The burgers have all been grilled, the parades have all been attended and the fireworks have all been shot off. It is time to get back to work.
And while the workforce is still shrugging off the long weekend this morning, thousands around the nation are realizing that it might just be possible that in the run-up to the long weekend they paid less than perfect attention to everything that was going on last week.
Or maybe you did pay perfect attention and are still wondering what is going on — because a lot happened.
Want to dominate the water cooler conversation this morning? Read on.
It looks like Greeks have decided to reject Europe’s bailout offer and the associated austerity measures that come with it. What remains to be seen is if this vote will amount to Greeks voting “no” on the euro.
Greece is massively in debt and pretty much out of money. Banks were closed last week to prevent the runs that would likely be fatal to the nation’s banks and the country’s economy. Banks are supposed to reopen tomorrow; however, according to The Wall Street Journal, that is all but impossible without an infusion of funds from the European Central Bank. There is literally not enough money in Greece to support the scope of bank runs that are anticipated.
And, such an infusion from the ECB seems unlikely, given European leadership’s stated position that a “no” vote would destroy the basis for talks because it would show that Greece was unwilling to take the steps needed to put its finances in order (i.e, tighten its belt and address the massive and pervasive corruption that has defined its economy for decades and decades) and get its economy growing faster.
Some think that in negotiations later this week Greece could, in fact, find itself in a worse position — facing even tougher austerity measures for a bailout than what was on the table before the “no” vote.
So, what happens next is up in the air. German Chancellor Angela Merkel and French President François Hollande are due to meet today in Paris to discuss the implications of the referendum. Greece could theoretically leave the euro and return to the drachma as a result — though that is complicated by the fact there is no codified process for leaving the eurozone and no precedent in this matter.
The “do or die” date is July 20, when Greece owes €3.5 billion ($3.86 billion dollars thanks to a largely depreciated euro) on a bond held by the ECB. If Greece does not pay on that bond, the ECB will all but certainly refuse future collateral from Greek banks and pull €89 billion (~$98 billion) in emergency liquidity assistance. Without euros to provide liquidity, Greece would have no choice but to return to printing its own currency.
The fallout from that remains an unknown factor. While almost all experts agree in the short term that it would be a disaster for almost everyone involved, some economists, like The New York Times columnist Paul Krugman, believe that a return to the drachma (and a lot of reform) could help Greece eventually sort out its economic ship.
Others were less … optimistic.
“Greece has just signed its own suicide note,” predicted Mujtaba Rahman, head of European analysis at the Eurasia Group risk consultancy.
Whatever you think, what happens next week will define the future of the eurozone one way or the other.
Yes, according to new research from Millward Brown Digital.
While Amazon is less than wholly candid when it comes to disclosing financial specifics about the number of consumers who plunk down $99 to become Prime members, they do tout the fact that Prime members spend more when they shop on Amazon than non-Prime members.
And by a lot.
Since, according to this new research, they convert to a buying customer 74 percent of the time.
Holy one-click.
In contrast, non-Prime member conversion rates are roughly 13 percent. And, with the typical online retailer’s conversion rate of about 2 or 3 percent, that would make Prime members’ conversion rates something like 22 times higher than the typical eCommerce conversion rate in the U.S.
This isn’t the first time this year Millward Brown has studied the subject. In April the firm’s web traffic research indicated that that same figure was at 63 percent, meaning in the intervening three months Amazon’s Prime membership has upped its conversion rate.
Now, it might be easy to conclude that Amazon Prime shoppers are, well, just shoppers who buy stuff all of the time no matter where they happen to find themselves online. Not so, says this report. Amazon Prime customers shopping off Amazon actually convert only six percent of the time (which is still more than the typical conversion rate).
And, armed with this data, that only sets the stage for the next phase of Amazon’s strategy: getting the familiar Amazon checkout button on as many merchant pages as possible to help merchants improve conversions where they want their consumers shopping.
“What we’ve accomplished in terms of removing friction also sets the bar [for other merchants]. Any merchant today that does not make part of [its] strategy the question, ‘How will I connect with an Amazon Prime user?’ is probably missing [out] on something really important,” Patrick Gauthier, vice president of external payments at Amazon, noted in a recent interview with MPD CEO Karen Webster.
With PayPal’s announcement of a definite date of its separation from eBay (July 20 is the kickoff of trading for all), one might have been tempted to wonder if PayPal were going to lay low for the intervening three or so weeks and coast quietly into that IPO.
Not so much.
Following the announcement of that final countdown to separation, PayPal announced Thursday (July 2) that it will acquire international money transfer provider, Xoom, for $890 million in an all cash deal.
Talk about putting your money where your mouth is.
Which in PayPal’s case involves making good on its vows to evolve past a touchstone for retail payments into a global financial services firm that can enable the seamless management and movement of money for consumers around the world.
PayPal announced that Xoom’s “anytime, anywhere” money transfer platform enables U.S. consumers to send money to friends and family in 37 different “receive” countries and pay bills via mobile phones, tablets and computers. Xoom’s proprietary “funds-out” network will allow PayPal to build out a key part of its consumer value proposition — digital money transfer and management.
And with 68 million active users in the U.S., there is a lot of value proposition for PayPal to offer here.
PayPal President Dan Schulman remarked that “expanding into international money transfer and remittances aligns with our strategic vision to democratize the movement and management of money. Acquiring Xoom allows PayPal to offer a broader range of services to our global customer base, increase customer engagement and enter an important and growing adjacent marketplace.”
Cross-selling Xoom’s capabilities will expand the set of offerings that PayPal’s existing user base in the U.S. can leverage, not to mention fast track its ability to enable global money transfer in attractive “receive” markets such as Mexico, India, the Philippines, China and Brazil. The acquisition could also help both companies create the scale and integrated product set that supports the development of new business models for how money is moved digitally between consumers, businesses and merchants.
Once the acquisition closes — which is anticipated to be in the fourth quarter of this year — Xoom will continue to operate as its own service but under PayPal’s umbrella.
The day after PayPal’s plans to acquire Xoom were announced, Western Union’s stock took nearly a seven percent hit.
Okay, so perhaps calling IoT an $11 trillion opportunity is a bit of an exaggeration, as that is the upper bounds of the estimate of the potential value of the IoT by 2025 according to the McKinsey Global Institute. The low-end estimate is a scant $3.9 trillion — you know, pocket change.
McKinsey’s report further indicates that as devices and sensors become more functional at interacting using the Internet as a common platform, the potential is there for companies worldwide to boost revenues, create new business and make decision-making more effective.
Far-flung connectivity and information “makes it possible to monitor and manage operations thousands of miles away, track goods as they cross the ocean or detect changes in the blood pressure of a diabetic that might be the sign of a heart attack,” the report notes.
“I think people are starting to understand all of the incredible impacts the Internet has had on business, their personal lives and the ways we can interact with government,” Michael Chui, co-author of the report and a partner at McKinsey, told The Huffington Post in an article published June 26. “We are extending some of the power, speed and scope of the Internet, not just to our online lives but to all of the physical things we do. It is transforming how we combine the physical world with online and bringing it all to new domains.”
The report cautions that companies that do not embrace the shift to IoT might get left behind by better connected competitors. And, of course, there is the need for interoperability for useful communication between hardware, software, networks and users.
Chui told The Post that “if you look at all the estimated value created by the Internet of Things, not just for companies but improved quality of life or longer life, 40 percent of that potential required interoperability.” The McKinsey paper suggests that IoT users adopt open standards to be shared between software companies and the manufacturers that build devices, taking a page from standards that have been a hallmark of the energy industry.
“Some of the most important risks are around cybersecurity,” Chui said in the interview with The Post. “Number one, many, many more devices are connected, which means there are more ways to breach security and cause problems. Number two, the consequences of a breach become more perilous. If you could hack a million driverless cars or control a chemical plant, those are risks for which the consequence of a negative incident are catastrophic. We need to invest appropriately and have a full dialogue. Awareness and understanding are the first step.”
Well, July 20 will be a day to mark on your calendar, as the day will offer a two-fer for financial services news buffs. In the morning you may get to watch Greece kickoff the currency apocalypse and then round out the day to see the value of PayPal’s stock after its first day of trading.
We also learned that soon everything we own will likely be connected to the Internet, which will make it easier for Prime consumers to do all of their shopping on Amazon.
Dash buttons for all.
Until our next dive …
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