Alternative Finances

What Payments Players Want Under The Tree

The end is near!  Well at least in terms of holiday retail is concerned.  As the sun rises on Panic aka Super Saturday, American consumers can be split almost evenly into two groups - those who can congratulate themselves on having already completed their Christmas shopping and those who are going to a mall to do heroic combat for what they believe will be the lowest prices of the season.

However, as the retail shopping season draws to a close, PYMNTS now considers the intangibles that money can’t buy.  Peace, love and hope?  Nope. The soft news is for CNN. Instead we are wondering what the power players in the payments ecosystem are hoping to find under their metaphorical trees this holiday season.

Here’s our shot at what might be awaiting them.

Apple |  Merchants

If Apple were to write a letter to Santa, we imagine it would begin with “Look, we’ve kept your sleigh full and millions the world-over ecstatic on Christmas morning with devices we built, and that you took credit for just because we delivered them.  So, you owe us Kringle.”  In fact, 2014 will likely be a year where once again the man in red will deliver lots of iPhone products - the iPhone 6 has reportedly sold around 70 million units in Q4 2014 and Morgan Stanley estimates that will equate to around $42 billion in revenue for Cuppertino.  Unfortunately all those iPhone 6 sales aren’t yielding Apple Pay users - 90 percent of those who could use Apple Pay, haven’t.  Among the leading reasons why not - consumers don’t know if merchants accept it.

And for Apple, the answer right now is unfortunately probably not.  Though 90 percent of issued payment cards could be enabled to use with Apple Pay, they lack the mass of merchants that it needs to get those consumers excited about using it.  And in the case of Walmart, CVS, The Gap and the many other major retailers that are part of MCX, they probably won’t be seeing those merchants sign-up anytime soon, since a non-compete agreement (among other concerns) prevents such things.

Amazon  | Sales of the Fire phone

If at first you don’t succeed, update it and try again.

In June Amazon released the Fire phone as a competitor to the iPhone.  Then it endured months of headlines about how how Fire failed to ignite, how consumers threw cold water on the Amazon Fire and (the best) how Fire Sales Were Ice Cold.  Amazon does not give up, easily, however and has rolled out a software update for the phone that brings with ita new and improved feature set. Among those features are text translation in English, French, German and Spanish. The upgrade also enables the phone's much-hyped Firefly feature to recognize 2,000 famous paintings,"best shot," takes three versions of a photo, and lets the choose their favorite. Now that’s handy.

Fine arts buffs and other interested consumers can still get one in time for Christmas, Amazon announced today it will give free two-day shipping on most Amazon devices, including the Fire phone, through Dec. 22 at 7 p.m. ET.And rumor has it that they have a warehouse full of them that they’d love to get rid of.

Google Wallet |  Users

Nobody know exactly how many users Google Wallet actually has – but estimates put the number between 10 million and 50 million,  which is a pretty wide margin of error.  However,  most estimates put that number as somewhere in the20 million range (though one that is suspected to be fairly low).  Though that may sound like a lot of users (in fact,Softcard might have 20 million downloads on their wish list for Christmas this year), but it’s worth noting that it took Google almost a year to get to 1 million downloads of it’s mobile wallet, whereas Apple Pay got to that milestone withinthe first 72 hours. Because neither company is all that interested in releasing their exact download figures, but the real money is on the fact that Apple could end up with at least half of Google’s reported 20 million downloads in the first year.

But Google doesn’t seem ready to quit just yet. A new update to the mobile app released on Monday (Dec. 15) now allows for extensive use of the iPhone’s Touch ID, enabling Google Wallet users to unlock the app with a fingerprint and the ability to see loyalty and giftcards while offline, although iPhone NFC access is still blocked. At those merchants that accept Google Wallet, of course.

Despite all of the cool use cases, and spike in usage thanks to Apple Pay and NFC giving Google Wallet a new lease on life in the physical store, Google needs more users for merchants to get excited (plus more merchants to get consumers excited, too). But the latter is still awfully hard. All merchants know that Google loves data like Rudolph loves his red nose and fear that access to their point of sale would be worse than having Santa having to deal with an elf strike the week before Christmas. And, if anyone could figure out how to overcome that hurdle, we feel sure that they’d find a spot under the tree for that present, too.

Carl Icahn | Peace On Earth, Goodwill Towards Men

It’s hard to know what an activist investor who already got every thing he wanted this year hopes for during the holiday season.  Early in 2014 he began beating the drum for PayPal to be spun out from under eBay in an independent IPO.  At the time eBay’s leadership firmly rejected the idea. Then, shortly after the announcement of Apple Pay, it seems eBay’s leadership had a change of heart and decided that maybe it was time for PayPal to go off on its own.

Carl Icahn was so happy, he doubled down on his investment in eBay and upped it by over 15 million shares.

And eBay was not Icahn’s only big win this year.  After first taking a large share in discount retailer Family Dollar, he then began advocating for its sale to one of its rivals - Dollar Tree or the Dollar Store.  And, it seems he got his wish, as shortly thereafter the two other discount chains entered into a short bidding war for Family Dollar, which ended in an agreement between Dollar Tree and Family Dollar that will see the former acquire the latter for around $75 a share.  Icahn, who has been selling off his nearly 10 percent stake in Family Dollar will certainly be able to buy some rather nice gifts with the proceeds, which are estimated to be just south of $500 million.

So we assume that what Mr. Icahn wants this year is peace on Earth, goodwill towards men, because what else could the person with everything possibly want.

Bitcoin | A Christmas Card From Just One Central Banker

A year ago no one anywhere had heard of Apple Pay, and bitcoin was the greatest idea since sliced bread as far as the payments world was concerned. In the wake of the Target breach, digital currency and the block chain were touted as the next evolution of payments security.

Flash forward a year, and things are not quite so sunny.  Mt. Gox fell apart spectacularly, Silk Road got busted,   2 of the 5 leaders of its governing body were convicted for criminal behavior, a new board member accused of being involved in allegations of child molestation was elected, the U.S Government said bitcoin was a commodity not a currency and should be taxed thusly and China's central bank more or less said no to bitcoin.  Repeatedly.

And then after all of that, Apple Pay came along, and sucked all of the PR air out of bitcoin’s balloon and bitcoin's price began a free fall.  That precipitous drop has seemingly been stemmed, but at more or less $300 a pop, bitcoin is trading at less than half of what it was in December of 2013.

And so after all of that, it was somewhat heartwarming to see bitcoin and the start-ups that love it get something of an early Christmas present this year from New York State's chief financial regulator Benjamin Lawsky.  Lawsky released a series of proposed new virtual currency regulations for New York state aimed at cutting digital currently startups in need of room to experiment some slack. If they move forward, it is expected that these regulations will likely be copied by other states and potentially federal regulators as well.

Lawsky told attendees at the Bipartisan Policy Center on Regulating Virtual Currencies and Payments Technology in Washington, D.C., on Thursday (Dec. 18). “The revised regulation will offer a two-year transitional BitLicense, which may be issued to those firms who are unable to satisfy all of the requirements of a full license, and will be tailored to startups and small businesses. That transitional BitLicense will help provide start-ups an on-ramp as they build up their operations.” There’s only one problem. There isn’t a central bank in the world who will willingly give up control of their money supply to any global currency, much less one for which the predominant use case is the purchase of illegal goods and services.

So, perhaps the bitcoin gods know that too since, despite Mr. Lawsky’s ringing endorsement of bitcoin innovation, the price of bitcoinkept falling. Then again, there’s always the blockchain going forward.

Yeah, sure.

So will Santa be able to deliver merchants to Apple and consumers (and merchants) to Google?  Will he be able to convince consumers to take the Fire phones in his sack (he does visit every child in the world in one night, a roughly equivalent miracle)? Will Carl Icahn shock the world next year by claiming investors' rights demand that Santa spin-off in an IPO the obviously more profitable gift delivery business  while simultaneously relocating the toy manufacturing operation away from the North Pole (with its crippling overhead costs and elf-controlled labor market)?

Only the new year tell. ​

Happy Holidays everyone!



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

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