11.2.17 Your morning briefing

The information you need to start your day, from PaymentsSource and around the Web:

Cash pours into cross-border payments tech: A group of investors from Europe, Asia and the U.S. has invested $280 million in TransferWise, providing fuel for the London fintech’s Asia-Pacific expansion, as well as the company’s ability to reach “gig economy” workers and entrepreneurs. Old Mutual Investors and IVP led the round, which values the seven-year-old TransferWise at $1.6 billion, reports TechCrunch. Other investors include Silicon Valley-based Sapphire Ventures, Japanese company Mitsui & Co. and World Innovation Lab, a U.S./Japan joint venture. Existing bankers Richard Branson, Andreessen Horowitz and Baillie Gifford also participated, bringing the total to close to $400 million, though some of that will go towards buying out other investors and cash-outs by company executives. TransferWise, which became profitable earlier this year, did not disclose that breakdown, but founders Taavet Hinrikus and Kristo Kaarmann reportedly sold a portion of their stake. Seedcamp, an earlier investor, also sold its stake in TransferWise. The round is relatively large for a fintech startup, and is an endorsement of the expanding market for technology that removes costs and inefficiencies from international payments. The growth of blockchain, the cloud and local networks is threatening traditional banking models, and leading to major collaborations such as the dueling blockchain networks R3 and Ripple; and WePay, which was just acquired by JPMorgan Chase for $220 million as the bank builds its own cross-border payments operation for small to medium-sized businesses and online merchant communities. “In the last five plus years, there has been a flood of new fintech players including the likes of TransferWise, Remitly, Worldremit and Xoom (a PayPal subsidiary) plus several others,” said Sarah Grotta, the director of the debit and alternative products advisory service at Mercator. In the case of TransferWise, the new investment follows a fee discount to compete with the expanding market of competitors, and will allow it to add heft to its Asian outpost in Singapore. TransferWise also wants to fund its “borderless account”, which is aimed at freelance and other “gig economy” workers who operate internationally and in multiple currencies; and its foray into social media driven payments.

Bloomberg News

Robert Carr’s new company gains steam: Beyond, the merchant services company founded by former Heartland CEO Robert Carr, has signed a partnership agreement to extend mobile point of sale technology. Beyond will offer CardFlight’s SwipeSimple mobile point of sale product, enabling small businesses to accept chip-card payments from mobile devices. SwipeSimple includes an EMV reader, back office dashboard for merchants to accept payments and manage business tasks. “Mobile payments with SwipeSimple bring a new addition to our suite of services allowing opportunity for businesses to grow,” said Carr in a release. Beyond focuses on smaller businesses that generally don’t have fast-growing revenue streams and as such are underserved by other processors. It focuses on nonprofits, fundraising companies and other businesses, and has ties to Give Something Back, Carr’s NGO.

A breach of disclosure protocol: The Reserve Bank of India has fined Yes Bank $1 million for a recent breach, in part because of the delay in disclosing the breach. The Cyber Breach Center reports the malware resulted in a large recall of debit cards. But an audit found the breach occurred between May and June 2016, and Yes Bank did not report it until September. The illegal withdrawals that followed the breach totalled about $194,000 and impacted 19 other banks. Many of India’s largest banks advised consumers to change PINs, while millions of debit cards were recalled. It’s the second such fine in recent days, following a fine of about $700,000 against Hilton by New York and Vermont that was also partly based on Hilton not disclosing the breach in a timely manner.

Amazon’s dibs on crypto domains: Amazon has registered domain names with ties to cryptocurrencies, a move that lays groundwork for the e-commerce giant to embrace virtual currencies, prevent other from taking the names, or a combination of the two. Domainnamewire reports Amazon has registered amazoncryptocurrencies.com, amazoncryptocurrency.com and amazonethereum.com. The registrations do not mean Amazon will run an ICO, issue coins, or accept payments in virtual currencies—it’s common for famous people or brands to register domains as a blocking mechanism, often to shield against lampooning. But any move Amazon into a new industry puts that industry’s participants on notice given Amazon’s scale. Domainnamewire quotes Ethereum co-founder as saying “Amazon, we’ve not seen that much, so we’ll see,” in regards to Amazon’s blockchain readiness. Amazon has its own digital currency, Amazon Coins, which it uses to sell digital content such as mobile apps.

ATM deserts? The U.K.’s Link network plans to slice bank fees to subsidize free ATMs, a move that’s drawn the ire of the ATM Industry Association, which contends the move will result in ATM deserts and cause communities to “wither.” Link operates about 70,000 ATMs in the U.K., and banks pay a fee of 25 pence each time a consumer uses a non-branch ATM. Finextra reports banks are complaining about these fees, contending it costs hundreds of million of pounds each year to fund the no-fee withdrawals. Link plans to cut the 25 pence fee to 20 pence over the next four years. This will cause a vast reduction in free access to cash since the loss of bank subsidies will make it more costly to manage a large fleet of no-fee ATMs, ATMIA contends. Link counters it will keep an “extensive” network of free machines, and will boost its financial inclusion program.

From the Web

Walmart Wants You to Party in Its Stores This Christmas Season
Fortune | Wed Nov 1, 2017 – Looking to shed its image as a no-frills retailer, Walmart is planning to hold thousands of holiday season parties at its stores and give customers a reason to shop there rather than with rivals. The results show that Walmart’s massive investments in features like grocery curbside pickup, in-store order retrieval, its own mobile payment app and the expansion of its online assortment are spurring shoppers to come into stores.

Russia’s Medvedev says the world shouldn’t be dominated by one currency
Reuters | Wed Nov 1, 2017 – Russia and China were considering linking their national payment system, Russian Prime Minister Dmitry Medvedev said on Wednesday, as he called for a more balanced global finance structure. Russia started to create the Karta Mir system after Western sanctions were imposed on the country in 2014, during the Ukraine crisis. Visa and MasterCard stopped providing services to clients of one Russian bank after Washington imposed sanctions over Moscow’s annexation of Crimea from Ukraine and support of pro-Russian separatists in eastern Ukraine.

Woman charged with stealing, identity theft after $250,000+ stolen from bank
ABC News | Wed Nov 1, 2017 – Tanya Garay-Contreras, 31, is charged with identity theft and stealing, which are class B and C felonies, respectively. Court documents say Garay-Contreras accessed the information of the checking account of an unidentified man, and went on to withdraw over $250,000 from February to September 2017. According to court documents, after she was arrested, she admitted to obtaining the account information and using it pay her own bills as well as others. Multiple Columbia residents have told ABC 17 and law enforcement officers that Garay-Contreras scammed them out of money.

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