This week, SoFi announced they have just invited the first members off the waitlist for SoFi Money – their spin on providing a blended checking and savings account. The bank like service was revealed earlier this year.

SoFi’s research, as posted on their blog, uncovered the following frustrations that consumers have with traditional banks:

• They hate fees. Who wants to pay $12 to maintain a checking account?
• The technology is lame. It certainly doesn’t live up to other online experiences, like Amazon or Instagram. Why should you have a separate log-in at the same bank to manage your checking account and your mortgage
• Banks make (way) more off people’s money than they do. Why are we left to accept an average 0.05% APY on a checking account in a rising rate environment?

Sounds pretty straight forward to me. Banks suck. But then they need to charge stupid fees and payout interest rates that are negative in real terms to be able to pay for all those brick and mortar locations and all of the VPs hanging out at HQ.

So what is SoFi offering that is better?

SoFi says their mobile first approach, that combines checking and savings, eliminates the fees but provides improved services. They are taking a hybrid approach so if you really need to you may speak to a living person instead of a bot – including financial planning services. The interest rate they are paying (today) is 1.10% –  a big leap from the 0.05% previously mentioned. And, of course, they hope that if you use their current account feature you may consider some of their other financial services.

SoFi believes the digital banking space is going to get crowded – and they are correct. Marcus by Goldman Sachs is pushing forward and Revolut from the UK should cross the Atlantic any day now. There are more challenger banking operations in the queue. SoFi believes traditional banks will remain in the lead for the near future but Fintech competition will force them to improve their services. And if traditional banks don’t up their game, it makes selecting an option like SoFi Money so much easier.

The post SoFi Launches Bank Like Service: SoFi Money appeared first on FinTech Ranking.

Silicon Valley startup Stripe has partnered with digital payment providers Alipay and WeChat Pay to enable merchants using its platform globally to accept payments from hundreds of millions of Chinese consumers.

Starting Sunday, the partnerships will allow online merchants using Stripe to integrate the ability for Chinese users to pay with Alipay and WeChat Pay on their websites, the company said.

Stripe hopes the integration will help boost its revenues by allowing clients to tap China’s vast consumer market, where credit cards account for only a fraction of online spending, the company said.

Alipay is the flagship payment service of Ant Financial, the financial affiliate of major Chinese ecommerce company Alibaba Group Holdings and has over 520 million users. WeChat Pay has more than 600 million users and is the payment app of entertainment and social network firm Tencent Holdings .

“If you are an internet business this unlocks a new vast customer base,” John Collison, Stripe’s president and co-founder, said in an interview. In turn, Chinese consumers will have expanded choice as to which international online merchants they can purchase products and services from, he added.

Founded by brothers John and Patrick Collison in 2010, Stripe provides technology that enables merchants in 25 countries to accept payments online. It charges a fee on each payments transactions processed through its platform.

“If we can help a business double their sales, then it doubles our revenue from that business,” Collison said.

The partnership coincides with the company’s launch in Hong Kong.

One of the most valuable venture-backed financial technology companies globally, Stripe has risen in popularity among software developers and online merchants because of its ease of use.

It is among the cohort of young fintech companies seeking to reinvent the payments landscape by taking better advantage of digital technologies to offer more user-friendly financial services and products.

It had previously partnered with Alipay to enable only the U.S. merchants on its platform to integrate the Chinese payment service. The new global partnership builds on that experience.

“Demand for services from Chinese consumers is at all-time high,” Souheil Badran, president of Alipay for North America, said in an interview. The new partnerships will connect them to hundreds of thousands of Stripe-powered businesses around the world, he added.

The post Stripe inks global partnerships with China’s Alipay, WeChat Pay appeared first on FinTech Ranking.

The popular OCBC Pay Anyone e-payment services – which includes a new QR code cashless payment service – are consolidated into a standalone mobile app for our customers’ convenience

Singapore, 30 May 2017 – OCBC Bank has launched its first standalone mobile payments app which makes QR code cashless payments available at close to 2,500 NETS terminals. The new standalone OCBC Pay Anyone app brings together all OCBC Pay Anyone services and enhancements – peer-to-peer e-payments, QR code payments and access to OCBC Pay Anyone integrated with Apple iPhone’s Siri and iMessage – into a fast and easy one-stop access to e-payments. With the app, customers can simply scan QR codes at participating merchants’ NETS terminals to pay for their purchases directly from their OCBC Bank account. Payments through OCBC Pay Anyone have increased exponentially with a tenfold increase in the amounts paid and almost fourfold increase in average monthly transactions since last year.

The OCBC Pay Anyone app is available for download on the Apple and Google Play mobile app stores. From 1 June 2017, an OCBC Bank customer can pay for purchases at more than 1,000 merchants (from Robinsons to Zara, Marks & Spencer, Gap, Paradise Classic restaurants, Caltex stations and Gardens by the Bay) by scanning the QR codes on the NETS terminal or printed receipt using the OCBC Pay Anyone app. After authenticating the transaction securely with a fingerprint, the payment is immediately deducted from the customer’s OCBC Bank account and paid to the merchant through NETS. This is unlike mobile wallets which require additional steps to top up the mobile wallet using a bank account. By the end of the year, customers will be able to make QR code payments at more than 50,000 NETS terminals island wide.

Mr Pranav Seth, OCBC Bank’s Head of E-Business, Business Transformation and Fintech and Innovation Group, said: “It’s a war on cash! OCBC Pay Anyone has been a favourite payment service among our customers, who have embraced the movement away from cash and increasingly adopted paying other individuals using just phone numbers. OCBC Pay Anyone payment volumes have increased 10 times since May last year. Now, we want to bring the same convenience to paying for your regular shopping and meals using QR codes, so we decided to consolidate all of our OCBC Pay Anyone payment services into a standalone mobile app to bring greater convenience to our customers.

“The launch of QR code cashless payment adds to the suite of OCBC Pay Anyone e-payment services. I believe the pick-up of QR code cashless payments will be strong given the increasing acceptance rate of cashless payments in general over the years. We will continue to push the boundaries in mobile payments and move the needle in becoming a cashless society. We are excited about the new and varied cashless payment options that we will roll out on the OCBC Pay Anyone app.”

OCBC Bank customers get a $10 rebate for first-time QR code payments

From 1 June to 30 June, all OCBC Bank customers can enjoy one $10 rebate when they make their first QR code payment using the OCBC Pay Anyone app at Robinsons, Marks & Spencer, Paradise Classic restaurants or Caltex stations.

Customers simply need to download the OCBC Pay Anyone app, perform the one-time setup and make a purchase of any amount by scanning the QR code on a NETS terminal at Robinsons, Marks & Spencer, Paradise Classic restaurants or Caltex stations. The $10 cash rebate will be credited to the customer’s account in July.

Making a QR code payment with OCBC Pay Anyone

Once the OCBC Pay Anyone app has been downloaded, customers need to perform a one-time setup to enable payments via the app.

–       To perform the one-time setup:

–       Click “Get Started” and tick the box to agree to the app’s terms and conditions

–       Key in online banking access code and PIN

–       Enter the one-time password sent to your mobile device and click “submit”

–       A message will be displayed indicating the successful setup

–       Click “Next” to proceed with QR code payments

QR code payments are available on Apple iPhone devices running iOS8 and above, and Samsung devices running on Android 4.4 Kit Kat with the fingerprint recognition feature.

To make a payment at a participating merchant, customers simply open the OCBC Pay Anyone app, scan the QR code on the merchant’s NETS point-of-sale terminal or on the printed NETS terminal receipt and authenticate the transaction using their fingerprint. The app will prompt the customer to choose the OCBC Bank account to pay from. Once the bank account has been selected, customers click “pay now” to complete the transaction.

1. Scan the QR code on the NETS point-of-sale terminal or on the printed NETS receipt. Authenticate transaction with fingerprint.
2. Select OCBC Bank account to pay from, and click ‘Pay Now’.
3. A successful transaction message will be shown once payment is complete.

Evolution of OCBC Pay Anyone

Launched in 2014, OCBC Pay Anyone is the only mobile payment service offered in Singapore that lets customers send money directly to any bank account in Singapore using just the recipient’s mobile number, email address or Facebook account – without having to perform transaction signing using a security token or to add the recipient as a “payee”.

In September 2016, the daily transfer limit on OCBC Pay Anyone was increased from $100 to $1,000, bringing greater convenience to customers and allowing payments for bigger-ticket items. The average transaction amounts since then grew three-fold. In October 2016, OCBC Bank further enhanced OCBC Pay Anyone by enabling transactions using Apple’s Siri voice command feature and directly within iMessage.

The number of e-payments performed grew fourfold, and the amounts paid grew tenfold, from a year ago. Seventy per cent of OCBC Pay Anyone users are aged between 16 and 29. OCBC Bank’s market penetration among youths and young adults continues to deepen, with one in every two members of this segment an OCBC Bank customer. The growing popularity of OCBC Pay Anyone requires OCBC Bank to continue innovating so that this e-payment service can deliver beyond the demands of its customers.

QR code payments are the next phase of mobile contactless payments that OCBC Bank has embraced. The new OCBC Pay Anyone app will no doubt make payments even more convenient and accessible for customers.

The post OCBC BANK LAUNCHES CASHLESS QR CODE PAYMENTS WITH ITS FIRST STANDALONE MOBILE PAYMENTS APP appeared first on FinTech Ranking.

Rapid growth in the use of contactless cards means cash will be overtaken as Britain’s most frequently used payment method by the end of 2018, according to a new report. This latest forecast still does not herald the demise of cash – even in ten years’ time it is still expected to make up 21% of all payments.

UK payments market: Contactless cards set to overtake cash in 2018

Analysis carried out for UK Payment Markets 2017 forecasts that debit cards will become the most frequently used payment method in late 2018, three years earlier than previously predicted due in large part to the increasing popularity of contactless.

There were nearly 2.9 billion contactless payments in the UK in 2016, more than 2.7 times more than in the previous year (1.1 billion). Contactless payments made up 7% of the total number of payments in 2016, with the continued growth meaning that by 2026 more than one in four (27%) payments in the UK is expected to be contactless.

Debit cards were used 11.6 billion times in 2016, 14% more than the previous year, with just over one in five of these transactions made using contactless. Cash was still the most frequently used payment method in 2016, used for 15.4 billion payments (3.8 billion more occasions than debit cards). Four out of ten (40%) payments in 2016 were made using cash.

By 2018, when debit cards are forecast to overtake cash, 13.4 billion debit card payments are predicted, of which 4.6 billion (or one in three) are expected to be contactless. Cash is expected to be used for 13.3 billion payments in 2018, meaning it won’t be the most frequently used payment method for the first time.

“The popularity of contactless means that we expect debit cards to overtake cash as the UK’s most frequently used payment method in late 2018, three years earlier than we previously thought,” explains Adrian Buckle, Chief Economist at Payments UK.

“This is a significant shift but it’s vital to note that even in the face of this change, we believe any claims the UK will soon become a cashless society are wide of the mark.

People will always want to choose the payment methods that best suit them, and cash will remain a frequently-used payment method for the foreseeable future. In ten years’ time, we will still be using cash for one in five payments in the UK, even as mobile payments and other innovations provide ever greater choice about how to pay.”

In total, 38.7 billion payments were made in the UK in 2016. UK Payment Markets 2017 also publishes data and 10-year forecasts for the other main payment methods, to give a complete picture of the UK’s payments landscape for both consumers and businesses, across every different payment type.

Other notable highlights from UK Payment Markets 2017

2016

• Cash was still the most frequently used payment method in 2016, used for 15.4 billion payments.
• Debit cards were used 11.6 billion times in 2016, 14% more than the previous year, with just over one in five of these transactions made using contactless.
• 4.1 billion Direct Debit payments, worth a total £1,262 billion, were made in 2016.
• 3.7 billion Credit card usage grew in 2016, with 2.8 billion payments made – up 9% year-on-year.
• 2.1 billion Bacs Direct Credit payments were made in 2016.
• 2016 saw 1.3 billion payments made via remote (online or mobile) banking. These payments were transmitted via the Faster Payments Service or cleared in-house.
• 471 million cheque payments were processed in 2016, down 14% from 2015.
• 39 million CHAPS payments worth £75.6 trillion were made – 0.1% of the volume, but 90% of the value of UK payments.

2026 forecast

• 18.2 billion debit card payments forecast for 2026, 57% more than 2016.
• 8.7 billion cash payments predicted for 2026 – down 43% from 2016.
• 4.4 billion Direct Debits payments predicted in 2026 up from 4.1 billion in 2016.
• 3.7 billion Credit card payments forecast up from 2.8 billion in 2016.
• 2.2 billion Bacs Direct Credit payments.
• 2.3 billion remote banking payments, 1 billion more than 2016, transmitted via the Faster Payments Service or cleared in-house.
• 156 million cheque payments, down 315 million over 10 years.
• 43.5 million CHAPS payments, up 4.5 million from 2016.

The post UK payments market: Contactless cards set to overtake cash in 2018 appeared first on FinTech Ranking.

Accounts Receivable Marketplace

Qupital bills itself as Hong Kong’s first and largest online invoice discounting exchange. The company aims to solve the problem of companies not having quick access to cash by allowing them to raise funds on the site through the auctioning off of unpaid invoices, essentially securitizing their accounts receivable. Investors, or what the company calls “Funders”, can view and bid on invoices listed on Qupital by companies seeking to raise funds. Once the company receives payment from their debtors, Qupital automatically transfers the funds to the Funders along with interest. The company advertises itself as a secure trading platform that allows investors access to an asset class typically available only to large institutions.

Qupital was founded in 2016 by co-founders Andy Chan and Winston Wong. The $2 million seed round was led by Alibaba Entrepreneurs Fund and MindWorks Ventures with c0-investments from DRL Capital and Aria Group among others. The company plans to use funds from the round to enhance its technology platform and also to facilitate expansion in the region.

Another Sign of Asia’s Fintech Boom

Although this investment by Alibaba marks its first foray into fintech in Hong Kong, the company has been well engrossed in fintech previously. Mobile payments platform Ant Financial, a subsidiary of Alibaba, has been called the largest fintech company in the world. Recently, the company has made several other fintech investments in other parts of Asia, including investments in the Philippines and India, as well as a merger with Dallas-based money transfer company MoneyGram.

Fintech in Asia has seen an explosion of fintech investments lately, with companies in Hong Kong, Singapore, and Indonesia, in particular, raising increasing amounts of funds. Given Ant Financial announcing its commitment of $3 billion towards global expansion and the various sub-regions vying to become the premier fintech innovation hub of Asia, one can expect not only an increase of Alibaba’s interest in fintech in the region but also an increase in fintech investments in general.

The post Alibaba Invests In Its First Fintech Company In Hong Kong appeared first on FinTech Ranking.

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In many parts of the world, tech companies (TechFins and FinTechs) are beginning to dominate the FinTech scene except India. BATs (Baidu, Alibaba and Tencent) and Internet finance in China dominate the market now. PayPal (Braintree and Venmo), Stripe and the likes of Prosper/Lending Club/Sofi have made serious inroads in the US although not to the same extent as China where internet finance cos have more customers than traditional banks in some segments.

India is a bit different though. In FinTech, we see that everyone happily agreeing with everybody but what we need to do is to feel under the covers. FinTech is looking very different in India and the leader(s) that will emerge might surprise you. In this article, I take a contrarian view on FinTech here and analyze why young private progressive banks might not be so far behind as we usually think.

Tech as public goods

The Western world was different where proprietary systems were built in financial services and they proliferated over last so many years. India is following more of an App Store model – this is open innovation at a massive scale with interoperability built in. And this is available to the banks.

The financial rewiring in India has been a top-down process, led by visionaries like Nandan Nilekani and driven by government and central bodies like UIDAI and NPCI. India stack is public goods – not done the Alibaba way or Tencent (WeChat) where the keys to the kingdom are held by a few large players. Aadhaar and the keys to create new financial services experiences are available to everyone. And therefore, young private banks in India have a better chance than their peers around the world. As India (and many nations) is moving towards non-card payments, the NPCI, IMPS and UPI type of systems have become important weapons for these private banks.

Younger banks with less legacy

The source of funds would always be your bank account and so that is very important in India (and I would argue elsewhere as well). As you go from India (tier 1 cities) to Bharat (tier 2/3/4 and villages), you will see that non-banks have a challenge with managing trust. So that brings us back to banks. One thing to note is that in contrast to developed markets, Indian private sector banks are relatively younger (8-15 years on average) and have comparatively modern setup and less bulky infrastructure. Young Indian private sector banks don’t have legacy infrastructure (unlike the west) in many cases. Some of them are actually neo-banks in many ways. Some of them have a fairly modern mindset and are conceptualizing and rolling out new features all the time. From experimental new core banking solutions like Leveris, which can help set up a digital bank in no time to biometric ATMs that don’t require cards (DCB bank) to using wearable tech where customers earn points while walking and those points can be redeemed from bank merchant networks, the leap of faith is evident. Look at the founding years of some of the private banks: ICICI Bank – 1994, IndusInd Bank – 1994, Kotak Mahindra – 2003, Yes Bank – 2004, Capital Local area bank – 2000, HDFC – 1994, Bandhan Bank – 2015 (banking license in 2014), IDFC Bank – 2015, and new payment banks and small finance banks.

A lot of bankers at these private banks are relatively young people as compared to banks in the western world. Many private banking leaders are smart and progressive thinkers. Experimentations are happening at a massive scale.

Profitability and market cap

A lot of these private banks are profitable in India, and these big boys have moved very fast.

(I want our global readers to understand this point while reading this story.)

In terms of market cap they are much ahead of PSUs:

Look at the ones on the right (private banks).

B2B startups empowering banks

Some very smart people and some very smart solutions are being built by banks or for banks.

CRMNEXT, a B2B FinTech startup, offers Bank-in-a-Box solution that is designed to provide solutions for inquiry to sales management, eKYC, biometric integration, ready adaptors for CIBIL, Aadhaar/PAN verifications, etc. As an example, this solution will enable Ujjivan to engage from day one with their existing 2.8 million customers from more than 450 branches across India.

IndusInd bank implemented a real-time enterprise-wide cross-channel fraud and AML management platform. It then began reusing in-memory data to offer simultaneous real-time cross-sell and upsell. It’s fraud management and cross-sell ing together. It’s a fraud management system that is enterprise-wide and operates in real time across products (cards, current accounts, loans, etc.), channels (ATM, POS, branch, mobile, etc.) and customers, employees and third parties as explained by Celent. At IndusInd, a bank in India, CustomerXPs’ Clari5 solution has been integrated with 15 real-time and seven batch systems, and has revolutionized fraud and AML management within the bank. In addition, the bank began reusing in-memory data to offer simultaneous real-time cross-sell and upsell.

And in some cases partnerships – YES Bank and PhonePe and similar partnerships are great examples. Then there’s digital onboarding and eKYC solutions from companies like Signzy. KredX, Rubique and other lending marketplaces and solutions are all helping connect borrowers to lenders in a better fashion. Active.ai is building chatbots for banks!

Where are the Techfins of India?

Well, Flipkart and Snapdeal had a great opportunity that they have missed so far. They have tried but because of the overall issues with these companies and the core business requiring attention, we have not seen Alibaba/WeChat-style aggression. Regulations also play spoilsport for them. Although they have moved a lot of local market grocers from kachha (slips) bills to e-enabled for knowing them better and giving loans, they have not been able to bring the transaction e-commerce data, financial data and payments together at a big scale. Flipkart and others have disappointed. No tech unicorn growing in FinTech in India the way they should have. China’s Ant Financial, the financial arm of Alibaba, and JD.com, another online marketplace, have masses of data about those who buy and sell on their platforms. They know their spending habits and how much cash they can spare, so an easy next step is to offer them small loans. Is this a great opportunity for private banks in India due to the lack of Techfins?

So what does this mean? What are we seeing?

1. Kotak bank launched 811 wherein you can open a bank account sitting at home or while on the commuter train to office – complete digital onboarding and eKYC based on Aadhaar and PAN, taking away the need for branch visits and in-person verification. Kotak bank calls it India’s first downloadable account that can be opened in under five minutes.

Image: Landing page of Kotak 811

3. YES Bank has had an amazing FinTech journey – it’s a mix of internal and external innovation. YES Bank’s “API Banking” is a one-of-a-kind ERP integration where the client’s ERP system is integrated with the bank’s system, and the client can perform its banking-related activities from its own ERP system using APIs. It is the largest user of APIs in Indian banking.The introduction of API Banking led to the acquisition of many new clients, and the deepening of relationships with existing clients. In the first 12 months, 62 clients were onboarded on API Banking (payments and collections) with overall throughput value over INR 5,000 crore. (USD $750 million) as reported by Celent. API Banking has enabled clients to reduce Turn Around Time (TAT) days to hours and provided operational efficiency through auto-reconciliation of transactions and has transformed many companies’ processes.
4. DBS (Singapore) launched Digibank in India, a mobile-only bank which was probably the first of its kind in India. I wrote about it in the article A Glimpse Into the Future of Banking: India’s First Bank in an App. Digibank now has more than 1 million+ customers.
5. Bajaj Finserv (NBFC) is a great company as well and has 70 million accounts between lending and insurance and a heavy duty data, tech and analytics play.

And don’t get me wrong. There are 800+ FinTech startups in India (listen to this podcast for more). There are 39 FinTech unicorns globally and we might produce a few more. At LTP, we have helped 110+ startups connect with banks in various engagement models globally through our platform MEDICI. We are a big proponent of change tech is bringing to this industry. But many industry experts argue that they don’t expect that in the foreseeable future FinTech will have the kind of existential impact on banks that Netflix has had on Blockbuster. But they can force the banks to bring drastic reductions in pricing and profit margins on some key products. Banks have real advantages in serving the SME lending market, which should not be underestimated; banks’ cost of capital is much lower. These low-cost and reliable sources of funds help them in lending. With digital transformation they are undergoing right now, things will become interesting.

Nobody can predict the future, but customers won’t differentiate between technology companies, banks, startups or Techfins. We will see a more diverse market and more collaboration between product developers at small companies and tech teams in global banks as they create and distribute new products. There will be outliers from the startup world – Paytm as an example could be an exception. I am very hopeful of VSS and Paytm – instincts, speed, simple propositions, deliver at scale, tons of data (commerce and payments data) make it a remarkable story. Selling insurance and other financial products and more to come.

In true sense, FinTech is Fin*2 + Tech. It needs mastery over both financial services play and tech play. Plus, it’s a very regulated market in India and banks have an edge over startups due to that. A progressive government at the center pushing cashless payments and digital banking is another factor. And launching payment products like BHIM app and providing impetus to the digital economy via demonetization – it’s the making of a perfect storm. The Center is also asking banks to go fully digital from onboarding to lending – these exciting times to watch young progressive banks.

In this article, one thing I want to make clear is India’s public sector banking is a different ballgame. I don’t know if the public sector banks will be able to catch up. There is a huge difference between public sector and private sector banks. I heard a top PSU bank saying innovation = buying software they like. ?

The pace of innovation overall is slow in banks. The number of builds and experiments are an example. Once in six months at banks vs. two-three weeks sprints for startups. UX/UI is another area where banks have quite a journey to cover. All this fosters co-operation between banks and FinTech companies. FinTechs gain access to banks’ scale and customers. Banks can exploit FinTechs’ expertise in programming and in analyzing mountains of data. You have read a lot on this subject from us already, so let me stop now.

We will keep updating you on the developments!

The post India’s Alipay or WeChat Pay Could Be a Young Private Bank or Progressive NBFC appeared first on FinTech Ranking.

The band is kicking into overdrive, and the crowd is on its feet, going bananas. Your attention drifts and panic surges over you for a moment. Instead of swaying to the music with thousands of fellow concertgoers, your heart skips a beat, and you pause to pat your pockets or tap your toe on your purse. They’re still there, and your panic dissolves for now, but you’ll do this all again — actually, many times — throughout the show. It’s part of the concert-going routine.

At major music festivals like Lollapalooza or Austin City Limits, which attract hundreds of thousands of music fans for all-day summer lineups, keeping track of cash and credentials (while achieving musical liftoff) can be a burden — and pickpockets are notoriously opportunistic.

Increasingly, however, large music festivals and many others are starting to make use of mPOS technology to keep track of who’s coming and going through festival gates, simultaneously enabling attendees to pay for food, libations and merchandise, while leaving their wallet and paper tickets at home. Through partnerships with ticket technology providers like Ticketmaster subsidiary Front Gate Tickets, more music festivals are turning to wearables, like wristbands embedded with mobile ticketing and payment technology, simplifying the credentialing and payment process for both vendors and consumers.

In a recent interview, Ben Taylor, COO of Front Gate Tickets, told PYMNTS that the bracelets, which use RFID technology to communicate with ticketing and payment devices, were first planned for limited rollout in 2010 for ticketing and access control alone. But, as attendees received the technology favorably, Taylor and his team decided to have all partner festivals go paperless, beginning in 2013.

Soon after, they started exploring other uses for the technology, including giving customers the option to link debit and credit cards to the wristbands, enabling payments, which they began rolling out in 2014. Since then, the technology has really caught on with consumers, according to Taylor.

“We’re seeing some very high adoption rates for this technology,” Taylor said. “The festivals do a good job of encouraging people to link their payment or other information to the wristbands, and we’re seeing lots of people sign up for them, and then 100 percent of the people that link payments use it for at least one transaction, so it seems the fans definitely see a value in the service.”

Going Cashless for More Revenue? 

According to Taylor, the mobile technology isn’t just a value-add for customer festivals — it’s also a boon for the festivals and vendors that sell goods or services and accept payment via the wristbands.

Research shows that customers who use mobile payments technology to place food orders via smartphone apps often make larger purchases than those who order in-store — and Taylor said that a similar phenomenon exists among festival fans who use the mobile wristbands for payments.

“I think it’s a bit of [a] cruise ship mentality. It almost doesn’t seem real if you don’t have to pull out your cash or credit card until the bill comes due at the end,” Taylor explained. “So, we’ve definitely seen this technology increase the per person spending, and also the number of transactions of people who opt-in to the mobile payments.”

And, as mobile payment technology becomes more commonplace — not just at music festivals and through wearable devices, but also at retail stores and through smartphones — concertgoers have become even more willing to spend mobile money, Taylor noted.

“When we first rolled out payments, there was a pretty minimal adoption rate compared to ticketing,” he said. “But it’s exploded over the past three festival cycles. It’s nearly tripled the adoption rate that we’ve seen, and I think that’s in part because it’s a technology that people are becoming more familiar with.”

Safer, with Security Inside

Taylor told PYMNTS that one of the reasons he believes festivalgoers have flocked to the mobile features, in addition to the convenience offered by removing paper tickets and physical wallets from the equation, is safety.

While music fans may like to envision music festivals as bubbles of peace and love, they can be a perfect environment for bad actors. With so many strangers standing shoulder to shoulder, carrying large amounts of physical currency can make fans vulnerable to theft. By leaving cash at home, fans can worry less and enjoy the festival experience more.

But, of course, digital payments are not exactly theft-proof yet either, which is why Taylor said he and his team designed the bracelets with a few crucial security features.

“We are not actually storing any information on the wristband — it’s completely encrypted and tokenized — so there’s nothing that can be accessed by someone who shouldn’t be getting their hands on it,” he explained. “We also recognize that during a festival it can be kind of easy to lose a wristband or something like that, so we also require a PIN to be entered before any payments are accepted, so if someone finds your wristband and tries to use it and they don’t have your pin, it won’t work.”

Live Music’s Mobile Future?

With adoption rates for both ticketing and payment features on the rise, Taylor and his team looked to add more features to the technology, including fan engagement, loyalty and other capabilities.

He said the idea is to keep fans invested in the technology and get more fans interested in adopting it by making the wristbands an integral part of the festival experience. Taylor also noted that as more consumers use mobile technology for payments, engagement, communication and other day-to-day activities, he expects more fans to embrace paying for purchases via these mobile devices.

As more music festivals and fans go mobile thanks to boosted convenience, security and revenue, there could be another upside — more fans swaying on beat, thanks to fewer off-beat pocket pats and purse toe-taps.

To download the May edition of the mPOS Tracker, click the button below …

About the Tracker

The PYMNTS mPOS Tracker is your go-to resource for staying up to date on a month-by-month basis. The Tracker highlights the contribution of different stakeholders, including institutions and technology coming together to make this happen.

The post Playing With The Band — mPOS And Cashless Concerts appeared first on FinTech Ranking.

Snap’s growth rate increased only slightly in Q1 2017 — a bad start to its first quarterly earnings report since going public. Snap hit 166 million daily active users at a growth rate of 5%, compared to the 158 million DAUs it had in Q4 when it hit a 3.2% growth rate. Snap’s year-over-year growth rate continued to slip, falling to 36% year-over-year from 48% in Q4.

Snap shares immediately fell more than 24% in after-hours trading as investors fled, seeing its long-term potential scale diminished by its current growth struggles. It’s now trading around $18.19, by far the lowest since it went public.

Snap added just 3 million new users in North America in Q1 to hit 71 million DAUs, the same number as in Q4. Since it relies on its home market to drive its revenue, this slow growth is especially troubling. Snap added 3 million in Europe to hit 55 million DAU. In the Rest Of World region it added just 1 million users to reach 40 million DAU, which was actually an improvement since it stayed flat at 39 million in Q3 and Q4.

It’s clear that Snapchat wants to downplay the low user growth, considering it slapped a big “3 billion+ daily snaps created” label ON TOP of its DAU graph. As TechCrunch predicted, Snap is desperately trying to highlight the depth of its engagement in the face of weak DAU growth.

Competitor Instagram Stories, with 200 million daily actives, remains larger than Snap’s entire app, which is further dwarfed by Instagram Direct’s 375 million monthly users and the whole Instagram app’s 700 million monthly users.

Earnings Call

On its first earnings call, CEO Evan Spiegel sounded glum, and spoke for just a few minutes. He focused on highlighting the company’s progress on Android development. Spiegel said that improvements to the performance of the Android app led Snapchat to double the amount of net additional Android devices on the network, and Android accounted for 30% of net additional users in the quarter.

Chief Strategy Officer Imran Khan says that Android improvements led Snapchat to now see an average of “over 30 minutes” per day per user, up from the 25 minutes to 30 minutes figure it gave ahead of the IPO.

Snapchat grew quickly from its early days, hitting its stride in late 2015 and early 2016. It grew 13.8% in Q4 2015, 14% in Q1 2016, and 17.2% in Q2 2016 to reach 143 daily active users. But in August 2016 launch of competitor Instagram Stories and the removal of the auto-advance feature that chained friends’ Stories together. TechCrunch predicted Instagram’s clone might not lure away loyal Snapchatters but could significantly hinder its growth. Analytics companies and social media celebrities told TechCrunch that they had seen Snapchat view counts drop between 15% and 40%, while some users had begun to prioritize sharing and watching on Instagram.

When Snap Inc filed to IPO in February, it revealed numbers showing that growth had plummeted. Snapchat grew just 7% in Q3 2016 and 3.2% in Q4. That means Snap’s growth fell nearly 82% to just 1/5th of its speed before Instagram Stories’ launch.

Since the IPO, Facebook has only gotten more aggressive about copying Snapchat. It launched Messenger Day, WhatsApp Status, and Facebook Stories — all clones of Snapchat Stories. Meanwhile, Instagram Stories hit 200 million daily active users, surpassing Snapchat’s entire app. Plus it launched a revamped Direct messaging feature that combined Snapchat-style ephemeral chat with traditional permanent messages.

Snap has sought to stay one step ahead of Instagram and Facebook. It’s developed more “Shows” with television networks for its Discover section. It began rolling out a Stories Search feature for viewing publicly submitted posts about certain topics. And it’s launched new creative tools like its Scissors cut-and-paste feature, Magic Eraser for photoshopping objects out of images, and augmented reality World Lenses that insert make-believe 3D objects into your Snaps.

Now with growth still struggling, the question is whether Snapchat can continue to survive Facebook’s onslaught, especially as the tech giant rolls out Snap’s best features to its international markets, potentially blocking future growth for Snapchat.

If it can’t prove it can get to massive scale, Snap will have to tell a tougher story about grinding out a higher average revenue per user and deeper time spent in the app in order to grow its business. But the problem is that ARPU isn’t growing fast enough either. While it’s normal to earn less in Q1 than the holiday Q4 season, Snap’s ARPU grew just 7.1% since Q3 2016.

Without rapid user or revenue per user growth, Snap investors are reconsidering its formerly lofty valuation.

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