Author: hec1

Amazon Go is a concept created by Amazon.com with the idea that consumers can go shopping with no lines and no checkouts. Shoppers scan their Amazon app upon entering the store and then they can just grab what they want and leave and the items will be automatically charged to their Amazon accounts. The idea is to create a seamless and quick shopping experience.

However, the actual payment process is an interesting roadblock for Amazon. There are many alternative forms of mobile payments such as Apple Pay, Google Pay, and Samsung Pay. Amazon Go store requires the consumer to use an Amazon app and account to process the transaction. Consumers can’t use any other payment methods. This may deter consumers going to a store like Amazon Go with such limited payment options. But either way, we are seeing that currency is slowly but surely transitioning from paper money to mobile payment.

Back in 2004, a European retailer, Metro Group was the first to implement a form a self-checkout with RFID technology, which Amazon Go is using as well. So the technology isn’t anything new and it is just a matter of how well Amazon Go can execute their vision.

Source:

https://www.amazon.com/b?node=16008589011

Samsung may be implementing Samsung Pay to their non-premium phones such as the Galaxy J series phone priced around $115. Samsung Pay allows users to save credit cards, gift cards, as well as other payment methods.

Samsung Pay recently launched in India. Samsung has been strategically and quietly adding Samsung Pay to cheaper phones and plans to experiment the idea in India. One of the reasons that Samsung possibly chose India to experiment with Samsung Pay on cheaper phones is because out of 85 million Samsung phones in India, 25 million are cheaper Galaxy J series. Also recently, India prohibited 500 rupees and 1,000 rupees bills from circulating thus making Samsung Pay easier to buy things.

If expanding Samsung Pay to cheaper phones in India turns out to be successful, it will be a very clever move made by Samsung. With the dense population in India, Samsung can easily turn into the mobile payment industry leader. However, competitors such as Paypal and Apple Pay can easily catch up as well. The competition against the many mobile payment companies are growing more and more intense but if Samsung can secure the first-mover advantage, they can secure their placement in the industry.

 

Source:

https://www.cnet.com/news/samsung-pay-galaxy-j-phones-india/

Smartphones are becoming more and more innovative and now, there are apps like Apple Pay and Android Pay to store credit cards and use them without the physical plastic card. According to a survey, one of the main reason that consumers are hesitant to adopt to mobile payments is the fear over security, data breaches, and hacking. But according to this article, mobile payments are safer than traditional. For every transaction made by mobile wallets, “mobile wallets create a random, one-time number — a transaction token — and even if someone was able to know that number, it’s not valid later.” This process is called tokenization and used by Samsung Pay, Android Pay, and Apple Pay. Another security measure that mobile wallets have while traditional credit cards don’t are authorizing payments with fingerprints. Mobile wallets also save recent transaction history for reference, allowing users to see credit card activity in one place.

I think mobile wallets still have security concerns despite the added safety measures it has compared to traditional credit cards. The fear of hacking and data breaches are definitely a concern because hackers are becoming more widespread and skillful. Also, there is a significant amount of personal information on our phones, which can be risky and concerning because many apps ask to access a lot of personal data before allowing the user to use their app. So users of mobile wallets need to be mindful of risks despite the many “safety” features.

Source:

https://www.nytimes.com/aponline/2017/03/02/us/ap-us-nerdwallet-dont-fear-your-mobile-wallet.html?_r=0

TransferWise, a London-based startup, developed and launched a new money transfer service for Facebook Messenger that allows users to send money internationally. TransferWise can exchange international currencies which allows users to use the service wherever they are as long as they are connected to the internet. TransferWise has developed an application programming interface (API), enabling their payment service to latch onto existing businesses capabilities, removing the need for banks and additional fees. TransferWise is currently available in the United Kingdom, United States, Australia, and Europe. TransferWise is also expected to expand to 50 other countries as well. TransferWise is valued at more than $1 billion and backed by many high profile investors.

I think TransferWise is changing the landscape of the digital payment industry as the payment industry moves towards digitalization. TransferWise is very promising because millions of people use Facebook Messenger on a daily basis so integrating a free money transfer system can attract many users to use the service. As companies like TransferWise, Venmo, Apple Pay, etc. are making mobile money transfer and payments easier than ever before, I think in the near future, we’ll see less and less bills and coins circulating as more people and companies adopt different forms of digital payment.

 

Source:

http://www.cnbc.com/2017/02/21/how-transferwises-facebook-hook-up-could-benefit-businesses.html

https://www.nytimes.com/reuters/2017/02/21/business/21reuters-transferwise-facebook.html

 

OpenFin is a startup company that helps electronic-trading firms build their desktop applications with an emphasis on integrating and connecting everything. The startup has raised $15 million with renowned backers such as JPMorgan, DRW, as well as Euclid Opportunities. OpenFin has 25 employees in New York and London and they plan to expand to 50 employees by the end of this year. Openfin strives to be like iOS and Andriod in the mobile application industry but in the financial application world. OpenFin’s software helps financial companies create and upgrade trading applications using HTML5. HTML5 is popular on Wall Street because it allows software to run on various types of devices. OpenFin focuses on easily downloaded and updated apps, security, and interoperability.

I think OpenFin has a lot of potential to grow and succeed. OpenFin is capitalizing on software and information system solutions for financial companies which is a very profitable industry since all financial institutions would eventually need or want better, faster, and more information. Financial market changes extremely fast, with stocks, currency, etc. changing within seconds. It is crucial for financial companies to have information and data quickly to provide adequate information for traders and investors.

Source:

https://www.nytimes.com/reuters/2017/02/16/business/16reuters-openfin-investment.html?_r=0

http://www.businessinsider.com/a-bunch-of-wall-street-trading-startups-have-one-connection-on-common-2016-12

 

In 2016, 33 million users used Amazon Payments, which is up from 23 million the year before due to expansion into France, Italy and Spain. Amazon Payments’ service “allows customers to make purchases on other websites using details already stored on their Amazon accounts instead of having to re-enter personal details.” The average transaction size is around $80 in 2016 and $84 in 2015.

Amazon Payments direct competitors are PayPal, Apple Pay and Android Pay, with PayPal leading the payment industry with 197 million active customers in 2016. Despite Amazon Payments’ growth, big online retailers such as Walmart or Target who see Amazon as a competitor are fearful of using Amazon Payments because it will unintentionally share their company’s important sales data.

Amazon Payments has a lot of potential to be competitive in the online payments/transactions industry. There are around 300 million accounts stored in Amazon.com. Instead of going after big retailers, Amazon Payments can partner with thousands of smaller retailers. Also creating an incentive such as a discount for people to use Amazon Payments, will entice customers to use it instead of using PayPal.

Source:

http://www.businessinsider.com/how-amazons-payments-service-could-solve-its-biggest-weakness-against-paypal-2017-2

http://www.cnbc.com/2017/02/07/amazon-payment-arm-is-stepping-up-the-challenge-to-paypal-apple.html

By the end of 2016, almost 1.81 million U.S. merchants had switched to card chips, which are supposedly harder to counterfeit. With the usage of credit-card chip technology, credit card thieves are turning to the internet. According to a report from Javelin Strategy & Research, there has been a 40 percent increase in stolen card data used to pay for merchandise online and mobile apps. U.S. government entities as well as retail companies alike had 1,093 data breaches last year, potentially exposing private customer and financial information and leading to identify thief. This forces retailers to spend and invest billions of more dollars to protect their sites and data. The fraud-fighting industry is blooming as more companies are trying to find solutions to prevent fraud and thieves.

It is good idea for companies to enhance their security systems and constantly improve their systems to stay ahead of online thieves because online fraud is very prevalent today. Thieves are constantly finding new ways of committing fraud and stealing customer information. Protecting data should be the number one priority for companies.

 

Source:

https://www.bloomberg.com/news/articles/2017-02-01/credit-card-thieves-move-online-as-chips-thwart-in-store-fraud

The world’s largest financial technology company, Ant Financial Services Group, is in the process of acquiring U.S. money transfer company, MoneyGram International Inc. for about $880 million. Ant Financial Services Group is affiliated with Alibaba Group Holding Ltd. Ant is also the leading the online payment company in China and worth about $60 billion. China’s fintech companies are on the rise and it is said that China’s fintech companies are accounted for 46 percent of all venture capital investment globally in 2016. The combination of MoneyGram’s expansive networks and Ant’s technological knowledge, can create a strong and competitive multi-national company. However, Ant Financial Services Group has to get approval by the Committee on Foreign Investment in the United States (CIFIUS) in order to acquire MoneyGram International.

It is great to see fintech companies and traditional financial services companies converge as we are headed to an increasingly technology enhanced world. It will be interesting to see the transformation of the fintech industry especially since there will be more overlaps between domestic and foreign fintech companies.

 

Source:

http://www.nytimes.com/reuters/2017/01/26/business/26reuters-moneygram-intl-m-a-ant-financial.html

Trading.co.uk is a London-based fintech firm that is launching an app that will monitor comments that Donald Trump makes on his social media accounts. The fintech company uses artificial intelligence to sort through the tweets and messages, alerting traders with the latest information.

This fintech app can be a very useful tool for traders because the United States and our president are very influential in the global market. This is especially true for day traders because they are trading millions of dollars every few seconds or minutes. So even the slightest decline or increase in stock prices and currencies can affect a day traders’ gain or loss. According to the article, a single comment from Trump caused a decline in the value of several billion dollars in pharmaceutical stocks several weeks ago. I think that fintech has revolutionized traditional ways of trading with AI and other forms high tech programs. The app benefits traders around the world as they see information in real time. Also, I think the app has a lot of potential for other applications in tracking and analyzing other powerful figures and companies.

 

Source:

http://www.nytimes.com/reuters/2017/01/19/business/19reuters-global-stocks-trumpometer.html

Fintech, once a slow-growing sector, is now considered one of the fastest-growing sector in Silicon Valley and today’s tech industry. Financial technology is being labelled and defined as a company or start-up that uses technology and solves financial problems, which embodies many different aspects of finance and money.

Historically, there had been low correlation between finance and technology but in recent years, there has been more intertwining between finance and technology, especially with the growth of mobile application and online platforms. A larger and more mature segment of fintech is digital payments which is a $450 billion industry. Other fintech segments includes but not limited to personal finance and investment management, lending, data analysis, money transfer and currency, and crowdfunding. In 2015 alone, more than $22.3 billion were invested in fintech which was more than the prior 5 years combined. Analysts are predicting the fintech sector to be lucrative and rising.

 

Source:

http://www.nytimes.com/interactive/2016/04/07/business/dealbook/The-Fintech-Power-Grab.html?_r=0

http://www.nasdaq.com/article/4-reasons-the-fintech-potential-remains-untapped-for-2017-cm729084