Welcome to the new PaymentsSource Morning Briefing, delivered daily. The information you need to start your day, including top headlines from PaymentsSource and around the Web:

PayPal's market is getting crowded: PayPal reported solid earnings after the market close on Thursday, though it gave a subdued outlook for the rest of the year, citing increasing competition in digital payments and currency fluctuations. PayPal reported fourth quarter earnings of $3 billion, up 17% from the prior year and in line with analysts’ expectations. It expects to earn between $2.9 billion and $2.95 billion in the first quarter, in line or slightly below analysts expectations of $2.95 billion, a tepid trend the company told investors will likely continue for the rest of the year. During the fourth quarter, mobile payments increased 53% to $31 billion, and payment volumes at Venmo jumped 126% to $5.6 billion. Venmo has long been popular with younger consumers and expanding it to other demographics is a big priority for PayPal since its split from eBay. The P-to-P service will also likely play an important role as the banks behind the Zelle email and mobile P-to-P app begin marketing in earnest this year. Zelle long operated without a lot of marketing or branding as clearXchange, and is already larger than Venmo, controlling more than half of the online banking market in the U.S. PayPal will also face more competition from MoneyGram, which should have the substantial backing of Ant Financial, assuming yesterday's announced acquisition is completed later this year.

Bloomberg News

The U.K. counter-recruits on Brexit: Amid attempts by European countries such as France, Switzerland and Lithuania to to lure financial technology companies away from the U.K. in the wake of the country's pending departure from the European Union, the U.K. has launched its own effort. Crowdfundinsider reports the country in April will host a conference for fintech companies, investors, venture capital companies and high net worth people. The U.K.'s financial technology industry employs about 61,000 people and is considered Europe's financial and technology hub and a rival to Silicon Valley. The Brexit vote has threatened that status, since the gateway status London enjoys as part of the European Union will likely be ending.

Admiral Amazon: Amazon's making a lot of forays outside of its traditional e-commerce core, such as opening book stores and a store with no checkout, moves that are shaking up the payments technology establishment. It's now deepening its horizontal integration, coordinating shipments from Chinese merchants to its U.S. distribution centers via ship. According to The Wall Street Journal, the e-commerce giant doesn't own ships but is providing freight forwarding and logistics for companies that reserve space on ocean liners and the trucking companies that ship goods from the seaport to Amazon's warehouses. The Journal reports Amazon has regulatory approval from the Federal Maritime Commission, and has also begun leasing planes (real planes, not to be confused with the company's Prime Air) in an effort to gain more control over its logistics.

XBox's transactions are no game: Microsoft's XBox has always had an interesting transaction strategy, one that's paying off in high volume. VentureBeat reports XBox revenues for the fiscal second quarter 2017 are down 3% to $3.6 billion, but attributed that to lower console pricing. Transactions are surging, the company reports. Microsoft told investors software and services revenue grew 18% and digital payments on Xbox reached $1 billion, as more users shift to buying software and games through automated methods. XBox gamers use a Microsoft smartphone app to load funds and scan QR codes to make purchases from the XBox console.VentureBeat also reported XBox's overall users expanded 15% to 55 million during the quarter.

Are half of Link's ATMs going to disappear?: Talks over Link's business model got feisty Wednesday, as ATM operators warned half of the country's ATMs could disappear if a deal on fees can't be reached. Link is the U.K.'s free ATM network, covering about 70,000 cash machines. Finextra reports the country's banks are angry about the cost of absorbing fees for non-bank ATM transactions, which is about $0.33 per transaction. The banks did not propose charging fees, but did call for the model to be reexamined. The battle comes shortly after Mastercard's planned. acquisition of VocaLink, which provides the technology that supports the Link network, came under fire from U.K. regulators over competitive issues.

From the Web (powered by Wiser)

Starbucks Is the Latest Restaurant to Post Soft Sales
Fortune Magazine • John Kell
Why Amazon might have something to do with it.

Nougat update rolling out to Galaxy S7 and S7 edge in India; Samsung Pay teased
Android Central • Harish Jonnalagadda
Samsung is getting ready to bring Samsung Pay to India. Samsung has started rolling out the Nougat update to the Galaxy S7 and S7 edge in India. The update comes in at 1.2GB, and includes visual tweaks to the user interface, improvements...

What Target's mobile payments plan says about today's retail trends
Mobilepaymentstoday.com • Will Hernandez
CVS, Kohl's and Wal-Mart all added payments features to their mobile apps in 2016. Target now reportedly will do the same.

More from PaymentsSource

Jack Ma's strategy is on a collision course with Donald Trump's agenda
It's been a chaotic week for the U.S.-based international payments establishment, facing the turmoil of being exploited in President Trump's clash with Mexico on one side, and the competitive bombshell of Alibaba's Ant Financial deal to buy MoneyGram on the other.

'Unified commerce' can drive user payment experience and merchant sales
The payments ecosystem is vast and the complexity is only heightening, but with the right integration of hardware and software solutions providers can empower retailers to not only improve in-store experiences but enhance data collection and the ability to analyze customer behaviors.

Facebook adds FIDO-certified Security Keys for stronger authentication
As Facebook users increasingly deal with personal and payment data, the social media giant is turning to the Security Keys standard hosted through the Faster Identity Online Alliance for stronger authentication.

Green Dot said to be in talks to buy Russell Simmons's UniRush
Prepaid-card provider Green Dot Corp. is in talks to buy UniRush, a smaller competitor co-founded by Russell Simmons, the music industry entrepreneur behind rap label Def Jam, according to people familiar with the matter.

John Adams

John Adams

John Adams is Executive Editor of PaymentsSource.