Payments Innovation

Sizzle Or Fizzle: Uber, Bitcoin, Botnets, SWIFT – And The Wells Wallets

You want to know what really sizzled this week? The weather in Boston – and it’s about darn time. We’ve even stopped complaining now that we skipped spring altogether and went right into summer – the sun is shining and everyone is smiling. The forecast for the long holiday weekend looks outstanding, too, which just adds more sizzle to our step.

As for payments, here are this week’s picks and pans.

As for the Sizzles …..


Despite Sen. Elizabeth Warren’s early week ride-sharing rant, Uber rocked it this week. From launching a loyalty program (can’t want to get my free rides) to teaming up with the reinvented Foursquare to make it frictionless for riders to actually get where they are going without having to navigate for the driver, Uber is clearly investing in its platform to deliver more certainty to Uber riders and drivers that they have their backs. As far as Sen. Warren’s complaints about the service, I’m all about certainty, too – that was my Monday column – but isn’t the best certainty for Uber drivers the certainty of jobs? Her proposed course of action is likely to deliver anything but more uncertainty.

We don’t like that bots are sizzling, mind you, but they are, unfortunately, on fire. And that’s not good if you’re a merchant trying to hold down the fraudster fort against their attacks. I was reminded yesterday in my digital discussion with the CEO of Forter, Michael Reitblat, that 83 percent of the fraud attacks last year were the result of botnets, besting some of the more “tried and true” tactics like account takeovers and phishing. Overall, according to the Global Fraud Attack Index that we do with Forter every quarter, fraud attempts are up 217 percent, putting nearly $5 of every online sale at risk. Good thing that there are players like Forter working hard to move fraud via botnets into the fizzle column.

Apple Retail
Apple’s first retail store overhaul in 15 years is hailed by just about everyone as a Grand Slam Home Run – and the store hasn’t even opened yet (it will, in SF, on Saturday). Ms. Ahrendts and Mr. Ive masterminded a complete reinvention of the Apple retail experience — with emphasis on the word experience — with a little shopping thrown in for good measure.

Designed to invoke memories of an new, old-fashioned town square, there are boardrooms for training, a “main street” called The Avenue to hang with artists and others who are brought in for a little cultural entertainment (and inspire visitors to stay longer and buy Apple stuff, of course) and while away under the trees in the Genius Grove to have said items fixed or spiffed up. The hope is that the brand/experience convo will lure in customers and keep them buying.

Burberry, Ms. Ahrendts’ old stomping grounds, may be wishing for her back. Their retail experience needs a bit of reinventing, and she did that for the iconic brand when she joined them. But they, like so many storied retail brands, are going through a bit of a spiraling down. Time for Ahrendts’ protegee, Christopher Bailey, to channel his inner Angela to bring the experience back to retail, once again.


If Google has its way, passwords will be a thing of the past – and hip, hip, hooray for that. Google is said to begin testing an alternative to logging in with passwords in favor of one that mixes a bunch of things to authenticate the consumer.

The solution, labeled the Trust API, is said to have lined up several FIs to pilot the new program. That bunch of things is said to include facial recognition, voice, keyboard strokes, and even how screens are swiped, in addition to where phones are located and used. Consumers can look forward to soon saying goodbye to the min-6-to-8-characters-with-a-capital- letter-and-number ritual for logging into a website.


First it was one, then two and now it’s said to be 12 banks that have potentially been compromised using SWIFT communication protocols. SWIFT insists that they, as the messaging system, weren’t breached, but rather someone(s) very, very clever and with an uncanny understanding of how the system operates got hold of bank credentials and access to the SWIFT network and directed money to all of the wrong places, including China. I recall three years ago at Innovation Project 2013 that a rather prescient panelist said that the payments system’s worst nightmare would be having the SWIFT network breached. Gen. Keith Alexander reiterated that this past year. And now we are living it.

SWIFT can point the fingers of blame all they want, but there are obviously protocols that need to be addressed to plug up the vulnerabilities. They’ve issued a framework this week that’s their first attempt to do that, but we can’t help but wonder whether three will turn into some other number in the coming weeks.


Speaking of vulnerabilities, the saga of Mt. Gox continues. When last we left Mt. Gox, the Toyko-based and now defunct bitcoin exchange run by Mark Karpeles, all sorts of people were trying to find the missing bitcoins that vanished when the exchange went belly up. Mr. Karpeles is cooling his heels awaiting trial on criminal charges related to the bitcoin’s disappearance.

Unfortunately, for those people with the missing bitcoin, on that score, there’s only bad news. Claimants say that they are owed $2.4 trillion, something that most say is “absurd” given that the value of all outstanding bitcoin isn’t even $8 billion. That one small detail aside, the trustee who’s been on the trail to find what went missing now says that there’s only $91 million that he could find in the sofa cushions to distribute, which is a very teeny drop in the $500 million asset bucket that was lost.

Here’s perhaps the best quote to date on the topic, courtesy of The New York Times yesterday. “The unfortunate reality of bitcoin is that it’s just so tempting to steal it digitally,” Kim Nilsson, a researcher with WizSec, said on Wednesday.

Absurd seems to be a good word to use to describe the whole of bitcoin, too.

Sizzle Or Fizzle: Wells Fargo Mobile Wallet

The news that Wells Fargo is launching its own mobile payments service later this summer begs two questions: Why? And will people want and use it?

The first question is simple: Battle Google and Apple at the in-store point of sale, or give them the sale points without trying. Small wonder that in a competitive environment where every sales dollar counts, and the traditional banking business is slowing and the trading business has its own challenges, that Wells should look to go the digital payments route. 

The details thus far: Wells Fargo Wallet will be built into the existing Wells Fargo app that is geared toward Android users. Banking customers who use Wells Fargo debit or credit cards can connect through the as-yet-to-be-debuted mobile wallet to work with NFC terminals globally. The homegrown experience is one where wallet users can transact with their accounts without the need for physical debit or ATM cards at the company’s branded kiosks. The plan is an ambitious one where more than 40 percent of the firm’s ATMs are scheduled to be running with NFC technology by the end of the year.

Mobile payments via digital wallet represents the latest attempt by a bank to bring a 360 degree, somewhat holistic in nature, where the consumer never really leaves that ecosystem. The idea is to have a relationship that goes across banking, investing and consuming.

But the field is a crowded one, and it is getting ever more crowded, now, with Wells in the fray. The concept of a mobile wallet also competes with entrenched behaviors and habits are hard to break – just ask the people and businesses with a stubborn adherence to paper checks. The fact remains that many of the people who bank (anywhere) and who are actively transacting in the financial system are typically holders of cards that come from multiple, separate issuers and they use those cards strategically for different reasons and across different types of transactions for different rewards.

There is another real, immediate concern that Wells Fargo may be joining the race a bit late — not too late, but late enough so that the battle over acceptance will be a real one. Many consumers may — and this a big may — find themselves to be wallet agnostic when it comes to using a point of sale, with consumers opting to use Wells Visa at Visa Checkout for example, or even Android Pay, platforms with which they are familiar and which may have sticky top of mind. Wells does want the closed ecosystem to get complete data on its consumers, but the ability to not use that last mile (or inch) at the wallet level might thwart that ambition. Only 28 percent of smartphone owners say they made purchases with the devices in the past 12 months, which means greenfield opportunities. But tilling that field may be harder than some think.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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