10.24.17 Your morning briefing

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The information you need to start your day, from PaymentsSource and around the Web:

Affirm's mobile swipe at banks: Affirm has launched a mobile app that lets consumers split large purchases into smaller fixed payments through a virtual credit card, an alternative to the accumulated debt and interest of bank-issued credit cards, which cause "anxiety and uncertainty," according to Affirm. To use the app, which is a mobile expansion of Affirm's traditional service, consumers request a one-time virtual card, receive approval, an interest rate, and the scheduled terms of the repayment, as well as a disclosure of the total cost of the item. The user gets a one-time credit card number and three-digit PIN that disappear after the repayment. Affirm operates among companies like Klarna and Splitit, attacking traditional credit cards by offering financing at the point of sale for larger purchases. Affirm, which has offered installment payments for years as an alternative to banks and credit cards, argues consumers are more comfortable paying for single purchases in installments. Affirm cited its own research of 1,600 adults that found 67% of Americans "fear" debt, and 72% of consumers worry about the total cost of purchases because of interest. "Credit is broken, primarily because the incentives for banks that issue it are built on business models that profit from consumers' failure," said Max Levchin, founder of Affirm, in a release.
New York subways join the 21st century: The New York subway system, which has a deserved reputation for being behind the innovation curve, is getting closer to accepting contactless payments, years after the London Underground adopted the technology. The New York Times reports the MTA will invest $573 million to install NFC fare collection systems on buses and subway station turnstiles beginning in late 2018 with full deployment by late 2020 for subways, buses, Metro North and Long Island Railroad commuter trains. Transportation ticketing company Cubic, which is trying to export the London technology to other markets, will manage the MTA's project. The MTA's Metrocards will be usable until 2023 as a gradual phase out. The transit system will also support the third party "Pay" apps as part of the NFC migration, reports 9to5Mac, following a limited test of Apple Pay earlier this year. As with most New York subway advancements, modernizing fare collections has not been smooth. Early tests for contactless transit payments in New York date to at least 2012, and attempts to modernize ferry payments have struggled.

Patreon cracks down on adult content: Patreon has updated its guidelines to tighten the rules for "adult entertainment" allowable on the crowdfunding site. Engadget reports the updates more heavily restrict the funding of webcam sessions and erotic movies, where previous policies were more general, provided the creators flagged their content as "not safe for work." The site has always banned funding for illegal activities and most porn, but generally permitted adult content consistent with an R-rated movie. The new policy is more proscriptive, prohibiting creators from selling "pornographic material" as a reward for patrons. Also, creators cannot use cash from the site to produce pornographic material, such as maintaining a website, funding or providing a private webcam session. Musician Jack Conte created Patreon four years ago to provide a way for fans of an artist's content to directly pay that artist for ongoing or upcoming projects. The site has grown, but with that growth has come some complications, such as being an unwitting target of changing YouTube advertising policies that were originally intended to crack down on hate speech or bullying, which Patreon also forbids.

Payment companies chase ISVs: A couple of days after First Data agreed to buy BluePay to expedite its initiative to attract independent software vendors (ISVs), Worldpay is partnering with payment gateway and EMV technology provider CreditCall to ease payment deployments for ISVs, value added resellers, software developers and system integrators. The two companies will provide a software development kit for chip card acceptance for point of sale hardware and mobile point of sale devices. The companies' goal, according to a CreditCall release, is to offer in-store, self-service, mobile and online payments through a single relationship to speed time to market and diversify payment options for their own clients. During a conference call to announce First Data's acquisition of BluePay, First Data Chairman and CEO Frank Bisignano said the ISV market has not yet begun to aggressively build their own payment systems, making the sector lucrative, fast growing and underserved.

From the Web

For banks, fintech holds key
China Daily | Mon Oct 23, 2017 - Chinese banks are highlighting the importance of financial technologies, or fintech, for client acquisition, service improvement and risk management amid intensified competition between financial institutions and fintech firms. Financial services firm EY defines fintech firms as "organizations combining innovative business models and technology to enable, enhance and disrupt financial services". Fintech firms have seen a wide adoption of their services in China in different fields, including money transfer and payments, financial planning, and borrowing. Sixty-nine percent of digitally active consumers in the Chinese mainland use fintech services, according to online interviews conducted by EY this year on fintech adoption across 20 markets.

Amazon will soon let you order from restaurants using the Amazon app on your phone
CNBC | Mon Oct 23, 2017 - Starting in November Amazon customers in select states will be able to order take-out from certain local restaurants directly through the Amazon app. Users will be able to browse participating restaurants, place their order and checkout with stored payment information all through the app, without any additional accounts or logins needed. The expansion of Amazon Pay integrates Clover point-of-sale systems, sending orders directly to restaurants in select states in the Northeast U.S. The company said that more than 33 million customers used Amazon Pay in 2016, nearly doubling Amazon Pay volume from the prior year. The service allows in-app payments for travel, digital goods, insurance, entertainment, and charitable donations. The restaurant take-out service is already available for orders from T.G.I. Fridays as of July and will expand to include restaurants in New York, Massachusetts, Connecticut, New Jersey, Pennsylvania, Maryland and Washington D.C. — and, of course, the Seattle area.

In Europe, cross border payments could be about to get a whole lot easier
CNBC | Mon Oct 23, 2017 - A global financial center, London is currently home to the European Banking Authority. The EBA works on both regulation and supervision across the European banking sector, with the aim of maintaining financial stability in the European Union (EU). The EU has big ambitions for payment services — it wants to create a single payment area that allows both citizens and businesses to make cross border payments "as easily and safely as they would in their own countries." The EBA has been working on the new payment services directive, or PSD2, which will become applicable next year. Among other things, the European Commission has said that the PSD2 will make the use of internet payment services easier and safer, and boost consumer rights.

More from PaymentsSource

First Data ties into Apple's channels to fuel its mobile strategy
For the second time in less than a week, First Data has found an already speeding car to hop on board in the company's strategy to cover as many digital commerce bases as quickly as possible.

Picking an e-commerce processor on rates alone is a recipe for failure
The lowest rates could be a sign the provider is not investing in itself, not being entirely transparent, or not providing a wide enough range of services for their clients, writes Drew Sementa, CEO of Tidal Commerce.

PayPal adds Pay with Google, boosts marketplace services
PayPal is strengthening its services for e-commerce marketplaces and crowdfunding money-raising projects through PayPal for Marketplaces, while also adding Pay with Google for its Braintree merchants accepting Android Pay.

IBM, Zelle partner to bolster P-to-P processing
Any bank using IBM for managing transactions and funneling payment processing onto a single platform will now have access and support for the Zelle person-to-person payment service.

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