PYMNTS Player Of The Week: New York City

By PYMNTS Editorial (@PYMNTS)

Name: New York
Headquarters: New York, USA
Founded: 1788
Employees: 290,000+
Market Capitalization: N/A

Key Stats:
1. 16 Number of payday loan lead generation companies sent subpoenas this week
2. 22 Number of virtual currency companies sent subpoenas in August
3. $99 New limit on text donations to NYC political candidates

While Silicon Valley Innovates, NYC Regulates

“When it comes to virtual currencies and our national security, New York’s in charge.”

PYMNTS.com contributor Jeff Green issued this statement in his November 25 report on New York and its proactive moves to regulate companies that deal in virtual currency. But, while correct for his report, our newest Senior Analyst might not have gone far enough in his assessment: A quick look at the recent headlines this week reveals New York City is taking the reins on a host of initiatives, from bitcoin to payday loans to political donations.

On December 3, New York regulators moved to crack down on online payday loans, sending subpoenas to 16 companies that supply providers with consumer data. The actions prove similar enforcement actions against the payday loan industry aren’t likely to subsist. In August, New York sent 35 cease-and-desist letters to online lenders who they alleged were violating state usury laws.

On the virtual currency front, Green illustrated why New York is stepping in to regulate bitcoin, despite previous actions from the Financial Crimes Enforcement Network (FinCEN) on how it should be regulated. New York, Green said, needs to better define its state laws, which don’t currently define “money” or “money transmission.”

With other states leaving virtual currency companies in a similar grey area, Green suggests that New York could set the tone for other states as they look to bring their financial laws “into the 21st century.”

NYC’s Regulation Doesn’t Stop Innovation

New York tempered its tough stance this week when it was revealed NYC merchants will look to leverage social Wi-Fi services to send shoppers geo-targeted ads. Lead by company called We2, the service has signed up what is says are “hundreds” of small to mid-size NYC merchants willing to convert their private Wi-Fis into public hotspots to help drive more foot traffic.

Most compelling about We2’s pitch, is that it offers consumers valuable incentives in exchange for the promotions: free Wi-Fi and an optional way to communicate with others on the network. If successful, We2 plans to move the service from NYC to cities across the globe.

Rounding off the week is news that hits closer to home for New Yorkers seeking to leverage technology for political means. On December 3, New York approved a law that allows residents to donate up to $99 to political candidates via text as a way to engage more citizens in elections. And if the quote of the week proves accurate New York could have a lot more of this type of innovation up its sleeve.

Quote of the Week: “The [We2] initiative [is] backed by the NYC Economic Development Corporation as part of the Bloomberg Administration’s efforts to further the position New York as a ‘Technology Hub,'” We2 wrote in its official press release.