Payment – Winds of Change for Acquirers

Europe has a fragmented card acquirer market with around 400 acquirers accepting cards at millions of POS terminals, on the internet and mobile. From 2010, domestic card acquirers face significant competition both from foreign cross-border card acquirers and PSP processors becoming acquirers.

Contactless form-factors (e.g. Apple Pay, Samsung Pay, Android Pay), digital scheme wallets (e.g. MasterPass, Visa Checkout), new security requirements (e.g. 3D-Secure 2.0, tokenisation security) and legal authentication requirements (e.g. RTS SCA) are constant challenges for the card acquirers.

In addition, more digital payment service providers compete with card acquirers. They offer the acceptance of IBAN-based digital payment services (e.g. iDEAL), online wallets (e.g. PayPal, Amazon Pay) and prepaid account services to merchants.

Both the payments industry and competing card-less payment service providers benefit from the European legal framework for border-less payment services (e.g. PSD2) and a unique IBAN-based bank payments infrastructure (e.g. SCT, SDD, SCTINST).

Driven by connected consumers, modern retailers intend to offer omni-channel retailing services. Retailers demand omni-channel payment acceptance services from their supporting acquirers, both for cards and card-less digital payments.

Rethinking Capitalism With the Blockchain

It’s easy to think of capitalism as being an ever-present cultural artifact since most of us have grown up in countries where capitalism is the leading political and economic template. But capitalism as an ideology, and as a cultural manifestation, is a relatively recent phenomenon whose origins were violent and turbulent.

We are a trading species and haggling and opportunity seeking is part of the definition of being human. Almost every society has engaged in this form of activity from time immemorial. But in the late 17th century, and especially in England, something occurred which resulted in a departure from the norms that had prevailed for governing society for close to four thousand years.

Previously, religion provided the roadmap for morality, and hard work was promoted as the pathway to virtue. Royalty ruled over countries and provided order to their territories, which were constantly under threat. So remaining in power also meant engaging in war.

When taxes failed to meet the costs of war, King James the First, being the largest landowner in England, decided to increase his revenue by giving exclusive licenses for the production of a product, a trade or even a government service. This led to the construction of monopolies and in 17th century England, there were monopolies for almost everything from coal, bricks, food, and even belts and buttons.

But what King James, and monarchs after him, had not bothered to consider was the effect this was going to have on the culture of their society. As an increasing number of people tried to compete for these monopolies, the competition began to challenge submission. A growing number of new landlords, members of trading companies and cloth manufacturers began to gain a voice in the way the country was being run.

Juxtaposed with this transition was the English Civil War. Following the execution of King Charles the First, the monarchy was replaced by the Commonwealth. In a short span of 30 years, merchants and manufacturers went from being subjects to public personages with political power. Economic grievances thus became political issues and competition was seen as the sister of innovation. Gradually, the established hierarchy started to crack as new entrepreneurs began to emerge making society more fluid in the process.

The result was a departure from the old ways of thinking which ignited commentary, debate and explanations. As the traditional order was overturned, people began to change their ideas about fundamental values. Previously, change to the order was regarded as blasphemy. But the growing prosperity offered by capitalism encouraged individuals to take risks, question the status quo, challenge authority, and be less fearful of innovation and novelty.

Today, this might seem almost like common sense. But this mode of thinking was the result of the birth of capitalism. It was a renegade mode of thought that gave an attitude to the way men and women thought, and challenged the values, habits and modes of reasoning of the past. It was fraught with opposition, was the bedrock of revolutions in almost every developed country, including the Industrial revolution, and has defeated Socialism, Marxism, Communism or any other kind of ideological ‘ism’ till date.

As the centuries rolled on, capitalism spread like a prosperity juggernaut and in doing so, changed our mindsets and ingrained the concept of free markets and profit maximization as natural law. We believed the economists who preached it from their podiums and policy makers who used it as a yardstick for policy construction.

But just as King James, blind sighted by short-term gain, failed to see the cultural ramifications of capitalism, we too as a society have been oblivious to the cultural impacts of capitalism as we pursued our hedonistic objectives – both as individuals and societies, especially in the past few decades.

Capitalism’s Waltz With Debt

Following the second world war, advanced economies in the West installed a ‘state-administered’ version of capitalism where economic growth coexisted with social and political stability. For almost three decades, this version of capitalism became the gold standard of government and remains the nostalgic fodder for politicians’ campaigns.

But by the end of 1970’s, this formula for success began to crumble with the outbreak of the oil embargo and the Iraq-Iran war. As oil prices began to soar, industries began to suffer and the newly elected governments in the US and the UK realized that they needed to find radical new ways to create economic growth to stay in power.

One of the ways they responded to this crisis was by privatizing industries, a move that is now referred to as Reagan-Thatcherism. The strategy was simple – If companies and households could not earn their revenue as they did before, they could lend their way to it. As public services were privatized, economic decision making was taken from government and handed to Wall Street.

As time went on, this process was amplified. When globalization began to take manufacturing jobs, high-paid skilled jobs were replaced by low-wage jobs in the service industries. Wages stagnated and people began to earn less than they did before.

In the process of finding a solution, governments once again turned to the commercial banks and relaxed lending restrictions. Even if wages were static, people could borrow money and maintain a certain lifestyle. As a result, the ability to manage society and economics slid gently from the control of the state to the commercial banks and financial markets.

The cultural ramifications were that debt-based capitalism became a norm and an increasing amount of importance was given to growth and consumerism. We went from being ‘citizens’ to ‘consumers’. Free market policies and regulations that would aid in providing more debt (see the repeal of the Glass-Stegall Act) were one of the main tenets of macroeconomic policy.

The result is something we all know too well and which we are still recovering from – In 2008, our debt-based capitalistic system collapsed under the weight of unsustainable loans, as our hedonistic pursuits become collectively unsustainable.

How did we get into this mess? How did we go from using capitalism as a way of escaping dictatorial doctrines to a society that was wasteful, indifferent and voracious? How did we not see this cultural change in which having more and consuming became paramount to anything else? The more money, freedom, leisure and luxury we got, the more we wanted.

One of the main reasons for this was the overall acceptance of contemporary free market capitalistic theories and the policies and models that were based on these theories. Free market economic models (and the policies that are based on it) are based on two main theories – the Rational Expectations Theory (RET) and the Efficient Markets Hypothesis (EMH).

These two theories work in conjunction. The RET states that the expectations of players in a market are formed on the basis of the information that they have and their past experiences. According to this theory, stock prices reflect all the information regarding a stock. Thus, by using the stock price as a proxy, we have access to all the information regarding a stock on the market, and can make rational decisions based on our expectations.

If someone makes a bad decision, then it is offset by someone who makes a good decision. The market is thus in a constant state of efficiency where the price of a share intrinsically incorporates all the relevant information. As a consequence, markets are in a state of equilibrium (EMH). We might have a shock now and then but the market always goes back to its natural state, which is that of equilibrium.

Our faith in these theories has resulted in accepting that the bad actions of one economic agent would be offset by the good actions of another. As more debt was offered to us, we accepted it as it was now the norm. In the process of handing over responsibility to the ‘other’, we believed in the banks, bought their complex debt-based financial instruments (CDOs, CDSs, etc.) and listened to the bastions of the system as they preached about its benefits from their pulpits.

These increasingly complex financial instruments have contributed to the development of a far more flexible, efficient, and hence resilient financial system than the one that existed just a quarter-century ago. After the bursting of the stock market bubble in 2000, unlike previous periods following large financial shocks, no major financial institution defaulted, and the economy held up far better than many had anticipated” – Alan Greenspan, the Chairman of the Federal Reserve, (2005).

Those who challenged the status quo were ostracized from academia and markets, while the players in the economy were happy to go on taking debt and serendipitously advance towards a false sense of prosperity, leaving the hard business of understanding the macroeconomics of the system to people who were elected to do so.

But following the crisis, we need to take a step back and question this reality and the abilities of these economic bastions. We need to ask ourselves if the entire structure of analysis and the level of understanding of the experts needs to be questioned. This statement was best summarized by the Queen of England when she visited the LSE in 2007 and asked the economists in the room a very simple question,

“Why did no one see this coming?”

Thus, conducting a review of economic dogmas necessitates a review of the very basics, i.e., RET & EMH. More importantly, it requires a change in mindset and asking the right questions. Consider this – If our economy is supposed to be based on patterns of equilibrium, how does it explain a capitalistic system’s obsession with constant growth? Think about it – If you work in a company or are creating one, then the primary objective is to grow. Every company is constantly trying to expand, or buy out or merge with another company. It seems that it is never happy where it is and even if a company wishes to remain constant, its competitors will force it to move.

So if this state of entropy is the natural state of affairs, then why do we use equilibrium-based economic models to witness economics and pass public policies (monetary and fiscal)? We can extend that line of questioning and even challenge the RET – If all decisions are rational, then why do people engage in philanthropy? From a personal objective perspective, it would seem to be the most irrational thing to do.

In spite of these abhorrent divergences from reality, we continue to pass policies and enact measures based on analyses done using DSGE (Dynamic Stochastic General Equilibrium) models. It’s like the equivalent of bringing a turtle to a rabbit race.

Not questioning these fundamentals has been one of the primary causes of our addiction to debt and our laissez-faire attitude that has allowed banks to get bigger and more entrenched in every aspect of policy making. Therefore, what is required is a revisit to the very fundamentals on which we base our understanding of the economy.

We need to move from equilibrium-based models to entropy-based ones. Equilibrium can exist in an economy, but it is a temporary state. The natural state of an economy is entropic due to the constant exchanges and decisions being made by agents and actors in the economy. In short, we need to move towards complexity economics.

Complexity economics was devised based on this understanding of entropy and is a field that is gaining increasing prominence today. In a recent speech, Andy Haldane, the Chief Economist of Bank of England stated it is necessary for the bank to base its models on complexity science as it allows us to integrate complex, adaptive networks. Using these kinds of models, economic policy would be based on dynamic complex network analysis and behavioral modeling, thus giving us a template that is more suited to modeling reality.

The blockchain’s role in all of this

In the past few years, commercial and central banks have been toying with the blockchain owing to its operational efficiencies. In a recent report, the Centre for International Governance Innovation (CIGI) stated that G20 countries should create a central bank blockchain consortium, a la R3CEV.

The blockchain is many things to many people. But at its heart, it is an engine of transparency. While it is irrational to think of the blockchain as some kind of panacea that will be the solution to our current economic malaises, it is nevertheless a useful tool that can be used with other financial technologies to offer us more clarity of our capitalistic system. And this clarity is required today if we are to use capitalism to escape from a coterie of rulers, as we did in the 17th century.

This issue needs to be discussed today as enter an era where banks, academics and public institutions push us towards a cashless economy. Becoming a digital economy comes with benefits, but also comes with increased risk, owing to the speed, size and interconnectedness of the financial system. And one of the ways we can ignite this conversation is by leveraging the transparency that is provided by new financial technologies, especially the blockchain.

Transparency is a lop-sided issue in today’s financial markets, for as we transition to a cashless economy transparency seems to be a one-way street. As customers and citizens become digital avatars, banks and government institutions now have greater amounts of highly granular data with stark levels of detail.

But peculiarly, consumers, on the other hand, are not privy to the same amounts of transparency when it comes to the financial operations of banks and public governing bodies. A review of some of the scandals that have unfolded in the past three months highlights the need for two-way transparency:

It is, therefore, urgent that we ascertain what kind of an economic reality we are headed towards before any infrastructural changes are put in place. Or else, the spread of a crisis in a hyper-connected digital economy will be faster and more violent than before.

The blockchain’s transparency is however only part of the equation. Transparency can be illuminating, but to transform transparency to clarity still requires effort. While the blockchain allows us to see what is going on, it would make no sense to use this information as an input to models based on equilibrium. If we are to truly leverage the potential of the blockchain and use it to define macroeconomic policies that are more representative of reality, it has to work in conjunction with complexity economics:

(Blockchain’s Transparency) + (Economic models based on Comp. Economics) = Clarity of Capitalistic system.

As we move into a more digital world with faster technological evolution providing strong headwinds of change, it is important to realize that adapting to this change will not simply be a case of investing in the new tool or updating one’s skillset. Capitalism has always been a renegade, whose greatest impacts have been born out of conflict and change. At every turn, this has required that tough questions be asked, and our notions and conceptions be rewritten.

If we are to continue growing with hedonistic sustainability, we need to better understand capitalism. The unison of complexity economics and the blockchain is a step in that direction and will entail the creation of new cultural forms, institutions and a new vocabulary for education. But with a better understanding of capitalism, people in democracies can play a much more positive and vigorous role in shaping their economic institutions.

There would be no capitalism without a culture of capitalism and there would be no culture if the existing ideologies were not challenged and overcome. At a time when information is so abundant that we can get the answer to any question, the real responsibility becomes asking the right question. If we fail to ask these questions and leverage the power of decentralization and transparency, we risk starting a conversation with the next generation by beginning with an apology.

Disclaimer: This article contains extracts from the author’s new book, ‘The Blockchain Alternative‘ (2017)

Kary Bheemaiah is the author of ‘The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory’ (2017).


  • Complexity and the Economy, W. Brain Arthur (2014)
  • Rethinking Economics Using Complexity Theory, Kirman, D. H. (2014)
  • Reconstructing economics: Agent-based models and complexity. Kirman, M. G. (2013).
  • Complexity Modelling in Economics: the State of the Art. Economic Thought, Vol 5, Number 2, 29-43. Bruno et al. (2016).
  • Why Information Grows, Hidalgo, C. A. (2015).


Blockchain is a distributed database that maintains a continually growing list of records that can be verified using hashing techniques.

Blockchain implementations have a handful of defining characteristics, it’s:

  • write-once;
  • append-only system (meaning records in the database cannot be changed, records can only be added to the ledger);
  • distributed;
  • replicated in multiple locations;
  • crypto-secured through a public or private key infrastructure;
  • uses hashes.

The hash functionality is particularly important as each individual transaction is hashed into the chain, and each block, which contains a bunch of transactions, is also hashed, which links it to the previous block. The moment anyone tries to change a transaction, everyone who has access to the chain would know immediately that it’s been tampered with because the hash wouldn’t match.

This creates a platform where multiple parties can share data, but all have proof that past records have not been changed. It’s quite a remarkable platform, but it’s in the very, very early stages of maturity.

Real-time payment systems launched across the world

When a person receives a check and has to wait for two-four days for its clearance, that’s not a good scenario. Many say that they have gotten used to it, but the younger generation is living a fast-paced life; millennials are challenging the status quo. There is a rising need for immediacy in payments whether it is banks, businesses, or even peer-to-peer. Solutions are available in some parts of the world for immediate transfer of funds. We have been tracking real-time payment systems launched across the world on an ongoing basis and have had discussions with people who built them. I thought of sharing it in the form of a timeline infographic to understand the trends.

People and businesses worldwide want payment systems that can achieve the desired speed of transactions, minimize the cost of transactions, reduce risks of fraud and bring satisfaction of service across different channels. That’s where real-time payments come into the picture. It has already been implemented in some countries and the US is not on the list.

Below is an infographic showing a timeline of countries adopting real-time payments:


1973: Zengin (operates 08:30-16:40)

Japan was the first country in the world to implement real-time payments.

1987: SIC

Switzerland was the first country in the Europe to implement real-time payments.

1992: TIC-RTGS (operates 08:30-17:30)

Turkey was the second country in Europe to implement real-time payments.

1995: CIFS

Taiwan was the second the country in Asia to implement real-time payments.

2000: Greiðsluveitan (operates 09:00-16:30)

Iceland was the third country in Europe to implement real-time payments.


South Korea was the third country in Asia to implement real-time payments.

2002: SITRAF (operates 07:30-17:00)

Brazil was the first country in South America and among the BRIC nations to implement real-time payments.

2004: SPEI

Mexico was the first country from North America to implement real-time payments.

2006: RTC

South Africa was the first African country to implement real-time payments.

2008: TEF

Chile was the second country in South America to implement real-time payments.

Faster Payments

The UK was the fourth country in Europe to implement real-time payments.

2010: IBPS

In 2010, China introduced real-time payments.


In 2010, India introduced real-time payments.

2011: NIP (operates 08:00-17:00)

In 2011, Nigeria introduced real-time payments.

2012: Elixir Express

Poland implemented real-time payments in 2012.


Sweden implemented real-time payments in 2012.

2014: Nets

Denmark implemented real-time payments in 2014.


In March 2014, Singapore introduced real-time payments.

Countries like Singapore and the UK have this service free of charge. Even countries like Nigeria and India are offering such real-time payment services.

In the US, we don’t have something which people enjoy in many countries across the world and that is an opportunity to build free real-time payments for any amount.

NACHA, the electronic payments association, has recently proposed a solution to provide a new, efficient and ubiquitous capability to expedite the processing of ACH transactions. With the new rule, the same-day processing of virtually any ACH payment can be enabled. But it will take some time for the rule to become fully effective. Same Day ACH would become effective over three phases during September 2016 as follows:

  • In Phase 1, ACH credit transactions will be eligible for same-day processing, supporting use cases such as hourly payroll, person-to-person (P2P) payments and same-day bill pay.
  • In Phase 2, Same-day ACH debits will be added, allowing for a wide variety of consumer bill payment use cases like utility, mortgage, loan and credit card payments.
  • Phase 3 introduces faster ACH credit fund availability requirements for RDFIs (receiving depository financial institution); funds from Same-day ACH credit transactions will need to be available to customers by 5:00 PM RDFI local time.

Phase 1 is scheduled to begin September 23, 2016.

In Australia, the service is in its implementation phase.

(article by Amit/LTP)

Disruption in remittance, survival of the savvy

Being savvy in the remittance industry is no longer limited to maintaining price competitiveness but has seen its horizon growing in many more dimensions. This industry has faced multiple issues in the past such as high transfer cost, limited money distribution methods, limited brand options, limited ways to deal with money, etc. The advent of new players in this space is redefining the solutions provided to these problems by this industry which was known to be mainly duopolistic in nature till a few years ago.

The infographic below provides a sneak peek at these issues and how they’re being addressed:


The remittance transfer industry is getting disrupted with upcoming models that encompass benefits of cost, customer experience, convenience and brand. These remittance models have evolved from cash transfers > internet banking > mobile wallets > digital payments using mobile money > crypto currency, and we have discussed them all in our articles.

Another major problem to be addressed by the remittance industry are the strict AML regulations which are forcing a number of banks to move out of remittance industry or closing the accounts of firms that specialize in money remittance services . We have seen many of them such as JPMorgan Chase and Bank of America in USA, Westpac in Australia and many more. In this situation, any company that is able to exploit an alternative model to remit money is poised to hold a stronger market position.

Mobile money transfer platforms and bitcoin are emerging as the promising tools to come to the rescue of this situation, but with their own limitations. While the large footprint potential with mobile money transfer platforms is highly dependent on host country’s regulatory environment, cryptocurrency is still in a nascent stage to reach the migrant population masses and achieve its potential benefits.

Here, a significant role can be played by the recently established fast-growing players such as Xoom, TransferWise, and WorldRemit, to name a few. These new companies can benefit over the start-ups on strong balance sheets and significant customer base and over the traditional companies such as Western Union and MoneyGram who might find it difficult to deploy the use of new currency with their existing legacy system.

In this article, we have analyzed three new and growing companies, for different corridors from the USA, to identify how their technology-based business models help them to transfer benefits to the end customer and hence differentiate themselves from established industry giants.


Xoom has positioned and established itself as a technology-driven company which enables instant and cheaper money transfers. For instance, for the USA-Vietnam corridor, the company provides the convenience of all options of cash pickup, bank deposit and home delivery on recipient side while charging a flat fee of $2.99 and $13.00 for payment through bank accounts and credit cards respectively. At the same time, a user sending money to be received through agent via Western Union is charged $5 and $20 for payment through bank account transfers and credit cards respectively.

This accounts for an average 61% higher fee.


Benefiting cost with speed, Xoom transfers take a maximum of two days for transfers through any mode, including deliveries to rural areas, while Western union transfers can take four to six days. Xoom’s model of partnering with existing agent distribution cash-out points enables it to transfer monetary benefits to the end consumer. For a country like Vietnam which has an unbanked population of 42% and $16 billion of remittance industry, such a high difference in fees can be game changer for major players.


WorldRemit has developed a significant space in the remittance industry by using its technology-based systems. In some of the most crowded corridors such as USA–Mexico, USA–Philippines and many more, the company is able to achieve highly competitive rates over the industry giants such as Western Union, passing cost advantage to the end customer for smaller amounts of money transfer.


In the USA–Mexico corridor, WorldRemit applies a flat fee of $3.99 for transfers less than $2,000, with an average 0.6% higher exchange rate than Western Union. Transfers are made instantly versus a period of minimum four days taken by other traditional models. Similar benefits by WorldRemit can also be applied by the migrants of the fourth largest remittance recipient country in the United States, Philippines. The company enables instant money transfers with higher exchange rates by an average of 1.3%, also accompanied with a reduced fee by an estimated 44% with regard to conventional players’ fee. This can amount to significant traction to the winning player in this multibillion dollar market.

Boom Financial:

This company is found disrupting the remittance space by addressing major concerns in this space like services to unbanked, convenience of transfers through mobile applications, cost effective services through technology-driven model and multiple distribution modes.


With a $0monthly and membership fee, Boom Financial enables cash deposits at Boom stores or mobile branches for a fee of just $1. Company issues a Boom Visa prepaid card for the first time at $0 and charges an ATM withdrawal fee of just $2 per transaction. Transactions up to $2,999 to Haiti’s Boom account through a mobile phone costs a maximum of $5 to the end consumer. This results in a complete transfer fee of $3 to $7, which can go to maximum of $12 in case money is sent through a Boom agent. Conventional models usually bring along the “cash pick up at agent location” model, charging a fee of $12 to $48, based on the bank account or credit card used as a payment mode. These charges by established players on conventional models translate to 4 to 16 times higher than these newer players with innovative models.

(source Let’s Talk Payments)

Come e perché investire attraverso l’Equity Crowdfunding

Un portafoglio efficace punta sulla diversificazione e dovrebbe includere almeno 30-40 startup e, potenzialmente, anche 100 o più

Quando si parla di equity crowdfunding, si tende il più delle volte a sottolineare i vantaggi per gli imprenditori che cercano fondi.

Poiché, peraltro, lo strumento è nuovo e ancora poco conosciuto, vale forse la pena di mettersi per una volta dalla parte dell’investitore e illustrarne vantaggi e svantaggi nonché spiegare come questo strumento possa essere inserito proficuamente nelle proprie strategie di gestione del risparmio.

La premessa fondamentale è che le piattaforme di equity crowdfunding consentono di scegliere tra una vasta gamma di imprese su cui investire, senza sostenere spese di intermediazione né al momento dell’investimento né a quello dell’exit.

Inoltre, l’equity crowdfunding semplifica l’accesso ad una tipologia di investimento che, fino ad ora, era stata esclusivo appannaggio di business angels e venture capital.

In che cosa si investe

Investire in aziende attraverso l’equity crowdfunding significa scegliere nuove imprese che si ritiene abbiano il potenziale per crescere. Si investono i soldi in cambio di una parte delle quote del loro capitale, il che significa diventarne soci. Se un’impresa in cui si è investito ha successo, le azioni che si possiedono avranno un valore più elevato di quello che si è pagato e si può quindi essere in grado di venderle ricavandone un profitto, oppure, di ricevere il pagamento di dividendi. D’altra parte, se l’iniziativa non ha successo – come peraltro succede a molte startup – si rischia di perdere tutto o almeno parte dell’investimento.

Perché investire

Acquisire quote di imprese in cui si crede, oltre, naturalmente, ai potenziali profitti che possono derivare dall’investimento, consente anche di conseguire alcuni benefici aggiuntivi:

  • La possibilità di essere azionista di un futuro business di grande successo. Lo stimolo diventa così scegliere le imprese che presentano i progetti più interessanti, seguire i loro progressi man mano che crescono e, infine, ottenere credito e riconoscimento per essere stati uno dei primi ad individuarle.
  • Si contribuisce alla cultura dell’innovazione, sostenendo gli imprenditori quando ne hanno più bisogno e dando loro la possibilità di ottenere grandi nuove imprese da zero o quasi.
  • È un modo per essere coinvolti nel processo di innovazione in un settore cui si è particolarmente interessati o di cui si è appassionati, per condividerne il successo. Ed è anche, perché no, una possibilità per sostenere amici e parenti nel loro sforzo di creare un nuovo business.
  • Ci sono vantaggi fiscali. In Italia, è previsto, per esempio, che una persona fisica possa detrarre dalle imposte il 20% del valore degli investimenti effettuati in startup e PMI innovative, che, tra l’altro, sono le uniche a poter raccogliere fondi attraverso le piattaforme di equity crowdfunding.

Quali sono i principali rischi dell’investimento in startup e PMI innovative

Ci sono tre grandi tipi di rischi quando si investe in startup.

  • L’impresa fallisce o tira a campare a lungo senza mai realmente avere successo. In questi casi, non sarà possibile riavere indietro i soldi investiti.
  • Anche se l’azienda ha successo, è probabile che l’investimento sia illiquido. L’investimento in una startup di successo è spesso bloccato per un lungo periodo di tempo – spesso diversi anni – mentre il business cresce. Ciò significa che è improbabile che si riescano a vendere le azioni e, probabilmente, nei primi anni dal momento dell’investimento, non si riceveranno nemmeno dividendi, indipendentemente dal successo che stia conseguendo l’impresa.
  • Vi è il rischio di diluizione. Se, dopo la campagna di crowdfunding, la startup raccoglie in seguito ulteriore capitale (cosa che le startup di maggior successo hanno sicuramente bisogno di fare), la percentuale di capitale che si detiene diminuirà rispetto a quella che si aveva originariamente. La diluizione in sé non è sempre negativa, per esempio è meglio avere l’1% di una società che vale 100 milioni piuttosto che il 10% di una che vale un milione, ma è comunque qualcosa di cui si deve essere consapevoli.

L’importanza della diversificazione

La chiave per investire con successo in startup – e attenuare i rischi di cui sopra – è la diversificazione. La maggior parte delle startup falliscono, ma le poche che ce la fanno vengono valorizzate a tal punto da consentire che le perdite vengano più che compensate. Ciò implica che, al fine di ottenere ritorni importanti, sia necessario aver investito in una o più imprese di successo.

Le possibilità che ciò avvenga sono molto più elevate se si costruisce un portafoglio diversificato, investendo piccole quantità in molte startup, piuttosto che grandi quantità in poche. Un portafoglio efficace dovrebbe includere almeno 30-40 startup e, potenzialmente, anche 100 o più.

Uno dei vantaggi principali offerti dalle piattaforme di equity crowdfunding consiste proprio nel semplificare la creazione di un portafoglio diversificato di investimenti. Impostare l’investimento minimo a un livello molto basso rende possibile investire in molte aziende, indipendentemente dal capitale complessivo che si sia disposti ad investire. Quindi, per esempio, se si decide di destinare ad investimenti ad alto rischio 10.000 euro all’anno per 3 anni, è consigliabile investire, nei 3 anni, 1.000 euro per 30 startup, piuttosto che 10.000 euro per 3 startup.

Si tenga conto che uno studio di Nesta ha rivelato che i ritorni per gli angel investor relativamente ad un portafoglio ben diversificato è mediamente pari 2,2 volte l’ammontare dell’investimento.

Come si guadagna

Il principale modo per far fruttare gli investimenti, banalmente, è quello di vendere le azioni ad un prezzo maggiore di quanto si è pagato. Non esiste (per ora) un mercato secondario per la negoziazione delle azioni di imprese non quotate, il che significa che non si è in grado di vendere quando si vuole. Tuttavia, se l’azienda cresce al punto in cui, per esempio, si quota in borsa, è acquisita da un’altra società o acquista azioni proprie, le azioni potranno essere vendute e, spesso, con un profitto significativo.

In alternativa, succede anche che alcune aziende siano in grado e decidano di iniziare a pagare dividendi. Ciò si verifica se l’azienda ha raggiunto una redditività, e, d’altro canto, non si aspetta di continuare a crescere in modo significativo; dunque, non re-investe tutti i profitti.

Può anche accadere in casi come la costruzione o ristrutturazione di un immobile, dove al termine dei lavori l’immobile viene venduto o affittato, oppure in altri come gli spettacoli teatrali o i film, dove l’impresa ha una durata limitata e gli utili vengono distribuiti al suo termine.

(articolo di Fabio Allegreni)

Online payment methods around the world

Not all countries have credit cards as the predominant payment method when paying for goods and services online. Payment methods can be quite diverse from country to country. The infographic below displays the different online payment methods of 29 countries around the world.

The infographic has been developed as a joint effort by Expert Market, Adyen and Tony Nguyen and Mihaly Orodan from MVF Global. The data for the infographic has been compiled by Adyen who has processed over $25 Billion in payment transactions in 2014 alone.

Payment methods online can be based on the preferences and payment infrastructure of that country. Online businesses looking to enter different e-commerce markets around the world will find it beneficial to have the capabilities to support as many of the relevant payment methods as possible. The ability to make the transaction process as easy as possible for customers can help optimize revenues online.

The infographic below displays the mix of online payment methods in different countries around the world:

MAp all countries4

Mobile payments in emerging markets

Are you making the most of your audience? You might be missing out on as much as 50%. Emerging markets with minimal credit card penetration are perfect for mobile payments given phone penetration and proliferation.


“Mobile payments are a buzzword these days, but it’s important to know that matters not just to customers, but businesses as well” – P.Morris

What is ApplePay and why is it important?

The long journey of ApplePay

There will be a great deal written and to be said about ApplePay. Many even astute experts will assume that Apple just took a year or so to build this new payment system.  The truth be told it was a very long odyssey that spans almost a decade. It is also a masterful act of negotiation on Apple’s part to not “disrupt”, but to work with and not against all parties in the payment system ecosystem.

Yes, it has been a very long journey for Apple and payments. This journey started just a few months after the first iPhone 1 was announced. Apple took a slow and methodical approach to what will become a central feature of iOS devices moving forward. The first patent applications that were directly related to payments began to appear in 2008, they just did not seem obvious on to just a few weeks ago. One could even go to the days before Apple released the iPhone and see the foundation being constructed for finger print scanners and other security systems. Apple knew very early on that to have a mobile wallet it has to be highly secured. The results was TouchID and this was primarily established with the purchase of AuthenTec. The security was also extended into the very processor of the iOS device, the ARM processor. This was achieved through the use of the TrustZone/SecurCore ARM developed specifically to secure financial data. Apple took this framework and made it the foundation of the Secure Enclave.

Payment card breaches changed everything

The Target payment card breach was a huge turning point in the payment card industry.  Up to this point all parties of the payments ecosystem had very little motivation to change the way they processed payment cards. The 1970’s era magnetic stripe was the primary system used in the US with dozens of startups for the last two decades spending billions of dollars to try to “disrupt” this system, all to no avail. But the Target breach was different, it was a huge number of cards, stolen from a top 5 retailer and it was getting the attention of government regulators. Thus in January 10th 2014 I asserted that the payment card companies would begin to support new technology that would assure the highest level of security.

EMV comes to America, but is it a better way to pay? 

This set the stage for a largest shift of payment card terminals in history. Visa and MasterCard proposed the EMV standard used in other parts of the world to become the replacement of the magnetic stripe of the payment card. The difference in the US is that PIN numbers would not be required. Hidden in the most recent EMV standards is a system called Wireless EMV. Wireless EMV is NFC by any other name with some extensions. For sanity I will mean both NFC and Wireless EMV went addressing this method. The shift first took place at the largest retailers in the US in 2013 and is taking place today. For a vast majority of merchants in the US these upgrades will be free or very low cost. In just about every new payment card terminal deployed in the US of course EMV is a key part of the device however most include NFC. The reasons are simple but also complex. EMV is slower then swiping a card in just about all studies. But it get worse, EMV in the most secure mode requires a PIN number and this can add over 45 seconds to a transaction that formerly took place in seconds.

There are other issues with EMV, it does nothing to address the foundation cause of the Target breach. The EMV system does not encrypt data after is leaves the card and is introduced into the merchant’s payment system. The only way this can change is through end-to-end encryption and tokenization. This means that the payment card data is encrypted through the entire payment system rendering any hack to the system useless.  Thus EMV did not present a satisfactory solution to what was the real issue with the massive payment card data breaches.

Apple developed an elegant solution. By securing a payment card in the iOS device inside the Secure Enclave and passing the payment card in an encrypted manner, three massive issues of retail payments are resolved:

  • Payment cards are always secured
  • Payment card date is always
  • Payment card transactions will be faster then card swipes

ApplePay: The patents just stacked up

It was certain, based on over 50 patents and patent applications that Apple would apply NFC technology as the foundation of the retail payments system. However, the first step was to negotiate a way that the Secure Element, controlled by the cellular carriers could be replaced by the Secure Enclave. This allowed Apple and not the carriers to control the destiny of the of ApplePay. This method was granted and endorsed by Visa and MasterCard and is called Host Card Emulation and this feature forms the foundation of the was ApplePay operates. This system was originally just related to NFC but Apple has extend it’s use cases for App purchases.

Apple was masterful in the way they negotiated with every element of the existing payments ecosystem. In the same manner Apple negotiated with the record companies, the movie industry, the TV industry, the book industry (not so well done), the cellular providers, the auto industry and home automation companies. Apple had to work with:
  • Visa, MasterCard, American Express, Discover, UnionPay
  • The top Banks
  • The top processors
  • The top payment card merchant service companies
  • The top payment card terminal manufactures
  • The top retailers
  • The top App developers

The points Apple highlighted:

  • Secure
  • Private
  • Apple doesn’t know what you bought
  • Apple doesn’t know where you bought it
  • Apple doesn’t know how much you paid for it
  • Cashier doesn’t see your name

How does ApplePay load a payment card?

The loading of a payment card is simple. You just take a picture of the card and it is encrypted into the secure enclave. At this point 85% of US payment cards are compatible with the Host Card Emulation/Secure Element Apple is using.

How ApplePay works at retail stores

From the perspective of the user: you enter into a retail store that has the upgraded ApplePay’s NFC systems, this is a trivial upgrade for just about any merchant and will cost very little or zero. Shop for your purchase. Go to the checkout. Take out you iPhone or Apple Watch and wave it past the NFC reader, press your finger on TouchID if it is an iPhone and the payment is complete. The transaction is completed that fast, with a receipt inserted into Passbook. This will be orders of magnitude faster then unhanding over a payment card and in the future having to use the EMV customer facing terminal. To the consumer ApplePay offers:

  • Security: The card is a one time use card and can never be stolen
  • Speed: There is little effort to wave an Apple Watch or iPhone past the payment card terminal.
  • Efficiency: By holding all your payment cards and reward cards on one device, your wallet will be smaller

From the merchant’s perspective: the transaction is routed through the traditional payment systems and requires no new contracts or relationships, it all just works. The payment is considered “card present”. This is important since all other mobile wallet transactions would have cost the merchant more money once the artificial subsidy payment startups used became unprofitable. Thus all the merchant needs to do is to have the NFC upgrade.  To the merchant ApplePay offers:

  • Security: They are not at all liable for any payment card data stolen
  • Speed: The lines will move faster because there is less delay
  • Efficiency: They will not need, nor are they allowed to ask for an ID

From Apple’s perspective: Apple gets to become a useful service holding payment cards in the most secure system thus far established for a mobile wallet. This will make Apple the center of the universe for payment innovation and allow for far deeper uses cases in the future.

How ApplePay works inside apps

The other aspect of ApplePay is inside of Apps. Apple has created an API that allows merchants to receive a one time use payment card number in a very secure manner and also pass on demographic information with permission, including address. Thus with a single touch Apple will complete a transaction and allow you to move on. Stripe has been a valuable Apple partner and was granted early access to the ApplePay system. The results are Stripe has created a beautiful and elegant API that allows App developers fast and easy access to ApplePay. Apple did not stop there, they are opening up this API to all developers and payment gateways and I predict it will be the dominate way to pay inside of Apps.

In the example case of a Target app transaction a consumer just shops as normal. When they are ready to check out, the cardholder just needs to presses TouchID to complete the transaction.

In the case of OpenTable, Apple Pay allows for the payment of the meal with a simple press on TouchID. No need to present any payment card after the meal.

Apple: A payments facilitator 

The pure brilliance here is Apple does not reqiure a merchant to change merchant account providers and the existing systems work as they always did. This is in radical contrast to the “disruption” model that just about every payment startup used. Apple’s path to work with, rather then against all parts of the payments infrastructure is the only reason even a company of Apple’s size was successful. If Apple approached this all with the idea they wanted “to own both sides of the transaction” like most payment companies, they would have met with high resistance.

Apple does not process any payments, Apple does not issue any payment cards, Apple will be a facilitator to the existing system and in the process improve it and change it in a remarkable way. Apple will securely holds the payment card, tokenizes it and use various technologies to pass it on safely during a transaction.

With the announcement of the iPhone 5s, Apple held meetings with banks and Visa and MasterCard. They wanted to present a new method for mobile payments that was far more secure then any method in history. They also wanted to request a wholesale cost for these transactions to be lower. Finally they asked for a rebate, a sharing in the card issuing bank’s profits for creating this method.

All of this was a monumental task because Apple needed to gain approval by numerous participants. They had to convince the card issuing banks that for many reasons it was in their best interest to support Apple’s new methods. Most do not understand that about 85% of fees that merchants pay will go right back to the card holder’s payment card issuing bank. Apple had to get the top 10 banks to agree to earn less money and offer Apple a portion for the value they offer. Apple also had to convince Visa and MasterCard, but that was the easy part. For all this work Apple will receive a portion of the Interchange Fees from the payment card companies and thus the merchant nor the consumer pays more for using ApplePay.

Apple receives revenue from the card issuing bank’s Interchange Fees. Merchants and consumers do not see any increase. Merchants can choose any provider. 

Just the beginning, there is more coming for ApplePay

The ApplePay we see today on September 9th, 2014 is not the ApplePay we will see in a year or more. ApplePay is just the first step of a much larger journey for Apple and payments. I am certain that the desire to not try to cause merchants to change merchant account relationships and retailers not to change the systems or processes they have built will be the foundation to the success. We will see Apple present new extensions that will use far more refined and richer experiences as Apple begins to integrate the back end of retailer’s POS systems. This will include data sent to the ApplePay user based on the transaction inside of a real and effective receipt system.

We will also see the introduction of iBeacons when used with ApplePay. This will be a huge next step for ApplePay and will move a huge step forward for ApplePay 2.

To be successful, ApplePay needed the widest acceptance at the widest number of merchants and I am 100% certain, this was the best path on this long ApplePay journey.

It just works: ApplePay magic

From the perspective of the typical iPhone or Apple Watch user, they will experience what many will see as Apple magic. It will all just work with even less asked of you then prior payment methods include just swiping a payment card. When Apple gets done adding even more rich features and layers, it will be hard for most people to want to use any other method. ApplePay I think, will become as exclusive to the new iOS devices as the Apple white headphones were to the iPod and later the iPhone 1. This will stand out as a clear sign that you are a new Apple iWallet user. There will of course be a prestige and status element attached to this all, and that is no accident. We will see this interesting and dramatic way to pay become almost iconic over the next few months.

I have always said that with mobile wallets, we will all vote with our wallets, literally.  We needed the reason, the premise to want to use any new way to pay. I think ApplePay is the first system to be worthy of crating a true evolution. With ApplePay, Apple will forever changed the way pay for goods and services. There will be less and less reasons to present your payment card. Your iOS device will take care of it all and it will just work.

(article by B.Roemmele)

Bitcoin e i suoi fratelli. La mappa delle crittovalute (Infografica)

La capitalizzazione di mercato del Bitcoin supera di gran lunga quello delle altre crittovalute in circolazione.


Con una capitalizzazione di mercato che supera gli 8 miliardi di dollari, il Bitcoin è di gran lunga la crittovaluta più importante del mondo. Al prezzo corrente di 621 dollari (prezzo di chiusura dello scorso 21 luglio), il valore complessivo dei 13 milioni di Bitcoin in circolazione vale 30 volte in più del Litecoin, la seconda crittovaluta che compone la mappa delle crittolvalute a livello globale.

CoinMarketMap controlla centinaia di valute virtuali, ma nessuna di esse si avvicina lontanamente alla rilevanza che ricopre il Bitcoin. Che per ora continua ad essere uno strumento di pagamento di nicchia, ma che lentamente sta guadagnando terreno nei confronti di altri mezzi di pagamento virtuale (carte di credito e di debito), tanto più che grossi player come ad esempio Dell, stanno iniziando a dare il via libera al Bitcoin come strumento di pagamento.

Chart link: