FinTech in Focus
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EMV & the FBI
Over the past two weeks there has been considerable discussion about the U.S. transition to EMV payment standards. Following an Oct. 7 hearing, the FBI released, and then quickly pulled, an advisory questioning EMV security technology. The FBI later issued a revised statement toning down the original language, prompting Sen. Dick Durbin to seek clarification from FBI Director James Comey about the bureau’s position on the use of personal identification numbers (PINs) at the point of sale. Banking trade associations have called the PINs security debate a “smokescreen” promulgated by retail-industry groups seeking to deflect concern about high profile data breaches.
Bitcoin & Blockchain
London-based startup Setl recently announced that its test network had processed more than one billion payment transactions in a single day. The announcement came as Clique Fund, a New York--based hedge fund, borrowed $10 million in stock using Overstock.com’s TØ platform, the largest transaction to date. Separately, the European Court of Justice will rule this week on whether bitcoin exchanges should be subject to value-added taxes.
Citigroup announced last week that Heather Cox would lead Citi FinTech to focus on the development of mobile banking services. Cox was one of five individuals named by American Banker to its 2015 Digital Bankers of the Year list. A new study by Juniper Research forecasts one billion mobile banking users by the end of 2015, and two billion by 2020. Separately, Square filed for an IPO last week with a valuation nearly $6 billion. The company is ending its payment processing agreement with Starbucks and faces a number of challenges, including the fact that Square CEO Jack Dorsey was just named as Twitter’s CEO.
We Want Crowdfunding!
There are growing calls for the U.S. Securities and Exchange Commission (SEC) to release final crowdfunding rules implementing Title III of the JOBS Act. In early October, six House Democrats sent a letter to SEC Chairwoman Mary Jo White urging the Commission “to work expeditiously” to issue final rules, adding that “it is long past time these rules to implement the JOBS Act were issued.” Similarly, the Financial Industry Regulatory Authority released a 346-page proposal to adopt crowdfunding portal rules. Meanwhile, Engine, which bills itself as “the voice of startups in government,” released a white paper containing recommendations to address the shortcomings in Title III.
Alternative Finance in the U.S. & Europe
The National Federation of Independent Business released a survey which found 34 percent of businesses are somewhat or very concerned about access to capital. Meanwhile, Greenwich Associates released a report which found roughly one-quarter of U.S. SMEs obtained credit from a non-bank lender, with 94 percent of non-bank borrowers indicating they would use them again. Awareness continues to be an issue however, with nearly 40 percent of companies surveyed in Europe reluctant to use alternative financing and nearly half of EU growth companies unaware of alternative sources. Separately, the University of Cambridge and the University of Chicago joined together to launch a survey covering the alternative finance industry in the Americas.
Please note: Nos. 2 and 4 are gradations from “Much”.
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