Square is getting a lot of attention these days.  Banks are sitting by while Square eats their lunch, and this is quite typical.  This happened with eCommerce where banks let PayPal and others take that space.  At the pace mentioned in this Bloomberg piece, Square is looking at up to 8% of the market which seems high but here is the quote. Square Payment Pace Rises 25% in Niche Coveted by EBay | Bloomberg Square, founded in 2009, is processing transactions at an annualized rate of $5 billion, up from $4 billion a month ago, as more consumers embrace mobile … Continue reading Square beat the competition by crediting merchants next day

So much has been written about RIM and the previously ubiquitous Blackberry. I see RIM as a solid future potential provided they do one thing.  Refocus. They must focus on the installed base of government and business customers.  Those customers all have installed Blackberry servers inside their corporate / government networks.  Can you imagine having your server and software working inside the US Government computer infrastructure?  This is an enormous competitive advantage. I say if I am at Waterloo HQ of RIM, you must throw away all preconceptions about your handsets.  That battle is lost.  Open your eyes, integrate android, … Continue reading RIM must focus on their advantage which is installed base of corporate and government installations

One of the key learning’s and outcomes of the 2008 banking crisis was the need to tighten up control over bank leverage, which in turn promotes de-leveraging and reduces rapid increases in debt.  This is primarily centred in Basel 3 which curtails off-balance sheet lending, and requires debt to to be first risk adjusted and have capital held against that risk. As with anything financial there are always unintended consequences, and those that seek to bypass the new rules.  Enter JP Morgan. Banks test ‘CDOs’ for trade finance |ft.com JPMorgan is among several banks that have begun testing investor appetite … Continue reading JP Morgan tests derivative based products for Trade Finance

In the “just when you thought you had heard everything” department, it turns out the Courtyard Marriott free wifi comes at a cost.  They are taking every web page served and rewriting it, presumably in preparation for injecting their own ads. I hate ads as much as the next person but the idea that a page is being altered and what I am viewing is not the same as is served on the ‘normal’ internet is quite abhorrent! Hotel’s Free Wi-Fi Comes With Hidden Extras | NY Times blogs The lines of code include references to “rxg,” which stands for … Continue reading Courtyard Marriott wifi rewriting every web page before you see it

I got all excited when I read about the Royal Canadian Mint and their MintChip initiative.  Cash Replacement it proclaimed.  I felt even better when I noted two people I have the privilege of knowing (Dave Birch and David Crow) on the judging committee.  The Mint refers to this initiative as “the evolution of currency”.   What they actually mean is the evolution of change.  I was at first disappointed when I realised this was all about small payments.  It was no co-incidence the challenge was timed with the Canadian budget and the Mints elimination of the 1 cent coin.  The … Continue reading Royal Canadian Mint introduces MintChip to handle < $10 transactions in Canada

Bruce Summers of the Kansas City Fed (retired) produces a highly articulate and relevant account (pdf) of the US Payments system that equally matches the Canadian. I especially liked this paragraph that epitomises banks today. US payments system failing to meet the needs of the digital economy | finextra "The idea that money in transit is digital information which can be processed immediately has not been readily accepted by the banking industry," he says. "Most bank-sponsored payment schemes depend on clearing and settlement systems that are designed around batch processing and delayed settlement, and these clearing and settlement arrangements are … Continue reading Bruce Summers critique of the US payments system and why banks will stick with status quo unless forced

The IMF warms up to the US. Cooperation and Connectedness—an Address to the Associated Press | IMF By Christine Lagarde Managing Director, International Monetary Fund Washington, April 3, 2012 As prepared for delivery Good morning. I am delighted to be here. I would like to acknowledge Tom Curley, who is just stepping down as Associated Press president and CEO after a lifetime of distinguished service in journalism. A warm thanks to Kathleen Carroll too. It is important for the IMF to maintain a good, open, dialogue with all members, especially the United States—our largest shareholder. You, the media, play an … Continue reading Cooperation and Connectedness–the IMF warms up to the US

Its been a while since I wrote about Groupon.  Back then my main issue was their misuse of accounting rules to ignore marketing costs when calculating profits and basically falsify profitability.  They were called out on that by the SEC.  However that might be chicken feed compared to what they are up to now. Groupon is essentially a sub-prime lender that does zero risk assessment | reDesign Well, for starters, it’s not a coupon company nor a marketing company. At its core, Groupon’s U.S. business is a receivables factoring business, as I wrote last year. They give loans to small … Continue reading This company is the opposite of “do no evil"– Groupon

Peer-to-Peer lending in the UK has suddenly become fashionable.  First Andy Haldane mentioned P2P as a valid and needed catalyst for innovation in financial services on Mar 14th.  Now we have demand for P2P returns from City investors, and finally the government are getting into the P2P business. City moves in on peer-to-peer lending | ft.com As this type of “direct lending” has expanded into business loans – through websites such as Funding Circle and ThinCats – it has started to attract the attention of more sophisticated clients who are keen to lend larger sums. Funding Circle lifted the maximum … Continue reading City moves in on peer-to-peer lending | ft.com