government monitoring,” the ordinance amendment stated, according to VentureBeat.

Under the legilsation the County Board of Supervisors in San Franciso is mulling, city departments would be required to create policies governing the use of surveillance technology, explain why they acquired new surveillance tools and provide annual reports that detail how they surveil people and acquire data.  The city’s controller would also be in charge of annual audits. San Francisco would also let the public weigh in before purchasing or deploying any new surveillance technology.  Under the city’s rules, surveillance technology includes license plate readers, cameras, biometrics and software that is used to forecast criminal activities, reported VentureBeat.

With public comment on amending the rules to ban facial recognition open, several privacy groups and concerned citizens came out with statements supporting the potential ban.  Tim Kingston, an investigator in the San Francisco Public Defender’s Office, said people of San Francisco don’t want to be monitored by the government using advanced technology.  He said the passage of the rules is important to ensure citizens in the city have oversight and control over what new surveillance technology is rolled out. He said it’s particularly important for people who are historically without power in the city.

——————————–

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. Check out our April 2019 Unattended Retail Report. 

MUFG Launches Proprietary Digital Coin

MUFG, Japan’s largest bank, will follow JPMorgan Chase in launching a proprietary digital coin.

Reports in the Japan Times said Mitsubishi UFJ Financial Group (MUFG) will roll out its digital token, dubbed Coin, later this year, according to bank President Kanetsugu Mike. The financial institution is reportedly planning to introduce the coin as a tool for its enterprise customers to deploy themselves as their own currencies, and white label the technology with customers’ own corporate names.

In an interview with the publication, Mike said the coin can “connect economic blocs” for corporates across different industries using the currency, and added that the bank is focusing on ease of adoption of a broader, coin-connected payment infrastructure for its corporate customers.

MUFG did not confirm when its coin would officially launch.

Earlier this year JPMorgan announced the launch of its own “cryptocurrency,” called JPM Coin. The technology aims to facilitate corporate payments for instant settlement between corporate customers of the institution.

But the initiative has been met with skepticism, particularly considering JPMorgan’s own CEO, Jamie Dimon, had at one time slammed cryptocurrency as a “fraud.”

“If you’re stupid enough to buy [bitcoin], you’ll pay the price for it one day,” he said at a conference in 2017.

But JPMorgan’s technology has also faced questions as to whether the tool is truly a cryptocurrency. Soon after the announcement of JPM Coin’s launch, cryptocurrency advocacy group Coin Center warned that the tool is not permissionless or public, and therefore does not meet the standards for being classified as a cryptocurrency.

“There’s a lot of confusion,” Coin Center Executive Director Jerry Brito told Market Watch in February. “I see folks referring to it as a cryptocurrency. It’s not a cryptocurrency. A cryptocurrency is one that is open and permissionless. If you want to download it, you don’t need permission; you just need some software.”

——————————–

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. Check out our April 2019 Unattended Retail Report. 

Supply Chain Strategies Forge Closer Ties With Shareholder Value

It’s earnings season once again, with executives and shareholders hanging on the numbers of revenues, profits and market growth. Yet, there’s another area of business operations that experts have said should be examined more closely to not only improve corporate performance, but boost shareholder value as well: the supply chain.

In a new report from Maine Pointe and the Global Supply Chain Institute, researchers laid out the correlation between the development of a holistic supply chain strategy and an increase in shareholder value. With only 16 percent of businesses reporting that they already have a multi-year supply chain management strategy, according to the Global Supply Chain Institute, this indicates that this area is probably overlooked come time to report on earnings.

“Many CEOs come from a finance, commercial or marketing background, and may not have a formal process in place for managing the global supply chain,” explained Maine Pointe Chairman and CEO Steven Bowen in a statement last week, according to Consulting.us.

Authors J. Paul Dittmann, professor at the University of Tennessee, and Dan Pellathy, professor at Grand Valley State University, said this could be due to the fact that CEOs are not prioritizing supply chain excellence — but they should.

“Supply chain excellence will translate into balance sheet, income statement and cash flow improvements yielding more economic profit for the firm,” the authors said in the report.

Economic profit — profit minus the cost of generating that profit — drives shareholder value and stock prices higher, the authors added. The report listed three ways that a strategic approach to supply chain “excellence” could drive economic profit: the support of revenue increases as a result of improved delivery to customers, the reduction of costs, and the lower capital requirements linked to lower inventory holdings, lower working capital and streamlined networks.

Risk management is also an essential component to driving shareholder value via supply chain optimization, the report stated, as supply chain disruptions can have a significant impact on shareholder value.

Large Conglomerates Demonstrate

Some of the largest (and most profitable) organizations in the world have demonstrated the link between supply chain management and shareholder value as of late. Last November, Apple saw a temporary nosedive in share prices after analysts at Nikkei assessed that the latest iPhone sales were slumping, pointing to rumors of product cuts through the supply chain.

Tesla has also seen its own share of shareholder woes, linked to supply chain challenges. Last year, analysts said delayed and late vendor payments were causing supply chain disruptions for the automaker. Safkhet Capital Founder and Chief Investment Officer Fahmi Quadir warned in October that a lack of diversification in Tesla’s supply chain could significantly impact Tesla if some of those vendors went out of business.

“We question the ability for Tesla to actually deliver on [its] promises to [its] customers when [the company is] on the brink of [a potentially] massive supply chain disruption,” Quadir told Bloomberg at the time.

In both of these cases, share values were negatively impacted — in the short term. However, according to analysts, supply chain management strategies can have a longer-term effect on shareholder values.

Professors Dittmann and Pellathy highlighted the case of one unnamed manufacturer, which reduced inventory by 50 percent without an effect on product availability through more effective supply chain strategies, causing an increase in economic profit and, subsequently, shareholder value.

The report added that talent management and logistics management in supply chain are essential components to improving supply chain operations, as is the adoption of new technologies. Organizations must also prioritize their supplier bases and deploy a win-win scenario — for instance, increasing payable terms and, in return, offering longer-term contracts and the open sharing of data, as the aforementioned manufacturer did. Finally, the authors said, businesses must break down supply chain siloes to match supply with demand.

——————————–

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. Check out our April 2019 Unattended Retail Report. 

Spotify Shares Sink On Amazon Music News

Reports that Amazon is planning to launch a free ad-supported music service caused Spotify shares to fall 4 percent on Monday (April 15).

According to Reuters, the eCommerce giant would offer the free music service through its Echo speakers, and it could launch as early as this week. Amazon already offers its Prime Music service as part of its Prime subscription service at $119 per year, as well as Amazon Music Unlimited subscriptions for $9.99 a month, or $7.99 per month for Prime members.

Earlier this month, Apple Music surpassed Spotify in the number of paid subscribers it has in the United States, with Apple Music boasting 28 million paid subscribers compared to Spotify’s 26 million, as of February.

Apple Music also has a growth rate of around 2.6 to 3 percent to Spotify’s monthly rate of about 1.5 to 2 percent. Spotify still has more paid subscribers worldwide, and users in general, as it has a free option that’s ad-supported. Apple Music does not offer a free option.

Apple Music is also growing faster around the world at 2.4 to 2.8 percent versus Spotify’s 2 to 2.3 percent, with Apple Music’s biggest growth from other English-speaking places where iPhone use is high and iTunes was popular. It’s also available on Android devices, and it’s been installed 40 million times from the Google Play store.

In response, Spotify has started pushing back against Apple, including filing an antitrust complaint against the tech giant last month over its alleged abusive control of the app store, claiming that it uses the store to its own advantage.

Horacio Gutierrez, Spotify’s general counsel, has said “apps should compete on merits, not who owns the app store,” adding that “once Apple became not only a platform provider, but also a direct competitor, their incentive to disadvantage rival services like Spotify became even greater, and their restrictions started to become more frequent and extreme.”

——————————–

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. Check out our April 2019 Unattended Retail Report. 

Klarna Launches Money Management Content Hub

Furthering its mission to make payments easier for people so they can be financially healthy, Klarna, the U.K. payments company, announced the launch of Mindful Money, a digital content hub.

In a press release Tuesday (April 16), Klarna said the hub will be home to personal finance tips and ideas that come from third-party contributors chosen by Klarna. Content on Mindful Money will cover saving, spending, and living. Klarna said money-making expert Money Magpie and leading journalist Daisy Buchanan are among the first wave of contributors.

New research from Klarna found that more than half of 18 to 27-year-olds polled think they are more financially savvy than people assume they are, with 65 percent saving for the future. But there’s also a lack of clear and accessible information about money management for the younger generation. The survey found 69 percent of survey respondents think terms and conditions of products aren’t clear, while two-thirds of young adults in the U.K. don’t know which sources to trust and believe.

The survey also revealed that 42 percent of those between the ages of 18 and 27 find it hard to track their financial commitments with budgeting and spending — saving for and purchasing a house and paying bills are the top three areas young people want help with.

“It goes without saying that the financial security of our customers — no matter their age or circumstance — is very important to us. We all have a responsibility, especially to young people, to help them spend and save safely,” said Luke Griffiths, U.K. General Manager at Klarna, in the press release. “We’re committed to being open and transparent about how our products and services work, and are always looking to find new ways to give our customers more choice and control in managing their finances — Mindful Money is born out of that mission.” The executive went on to note that Klarna’s research shows that 54 percent of Gen Z and Millennials also want more sources of agenda-free information. He said launching Mindful Money is aimed at creating a platform for conversations about money management. “No preaching or jargon, just an open community for people to access helpful tips and ideas from our great range of contributors,” said the executive.

——————————–

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. Check out our April 2019 Unattended Retail Report.