10.31.17 Your morning briefing

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

Blockchain ID: Sony has applied for a patent for a user identity system that applies blockchain technology as part of multi-factor authentication. The system would use two blockchains, one to create user codes and the other to confirm the user when he or she executes a transaction—each blockchain would act as a check against the other. The system could vet identity for any transaction that uses the blockchains through the same smart contract concept that automatically triggers a currency transfer once certain conditions are met. In this case, the smart contract would trigger the production of the ID code and transaction confirmation based on authentication rules set by the blockchains. There is some disagreement among financial institutions as to the effectiveness of blockchain as a security tool, though security is a substantial part of IBM's investment in blockchain.
U.K.'s 'check 21': The U.K.'s migration to an image-based check clearing system has taken another major step with the formal commencement of a phased roll in, reports Finextra. The news site reports the initial volume of checks will be small as the U.K.'s Cheque and Credit Clearing Company runs two clearing systems in tandem until all banks have gone online by late 2018. The system, which is powered by Vocalink and Exela Technologies, is expected to reduce the time required to process checks to one day from six and accommodate interbank mobile check deposits. Check usage is in decline in the U.K., Finextra reports, though it's still substantial as more than 477 million checks were written in 2016 and attempts to abolish checks in the U.K. are usually met with widespread rejection.

Recycling bin: Samsung has build a bitcoin mining device by stringing 40 Galaxy S5 smartphones together, reports Motherboard, which adds as few as eight wired together can mine the virtual currency more efficiently than a desktop computer. The demo came after Samsung was cited in a Greenpeace report as lagging global best practices for the disposal of electronic equipment, according to Engadget. Samsung also turned an S3 smartphone into a monitoring system for fish tanks, and plans to release the software required to replicate the functions at home. Samsung also earlier faced environmental backlash for recalling Samsung Galaxy Note 4 phones because of fire risk.

Laissez faire: Cryptocurrencies are not a "pressing" issue for the Australian central bank, and as such the government probably is not going to make rules surrounding blockchain, bitcoin and other virtual currencies. In a speech before the Australian House of Representatives, Tony Richards and David Emery, who represented the central bank's payments policy unit, said the decentralized and international nature of digital currencies works against centralized regulation. The two officials said the most likely impact of the technology is to wring out inefficiencies in older processes, a benefit that works against heavy regulation. Australia's stance is in contrast to countries such as China, which is attempting to maintain centralized control over currency by tightening regulations on virtual currency exchanges.

From the Web

India’s Top Payment App Has Eyes on U.S. Market
The Wall Street Journal | Mon Oct 31, 2017 - India’s largest mobile-payment app—backed by the likes of China’s Alibaba Group Holding Ltd. and Japan’s SoftBank Group Corp.—has its eye on the U.S., its founder said. Speaking at The Wall Street Journal’s D.Live Singapore event, Paytm founder and Chief Executive Vijay Shekhar Sharma said his aim is to expand into developed markets, also including Japan and Europe. “I want to build a product made in India consumed by those…in the developed world,” he said. The U.S. mobile-payment market, where Paytm would face established players like PayPal Inc., amounted to $112 billion last year, according to Forrester Research.

Top banks and R3 build blockchain-based payments system
Reuters | Mon Oct 30, 2017 - Fintech firm R3 and 22 of the world’s biggest banks have together developed an international payments system that would allow existing central bank currencies and any new digital ones to be transacted via the blockchain, R3 said on Tuesday. The blockchain, which first emerged as the architecture underpinning cryptocurrency bitcoin, is a shared database that updates itself in real-time and can process and settle transactions in minutes using computer algorithms, with no need for third-party verification.

Tech companies are coming up with outlandish ways to get you to try mobile payments
USA Today | Mon Oct 30, 2017 - According to 451 Research, only 25% of U.S. retailers even offer the contactless terminals that accept mobile payments. (Missing in action--giants like CVS, Home Depot, Target and Burger King.) If the recent Money2020 conference is any indication, tech companies clearly are not giving up. They pulled out the stops to show off tools they hope will enhance mobile pay, and get consumers switching to a quicker, and potentially safer way of paying. Some work with the traditional mobile wallets of Apple, Google and Samsung, while others use the basic concept — the smartphone as your payment mechanism — and take it in different directions.

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