10.20.17 Your morning briefing
The information you need to start your day, from PaymentsSource and around the Web:
Tax cut for bitcoin: The Australian parliament has passed legislation to halt "double taxation" on virtual currencies such as bitcoin, a major victory for cryptocurrencies since it levels the playing field with government-issued money. The legislation, which goes into effect July 1, 2018, removes the goods and services tax (GST) on the purchase of digital currency, leaving only the GST tax on the actual purchase of goods and services, reports TheWest.com. It's one of several moves Australia is making to encourage financial innovation. Standards Australia is building blockchain standards in an effort to make it easier to add use cases; and Scott Morrison, Australia's Treasurer, introduced new legislation on Thursday to lift the ban on using the word "bank" by companies with authorized deposit insurance licenses with less than $50 million in capital. This move is seen as beneficial to smaller fintech companies and "challenger" financial institutions, which will be able to market themselves as banks at an earlier stage.
The key(board) to lure young people bank to banking: A Tel Aviv startup has finished raising $10 million to expand a smartphone keyboard that lets bank customers access financial services without logging onto a banking app, that latest in a series of plays to use payment technology to lure reluctant young consumers to banking. MazMaa is behind the $10 million investment in PayKey, which reached its total second round goal after raising the first portion of its funds earlier this year. PayKey's total funding is now $16 million, reports TechCrunch. Banks use PayKey's white-label smartphone keyboard, which uses each bank's security, to help consumers make payments, check balances and handle other services. PayKey's strategy is to help banks attract younger consumers that use social payment apps like Venmo by enabling bank transactions from within social media or messenger apps. PayKey's clients include WestPac, UOB and Bank Leumi.
Fintech chamber of commerce: One of the many unknowns of Brexit is its impact on London as a financial and technology capital, and there's been plenty of evidence on both sides--some suggesting London will hold onto its status and other signs London will decline in status. The city is getting directly involved, traveling to the Money 20/20 show in Las Vegas with a contingent of financial technology companies and data from the city's Pitch book reporting more than $1 billion has been invested in fintech companies in London in 2017, double 2016's total, according to Finextra. The financial companies will sell the city as a destination for fintech companies, amid campaigns from cities such as Belgium and Paris to lure London-based companies away. The U.K. companies are expected to be Revolut, an fx app that just raised $66 million; Onfico, which raised $30 million in September; Fractal Zabs and Yoyo Wallet.
How will virtual coins affect physical coins? The inspector general is warning other government offices to study how cryptocurrencies may impact traditional cash. Eric Thorson's letter is directed to Steven Mnuchin, the U.S. Treasury Secretary, and the department may face challenges in the coming years as bitcoin and other cryptocurrencies embed deeper in the U.S. economy. Thorson is particularly concerned about the impact on the business models of the U.S. Mint, which produces coins; and the Bureau of Engraving and Printing, which produces Federal Reserve notes. Cryptocurrency is not the only concern. Thorson also said e-commerce, mobile technology, P-to-P and payment card technology could erode consumer demand for traditional money. It's a far cry from the drama of India's almost-instant removal of most of the country's cash from circulation, but Thorson's note does lay the groundwork for changes in how the U.S. government manages currency. In his letter to Mnuchin, Thorson also sounded an alarm about the increased threat of money laundering and cybercrime as e-commerce expands.
From the Web
ATM Skimmer Found In Howell Tied To Over 100 Fraudulent Transactions
CBS | Thu Oct 19, 2017 - Police in New Jersey are warning bank customers to be on the lookout for an ATM skimming scam. Howell Township Police said two men have made over 100 fraudulent transactions in Monmouth County, and stolen the debit card numbers of just as many. “These are professionals, not just two guys got together try to scam people. This is an elaborate, complex, international scheme,” Christian Antunez told CBS2’s Meg Baker. They do it with external skimming devices at locations you might think are the safest — your local bank. The Howell branch of the Manasquan bank first noticed that someone smeared something on the security camera lens. “When we started to put everything together we realized that so far here in Howell Township, about thirty to forty-thousand dollars of fraudulent withdrawals,” Antunez said. The accounts were foreign, mostly Canadian. Police recovered a skimmer from the branch in Manasquan in early September. Evidence shows it was in place for three days stealing personal information from dozens of customers.
Smart devices everywhere could start doing all the shopping and bill paying, firm says
CNBC | Fri Oct 20, 2017 - Hate shopping and paying bills? Then there could be good news: Soon, everyday devices will be making automatic "invisible" payments, according to one company. Here's the idea: Smart devices, like household electronics or vehicles, will be able to pay for your needs — without you needing to ask for them. Of course, there are major privacy and security concerns with such a technology, but there's also real promise. One example could be a re-imagining of the utility bill where "your devices, your television, your fridge, pays for electricity and negotiates electricity prices," said Phil Pomford, general manager for the Asia-Pacific region at London-listed payment processing company Worldpay. As the so-called Internet of Things — the idea that every device will be digitally connected —comes to fruition, smart devices will be able to make "invisible payments" by acting as agents on the consumer's behalf, Pomford told CNBC earlier this week.
Cuban Man Faces Deportation for ID Theft of Hospital Workers
U.S. News & World Report | Thu Oct 19, 2017 - A Cuban national faces deportation once he finishes serving about three years in prison for his role in an international conspiracy to file more than 900 phony federal tax returns seeking $2.2 million using employee information stolen from the University of Pittsburgh Medical Center. Yoandy Perez Llanes, 34, pleaded guilty to money laundering conspiracy and aggravated identity theft charges in April. He's been in custody since his arrest in Venezuela in May 2015. He was sentenced Thursday by a federal judge in Pittsburgh who gave him credit for 30 months in custody, then ordered Llanes to spend six more months in prison before deportation. Assistant U.S. Attorney Gregory Melucci said Llanes' role was to track phony tax refunds that were to be paid as Amazon.com credits and to receive cellphones, computers and other electronics bought with the credits that were shipped to him in Venezuela. The service converting tax refunds to Amazon credits is offered by online filing service Turbotax and is known as monetizing.
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