FintechBot Roundup – Week 36 – 2013

I spent a lot of time out of the office last week so this round up is as much for me than for the other handful of people who actually read it. Let’s have a butchers at what went on…

Bitcoin News

The ‘cryptocurrency that could’ continues to provide fascinating stories. Last week the California Legislator passed a money transmitter reform bill. The bill aims to make it easier for payments startups to navigate the regulatory burdens of the US’ strictest state but also the home to Silicon Valley. Will it pave the way for more disruption? Will the Governor sign it into law? Assembly member and author of the law, Roger Dickinson said,

“Technological innovation within the money-transmission and payments industry has skyrocketed in the last few years, yet California’s regulatory framework has lagged behind, […] Providing clarity to existing companies and new start-ups on licensing requirements will ensure a vibrant money transmission market place that is fair for business while protecting consumers.”

Meanwhile the UK there has been sightings of Bitcoins at Number 10 as the Government seeks to understand a bit more about this disruptive little 4 year old. It seems the main concern from the Government is the anonymity of the currency, which in turn is causing the banks to steer clear due to tough regulations especially around international remittances. Can Bitcoin be shoehorned into existing UK regulations? 

And talking of anonymity this great article from MIT’s tech review look a the mapping of the Bitcoin economy and how it could actually reveal users identities.

“The Bitcoin protocol still has huge potential for anonymity,” says Sarah Meiklejohn, who led the research project, “but the way that people are using it is not achieving anonymity at all.”

Forbes tested the anonymity of Bitcoin by purchasing some illegal drugs (‘it’s for research man’) and promptly being busted, not by the police but by researcher Sarah Meiklejohn mentioned above.  The Bitcoin client received an upgrade last week to 0.8.4 to improve security for users

GigaOm took a look a the opportunity that international remittances do present for Bitcoin startups as banks close their doors on many schemes, the present a massive need to be filled. The cost of sending money averages at 8.85% according to the article. How much can these new companies shave off that? And can they crack the regulatory requirements to make it happen? Classic innovators dilemma conditions, large organisation exit a risky business and smaller ones come in and make it work for less…then scale upwards. To be continued I am sure.


Payments News

Payments as an API business pioneers Braintree are apparently hawking themselves round for sale. It seems their (own self inflated?) valuation of one billion dollars is putting off suitors. They are currently processing 10 billion dollars a year in payments and also own mobile payments company Venmo. Last week Braintree also announced new fraud prevention tools for merchants. It will be interesting to see who, if anyone, does snap them up (PayPal seem to be the favourites). It will be even more interesting who would then buy Stripe in defence.

Talking of Stripe, their march across Europe continues as they went live in Ireland to add the recent full launch in the  UK and beta trials in Belgium, The Netherlands and France. They took a cheeky swipe at the existing payments players in their press release / blog post announcing the launch;

“To date, online payments infrastructure in most of these countries, including Ireland, has been dominated by lumbering incumbent banks. Accepting internet payments involved weeks of setup, reams of paperwork, and bureaucratic approval processes.”


PayPal had a mixed week. It seem they still have some way to go on ‘Customer First: The PayPal Way‘ as it emerged they had frozen the accounts, containing 45,000 dollars of another project, this time it was privacy focused Icelandic email startup Mailpile. The company were pretty quick to unfreeze the accounts in this instance, maybe the PayPal way is almost here.

In better news PayPal launched a new app which had some very innovative features as well as redesigned experience throughout. Features such as order ahead i.e. submit an order while standing in line at a coffee shop, They have also built credit into the app allowing you to apply for finance for those bigger purchases. It all builds on their desire to be seen more as an instore payment provider rather than just an online one. A big challenge.


 Security News

A new variant of evil looking and sounding banking malware is in the wild. HesperBot (HesterBot named after exRBS chairman would have been a more amusing name) is similar to the infamous Zeus malware and is starting to be seen across Europe. It does the usual awful things like stealing logon data but also seems to be targeting a number of mobile platforms i.e. Symbian, Blackberry and Android.

Trouble in Middle Earth as Kabam the makers of the mobile Hobbit game have warned of fraudulent activity around its virtual currency Mithril. Dodgy 3rd parties have been flooding the game with offers of cheap Mithril which maybe cheap for a reason i.e. it is fake. Only ever buy Elven manufactured Mithril.

A good heart these days is hard to find‘ sang Feargal Sharkey, which might point the reason that technology company Bionym have decided the harness the uniqueness of the heart beat to create a new product, Nymi. Nymi is a wrist band that can track the wearers ECG (ElctroCardioGram) and allows biometric to access all manner of systems including payments.



Confrence News

This week in New York it is Finovate Fall, which is one of the biggest Fintech conferences in the world. Snarky Bostonian Bank Blogger, Ron Shevlin takes a look at what he wants to see at the conference (hint: it is not slick UIs at the expensive of tangible business models). Jim Marous has taken at look back at the history of the event and it is interesting to see the patterns of companies demoing over the years coupled with how many of the innovations shown have actually made it into mainstream banking.

In the UK Next Bank Europe will take place on the 5th & 6th of November. Hopefully I will be speaking at the event but please do not let this put you off attending.

Jumble of Fintech Links

Lots of little stories from the Fintech world that I can’t be bothered to categorise.


And that was the week that was. Hope it was good for you. Follow my little @fintechbot for all the latest news first. Here is a big list of all the links used (and some not used) in this weeks post.

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