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.



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.

Mentors: The good, the bad and the ugly

I have mentored hundreds of entrepreneurs from dozens of countries.

Pretty much every flavour, from MBA graduates or successful professionals that discovered they want to suffer the freedom to start from scratch, to young developers in accelerator programs across Europe.

The lost causes, the predictable success stories and everything in between – half probably don’t remember me, a few hate me, too many take my advice too seriously.

I’ve managed dozens of mentors that gave up the time they didn’t have for their families to help the next generation in many of these programs. They obviously also had an opinion on how to manage a business to support entrepreneurs launching businesses.

As a consequence of launching my first FinTech startup 3 years ago, with both the benefits and challenges of having never worked in financial services, I’ve dealt with both people who wasted my energy as well as geniuses that we couldn’t have survived without. And, truth be told, geniuses that could have ended us and other people who we owe being alive to.

I’ve experienced from both sides of the table how mentoring can make or break a startup: in many ways mentoring will shape your startup more than the little cash you’ve got left in the bank. Cash is probably a more urgent issue, but that merits another post.

Like a cult movie, mentors play three roles. It obviously helps if you figure out what shapes potential mentors before they become your companion.

The Good

Good mentors are the worst. The best startups navigate uncharted waters by definition, normally working on a problem no one has solved that way (if at all) before.

Domain experts will view everything from the lense of their (corporate) successes and failures. They are likely to answer the questions from the startup instead of helping them identify the right hypothesis to work on testing.

Serial entrepreneurs will rarely be transparent about the endless times they almost gave up, and rarely realise how much things have changed since they last spent time in a basement. Yet many can boost morale, share great ideas and introduce you to powerful friends. Handle with care.

The Bad

Bad mentors are relatively easy to spot. Conflicts of interest. Lack of hobbies. Ego driven. Trying too hard or not listening at all.

They might to be able to provide marginal value, but they are guaranteed to distract you as long as you allow them to.

Run as fast as you can unless you are out of ideas – in which case you should probably try to get a job.

The Ugly

Ugly mentors are the ones that hurt repeatedly, but that can gauge the urgency of the long list of unsolved problems that can make your startup fail, and help you identify options to continue your quest.

They are the ones that let you know when you are wrong, trying different angles to make you aware of risks you are oblivious to.

They are also the ones that provide data driven emotional support in times of need, the ones that understand that as a CEO one of your toughest challenges is managing your own psychology.

Always keep a few on speed dial. If you can’t find one, try talking to a stranger whose life could be better thanks to what you are up to and learn why he doesn’t care.

Worth it?

So is mentorship worth it? Most definitely.

You have to push your limits and try your luck. Learn and share. Share and learn because at the end of the day, beyond the human need to help others develop by looking at their problems from your perspective, enjoying the intellectual freedom of thinking about challenges that you are not committed to, or the comforting feeling of your opinion having a positive impact on projects that might change the world, the best thing about being a mentor is that it helps you realise whether you are ready to launch another startup or if you’d rather watch from the sideline.

(article by Luis Rivera)

What is the sharing economy?

An introduction to the difference between Couchsurfing, Uber, Airbnb, DoorDash, and Etsy

The sharing economy: We all have an understanding of it, but describing it is still a challenge.

We’ve also heard it called many things: “sharing economy”, “collaborative consumption”, “peer economy”, “on-demand”, and even “peer-to-peer marketplaces”.

All the companies placed in these categories have similar attributes: they wed supply and demand. Too often, however, we use the phrases interchangeably when there are actually key differences that should be considered in order to understand how these new categories shape our economy.

The phrase “sharing economy”, most similar to “collaborative consumption” and “peer economy”, suggests an economy based on resources, and not on any abstract system of money. For example, one of the most pure representations of the sharing economy would have to be Couchsurfing, which was founded over a decade ago.

As a host on Couchsurfing, you offer a spare bedroom in your home (or even just a couch) to “surfers”, usually foreigners travelling through the area who need a place to crash. In this case, there’s no exchange of money whatsoever, reflecting a true sharing model.

Yet Uber and Airbnb, not Couchsurfing, are considered the biggest “sharing economy” companies out there, most likely because Airbnb and Uber are valued at $25.5 billion and $62.5 billion, respectively. So where’s the sharing? Someone is either hiring an Uber or renting an Airbnb unit. The only “sharing” piece of the resources used is that the cars and the spaces are owned by individuals and are often underused assets, such as a car, space, and in some cases, a person’s time.

But there’s still money being exchanged. Uber and Airbnb would better be described as “peer economy” companies, because “peer-to-peer” is a decentralized system versus a more traditional capitalist system, where a business owner owns the production and hires the labor. In either case, however, money changes hands.

Further discrepancies arise when you take a closer look at these two peer economy companies. Most obviously, Uber is an “on-demand” service powered by “peer-to-peer labor”, whereas Airbnb is more of a marketplace. One can get a room on-demand, but that’s not a core part of the platform. And there’s no labor component at all.

This differs from Uber, when every Uber call is immediate. It’s an action that demands immediate action.

So what are the other on-demand startups out there that also aggregate labor? Dozens of food delivery companies (e.g. DoorDash and Instacart), household errands and services (e.g. Handy, TaskRabbit), and many others (e.g. Postmates, YourMechanic, Staffly)—these are less “sharing” economy companies, and more “excess labor” companies. In the case of these companies, there are no assets being shared, but services are being provided by a person.

Companies like Breather, WeWork, and Rover, on the other hand, are more like Airbnb, in that they’re marketplaces, with an on-demand component, but not an excess “labor” component.

Finally, there are the peer-to-peer models that are pure marketplaces, including Etsy, Shapeways, Vinted, and Wallapop. For example,  Vinted has no “on-demand” component, but it is a flavor of the peer-to-peer model since individuals are buying, selling, and swapping each other’s clothes. It’s basically Amazon for secondhand clothing.

But across all these companies, consumers are still paying, which is why the Harvard Business Review argues we should be calling Airbnb and all its peers (Uber, Lyft, WeWork, Instacart, Handy, etc.) part of an “access economy”, not a sharing economy:

Sharing is a form of social exchange that takes place among people known to each other, without any profit. Sharing is an established practice, and dominates particular aspects of our life, such as within the family. By sharing and collectively consuming the household space of the home, family members establish a communal identity. When “sharing” is market-mediated — when a company is an intermediary between consumers who don’t know each other — it is no longer sharing at all. Rather, consumers are paying to access someone else’s goods or services for a particular period of time. It is an economic exchange, and consumers are after utilitarian, rather than social, value.

While HBR makes a solid point, however, it doesn’t look like their article (published a little over a year ago) will make any inroads in changing how we speak about this new generation of companies. As a phrase and category, the “sharing economy” is here to stay, and it will continue to be used to describe services as wildly different as Couchsurfing (a website where people host strangers in their home for free), Uber and Lyft (apps where you press a button to hail a ride from a company contractor), and Vinted (an online marketplace where people buy, sell, and swap clothing).

My next pieces will expand on the sharing economy divisions introduced above, and will reveal how even “peer-to-peer” and “on-demand” are broad umbrella categories that don’t always mean the same thing in every case.

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)

E-commerce: How men and Women differ shopping online

We all know about the battles of the sexes, but how do they stack up in the e-commerce environment?


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)

Keep your kids safe when they’re using a smartphone

Nowadays, kids want to use smartphones. Of course, most parents aren’t willing to actually buy their kids a device, but plenty have no problem letting them play with one. Of course, when a child uses a cell phone they can potentially be exposed to all kinds of dangerous things that aren’t meant for young eyes.

But the risks aren’t just for the children, but they can affect you, the parents, too. Kids could make unwanted in-app purchases, make calls to people you don’t want to talk to, they could even share photos you don’t want the world to see, and they can do plenty of other bad things. So what can you do? Check out the infographic below for the answers.


(article by D.LeClaire)

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