12.15.17 Your morning briefing

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

FCC ends net neutrality: The FCC on Thursday voted 3-2 along party lines to end net neutrality, a 2015 rule that prevents internet providers from charging extra for faster speeds or blocking access to websites. The payments technology industry has mostly supported net neutrality based on the argument that equal access to the internet makes it easier for smaller technology startups to get up and running, and creating differently priced lanes would unfairly disadvantage larger established companies over startups. In the fintech industry these startups are of particular importance since many larger companies rely on third-party developers for innovation. "By paving the way for Internet Service Providers (ISPs) to block, throttle and introduce paid prioritization of data, the FCC's ruling introduces new powers and incentives to a small group of companies," said Jordan Lampe, head of strategic products for Dwolla, in an email, adding getting rid of net neutrality will reshape the way banking apps are presented, introduce a new era of financial service and ISP negotiations, and possibly create the next generation of interchange. "This not only harms consumers and those that provide services to consumers, but it unnecessarily jeopardizes the virtuous cycle of innovation fueling the most explosive economic engine this industry—and mankind for that matter—has ever seen." The argument in favor of ending net neutrality from Ajit Pai, the Trump-appointed chair of the FCC, is consumers have never complained about internet providers blocking sites, but they do complain about access to the internet. Pai argues removing net neutrality would encourage internet providers to invest in expanding their networks. The New York Times reports the vote is likely to be followed by legal challenges.
Gemalto scoffs at $5 billion offer: Gemalto has rejected Atos' proposal for a takeover valued at EUR46 per share, or about $5 billion. Gemalto contends Atos is undervaluing the company by offering a discount of more than 27% vs. Gemalto's 12-month high; and is also not addressing the interest of Gemalto's stakeholders. Additionally, Gemalto contends Atos is not presenting a compelling plan for the company's prospects that is better than Gemalto's prospects as a standalone company. Gemalto will soon present a development plan that will focus on a new generation of digital security, according to the company's statement. A combination of Atos and Gemalto could boost Gemalto's financial performance, which has been challenged by diminishing activity in EMV adoption. There are also potential geographic synergies and opportunities for both companies as Internet of Things deployments accelerate. Bloomberg reports Atos is moving ahead with its unsolicited offer despite Gemalto's rebuff.

Not big on electronic money: The Reserve Bank will probably not issue electronic bank notes, and its governor is also not keen on bitcoin. The Sydney Morning Herald reports Philip Lowe called bitcoin "speculative mania" in a speech this week, and added there is no case for an electronic bank note. Other countries are considering virtual currencies and the use of cash is declining in Australia. Lowe said digital currency is not "technologically feasible" and said most countries will probably not adopt centralized digital currencies. Lowe did say it was possible to issue currency on a blockchain for limited use, though that was also likely far out on the horizon.

When bubbles collide: A Miami penthouse is on sale for bitcoin — and the owner won't take cash. The New York Post reports the one-bedroom, one-and-a-half-bath apartment has high ceilings, wood floors and views of Biscayne Bay and the Miami skyline. The building also has a fitness center, pool, spa and party room. The listing is for 33 bitcoin, or about $542,000, though that valuation could vary based on the day, given bitcoin's volatility. Redfin, the real estate listing site, told the New York Post this is the first listing that requires bitcoin for payment, without giving other options. It's not unheard of for bitcoin to be a choice; Redfin told the paper 75 other listings have accepted bitcoin for real estate payment, mostly in South Florida and California. The site also suggested it's not fiscally healthy for a currency as volatile as bitcoin to be used to buy or sell a home.

From the Web

Indonesia's Go-Jek acquires three companies to boost payment services
Reuters | Fri Dec 15, 2017 - Indonesia’s Go-Jek has acquired three financial technology businesses, as it expands from ride-hailing and other mobile on-demand offerings into payments and other services. Go-Jek has bought offline payments processing company Kartuku, online payment gateway Midtrans, and saving and lending network Mapan, the company said in a statement on Friday. The acquisitions will take its combined debit card, credit card and digital wallet transactions to close to $5 billion, it said.

Credit card groups face higher costs to help struggling customers
Financial Times | Thu Dec 14, 2017 - Credit card companies will have to pay over 14 times more than first forecast to implement measures designed to help the 3.3m Britons mired in persistent debt. The Financial Conduct Authority on Thursday raised significantly its estimates for the cost of plans that would force lenders to reduce or even cancel credit card interest and charges for customers struggling with severe debt. After consulting UK Finance, the trade body, it forecasts that one-off costs could be as high as £101m, in addition to yearly expenditure of £18m. This compares with earlier estimates of a £7.2m one-off cost and annual payments of £20.6m.

Alibaba Will Sell Cars From a Vending Machine
U.S. News & World Report | Thu Dec 14, 2017 - Alibaba Group Holding Ltd (NYSE: BABA) has been a major retail disruptor in China thanks to its creative approach and willingness to embrace technology. This week, the company provided investors with updates on the innovative ways Alibaba is planning to disrupt the Chinese auto market as well. Alibaba announced the launch of two "Super Test-Drive Centers" in Shanghai and Nanjing ahead of its anticipated launch of its first massive "Auto Vending Machine" in January. Alibaba's goal is to bring the same level of convenience and selection that customers enjoy with its Tmall e-commerce platform to the car-buying experience as well.

More from PaymentsSource

Interac's P-to-P offshoot outpaces U.S. rivals
Interac e-Transfer's P-to-P usage is on pace to reach $90 billion in 2017, up from $63 billion in 2016. By comparison, the U.S. banks' Zelle e-transfer service processed $55 billion in 2016, and PayPal's Venmo processed about $25 billion during the first three quarters of 2017.

Fraudsters are also taking advantage of the holiday rush
With the holidays fast approaching, the attention of watchdogs, regulators, merchant acquirers and processors needs to be on both the bottom line and the more sophisticated forms of online fraud like transaction laundering, writes Ron Teicher, CEO and founder of EverCompliant.

Is Visa's buy-in necessary to kill signature authentication?
As Mastercard, Discover and American Express all plan to drop signature authentication at the point of sale, Visa is largely mum on the topic. But does it really need to weigh in?

Wirecard to support Vocalink’s Pay by Bank service
Pay by Bank, an app developed in recent months by Mastercard’s Vocalink unit, is expanding as Germany’s Wirecard makes the service available to all of its U.K. merchants.

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