FintechBot Roundup – Week 31 – 2013

BitCoin news back at the top this week after it emerged that Thailand had banned the cryptocurrency…or had it? A local Bitcoin Exchange company had been going through the process of fully registering with Thai authorities. As part of that process the company were called in front of a panel of experts at the Bank of Thailand.

At the conclusion of the meeting senior members of the Foreign Exchange Administration and Policy Department advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets the following Bitcoin activities are illegal in Thailand:

Buying Bitcoins
Selling Bitcoins
Buying any goods or services in exchange for Bitcoins
Selling any goods or services for Bitcoins
Sending Bitcoins to anyone located outside of Thailand
Receiving Bitcoins from anyone located outside of Thailand


Following that announcement the BitCoin world went into a frenzy but it is still far from clear whether or not the activities listed above are legal or if the requesting company have just not been granted a money transmitter license. It will be interesting to see how this unfolds over the next few weeks especially if the Bank of Thailand do confirm their postion.

This article is a great overview on how BitCoin exchanges work and the problems they currently face. Another very closely related issue to this is ‘GovCoin‘ a term being used more widely thanks to the bending and alterations being forced upon the BitCoin system as it rubs up the banks, and the Governments that effectively manage them, in all the wrong ways. Jon Matonis looks into this issue and how it is shaping the future of the cryptocurrency.

In more pleasant BitCoin news, this interview with the founder of Bitcoin powered mobile wallet Kipochi, Pelle Braendgaard, is well worth a read. Africa continues to be a real source of financial innovation.


Cloud bank news

The Dutch Banking regulator (DNB) has approved Amazon Web Services for use in “all facets of Dutch financial operations”. This is huge news, will we now see a raft of banks making infrastructure (and shortly followed by core bank systems) their next commodity? Will we see other countries follow suit? Or will it be a wait and see approach i.e. let the others make mistakes first.

Meanwhile IBM and Amazon are battling it out for a CIA cloud contract. Banks and Governments in the cloud. Those data centres are starting to look like a burden to some and a gold mine to others.


Goldman Sachs News

Programmer Sergey Aleynikov has been rearrested for the theft of code from Goldman Sachs. The ex-employee uploaded modified open source code containing his own alterations so that he could unpick the code and release the improvements back into the open source community.  He has already been tried and acquitted following an appeal but has now been rearrested and is facing several charges in New York. Michael Lewis has written a brilliant and lengthy article on the story that I can’t recommend highly enough. I have a feeling this might just blow open banks usage of open source and whether they are taking more value than they create, which seems to be their default behaviour.

Serge quickly discovered, to his surprise, that Goldman had a one-way relationship with open source. They took huge amounts of free software off the Web, but they did not return it after he had modified it, even when his modifications were very slight and of general rather than financial use. “Once I took some open-source components, repackaged them to come up with a component that was not even used at Goldman Sachs,” he says. “It was basically a way to make two computers look like one, so if one went down the other could jump in and perform the task.” He described the pleasure of his innovation this way: “It created something out of chaos. When you create something out of chaos, essentially, you reduce the entropy in the world.” He went to his boss, a fellow named Adam Schlesinger, and asked if he could release it back into open source, as was his inclination. “He said it was now Goldman’s property,” recalls Serge. “He was quite tense. When I mentioned it, it was very close to bonus time. And he didn’t want any disturbances.”


Developer/API News

PayPal’s REST APIs are now available globally, as they continue their battle with the likes of Stripe. Talking of which, Stripe now have a shop, not for cutting edge APIs but for T-Shirts. Another thing I love about the API trend and the changes it is bringing about in financial services development is things being much more in the open. This article by Pete Keen looks at the risks of processing payments via web services and he has written some code to limit the risk. Lovely stuff…complete opposite to the Goldman story above. 

In slightly related news I liked this interview with Visa developer, Michael White, I think glimpses into the world of financial systems and their creators are rare things and I am not sure why.  Do banks just keep these things secret just for secrets sake? Or to give the perception of infallibility by obscurity?

Skeuocard is a lovely little bit of code that upon entry of your credit card number renders the correct type of card.

Westpac New Zealand is running a competition aimed at developers and designers. The Westpac App Challange is looking for app ideas/prototypes that “make a process, transaction, application or any other common banking activity easier, faster and safe for customers”. The winners will get 10,000 New Zealand Dollars each. Watch the cringe inducing video to get more details. I love these kinds of initiatives but as the video shows these interactions with the real world still feel very awkward.

In other BIG NEWS from the southern hemisphere


Mobile Payments News

Isis the US carrier based mobile payments initiative reminded everyone it still existed by announcing they will launch something by the end of the year, honest. I am yet to be convinced that the carriers have anything to offer but further complications in the already byzantine system of payments. I am willing to be proved wrong but I still don’t see why you would move the secure element on a plastic debit/credit card onto virtually the same chip on a SIM card? Sideways move.

OpenTable the restaurant reservation service is looking to embed payments into its app. So not only will you be able to get a great little table by the window you will also be able to pay directly from the app and keep your talking to humans at an absolute minimum. Banks thinking they can continue to own end to end payments journeys must surely see the writing on the wall (not the menu).

The payments Nascar problem shows no signs of being resolved and last week saw another payment option soon to be added to the morass. Mastercard’s MasterPass brings its virtual mobile wallet stylings to the UK. I guess anything that stops me giving away the keys to my house every time I buy is a good thing. Argos, Boots and House of Fraser are all on the launch list.


Security/Whoops News

The long rumoured iPhone biometric sensor seems to have been confirmed via some code in the latest beta release of iOS7. We will see if that is true when the new iPhone launches in September (at a guess).

You can learn more about banking security requirements from this tale of woe than you ever will from a banks own website where they just say ‘Cover your PIN’ and S’hred your documents’ and other such lazy platitudes. I love a good tale of security woe.

Yorkshire and Clydesdale bank suffered an Internet banking outage following their failure to renew their domain name. Doh.

And it seems this practice is acceptable to a bank (although I am unable to verify which one but it looks more like a fraud attempt)


Miscellaneous interesting stuff

Do you fancy heading up Libya’s central bank? You can apply online now.

Barclay’s have mobile and digital specialist Zapp’d. Ian Sayers, ex-chief architect for digital and mobile at Barclays is headed to Vocalink to work on the mobile merchant payments company Zapp. He joins ex-HSBC head of propositions Peter Keenan. Strong looking team but can they get the product out there and get traction? Going to be a tough one I think.

Brett King’s Breaking Banks radio show (Every Thursday at 8pm EST) continues to be an interesting series of shows. This weeks episode looked at how people spend and use money and how it is far more simple than saving and avoiding the temptations of daily life. Well worth a listen each week.

Social media payments service, Chirpify, raised $6 million in Series A funding. It seems there is money in buying stuff via simple reply on Twitter.

An interesting read on the challenges of scaling ATM usage in India and the innovation it is driving in the main providers i.e. NCR and Diebold, as they deal with the infrastructural challenges the country presents. For example, ATMs that casn switch intelligently between solar, AC grid and battery backup.

Last but by no means least a great article in the Guardian looking at the entrepreneurship in Minecraft through creation and collaboration. The future of money will certainly be heavily impacted by computer gaming.


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