How has the banking battlefield evolved? - Decoding: Banks - Episode 1

11 FS kicks off their Decoding: Banks series with a look at the banking landscape today and how we got here. Over the course of the episode, we look at some of the fundamentals - what is money, what is a bank and how has the banking ecosystem today taken shape? We'll also look at how rival players have changed the game and what the future might hold. Let's get started.

Regulating digital payment services and e-money

Improvements in technology, coupled with growing demand for digital payment methods, are increasingly reshaping the way payments are made. Non-bank institutions now offer a wide range of retail payment services. This raises the question of where the regulatory perimeter should be drawn. Financial authorities now face the task of deciding whether the risk profile of different payment services are appropriately reflected in their regulatory frameworks. A sound understanding of the regulatory approaches in other jurisdictions contributes to this assessment.

Johannes Ehrentraud, Jermy Prenio, Codruta Boar, Mathilde Janfils and Aidan Lawson have had a paper published by the BIS' Financial Stability Unit entitled "Fintech and payments: regulating digital payment services and e-money".

Download an read it HERE.

The cashless society is coming. More reason than ever to use cash

From The Guardian 

"Want to resist purchases you'll regret? Use cash. The problem with 'frictionless' firms like Clinkle is that friction can be good

Silicon Valley is getting all excited again, in its Silicon Valleyish way, about the future of how we pay for things. The specific cause of excitement, this week, is the news that Richard Branson has made an investment in Clinkle, a mysterious startup that promises to revolutionise payments in some unspecified way, possibly by letting people send money from smartphone to smartphone using sound. (The company just put out a really strange advertisement that fails to clear things up.)

But predictions about the coming End of Cash have been around for years, growing louder since the arrival of contactless payment, of Square, and of Bitcoin. The other day, research from Tufts University gave the cause a new boost: cash, it revealed, costs US consumers, businesses and governments more than $200bn annually in everything from ATM fees and theft to lost tax revenue. Oh, and it helps spread disease. Could it be time, wondered Tim Fernholz at Quartz, to give up on cash entirely?

It's an intriguing question. But it has a simple answer: no!"

read more>>

Legal grey area has Bitcoin ATMs treated as money-laundering machines

“The Robocoin is an ATM for Bitcoins, and for a few glorious days this past weekend, on a conference center floor in San Jose, California, it dished out thousands of dollars in exchange for Bitcoins, the world's most popular digital currency.

The two brothers who built the Robocoin - Mark and John Russell, of Las Vegas - are still trying to figure out what to do with their contraption. But one thing's certain: they don't want to operate it on their own. Mark Russell isn't even sure if that's legal.’

read more>>

And now take a look at the Robocoin Bitcoin Kiosk at work.

Awareness Still a Problem with Mobile Wallet, Says Square’s Dorsey

Square CEO Jack Dorsey, speaking about Square’s ongoing partnership with Starbucks described consumer awareness as a hurdle for mobile payments. Starbucks does little traditional marketing which means retail’s biggest mobile payments evangelist isn't spreading the word as much as it could.

Consumers still trust branch, ATM and online banking over mobile banking

“Through all the Mobile World Congress hoopla over corporate alliances, open platforms, new players and all the rest, it seemed that the least ink (or electrons, as the case may be) covered one of the most important aspects of mobile banking and payments: Consumer acceptance.” 

read more>>

What we are reading … 27th February 2013

Imaging Brings Coveted Ease of Use to Mobile Banking: Study http://dld.bz/ckjbZ

PayPal Targets European Mobile Payments Market http://twb.io/Zx6Uz9

With 590M Mobile Banking Users Expected in 2013, New Insights Warn of Growing Fraud Threat http://dld.bz/ckjbX

MasterCard unveils MasterPass digital payments service http://www.finextra.com/News/FullStory.aspx?newsitemid=24575

Commission drops anti-trust probe into European Payments Council http://dld.bz/cjXku

Big banks are as risky as ever, economist warns http://shar.es/j3dd6

Why Eye Contact Still Matters In The Age of Email http://mashable.com/2013/02/20/kids-communication-social-media/

What You Need to Know About Debit and Credit Card Fraud http://shar.es/j3dtn 

Square Broadens Its Business Strategy with New Hardware Bundle http://dld.bz/cjXkp

Programming an NFC Tag Gets Remarkably Easy

Programming a NFC (near field communication) tag is very easy and fast to do. In this short video you will see how to program NFC tags using an NFC enabled smartphone.

Now, what to do with it?

How is technology changing the way we use money?

How is the financial industry changing and what are the opportunities? Three entrepreneurs working on changing the way we think of banks and money give their views.

Jeremias Kangas from localbitcoins.com is a proponent of the crypto-currency Bitcoin and believes that digital cash is the future. Kristoffer Lawson from Holvi talks about the decentralization that we have seen in other industries coming to the banking sector. Peter Ollikainen from Mistral Mobile talks about the opportunities and challenges for technology to provide financial services in developing countries.

This video was recorded as a part of the seminar Banking 2.0 - the future of money.

MasterCard unveils digital wallet and open API

MasterCard has unveiled a digital wallet that will allow users to make purchases in-store, online and through their mobile phones.

The card giant's PayPass Wallet Services will let customers make contactless payments through cards and mobile phones in stores with NFC terminals. In addition, online shoppers will be able to store their details in the wallet and then make purchases with a single click.

The wallet is open, which means that banks, merchants and other partners will be able to white label their own offerings while consumers will be able to pay with American Express, Discover, Visa cards as well as MasterCard offerings.

At the same time, an API lets partners connect their own digital wallets into the PayPass Acceptance Network, linking to MasterCard's check-out, fraud detection and authentication services and enabling their customers to make purchases wherever PayPass is accepted - online and in store.

The wallet will be available to partners in the third quarter 2012, initially in the US, Canada, UK and Australia, with more countries to follow.

Watch Dave Butler, Head of MasterCard's Open API, comment on the announcements from the CTIA Wireless 2012 Conference



At the same time as the wallet launch, MasterCard also published new research in the form of a Mobile Payments Readiness Index (MPRI) that analyses and ranks 34 markets worldwide in terms of how ready (or not) they are to implement mobile payments.

Initial results suggest it's early days for mobile payments, with the top five markets identified as Singapore, Canada, the United States, Kenya, and South Korea.

Ted Iacobuzio, MasterCard's Vice President of Global Insights, talks about the Mobile Payment Readiness Index

US Senators worried about Bitcoin and the possible link to the online drugs market

Bitcoin is a peer-to-peer virtual currency that was established in 2009 which bypasses regular banks and clearing houses.

Bitcoin has come under fire recently from US senators who are worried that it is being used to anonymously buy illegal drugs online.

The coins can be generated online by people running an application called a Bitcoin Miner and are then stored in the user's digital wallet and exchanged anonymously, using an electronic signature.

Recently, the currency was in the news after the Gawker blog network posted a story claiming it was the only way users can buy drugs on Silk Road, an online marketplace accessible through the annonymising network Tor.

Democratic senators Charles Schumer of New York and Joe Manchin of West Virginia have now written to Attorney General Eric Holder and Drug Enforcement Administration head Michele Leonhart expressing their fears about both the Silk Road and Bitcoin.

The senators say they "urge you to take immediate action and shut down the Silk Road network" but this would be an extremely difficult task, prompting speculation that the site's currency, Bitcoin, could be targeted instead.

Drug Enforcement Administration (DEA spokeswoman) Dawn Dearden told Reuters that the agency is concerned about Bitcoin and similar digital currencies, adding: "The DEA is constantly evaluating and analysing new technologies and schemes perpetrated by drug trafficking networks."

What is Bitcoin? Well follow the outfit’s own video.