10.19.17 Your morning briefing
The information you need to start your day, from PaymentsSource and around the Web:
With all deliberate speed: The recent spate of data breaches and hacks connected to Swift has made the U.S. Federal Reserve concerned enough to increase its focus on payment security...in early 2018. At that time, the U.S. central bank will launch a study analyzing payment security vulnerabilities and will form working groups to focus on reducing the cost of payment security. Federal Reserve board governor Jerome Powell on Wednesday said the payment industry has reached a "critical juncture" because of technology, reports Reuters. This technology is a "historic opportunity" to transform daily lives, and fintech firms and banks are embracing this change, Powell told a conference in New York. The Federal Reserve does not directly govern the U.S. payment system, but it can push change, as it is in areas such as the faster processing required for digital commerce. Powell's latest comments suggest the government will take a closer at security risk, which could lead to more direct government involvement in the future.
ATM thief's starter kit: There's a instruction manual on the Dark Web that teaches people on how to steal from ATM, reports Finextra, citing research from Kaspersky Lab. Called Cutlet Maker, the kit sells for about $4,000 and details the steps required after the user breaks into the machine. Crooks are also instructed in how to plug in a USB device to upload malware and access the machine's software toolkit. From there, the device relays information on the currency, value and number of notes that are in the machine, and can enable further theft. The kit comes as ATM theft is on the rise The number of payment cards compromised at ATMs in the U.S. jumped 70% in 2016, and thefts at the actual machines compromised rose 30% in 2016 following a 600% hike in 2015, according to FICO.
Mobile coupon sports: The Oakland A's and the NBA aren't the only sports enterprises using mobile technology to streamline fan experience while providing opportunities for fans to shop and pay for items. The Phoenix Suns are among the early adopters of technology that powers bidding and payments for mobile reverse auctions during games, reports SportsTechie. Dropit hosts live auctions on jumbotrons at sports stadiums and arenas. It displays an item, then begins price reductions. Fans can halt the countdown and agree to buy the item via a Dropit app on their smartphones. Phoenix's first auction will occur during an Oct. 23 game against the Sacramento Kings. Prior auctions at baseball games resulted in the sale of a $15,300 on Ducati motorcycle for $3,900 and a $22,300 Mitsubishi Outlander Sport for $11,800. Sponsors pay an advertising fee to the home team for auctions, and a fee to Dropit for running the auction. There's a marketing component, since the model allows coupons and rewards programs for fans who participated in the auctions but did not win. The app also accumulates data that can feed future loyalty programs at the stadium or arena.
Crypto POS: Blockchain platform Wala is collaborating with mobile point of sale company M-vendr to power digital currency mobile point of sale technology for small retailers, a move the companies hope will expand virtual currencies in emerging markets, according to a release form M-vendr. Wala is built on the Ethereum blockchain, and the Wala token allows users to transfer value to peers as a form of payment. Wala envisions the collaboration supporting small businesses, pop-up stores and bill pay for utility companies. Wala consumers will also be able to make purchases directly from Wala accounts and can make transfers for MNO, cable bills or other recurring services.
From the Web
Credit card rates spurt higher with one at 30 percent
CNBC | Wed Oct 18, 2017 - Just in time for holiday shopping, retailers have a gift for consumers: higher interest rates on their credit cards — including one that's above 30 percent. The average retail card rate has risen for the third straight year and now is brushing 25 percent, according to new survey from CreditCards.com. The BrandSource card rate ranks highest at 30.49 percent. That interest rate is "ridiculously high," said Matt Schulz, senior industry analyst for CreditCards.com. "If you can't pay that bill off at the end of the month, the math just doesn't work for you regardless of what the rewards are." The current average of 24.99 percent, up 1.15 percent from a year ago, compares to an average for general-use cards of 16.15 percent. Of the cards surveyed, just 10 offered rates less than that broader average to their most creditworthy customers.
Top 10 cashless countries
China Daily | Thu Oct 19, 2017 - The rankings took into account a raft of criteria, such as the number of credit cards per person, the number of debit cards per person, and the number of cards in issue with contactless functionality, according to a recent study from global trading site Forex Bonuses. The growth rate of cashless payments over the past five years, payment transactions made with non-cash methods, and people's perception of mobile payment options were also included as factors in the rankings. Canada took the crown, as its citizens own more than two credit cards per person on average and 57 percent of payments are made with cashless methods, though it has the lowest number of debit cards among the countries included in the research. While scoring high on many metrics, China ranks sixth in the list. Despite advances in mobile payment methods, it has a low share of credit card ownership and cashless payment counts for only 10 percent of consumer transactions.
Amid Brazil’s persistent economic crisis, fintech startup GuiaBolso raises $39 million
TechCrunch | Wed Oct 18, 2017 - Despite a continuing economic crisis, Brazil’s technology startups are continuing to attract cash and financing, with the mobile personal financial service GuiaBolso raising $39 million in fresh funding. Readers outside of Brazil can think of the company as a combination of U.S. services like Mint, Credit Karma and Lending Club, all rolled into one. That GuiaBolso has emerged as a bright spot in the otherwise grim horizon of Brazil’s economic outlook speaks to a broader divergence between the country’s digital economy, which continues to grow, and its offline industries, which have been stumbling since 2015. The new round was led by Vostok Emerging Finance, a publicly traded Swedish fund with its roots in big Russian private equity. Additional investors include Ribbit Capital, the International Finance Corp. and QED Investors, while impact investment firms Endeavor Catalyst and the Omidyar Network also participated.
More from PaymentsSource
Amex's next CEO may have to reinvent the company
American Express' incoming CEO may have to fundamentally change how the company makes money, if regulators and the Supreme Court side against it.
Fusing e-commerce with ATM security, Diebold adapts to a digital economy
Diebold Nixdorf is a well-known provider of ATMs, but in an increasingly cashless economy it needs to apply its expertise in new ways.
'Cashless store' tests will fail unless consumers have a choice
While many consumers are indeed adding smartphone-driven digital pay and mobile order and pay options into their payments toolbox, cash continues to resonate with American consumers, who show little interest in being "all in" with cashless, or having their choices limited in any way, writes Brian Bailey, managing director of North America for Cardtronics.
Data: Seizing the P-to-P market
Person-to-person payments are a core area of interest beyond just the banking industry. The news that PayPal is bringing Venmo into e-commerce should be serious concern for many companies that wanted a piece of the P-to-P pie. But Venmo's success does not necessitate others' failure.
Existing encryption's a casualty of the massive KRACK WiFi attack
Companies and households should therefore be on the lookout for security patches of their wireless access points and endpoint devices like laptops, desktops and mobile devices, write Steven Murdoch and Frederik Mennes from Vasco Data Security.