Morning Brief 2.27.20: Square earnings boosted by P2P, Caviar sale

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Square deal

The growth and monetization of Square’s Cash App boosted the company's quarterly earnings, along with the sale of its food delivery unit Caviar.

Active monthly Cash App users stood at 24 million consumers in December 2019, up 60% from 15 million in December 2018 and up over 240% from the 7 million user base in December 2017. The annual revenue generated from active monthly Cash App users has more than doubled in the last two years, going from roughly $15 per user in 2017 to $30 per use in 2019, excluding bitcoin revenue.

The sale of Caviar, which concluded during the fourth quarter of 2019, resulted in a gain on sale of $373 million.

Cash out

Tesco is opening a digital-only store in London, its largest foray into cash-free retail and a potential source of controversy as the U.K. grapples with the growth in digital payments while much of the country's population still requires cash.

The store will support contactless cards and mobile wallets, reports The Times in the U.K. It will also have extra customer service staff.

Cash-free stores align with an increase in mobile and card payments, but they also draw political opposition. Several states in the U.S., for example, have advanced legislation that requires stores to accept cash.

In the red

Klarna has been a hit with investors as one of Europe's most highly-valued fintechs, but it's run into rare financial snag.

The point of sale credit company reported an annual loss, the first in its 14-year history, reports CNBC. The 2019 loss was about $113 million. The company reported a profit of about $16 million in 2018.

Klarna said its business overall is healthy, noting it reported a 31% rise in revenue and 75,000 new merchants.

Real-time consolidation

The Reserve Bank of New Zealand and payment technology company SIA have launched a real-time payments system that replaces two platforms, the Exchange Settlement Account system and the Central Securities Depository system.

More than 600 users access the RBNZ infrastructure, including banks, custodians, registries and brokers.

The new system is based on real-time gross settlement and central securities depository applications from SIA, which are used by other central banks in Europe and North America.

Follow that bird

E-scooter firm Bird is testing a payment app that uses Bird's app and QR codes to execute transactions. After scanning the QR code, consumers enter the amount owed and confirm the payment.

The app is available in Santa Monica and Los Angeles, reports Engadget, adding Bird is targeting businesses that don't necessarily support NFC.

The firm is reportedly looking for new revenue streams after raising more than $700 million, yet having only $100 million in cash on hand.

From the Web

How Monzo brought Silicon Valley’s ‘wild ideas’ to Britain’s staid banking system
CNBC | Thu February 27, 2020
Tom Blomfield started Monzo in 2015. Five years later, the digital bank’s bright coral pink cards are now a common sight in London. The U.K. entrepreneur traveled to Silicon Valley in 2011 to help build another fintech firm, GoCardless, at the start-up accelerator Y Combinator. After his return to Britain, the Valley never really left him. U.S. payments giant Stripe and Y Combinator both went on to invest in Monzo.

Buy now, pay later 'growing fast' amid debt fears
BBC | Thu February 27, 2020
Buy now, pay later services for online shoppers are growing at 39% a year, a report says, despite worries that young consumers are sleepwalking into debt. Convenience and the ease to make snap purchases are behind their popularity, according to the report by payment processors Worldpay.

Facial recognition app used by more than 600 law enforcement agencies suffers significant data breach
FOX NEWS | Thu February 27, 2020
A new facial recognition company, which claims to be used by over 600 law enforcement agencies, has suffered a data breach, according to the company. Clearview AI confirmed with Fox News that its entire client list was stolen in the breach. According to the company, someone gained access to a list of all of Clearview’s customers, the number of accounts used by those customers and the number of searches they have conducted.

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