Coin News

Bitcoin has been called 'digital gold', but does this mean the two markets behave similarly? CoinDesk analyses suggest the answer may be no.

 The passage and implementation of the Affordable Care Act created a perfect storm of disruption in the healthcare industry. All at once came massive systemic changes, from the expansion of Medicaid to minimum essential benefits. But healthcare is a stubborn space. Think of it like a Rubik’s Cube, where every move has a ripple effect, and solving multi-faceted problems is par for the course. Read More

The Chamber of Digital Commerce, a Washington-based proponent and trade association of digital currency and blockchain technology firms has launched a new consortium called the Smart Contract Alliance. The Chamber of Digital Commerce (CDC), a Washington-based advocacy group and trade association that promotes digital currencies and blockchain technology has unveiled a new consortium called the […]

The post Chamber of Digital Commerce Establishes the Smart Contract Alliance appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

The launch of a new cryptocurrency designed to make real the anonymity once thought to be offered by bitcoin has been delayed.

Bitcoin is designed as a peer-to-peer network, where nodes randomly connect to other nodes. Transactions and blocks are transmitted over...

The post How Falcon, FIBRE and the Fast Relay Network Speed Up Bitcoin Block Propagation (Part 2) appeared first on Bitcoin Magazine.

This story was delivered to BI Intelligence "Payments Briefing" subscribers. To learn more and subscribe, please click here.

Mastercard, the second-largest US-based card network, posted strong growth in volume, cards, and transactions in its Q2 2016 earnings call.

But as the US credit card environment becomes increasingly competitive, the firm will need to find ways to balance impressive rebates and incentives with profitability — something that all the card networks are currently trying to navigate. 

Three key categories saw an uptick:

• Volume: Mastercard’s gross dollar volume (GDV) increased to $1.2 trillion, up 7.6% constant currency year-over-year (YoY). Both US and international volume grew at roughly that rate, hitting $391 billion and $837 billion, respectively. For context, Visa purchase volume grew slightly faster, hitting 10% YoY growth constant currency in the quarter.  
• Cards: Mastercard added 143 million cards in the past year. The firm now counts nearly 2.3 billion cards worldwide. It’s worth noting that card growth came entirely from Mastercard-branded products — the number of Maestro cards decreased by 9 million.
• Transactions: Mastercard processed 13.7 billion transactions in Q2 2016, up from 12 billion in the same quarter last year. The average number of transactions per card increased slightly, from 5.6 to 6.0. But the firm noted that a competitive rewards and card environment offset this number slightly.

In order to maintain and accelerate growth in these categories, Mastercard will have to find an effective way to navigate the competitive credit card market. 

• Rebates and incentives spending is on the rise. Strong rewards offerings are the most important factor for customers willing to take on credit — a new survey from Citi found that 67% of customers said a rewards program is the biggest reason to choose a card, beating out interest rates and sign-on bonuses. That’s pushing card networks to invest in robust and aggressive rewards offerings in order to help issuing bank partners attract new consumers and prevent existing consumers from leaving for better offers, which is creating competition across the industry. This quarter, Mastercard’s rebates and incentives spending increased 23% YoY, from $940 million to $1.1 billion. 
• But in the long run, these investments could pay off in a big way. Open-loop networks aren’t often directly targeting consumers. Rather, they’re marketing their rewards programs to issuers in order to present themselves as the most attractive partnership option. But banks are seeking strong rewards to gain consumer business because these rewards drive up consumer spending. If Mastercard continues offering robust rewards programs, its issuers could attract more clients and grow their spend, which therefore would lead to an uptick in Mastercard’s issued cards, volume, and overall transactions. But it will be necessary for the firm to do this in a way where they can balance their increase in spending with the gains they’re making, or they’ll see their bottom line further offset by these types of investments.

MasterCard's future is just one piece of the broader payments industry, which includes acquirers and processors, issuers, card networks, gateways, and more.

Evan Bakker and John Heggestuen, analysts at BI Intelligence, Business Insider's premium research service, `have compiled a detailed report on the payments ecosystem that drills into the industry to explain how a broad range of transactions are processed, including prepaid and store cards, as well as revealing which types of companies are in the best and worst position to capitalize on the latest industry trends.

Here are some key takeaways from the report:

• 2016 will be a watershed year for the payments industry. Payments companies are improving security, expanding their mobile offerings, and building commerce capabilities that will give consumers a more compelling reason to make purchases using digital devices.
• Payments is an extremely complex industry. To understand the next big digital opportunity lies, it's critical to understand how the traditional credit- and debit-processing chain works and what roles acquirers, processors, issuing banks, card networks, independent sales organizations, gateways, and software and hardware providers play.
• Alternative technologies could disrupt the processing ecosystem. Devices ranging from refrigerators to smartwatches now feature payment capabilities, which will spur changes in consumer payment behaviors. Likewise, blockchain technology, the protocol that underlies Bitcoin, could one day change how consumer card payments are verified.

In full, the report:

• Uncovers the key themes and trends affecting the payments industry in 2016 and beyond.
• Gives a detailed description of the stakeholders involved in a payment transaction, along with hardware and software providers.
• Offers diagrams and infographics explaining how card transactions are processed and which players are involved in each step.
• Provides charts on our latest forecasts, key company growth, survey results, and more.
• Analyzes the alternative technologies, including blockchain, which could further disrupt the ecosystem.

To get your copy of this invaluable guide, choose one of these options:

1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
2. Purchase the report and download it immediately from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the payments ecosystem.

Join the conversation about this story »

Libertarian presidential candidate Gary Johnson has said that he would consider granting pardons to several high-profile convicts of hacking and computer-related crimes such as Ross Ulbricht, Edward Snowden, and Chelsea Manning. In 2015, Silk Road founder Ross Ulbricht was convicted of drug, conspiracy, and hacking charges, which gained significant popularity as the first darknet for […]

The post Libertarian Presidential Candidate Would Consider Ross Ulbricht Pardon appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

One of the fundamental assumptions of blockchains, whether public or private, is that 51% of actors, especially miners, are honest. Logically, the more actors there are, the more the assumption stands. However, numerous bitcoin developers, including Gregory Maxwell, Peter Todd, Luke-Jr and others, have stated that bitcoin mining is centralized in two or three individuals. […]

The post Researchers Claim Bitcoin’s Blockchain Can Be Secured Even if 51% of Miners Are Malicious appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

In a bid to track when police guns are fired a new type of gun is being designed utilizing blockchain technology, which would make police accountable each time a gun is fired. The Glockchain, which is being designed by a group of people, is one of many prototypes that will see many companies and designers […]

The post Blockchain-Based Glockchain Tracks Police Gun Usage appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

Digital currency exchange and wallet provider Coinbase has extended bitcoin and ether buying to customers in Canada and Singapore, within days after announcing the same feature to Australian users. Firmly in its global expansion phase, bitcoin and ether exchange and wallet Coinbase has now enabled its bitcoin and ether buying feature to customers in Canada […]

The post Coinbase Extends Bitcoin, Ether Buying in Canada & Singapore appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

German digital bank Fidor is being acquired by Groupe BPCE, the second-largest banking group in France.

Fidor will continue as in independent business after the deal, announced late on Thursday, closes. Founder Matthias Kröner will remain as CEO. Financial terms of the takeover haven't been disclosed.

Kröner says in an emailed statement: "This move will allow Fidor to continue its international expansion and drive the development of our innovative digital technology even further.

"In a world of increasing volatility, it is important to be a member of a strong group and this transaction is strongly improving our overall financial sustainability."

François Pérol, Chairman of BPCE, says the deal is "a key step in the acceleration of the digital transformation of our group." BPCE was formed in 2009 through the merger of Banque Populaire and Caisse d'Epargne.

Digital-only bank Fidor was founded in Germany in 2009 and has 120,000 customers. It is unusual for two reasons — firstly, it puts a big emphasis on the idea of "community" in banking. Its message board has 350,000 members and is a key part of its offering. Fidor encourages customers to request services, changes, and offer advice to other customers.

Secondly, it's built more like an app store than a traditional bank. In Germany, Fidor offers core banking services but partners up with other companies to offer things like peer-to-peer loans and foreign exchange transfer. (It has plenty of other innovative features, like linking interest rates to Facebook likes.)

Fidor launched in the UK last September and BI interviewed Kröner in London at the time to get an idea of what the bank was about. We're re-publishing the interview below so you can see what BPCE was so excited about. 

Business Insider: Do you want to tell me a little bit about the Fidor story and where the bank is coming from?

Matthias Kröner: Well, how much time have you got? First of all, maybe I should share a little bit about why we set up a bank at a time like that. The team that set up Fidor, there's a core of really dedicated, innovative, rule-breaking guys. We ran a bank before already, this is our second bank. The bank we set up before was a similar direct banking, web-based approached.

BI: What was that called?

MK: DAB Bank. It was a very customer-focused approach, it was rule-breaking. There was a lot of transparency. For the first time we allowed people a very detailed look at their assets, the market price development and enabled them to act on market developments. It was there, like Fidor today, to primarily service the needs of the customer, not the bank.

Why do I think like that? I don't know, but I think I started my business life in the hotel industry and hospitality, and this is why I'm interested in concepts. I'm always interested in how you can set it up in a different way.

With Fidor we thought how can we improve the experience for the customer. With the onset of Web 2.0 we thought this is going to affect retail banking, 100%. And on this conviction we applied for a banking licence. Then the financial crisis started.

BI: Good timing.

MK: Perfect timing. On the one side we've been super annoyed by that, at one time thinking about stopping. On the other side, we had the chance to witness how the established players are acting and behaving in this environment, which they caused themselves.

We saw the Occupy movement, the "We are 99%" movement, how people suddenly started to publicly hate bankers, to call them banksters. We thought, well, that's the biggest starting signal of all. There was a must for Fidor. We received a banking licence in May 2009 and we kicked off our banking business in 2010.

BI: Am I right in thinking you launched here in April?

MK: Yeah, in a very silent, below the radar way. Why do we do so? We first of all want to test the temperature, getting familiar with the environment. You have your own rules like everybody. We've got a German licence which means we can passport that, but nevertheless it's a UK environment.

BI: How's the water been so far?

MK: To be honest, it's the second step we're doing, because we're very active in our loan book business already in the UK. That was going on way before — I would say 3 years now? But we are not acting on a Fidor brand name, we're acting with different loan partners and loan generators and financing and refinancing those parties. Again, we feel very comfortable being in this market. But now it will be Fidor brand.

What is the temperature? So far we feel comfortable. We have the first 100 or so community members, we have the first discussions going on in our community and it will get really interesting when we start to come around with the first products and offerings.

BI: So you haven't launched any products yet?

MK: No, community only so far. Why? Because as part of putting our toe in the water we're going to talk to these early adopting customers and users. We don't talk to them we listen, in order to find out what their priorities will be, what they want to see from a new bank, what they do not want to see. We're taking a mutual approach.BI: What products are you planning to launch?

MK: First of all, I would say we'll come out with a savings product. Then we will have a sequence of roll-outs and see how we walk along that. It's not all planned out. In the community there's a lot of conversation going on about bitcoin, so we will see how British regulators handle that. Will it be the top priority? We will see.

We will see what we can do with payments, maybe integrate Ripple. We're definitely going to come up with an SME [small and medium enterprise] product at some point, maybe not now but in the longer term. But longer term to us means 9 months instead of 3 months. I'm not talking normal banking longer term.

You can see what we have today in Germany, which is the current account for retail and corporate that is very rich in its functionality. It has different ways of sending money, it has peer-to-peer lending as well as normal loan products from us, savings and investments via crowdfunding, FX as well as precious metals.

We're teaming up with peer-to-peer brokers, crowdfunding partners — the fintech environment. Which means the product is as attractive as possible. Fintech we are embracing. We are very happy to integrate them into our product. Our account in the UK will become what it is in Germany, which is a marketplace.

BI: Interesting, so you're reimagining how a bank works.

MK: Yeah, maybe. We have some core features delivered by us and the rest is from outside partners. But we as the bank take care of regulation, we as a bank take care of our customers' identity, we take care of the payment issues. We enable it by an API technology. We've already had one or two developer days in the UK.

We are, in a nutshell, an infrastructure platform with a banking licence. And this is what creates this kind of flexibility and possibility to ask a community — what do you want to have? We are agnostic. At the end of the day we are driven by the priority of our customers.

BI: What do you make of the UK's fintech scene?

MK: In the sense of adoption by the customer, Germany is actually the least developed country in terms of fintech. The German audience is super scared of any tech-driven innovation. They say, why do I need this? They worry we'll take their data. They're extremely scared of anything that requires data. Somehow they've trapped themselves.

We have almost 300,000 in our community and almost 90,000 fully KYC [know your customer, a legal identity checking requirement] customers. But this is only because we are offering you both — it's like the Sushi Samba [an Asian fusion restaurant in London]. We offer you traditional banking, but we spice it up with innovation.

The fintech environment in Germany is pretty poor. The UK is way ahead. This, of course, is part of the US influence because whenever a US peer thinks about going to Europe they think about going to the UK, not knowing that you do not regard yourselves as Europe.

BI: Within Europe where do you see the UK ranking — do you see it being one of your top markets?

MK: Absolutely. We see the UK being a core market like Germany to us. The majority of our loan book is already in the UK. On the other side we think the banking environment is extremely interesting in the UK. You have a very oligopolistic market in the UK. It's not a real competitive environment.

BI: You mentioned there's been quite a lot of talk of bitcoin in the community. You're quite popular with bitcoin fans in Germany, do you see bitcoin banking as a big opportunity here?

MK: It really depends on what we define as bitcoin banking. Today I have to say we do not touch bitcoin. We think regulators are doing good to understand what it really means. People make a mistake by thinking the euro, the deutschmark, the pound is given by nature. This is not good for you.

On the other side what I find more interesting to be honest is the blockchain technology [the software that underpins bitcoin and allows transactions]. Bitcoin is a use case for the blockchain technology. We also have to talk about what are the use cases for the bitcoin, because besides trading I don't see a lot.

We need to do way more trial and error on use cases of the blockchain. The objective should be that there is a huge advantage for the customer using it. Why am I saying that? Because I find even in an innovative environment there's a lot of dogmatism.

BI: So are you looking at the blockchain and how you can use it?

MK: By integrating Ripple a year ago, we already are. We're way closer than any other bank I would say. A bank's role in future will be protecting your identity. Identity will be the biggest asset.

BI: What does that mean?

MK: I hoped for that question. That means a bank is by law a trusted partner to you. I'm forced to double check your identity for money laundering reasons. So once I've done this, I could go to a fintech company looking for customers and say look, all of the customers I have are KYC'd. If the customer agrees, we can share the credentials with you.

BI: It goes back to what you were saying earlier about the bank as a marketplace.

MK: Absolutely. It's a platform, it's an infrastructure, it's a marketplace, it's shielding by a banking licence. All this is driven by our own propriety technology called Fidor operating system. It's ringfenced by our API environment. And that's modern banking.

Join the conversation about this story »

NOW WATCH: Animated map shows where all the world's McDonald's are

German digital bank Fidor is being acquired by Groupe BPCE, the second-largest banking group in France.

Fidor will continue as in independent business after the deal, announced late on Thursday, closes. Founder Matthias Kröner will remain as CEO. Financial terms of the takeover haven't been disclosed.

Kröner says in an emailed statement: "This move will allow Fidor to continue its international expansion and drive the development of our innovative digital technology even further.

"In a world of increasing volatility, it is important to be a member of a strong group and this transaction is strongly improving our overall financial sustainability."

François Pérol, Chairman of BPCE, says the deal is "a key step in the acceleration of the digital transformation of our group." BPCE was formed in 2009 through the merger of Banque Populaire and Caisse d'Epargne.

Digital-only bank Fidor was founded in Germany in 2009 and has 120,000 customers. It is unusual for two reasons — firstly, it puts a big emphasis on the idea of "community" in banking. Its message board has 350,000 members and is a key part of its offering. Fidor encourages customers to request services, changes, and offer advice to other customers.

Secondly, it's built more like an app store than a traditional bank. In Germany, Fidor offers core banking services but partners up with other companies to offer things like peer-to-peer loans and foreign exchange transfer. (It has plenty of other innovative features, like linking interest rates to Facebook likes.)

Fidor launched in the UK last September and BI interviewed Kröner in London at the time to get an idea of what the bank was about. We're re-publishing the interview below so you can see what BPCE was so excited about. 

Business Insider: Do you want to tell me a little bit about the Fidor story and where the bank is coming from?

Matthias Kröner: Well, how much time have you got? First of all, maybe I should share a little bit about why we set up a bank at a time like that. The team that set up Fidor, there's a core of really dedicated, innovative, rule-breaking guys. We ran a bank before already, this is our second bank. The bank we set up before was a similar direct banking, web-based approached.

BI: What was that called?

MK: DAB Bank. It was a very customer-focused approach, it was rule-breaking. There was a lot of transparency. For the first time we allowed people a very detailed look at their assets, the market price development and enabled them to act on market developments. It was there, like Fidor today, to primarily service the needs of the customer, not the bank.

Why do I think like that? I don't know, but I think I started my business life in the hotel industry and hospitality, and this is why I'm interested in concepts. I'm always interested in how you can set it up in a different way.

With Fidor we thought how can we improve the experience for the customer. With the onset of Web 2.0 we thought this is going to affect retail banking, 100%. And on this conviction we applied for a banking licence. Then the financial crisis started.

BI: Good timing.

MK: Perfect timing. On the one side we've been super annoyed by that, at one time thinking about stopping. On the other side, we had the chance to witness how the established players are acting and behaving in this environment, which they caused themselves.

We saw the Occupy movement, the "We are 99%" movement, how people suddenly started to publicly hate bankers, to call them banksters. We thought, well, that's the biggest starting signal of all. There was a must for Fidor. We received a banking licence in May 2009 and we kicked off our banking business in 2010.

BI: Am I right in thinking you launched here in April?

MK: Yeah, in a very silent, below the radar way. Why do we do so? We first of all want to test the temperature, getting familiar with the environment. You have your own rules like everybody. We've got a German licence which means we can passport that, but nevertheless it's a UK environment.

BI: How's the water been so far?

MK: To be honest, it's the second step we're doing, because we're very active in our loan book business already in the UK. That was going on way before — I would say 3 years now? But we are not acting on a Fidor brand name, we're acting with different loan partners and loan generators and financing and refinancing those parties. Again, we feel very comfortable being in this market. But now it will be Fidor brand.

What is the temperature? So far we feel comfortable. We have the first 100 or so community members, we have the first discussions going on in our community and it will get really interesting when we start to come around with the first products and offerings.

BI: So you haven't launched any products yet?

MK: No, community only so far. Why? Because as part of putting our toe in the water we're going to talk to these early adopting customers and users. We don't talk to them we listen, in order to find out what their priorities will be, what they want to see from a new bank, what they do not want to see. We're taking a mutual approach.BI: What products are you planning to launch?

MK: First of all, I would say we'll come out with a savings product. Then we will have a sequence of roll-outs and see how we walk along that. It's not all planned out. In the community there's a lot of conversation going on about bitcoin, so we will see how British regulators handle that. Will it be the top priority? We will see.

We will see what we can do with payments, maybe integrate Ripple. We're definitely going to come up with an SME [small and medium enterprise] product at some point, maybe not now but in the longer term. But longer term to us means 9 months instead of 3 months. I'm not talking normal banking longer term.

You can see what we have today in Germany, which is the current account for retail and corporate that is very rich in its functionality. It has different ways of sending money, it has peer-to-peer lending as well as normal loan products from us, savings and investments via crowdfunding, FX as well as precious metals.

We're teaming up with peer-to-peer brokers, crowdfunding partners — the fintech environment. Which means the product is as attractive as possible. Fintech we are embracing. We are very happy to integrate them into our product. Our account in the UK will become what it is in Germany, which is a marketplace.

BI: Interesting, so you're reimagining how a bank works.

MK: Yeah, maybe. We have some core features delivered by us and the rest is from outside partners. But we as the bank take care of regulation, we as a bank take care of our customers' identity, we take care of the payment issues. We enable it by an API technology. We've already had one or two developer days in the UK.

We are, in a nutshell, an infrastructure platform with a banking licence. And this is what creates this kind of flexibility and possibility to ask a community — what do you want to have? We are agnostic. At the end of the day we are driven by the priority of our customers.

BI: What do you make of the UK's fintech scene?

MK: In the sense of adoption by the customer, Germany is actually the least developed country in terms of fintech. The German audience is super scared of any tech-driven innovation. They say, why do I need this? They worry we'll take their data. They're extremely scared of anything that requires data. Somehow they've trapped themselves.

We have almost 300,000 in our community and almost 90,000 fully KYC [know your customer, a legal identity checking requirement] customers. But this is only because we are offering you both — it's like the Sushi Samba [an Asian fusion restaurant in London]. We offer you traditional banking, but we spice it up with innovation.

The fintech environment in Germany is pretty poor. The UK is way ahead. This, of course, is part of the US influence because whenever a US peer thinks about going to Europe they think about going to the UK, not knowing that you do not regard yourselves as Europe.

BI: Within Europe where do you see the UK ranking — do you see it being one of your top markets?

MK: Absolutely. We see the UK being a core market like Germany to us. The majority of our loan book is already in the UK. On the other side we think the banking environment is extremely interesting in the UK. You have a very oligopolistic market in the UK. It's not a real competitive environment.

BI: You mentioned there's been quite a lot of talk of bitcoin in the community. You're quite popular with bitcoin fans in Germany, do you see bitcoin banking as a big opportunity here?

MK: It really depends on what we define as bitcoin banking. Today I have to say we do not touch bitcoin. We think regulators are doing good to understand what it really means. People make a mistake by thinking the euro, the deutschmark, the pound is given by nature. This is not good for you.

On the other side what I find more interesting to be honest is the blockchain technology [the software that underpins bitcoin and allows transactions]. Bitcoin is a use case for the blockchain technology. We also have to talk about what are the use cases for the bitcoin, because besides trading I don't see a lot.

We need to do way more trial and error on use cases of the blockchain. The objective should be that there is a huge advantage for the customer using it. Why am I saying that? Because I find even in an innovative environment there's a lot of dogmatism.

BI: So are you looking at the blockchain and how you can use it?

MK: By integrating Ripple a year ago, we already are. We're way closer than any other bank I would say. A bank's role in future will be protecting your identity. Identity will be the biggest asset.

BI: What does that mean?

MK: I hoped for that question. That means a bank is by law a trusted partner to you. I'm forced to double check your identity for money laundering reasons. So once I've done this, I could go to a fintech company looking for customers and say look, all of the customers I have are KYC'd. If the customer agrees, we can share the credentials with you.

BI: It goes back to what you were saying earlier about the bank as a marketplace.

MK: Absolutely. It's a platform, it's an infrastructure, it's a marketplace, it's shielding by a banking licence. All this is driven by our own propriety technology called Fidor operating system. It's ringfenced by our API environment. And that's modern banking.

Join the conversation about this story »

NOW WATCH: Animated map shows where all the world's McDonald's are

While some miners are attacking Ethereum Classic, the spin-off blockchain based on the consensus and protocols of the original Ethereum blockchain continues to gain support. After miner Chandler Guo announced he and other miners plan to attack Ethereum Classic Tuesday, Bill Shihara, CEO of Bittrex, a cryptocurrency exchange, contacted CCN express his skepticism about the […]

The post Bittrex CEO Bill Shihara Questions Miner Attack on Ethereum Classic appeared first on CCN: Financial Bitcoin & Cryptocurrency News.