Innovation and Banks: Like Fish and Bicycles [TWIEB #14]

This week it was clear that mobility continues to drive much of the innovation going on in the Fintech space. It was also evident that mobile payments are at the top of the agenda for most banks although, discussions from the recent BankInnovation 2012 summit highlight the fact that Banks themselves (not unsurprisingly) have not been responsible for most of the innovation they now use. Even the credit card, apparently, came to them from elsewhere.

Happy Easter!

Banking Business Review (BBR)
Google buys payment technology firm TxVi

Google has acquired mobile payments technology company TxVia to enhance its digital payments service. TxVia provides mass-market prepaid cards, general purpose re-loadable cards as well as more B2B-focused initiatives like incentive payments, government disbursements, payroll and expense management. The company said that the acquisition will assist it to counter balance the growing impact from its arch rival such as PayPal. It also potentially gives Google a whole new raft of products that can be plugged into its payments service.

Bank Innovation
BI2012: Outsiders Rule Banking Innovations
In innovating banking, it is not the American financial institutions doing the creative work. (From BankInnovation 2012) At least that’s what fintech startups believe. “Financial institutions tend to solve their problems and force it on customers,” said Shawn Budde, co-founder and chief risk officer at short-term loan provider ZestCash, during a panel at last week’s Bank Innovation 2012. “Frankly, almost all innovation is coming outside of the banks. Banks aren’t doing the innovating for the most part.” Budde pointed out that even the development of credit cards came from outside traditional banks decades ago.

American Banker
Bump Pay Nudges Mobile P-to-P Market
The apps provided by Bump Technologies, which let people share data and photos by touching their phones together, have proven popular — the app has attracted 80 million users in three years. While the technology’s use as a payments enabler has been slowly developing for the past couple of years, Bump believes there’s enough of a current opportunity to spin off a Bump app dedicated entirely to payments. Bump Pay, which is currently available for the iPhone through a Bump Technologies subsidiary called Bump Labs, enables two smart phones using Bump apps to transfer card or account payments data by tapping against each other. The transactions require physical contact, rather than the near-field communication wireless technology that drives most tap-and-pay mobile phone payments and is the favored technology of large mobile payments initiatives such as the Google Wallet and the Telecom-driven ISIS.

VentureBeat
PayPal announces new pricing model, creates suite of mobile products

PayPal announced that it has consolidated its payments system today, with some upgrades to the way small businesses accept payments online, offline, and in the mobile world. “PayPal Here was just part of a fundamental change for small businesses,” said Peter Karpas, PayPal’s vice president of customer engagement, in an interview with VentureBeat. “Small businesses are the heart of PayPal, just like they’re the heart of the country.” The new, tiered system is called PayPal Payments, a small departure from its original “Website Standard” and “Website Pro” offerings. The company is dropping “website” in a move that it compares to Apple dropping “computer” from Mac Computers to define itself a broader technology company.

Mobile Payments Today Blog
The high stakes world of mobile payments
When we created our immensely popular and wildly informative infographic last year explaining just what a mobile payment is, we were gratified that so many people found it useful. Now we’re being asked about all of the companies that seem to be jumping into the mobile payment game. It’s a good question. Almost every day a new player enters the market. And why is that? Because so much is at stake. The expectation is that a large percentage of the $6.2 trillion in credit card transactions is going to migrate to mobile. (And that doesn’t even include other transaction types that could be supplanted by mobile payments.)

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