With 49 days left in the year, there are 42 shopping days left until Christmas, and the official sprint to the end is upon us.
Some might call that scary.
But lest we rush by a bit too quickly, we have three interesting bits this week worth taking a closer look: the most successful day in eCommerce history happened last weekend, SWIFT shut the door on Ripple rumors and MoneyGram settled with the FTC.
Singles Day $30B Bonanza
There were rumors that the economic uncertainty surrounding China's relationship with the U.S. might throw a damper on Singles Day’s uninterrupted growth streak over the last nine years. Many worried that Alibaba might struggle to top the $25 billion in a single day that was last year’s record.
Well they did, with a “but.”
Singles Day smashed last year’s record with a whopping $30.8 billion in the 24-hour shopping event that is 11/11. Singles Day had beaten the previous year’s record by 5:14 pm local time — and just kept right on going until sales were 27 percent year on year.
That was, however, smaller than the 39 percent year-on-year growth recorded in 2017.
Singles Day — also known as the Double 11 shopping festival — was marked, as usual, by big discounts in Alibaba’s eCommerce hubs like T-mall, as well as its real-life offerings like its delivery service Ele.me and its various physical shopping destinations. The event also consisted of a celebrity-enhanced gala event which featured names like Miranda Kerr and Mariah Carey and ran for the full 24 hours of the festival.
Company founder Jack Ma appeared at the start of Singles Day, but he did not give a speech.
The focus of the event this year, and going forward, Alibaba CEO Daniel Zhang told CNBC, will not just be growing eCommerce, but growing out what it calls its vision of “new retail.”
“When we talk about new retail, we strongly believe that online commercial world and offline brick mortars are not separate worlds. And if you look at the customer base today, everyone is living in the internet. Everybody is the internet user. You have the same customer base. You must have the same commercial world. It’s all about how to innovate online and offline to a whole digitized commercial world.”
SWIFT’s Week In The Rumor Mill
SWIFT has firmly said no to rumors circulating that the pending upgrade of the SWIFT network would enable Ripple products to be available to roughly 4,000 more banks.
“I’m not sure where those rumors are coming from, but the upcoming standards release … is entirely unrelated to RippleNet,” a SWIFT spokesperson said. “Its primary purpose is to ensure all payments include a tracking reference (UETR, Unique End-to-End Transaction Reference), which will allow banks to track their gpi payments end to end in real time.”
A source close to the matter told media that no evidence of any integration can be found and that there is no reason to believe anything novel is happening with SWIFT and Ripple.
It was a big week for rumors rolling out about the interbank messaging system. There were also reports that SWIFT is disconnecting Iranian banks from the messaging system due to the U.S. sanctions against 50 of Iran’s financial firms. SWIFT at this point is not confirming if the ban applies to all of the financial firms on the U.S. government’s Iran sanctions list, or if it is only removing some on the list at this time.
The move is expected to aid the Trump administration in isolating the government of Iran, though some critics have complained the move will also worsen U.S. and European Union relations. Worries have also been voiced that the move by the U.S. will push forward EU efforts to create a payment system that isn’t influenced by the White House. The EU has said it is working on one — though at this point no countries have offered to host the payment company because they are worried about retaliation from the U.S.
In a statement to the paper, SWIFT said the move to kick the Iranian banks off its messaging system was “regrettable,” but that it was necessary to maintain the integrity of the financial system around the globe.
MoneyGram And The FTC Settle
The Federal Trade Commission and MoneyGram have agreed to a $125 million penalty to settle a violation by MoneyGram of a six-year-old settlement tied to anti-money laundering (AML) controls.
The FTC alleges that the company failed to prevent “at least $125 million” in fraudulent transactions from being completed between April 2015 and October 2016 because the revised fraud prevention system that was put in place after the 2012 settlement was ineffective. In 2012 the firm was accused of aiding and abetting wire fraud.
MoneyGram said the fraud that winnowed its way through its agent network was due to “external circumstances.” The new settlement allows MoneyGram to pay the $125 million and extended the deferred prosecution agreement (DPA)with the Department of Justice (DOJ) until May 2021.
The new round of penalties comes on top of $100 million the company paid in the initial 2012 settlement. The investigation leading up to that settlement stretched from 2003 to 2009 and focused on agents in the U.S. and Canada. The investigation found that MoneyGram knew as far back as 2003 that a scheme was in place that lured victims into sending money to fictitious accounts.
“The FTC’s 2009 order required MoneyGram to protect consumers from fraud through its money transfer system, and, today, we are holding MoneyGram accountable for its failure to do so,” said FTC Chairman Joseph Simons in the November 8 announcement. “MoneyGram’s alleged failure to implement key provisions of the order allowed scammers to continue to use its money transfer system to rip off consumers.”
MoneyGram also settled with the FTC in a separate case, wherein the regulatory agency accused the company of violating a 2009 order that stipulated the company needed to cut down on fraud. In that case, the FTC said MoneyGram did not address fraud that had originated from its large agents, and instead had focused its lower-volume, smaller agents known as “mom and pop” agents.
“MoneyGram did not place any restrictions on one large chain agent until approximately mid-2013, even though the chain was the subject of more fraud complaints than any other MoneyGram agent worldwide,” the FTC said in its announcement.
So what did we learn this week? Never underestimate selling acumen of Alibaba, the persistence of the rumor mill or the determination of the FTC.
Have a good week.