Bitcoin backers have big dreams

Bitcoin backers have big dreams—dreams of reinventing the financial system based around a currency not issued by governments and not subject to the whims of central banks. But the cryptocurrency’s volatility over the last few months has raised questions about whether most people would want to depend upon it to pay for goods and services.

Despite the wealth of bitcoin-related startups entering the market, even bitcoin’s most avid supporters admit that its volatility might not subside anytime soon. But that might not matter. After all, bitcoin isn’t really a tool for normal consumers; while it may be used by companies to exchange money and avoid transaction costs, there’s little reason for small-time consumers ever to use bitcoins directly.

http://qz.com/87556/someday-you-may-use-bitcoin-without-even-knowing-it/

Google figures out the simplest, most profound way to send money: over email – Quartz

Two years ago, Google promised to “make your phone your wallet.” But it hasn’t delivered, largely because phone manufacturers and wireless carriers have been wary to sign onto the service, known as Google Wallet.But Google may have just found a creative way into mobile payments that doesn’t require any other companies to cooperate: email.Google announced that it will gradually allow adult Gmail users in the US to attach money to their emails the same way they might attach documents, images, and other files. Transactions are free for users who link their bank accounts directly to Google Wallet; using a credit or debit card costs 2.9%. There’s a limit of $10,000 per transaction.Sending money over email is one of those incredibly simple ideas that hides how profound it could really be.As previously conceived, Google Wallet involved waving certain NFC-enabled Android phones in front of receivers installed at select businesses. Or you can download an app to transfer money, which is how competitors like Venmo and eBay’s PayPal work, too.All of that is downright cumbersome compared to the simplicity of sending an email, which could help introduce many more people to mobile payments. Google is the world’s largest email provider. Think of how SMS-based money transfers allowed mobile payments to spread quickly in the developing world. Gmail is, in a sense, the SMS of developed economies.Google can also help solve another point of friction with mobile payments, which is that both sides of the transaction need to have accounts with the service handling the money. The same is true for Google Wallet transfers, even over email, but having a Google account is way more common than having an account with, say, Venmo or PayPal. Google may be the closest thing the world has to a universal bank.That is, until alternative currencies like bitcoin—which don’t work that way and allow for more seamless transactions—start to gain mainstream adoption.

via Google figures out the simplest, most profound way to send money: over email – Quartz.

Leaning Down: Facebooks Stock At Its IPO Anniversary – Forbes

Any reflection on the Facebook IPO should probably extend to Silicon Valley itself. Increasingly, it seems, the center of America’s technology innovation has not been living up to the hype. It’s not just the failure of the most high-profile tech IPOs of this era—Facebook, Zynga and Groupon—or the end of Apple’s incredible stock-market run. There is also the disappointment of the venture capital model, which has with very few exceptions failed to deliver adequate returns for many years now, especially given the liquidity premium associated with such investments. The big tech company that is now surging is located in South Korea. And the Internet economy has yet to produce the GDP gains in the U.S. associated with prior technological revolutions. Even the long-trumpeted productivity gains have failed to materialize. The economic benefits of whatever goes on in Silicon Valley, to a certain extent, have remained there. The life lessons offered by the titans of Silicon Valley, like Sandberg and Thiel, are generally well-received and lauded, but often feel like they are coming from some reality-distorted tech dreamworld, where people are paid not to go to college and women get to build nurseries next to their offices.

via Leaning Down: Facebooks Stock At Its IPO Anniversary – Forbes.

Will BitCoin be a “Facebook” or a “Myspace”? Either way, it’s a revolution. – Forbes

Everybody needs to calm down about BitCoin.  There has been an explosion in the virtual currency’s price in the last few months.  Below is the 6 Month price graph as of  the USD :: BTC conversion rate.  Not featured on this chart are the years 2009 through 2011, on which you would see two more orders of magnitude growth at the very least.   Phenomena like this don’t come along that often; charts like these forge millionaires and financial legends.  As appealing as the fantasy is, we have not yet seen how this particular instance of virtual currency will pan out.  Which is why everybody needs to calm themselves.  Virtual currencies (vTC) are not a new thing; far from it.  There are quite a lot of them out there, just as there have been many incarnations of the mobile phone, the social networking site, the blogging platform, and almost any other technological advancement that has ever happened.

via Will BitCoin be a “Facebook” or a “Myspace”? Either way, it’s a revolution. – Forbes.

Mobile to outpace other payment methods in next 5 years | MobilePaymentsToday.com

Online shopping may be where the attention is focused, but the brick-and-mortar retail store is still where 93 percent of total U.S. retail dollar volume goes. This, according to a new study from researchers at Javelin Strategy and Research.The new study also said that mobile payments will soon begin affecting the point-of-sale retail market in profound ways.”The retail POS market is evolving at a remarkable rate with the increased popularity of the e-commerce and mobile payments markets,” said Aleia Van Dyke, industry analyst at Javelin Strategy and Research. “Today’s consumers are demanding more digitized payment options to enhance their in-store shopping experience. The advanced features of non-traditional payment options like mobile and prepaid cards have encouraged adoption with today’s tech-savvy shoppers.”According to the new Javelin study, mobile payments will reach $5.4 billion by 2018. Admittedly, thats a tiny portion of retail POS purchases, which Javelin estimates will reach $4.2 trillion in 2018.

via Report: mobile to outpace other payment methods in next 5 years | MobilePaymentsToday.com.

3 Things Banks Must Do to Survive the Mobile Payments Jungle – American Banker Article

Bankers frequently ask us how mobile payments will generate revenues and profits. But an even more burning question may be: How much do banks stand to lose by not providing a robust mobile payments offering?

Some consumers maintain a combination of a checking and savings account and perhaps a brokerage account or mortgage with their bank. Consider the risk to that bank if a national retailer with a financial services franchise including thousands of branch outlets, or a new entrant such as PayPal, inserts itself into that customer relationship by offering a mobile wallet with enticing discounts and loyalty rewards.

In this worst-case scenario, the bank loses that valued credit card relationship along with the deposit base as the customer redirects his cash flow. The potential threat is significant: the six largest credit card issuers in the U.S. earned a combined $92 billion in revenue during fiscal year 2012 from their credit card businesses.

Now consider the possibility of these alternative players moving beyond payments by offering checking or bill payment services. Once they have convinced consumers to jettison their bank-issued plastic, they may begin to peel consumers away from their banks by providing products similar to traditional banking products, but with more attractive features at less cost.

Deploying a mobile offering is not solely a defensive strategy of course. For those banks seeking to grow, mobility offers a way to not only attract new customers, but to further engage existing customers and extend share of wallet. Mobility can help banks become more enticing to customers by enabling them to receive offers when and where they want.

We believe that mobile payment technologies such as cloud wallets, QR codes and near-field communication (NFC) payments will be the next big thing because of their rich feature functionality, so banks should be investing accordingly. Certainly, major payments players are already pursuing a similar strategy, including Google, Isis (the joint venture among AT&T, T-Mobile and Verizon) and Visa. While NFC has not taken off as quickly as initially predicted, Gartner estimates that by 2015, approximately half of smartphones globally will have an integrated NFC capability.

via 3 Things Banks Must Do to Survive the Mobile Payments Jungle – American Banker Article.

Mobile payments will become mainstream in next four years – AIB Merchant Services – Digital Life – Digital Life | siliconrepublic.com – Ireland’s Technology News Service

“Consumers, retailers and technology developers will see mobile payments becoming mainstream within the next four years,” said AIBMS general manager Nigel Motyer, opening the event, which was attended by 150 people, including merchants. “Consumers will insist on mobile loyalty rewards and coupons, making their mobile shopping decisions based on this.”

Jon Rutter, director of product management for mobile solutions at US payment processing company First Data Corporation, advised merchants not to be complacent when it comes to adopting new technology. “Consumers have an increasing amount of power and will take business elsewhere if dissatisfied,” he warned.

“You have to get ahead of that curve, get in touch with your consumer base. Over 80pc of the world population have a mobile device. One-third of all Facebook usage and one-half of all Twitter use is mobile,” he added, explaining that consumers want a seamless experience. With First Data being an AIBMS partner, Rutter unsurprisingly recommended that merchants develop partnerships to leverage others’ expertise in m-commerce in order to keep up with consumer demands.

via Mobile payments will become mainstream in next four years – AIB Merchant Services – Digital Life – Digital Life | siliconrepublic.com – Ireland’s Technology News Service.

Why Is It Difficult to Align Strategy with Social Impact?

In Michael Porter’s 1996 article “What is Strategy?”, he defined a company’s strategy as differentiating its activities from competitors to create a unique and valuable market position.  This article was framed from the perspective of a for-profit company seeking competitive advantage and profit.  However, Columbia Business School’s 2012 Social Enterprise Conference is asking how we can re-frame this narrow definition of strategy and build strategies within and across sectors to make social impact and tackle major social and environmental issues.There are several challenges to creating coherent strategies across sectors that will align numerous organizations.  First, the desired outcome is not obvious. For-profit companies can rally around maximizing shareholder value as the indisputable goal, but it is difficult for organizations fighting poverty to determine which outcomes could be measured to signal success.  Second, it is arguable which activities will most effectively lead to a desired outcome to reduce poverty or improve public health.  This continues to be true though organizations are using innovative data approaches to measure their outcomes. Finally, even with a game plan, financial incentives generally don’t exist to propel various organizations to execute on a single strategy.  In addition, the sources of funds and the priorities of funders can dictate the substance of many strategies.

via Why Is It Difficult to Align Strategy with Social Impact?.

What the mobile payment craze is really about: Coupons! | Mobile – CNET News

Your smartphone is going to get more adept at handling money, but maybe not in quite the way youve been imagining it would.Theres been a lot of talk lately about mobile payments and how new apps or NFC technology will let you pay for things with your smartphone. But the truth is that this market is less about finding a new way for you to pay for things and more about offering you an easier way to carry and redeem coupons and special offers.Whats the most successful mobile payment system to date? Its an application that can be downloaded onto your phone to pay for coffee. Yes, the Starbucks app, launched in January 2011, has processed 55 million transactions, the company has said, adding that it processes more than a million mobile phone transactions per week. The app, which is quite simple, uses a bar-code-like technology to scan your phone. But thats as far as it goes — its a payment app used by only one merchant.Then why is it so popular? Its not because you can pay for a latte with your phone instead of pulling out cash or a credit card, but because its also your loyalty card. It keeps track of how many times youve visited the store and what youve purchased so that Starbucks can push you more offers and coupons that keep you coming into its stores. And the beauty of integrating this into a mobile app is that you dont have to carry around that card on a key chain or tucked into your wallet. Its always with you on your phone.Starbucks Rewards a la Android.Credit: StarbucksIts this concept of digitizing things you often carry in your wallet that has customers excited, says Jaymee Johnson, director of marketing for Isis, a new mobile payments company established by three of the nations largest four wireless operators.”I can give you a better way to pay,” Johnson said in a recent phone interview. “But thats not broken. Its not too taxing to pull out a plastic credit card from your wallet. But what mobile payments also give you is a way to manage your loyalty cards and your financial life.”In other words your “digital” wallet is where you can store all your loyalty cards, coupons, receipts, and even some day your drivers license. These apps also have the potential to give you real-time banking and financial information, so that you know how much money is in your account.But its the couponing and special offers that consumers get from using these apps that will drive usage most immediately. With the growth of local daily deals services like Groupon, and with the use of coupons on the rise, consumers are looking for more convenient ways to redeem rewards. According to the retail trade publication Retail Gazette, 58 percent of consumers now shop with coupons. And coupon use has grown by 40 percent in the last four years.

via What the mobile payment craze is really about: Coupons! | Mobile – CNET News.

Private Currency Competition Is The Monetary Answer – Forbes

The push for monetary reform is on, and intellectuals seeking to reform the monetary system in accordance with free market principles are seriously debating two alternative solutions. One is a return to the gold standard in some fashion. The other is a free market in currency, i.e., private currency competition. Toward the latter end, Rep. Ron Paul has sponsored a bill repealing legal tender law.

Their primary concern is the establishment of perfect money, which they define as money which changes in value the least. A much stronger case can be made for private currency competition than for a national gold standard in achieving this goal. Broadly speaking, private currency competition can provide the means to both a better concept of money (i.e., the development of an ideal monetary standard), and a better practical implementation of a monetary system.

Regarding the first advantage, some believe that humanity has already found the ideal monetary standard in gold. However, there are important reasons why alternate standards should be tested on the market, not the least of which is the theoretical case for commodity baskets.

To say that money should be stable necessarily implies that there is something by which the value of money remains stable; stability does not exist in a vacuum. It is generally accepted that commodity price trends mark the stability of the currency in which they are denominated. A decline in currency value is expressed as a general rise in the price of commodities, which are fundamental to an economy. Commodities should therefore be candidates to serve as a monetary base. Among others, Benjamin Graham and Friedrich von Hayek advocated a basket of commodities, the latter within the context of a system of private currency.

Hayek believed that the measure of a private currency’s stability would be the aggregate price of a basket of commodities in that currency over time. A constant aggregate price is the definition of stability. Issuers would achieve this stability through loan extension and expiration operations (the major, long-term method) or currency trading (the minor, day-to-day method).

via Private Currency Competition Is The Monetary Answer – Forbes.