2.28.19 Your morning briefing

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

Overhead costs
Square's stock price plunged more than 6 percent Wednesday evening following an earnings miss, a underperformance the company attributes to the cost of its diversification beyond a mobile point of sale company.

For the first quarter ending Dec. 31, Square said its earnings would be 6 to 8 cents per share, well below Wall Street analysts’ expectations of 11 cents. That's based on a net loss of 28.2 million from 15.7 million the prior year. As the same time, operating expenses jumped 51.5 percent to 383.2 million, as Square upped its spending on sales, marketing and product development. The company's products remain popular, as total revenue jumped 51 percent to $932 million.

Mobile point of sale hardware companies are under pressure to add more accounting, lending and merchant software as small to medium sized businesses look to consolidate third party relationships. Beyond Square's various attempts to add banking services, the company has also added more technology tools for merchants and other fintechs. It's also had high profile leadership churn in recent months.
More time for mobile
The Reserve Bank of India has extended a Know Your Customer deadline by six months, giving some breathing room to Amazon Pay, MobiKwik and other mobile payment apps.

The deadline is today, but the companies asked the government for an extension due the complexity of vetting a large number of users in a new market, reports Business Today, which quotes Payment Council of India numbers saying these companies could have lost 80 percent of their customer base in India.

The RBI said the move was made in part to improve financial inclusion in India, where most payments are still made in cash despite a considerable push for mobile payments.

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South Korean banks aren't adequately open to third parties, according to South Korea's Financial Service Commission, which will force the nation's banks to open their payment systems to fintechs.

The country's banks already have a two-year-old API, but access has been limited and is accompanied by high fees, reports Pulse News, a local site. The government's move will require much more openness and will cut fees by about 90 percent.

It's a move similar to Europe's PSD2, which has spurred open banking in Europe and elsewhere.

Restaurant VC appears
Romulus Capital and Recruit holdings are among the investors in a new $20 million round in Presto, which offers tablet order and payment in restaurants, as well as wearable devices that alert servers when customers need them, reports TechCrunch.

Presto aims its technology at restaurants that want to maintain an "eat in" service level while adopting mobile technology — and is a competitive play against Uber Eats and other apps. Its clients include Red Lobster, Denny's and Outback Steakhouse.

Presto also uses AI to gauge local activity such as sporting events to help restaurants determine specials or staffing levels.

Expansion plans
German mobile bank N26, which has used partnerships with mobile payment apps to fuel its expansion, plans to open in Brazil, giving it a second market in the Western Hemisphere along with the U.S.

N26 has work to do before it can formally launch. It has applied for licenses in both the U.S. and Brazil, and is still looking for bank partners in both countries, though it recently raised about $300 million to aid in that effort.

N26 will launch a subsidiary in Brazil next week. It hopes to debut in both Brazil and the U.S. later in 2019, reports Finextra.

From the Web

Why digital identities will be so important in the next few years, according to Mastercard's vice chairman
CNBC | Wed February 27, 2019 - The pace with which we are moving toward the internet of things is "very rapid", according to the vice chairman of payments giant Mastercard. With our lives becoming increasingly digitized, the amount of personal data we share online is increasing.

Bitcoin is ‘Potentially Disruptive’ to PayPal & Visa: Analyst
CCN | Wed February 27, 2019 - Bitcoin or another cryptocurrency won’t supplant PayPal and credit cards as payment options yet, but they could in due time. That’s the assessment of Lisa Ellis, an equity analyst with sell-side research firm MoffettNathanson.

Another Tech Guru Said They Still Believe In Bitcoin Despite Price Crash
Forbes | Wed February 27, 2019 - While the bitcoin price has struggled, bitcoin supporters have remained hopeful it will continue to grow, with the likes of Twitter's Jack Dorsey and Tesla's Elon Musk heaping praise on bitcoin and its underlying technology. Now, Apple cofounder Steve Wozniak has said, despite the heavy bitcoin sell-off, he still experiments with bitcoin and believes there has been "massive value creation" since the bitcoin bubble burst.

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