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

Venmo and partners boost PayPal: PayPal's strategy to partner with large institutions and push its popular Venmo social transfer app are literally paying off, as the company raised its earnings outlook and reported earnings that beat analysts' expectations. For the second quarter PayPal reported revenue of $3.14 billion, an 18% increase over the prior year and over expectations of $3.09 billion. It also earned $0.46 per share, over the estimate of $0.43 per share. The company raised its guidance for the rest of 2017 to a range of $1.80 to $1.84 per share, up from $1.74 per share to $1.79 per share. PayPal's strategy since it separated from eBay in 2015 has been to innovate, expand the Venmo P-to-P service and to collaborate with banks and other large companies. To that end, it has entered revenue-boosting deals with Visa and Mastercard, ending a previously cantankerous relationship and promising to share data and marketing. PayPal has also partnered with Citigroup, Apple and others to expand its reach and to extend the payment company's presence inside stores as PayPal builds its own mobile wallet app. And in just the past day, PayPal has entered partnerships with Bank of America and with Baidu, a Chinese digital service provider. Additionally, volume at Venmo, a key unit for PayPal, has doubled in the past year, reaching $8 billion in payments and benefiting from deals to allow Venmo use at U.S. merchants that accept PayPal, and keeping the social payment app competitive with the rival bank-powered Zelle service. As part of its earnings report, PayPal reiterated a goal of getting consumers to use its service at least twice per week.

Bloomberg News
Bloomberg News

Stripe gets into taxes: Stripe has acquired tax form automation company Payable, which will allow Stripe to offer reporting compliance to Stripe Connect's users. Stripe Connect powers payments and third party disbursements across multiple jurisdictions for seller marketplaces. One complication in that ecosystem is tax reporting, since the payments are often taxable income for the marketplace's sellers. These payments have to be reported to the IRS or other authorities, often involving government agencies in different countries. As part of an existing collaboration between the two companies, Payable has used Stripe's API to automate the generation of tax forms for the proper jurisdiction. Following the acquisition, the current integration will be used for the 2017 tax season, and Stripe will fully integrate Payable into Stripe Connect and the Stripe dashboard for the 2018 tax season.

Big breach in Italy: A day after Wells Fargo disclosed an accidental breach, Italy's UniCredit has disclosed a breach affecting about 400,000 consumers. The bank attributed the breach to a third party data manager, and reported two exposures—one between September and October 2016 and another in June and July of 2017. Unicredit also contends no passwords were stolen, minimizing the possibility of unauthorized payments or other transactions, though some other personal data may have been compromised. UniCredit is investigating the breaches and will file a claim with government prosecutors.

ItzCash gets cash: Ebix, the parent company of Indian digital wallet and bank payment collaborator ItzCash, has committed $100 million to fund ItzCash's expansion, reports VCCircle. ItzCash intends to use the funds to develop and sell products that bundle payments, insurance, lending, remittance and travel in a single platform that serves both consumer and business clients. The company is also looking to scale to accommodate the fast uptick in digital payments in India following the government's replacement of most of India's cash.

From the Web

Citigroup CEO touts the $100 billion goldmine Citi took from American Express
CNBC | Wed Jul 26, 2017 - Citigroup's partnership with Costco may be old news, but Citi CEO Michael Corbat said he still considers the deal, which the big bank took from competitor American Express, a huge success. In a wide-ranging interview with "Mad Money" host Jim Cramer, Corbat said the deal with Costco to issue the retailer's branded credit cards was much larger than it may have initially seemed. "If I came in and said, 'Jim, let me tell you about a deal that we're gonna do. And that deal is going to be with a terrific partner, one of the best retailers in the world. And in that deal we're going to bring in $10, $11 billion of receivables. We're gonna bring in new cardholders. And those cardholders, in a single year, are going to spend $100 billion on that card,' think about it," Corbat said. The 16-year-long deal between American Express and Costco expired in March 2016. Since then, the discount retail chain has partnered with Citi for its credit cards and Visa for its rewards program.

Watch Out PayPal, Amazon May Be Your Next Rival
Fortune | Wed Jul 26, 2017 - Amazon's long ago shift into consumer electronics made it a rival to Google and Apple's devices. [f500link]Amazon is also buying Whole Foods, challenging a variety of grocery store chains along with meal kit delivery service Blue Apron. Now analysts say payment services like PayPal and Visa should watch their backs, according to Bloomberg. They believe that Amazon's next move will be to push further into payments by promoting Amazon Pay, a service launched in 2007 for making payments online and on mobile.

Bitcoin Exchange Was a Nexus of Crime, Indictment Says
The New York Times | Thu Jul 27, 2017 - A Russian man was charged with overseeing a black market Bitcoin exchange that helped launder billions of dollars and stood at the nexus of several criminal enterprises, according to a federal indictment. The indictment, which was unsealed in California on Wednesday, gave a long list of illegal activities that the Bitcoin exchange, known as BTC-E, facilitated, including ransomware fraud, identity theft, drug trafficking and public corruption. The Russian man charged in the case, Alexander Vinnik, 37, was arrested in Greece on Tuesday. Mr. Vinnik had “directed and supervised” BTC-E’s operations, according to the indictment, and is said to have had co-conspirators.

More from PaymentsSource

To expand globally, Wirecard focuses on merchants going digital
Wirecard has released a flurry of products in recent months as it builds a global footprint, and its most recent effort focuses on risk management for small businesses that want to sell online.

Is Discover's breach alert service a risk to its brand?
Discover Financial Services has made a point of giving customers a sense of control over their accounts by being at the forefront with notifications and its “Freeze it” service launched two years ago that instantly blocks transactions when a card is reported lost or stolen.

TSYS reports strong income after TransFirst integration
Total System Services Inc. said its income surged during the second quarter of 2017 based on continued revenues that totaled $1.2 billion, up 6.1% from $1.5 billion a year earlier.

Visa invests in Marqeta card issuing tech sandbox
Visa has led a $25 million investment round in open card issuing platform Marqeta, and the two companies will collaborate on consumer and commercial payment projects.

John Adams

John Adams

John Adams is Executive Editor of PaymentsSource.