Market Watch

Swiss New Finance Conference – Bern 08/23/2012

Time to dust off my German and start learning Swiss-German (not that similar … at all). I have the opportunity to attend the Swiss New Finance Conference which covers the following:


A lot of the topics cover funding innovation, notably via Crowdfunding. I am looking forward to learn more from C-Crowd, which as developed a legal crowdfunding solution in Switzerland. Now that they have several projects funded, I am curious to learn more how the companies manage large shareholders base.

I am also interested to learn more from the Open Bank Project. An API standard for bank connection is definitely an integral part of Banking as a Service. Whether individual solutions (such as the one created by Credit Agricole, Axa Bank for example) or standard project such as Open Bank will ultimately succeed is not sure (in my view), but they contribute in pushing this agenda.

Also interesting is the presentation from Pelle Braendgaard. I have followed Pelle on Twitter for a long time ( @PelleB ), if you are interested in innovation in financial services, this is definitely an account to add.

Finally, I am keen to get the latest update from the guys of Shareleap , they are trying to reinvent shareholders’ relations, a rather big and important problem.

Might never know, maybe some of you will be here  (… Bern …. in August …. ) > happy to meet if this is the case!



Market Watch Mindset Payments Personal Finance

Underbanked? Not without financial services!

Who are the underbanked in the US? If we refer to Javelin Strategy latest study:

“Comprising an estimated 35 million US adults (or 15% of the US population), underbanked are typically young, ethnically diverse, and more likely to use the “computer in their pocket” (i.e. their mobile phones) to conduct their banking.”

But does that not mean that the services targeting them are less diverse than classic banking services? On the contrary, the bank-less (as personal bank account / most of these services leverage the banking infrastructure in some form) universe of services is exploding!\

– The most know is probably the prepaid cardGreendot is one of the biggest new players in the field. These cards allows people to benefit from modern payment means without having to open a bank account. While there are several fees attached to its use (list of Greendot fees available here) , they can have advantages over a bank account as they don’t allow overdraft and don’t require minimum balance.

By the way, you can find these cards in retail stores:


– Don’t want to have a card? You can also pay online with cash using services such as Paynearme . Print a code online, present it at the nearest 7/11, pay in cash and the transaction is finalized. You can try it here. Seems strange? Not when you consider that:


– While all the talk is about branchless in retail banking, you can also use physical financial services locations without having a bank account.
Walmart Money Center provides check cashing services, distributes various financial services and according to the New York Times has benefited from the current banking crisis. Other players, such as Mango have looked at the opportunity to create Brick and Mortar financial stores. 


– While Square may be the most talked about startup in mobile payment, it does not prevent competitors to provide bank-less solutions.
RevCoin‘s difference is not its more rounded shape, its the fact that you can accept credit cards without linking a personal bank account. RevCoin is linked to a Debit Card provided to the users at the same time they receive their dongle. 


More than replicating existing offers linked to a personal bank account, prepaid product have also specific and innovative services
Payperks (an Anthemis Investment) combines prepaid card, education program and sweepstakes to provide an alternative to the paycheck  or cash payment. Payperks users are educated and incentivized (via sweepstakes games) to make better long term financial decision (avoiding late bill payment fees for example)


– Have a club, an association, a small company and want to manage both your money and your financials at the same time? Holvi offers exactly this by allowing organization to build, control and share their internal finance. Receiving payments are automatically integrated, invoices are matched as well.


– Cross-border payment companies such as Western Union are well known. But what if you could directly pay for charges instead of sending money across? Companies such as iSend provides exactly that by allowing people to pay for electricity telco bill or mobile top up of their families abroad. With Mamamikes , based in Kenya, you can also buy vouchers toward specific items.


What is driving this innovation?


Multiple factors are playing but I think among other things the relatively simpler regulation allows for more innovation that benefit the customers. They often have lighter licences to operate as they cannot provide credit services.  Most of these startups operate on top of the banking infrastructure, which provides some form of security.
For some of them, they  have engaged in following principles toward better financial services. The Compass Principles  designed by the Center for Financial Services Innovation , an unbanked, underbanked targeted think-tank can apply to the financial services sector as a whole.
With the growth of the prepaid market, regulators are starting to pay more attention to this market. It is important, in my view, that they are careful in allowing such innovation to continue via competition. While a number of bad operators can be expected in any industry, the trend is that the services towards underbanked and unbanked are becoming better and cheaper.
Market Watch Payments

No more Credits? An opportunity for Facebook.

I will not pretend that I had even one tenth of an insight into Facebook decision to finish its Credits program (announced here on their blog: Techcrunch as a review of what this could mean: .

In the context of their Karma acquisition, this actually solves one of the issue highlighted in my previous post.

The difficulty in this scenario is that the 30% rate is not compatible with ecommerce. Facebook would need to maintain several different rates depending on the activity done through its platform.

With Credits, Facebook may have limited itself to virtual goods as it had its rate of 30% seemed both as a platform tax as well as an “interchange” type rate for processing payments. It was therefore difficult for it to apply different rates on its currency.

Without Credits and with the new focus on local currencies, Facebook can still apply its 30% rate on the use of its platform for in-Facebook apps while having the opportunity to drive more E-Commerce on its platform for social events. Though the question remains, is is this experience significantly better than the one provided by outside websites leveraging Facebook Graph.