Data Dive

Data Dive, Summer Heat Edition: Venmo Speeds Up, Amex Branches Out And Walmart Takes A Pass

Despite its reputation for being what Nat King Cole called “the lazy, hazy time of year,” summer 2017 seems stubbornly determined not to live up to its seasonal billing.  It’s hazy enough – or at it has thus far been extremely hot.  Arizona temps grounded flights last week when they got about 120, and even the Pacific Northwest saw temperatures get up over the 100 mark in Portland.

But as for the lazy, well not so much.  PayPal lived up to a promise it made about a year ago when it was announcing new partnerships with the card networks and brought instant payments to Venmo; Amex is eying an insurance play; and Walmart and Amazon it seems both had their hearts set on having a Whole Foods to call their own.

And if you can’t stay cool this summer – and odds are if you’re reading this from Arizona you can’t – we can at least keep you very well informed

Venmo Goes Insta-Pay

PayPal announced news that soon, Venmo and PayPal users will be able to send money transfers via its mobile app in a heartbeat to anyone they want — and have the receiver access and use those funds — in a heartbeat — anywhere that Visa and Mastercard debit cards are accepted. (Which is pretty much everywhere.)

That is a pick-up in speed from the current 24-hour wait period – and the cost of accessing funds instantly is $.25.

The move comes as part of the reset in digital strategy that PayPal first began rolling out last year when deal Visa and Mastercard aimed at enhancing future cooperation and interoperability were first announced. PayPal’s does not wish to be seen as a payments ecosystem adversary – but instead as an ecosystem enabler in digital banking and money transfers, leveraging the reach of PayPal online and via mobile pay for the benefit of card issuers and the consumers they serve. By the numbers PayPal has  200 million active users, checkout on 75 percent of Internet Retailers’ top 100 merchants and 50 million customers for its OneTouch fast checkout product.

“Over the course of the last year, we haven’t just reframed the way we are working with Visa and Mastercard but also how we are working with the entire banking ecosystem,” COO Bill Ready told Karen Webster in an interview shortly after the news was announced. “We aspire to be one of the best ways for issuers to engage their customers and drive engagement and revenue for them and for the ecosystem.”

“We want to help people get the most use out of the cards they already have in their wallets,” Ready explained, “and make that interaction easy and secure and instant, if that’s what they want.”

Amex Moves On Insurance

American Express has joined the latest $29-million funding round for Palo Alto-based insurance tech startup, Next Insurance.

The round was led by Munich Re’s HSB Ventures. With American Express’ investment, Next Insurance’s funding will be brought up to $35 million.

Next Insurance is structured to compete in what it refers to as the emerging “insurtech” market, which seeks to upgrade and update the insurance industry through an infusion of digital technologies.

Specifically, the firms specializes in targeting smaller businesses and individual service providers such as  personal trainers and contractors.

With Next Insurance’s funding, the company is hoping to expand its offerings and gain business in new areas within the small business sector.

“Finding the right insurance is often a time-consuming, complicated process for small-business owners. Next Insurance has simplified the process through its easy-to-use website and analytics,” said American Express Ventures’ managing partner Harshul Sanghi on Amex’s investment in Next Insurances latest fundraising round.

The Walmart/Amazon Bidding War That Wasn’t

After Amazon managed to turn the retail ecosystem’s collective head with its announcement that it would be acquiring the nation’s sixth-largest grocery chain, Whole Foods Market. Rumors began to circulate that the $14-billion deal could in fact get much more interesting.

While discussing the deal on CNBC – analysts and JPMC noted that while it seemed unlikely that any mainstream grocery players would have the money or wherewithal to go 10 rounds with Amazon for ownership of Whole Foods – Walmart could still be the wild card in the pack.

“From our perspective, we have a hard time seeing Kroger, Costco or Target coming in over the top. We do think there is a chance that Walmart makes a bid. There are compelling reasons for it to do so (adding new, generally wealthier customers; acquiring a strong brand; generating synergies and efficiencies; et al), in addition to keeping Amazon out of its wheelhouse.”

At the $14-billion opening price – Whole Foods represents 3 percent of Amazon’s market cap, and about 6 percent of Walmart’s.

But it seems such a bidding war is not to be.  As of last Friday, Whole Foods had not received any rival offers to the accepted $13.7-billion bid from Amazon. Most analysts concluded that Amazon would have been the likely winner in a bidding war in any event.

So what did we learn this week? Venmo’s getting faster, Amex is branching out – and Walmart didn’t really want Whole Foods after all, nor did it want to invest over 6 percent of its market cap in preventing Amazon from having it.

Lot of fast notion in hot weather. Stay cool.

 

 

 

 

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