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Is It Time for Mobile Payments to Take Off in Brazil?

 3 min read / 

Two years is a long time for technology development. Back in 2015, several home-grown mobile payment apps were taking off. Still, none of the big players was showing a real interest in the country.

Fast forward two years and the mobile payments landscape is very different. The major players are betting big on Brazil: Samsung Pay arrived in 2015, and Google Pay was launched in October 2017.

Now, Android Pay finally arrived in Brazil too. It operates with near-field communication (NFC) technology, the same way Samsung Pay and Google Pay does. Despite coming just after Google Pay, the launch of Android Pay is a potential game-changer.

The Hurdles

While Apple Pay has yet to be launched in Brazil and Samsung Pay has had a relatively low adoption rate so far, Android Pay has a promising future, at least on paper.

On the upside, smartphone penetration is growing exponentially in Brazil. In 2016, 70% of the population already was already using a smartphone compared to only 33% in 2012. This is mainly due to the sales of mid-range, affordable handsets.

Android OS holds a market share of 82.8% (as of January 2017) in Brazil, according to Statista. Android Pay also partnered with the biggest Brazilian banks (Banco do Brasil, Itaú, Caixa and Bradesco) and credit card issuers MasterCard, Visa and Brazil’s own Elo.

However, Brazil’s financial inclusion is a different story altogether: only 30% of the population has a debit card, and credit card penetration is even lower (according to World Bank data). To use Android Pay or any of the other mobile payment services, users will have to link a debit or credit card to the app. So, those who own a smartphone but do not have a debit/credit card will not be able to use the service.

The Future of FinTech

Traditional financial institutions, like retail banks, have lagged behind in emerging economies – financial inclusion is clearly happening in the FinTech sector. The FinTech scene in Brazil is booming, and São Paulo is putting financial technology on the map in Latin America – that means, a person does not need to go through a bank to get credit, make payments or send money to friends (P2P). This is a trend not only in Brazil but in all emerging economies.

Other adjacent issues are getting in the way of mobile payments adoption. For instance, problems with NFC technology itself and a widespread lack of trust in mobile payments – 44% of Brazilian internet users are concerned with fraud when making a purchase through mobile wallets or apps.

Even with all the hurdles in place, major players believe that Brazil has reached a certain level of technological maturity and financial inclusion. The next few months are going to be crucial for Android Pay and Google Pay, and high adoption will be key.

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South Korea Bitcoin Regulation on The Horizon

 1 min read / 

South Korea Bitcoin

The Story

South Korea’s government held an emergency meeting to discuss the impact of cryptocurrency speculation last Wednesday. Banning minors from investing and introducing capital gains tax on cryptocurrency were suggested as means of protecting citizens, reports say.

The meeting was a response to talk of cryptocurrencies being in an asset bubble and the impact investing is having on younger generations. New measures to tackle this problem could be announced by the end of the week, according to Reuters.

Why It’s Important

South Korean exchange Bithumb – the worlds busiest – has hit it off with students. The ease of opening an account and the option to invest small amounts has caught the attention of many young people.

This group’s obsession with the digital assets prompted the emergency meeting. President Moon recently expressed his fear of students joining the trend and becoming obsessed with the rapid price changes of cryptocurrency prices. He labelled this a “serious pathological phenomenon.”

“Some even abandoned their studies and part-time jobs as they believed they could make much more money by investing in bitcoin,” said Reuter Correspondent Dahee Kim. The trend appears to be causing social problems in the country.

The country banned initial coin offerings back in September.

Keep reading |  1 min read


Jamie Dimon Comments on Bitcoin After Futures Contracts Go Live

 1 min read / 

Jamie Dimon Bitcoin

The Story

Source: CNBC

“I remain highly skeptical of it,” said JPMorgan’s CEO Jamie Dimon, when recently asked about bitcoin. “I’m open-minded to uses of cryptocurrency if properly controlled and regulated,” Dimon added. The executive, who famously called bitcoin a “fraud” appears to have softened his opinion just days after the bitcoin-based futures derivative began trading on the Chicago Board Options Exchange.

Why It’s Important

This is the first time Dimon has spoken about bitcoin for two months. The timing of Dimon’s comments might suggest JPMorgan will offer the bitcoin derivative to its clients. The contract would allow clients to take long or short positions on bitcoin’s price.

Similar contracts will trade on the CME and Nasdaq exchanges in the near future.

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SEC Warns Against Bitcoin and ICOs

 2 min read / 

SEC Bitcoin

The Story

“If a promoter guarantees returns, if an opportunity sounds too good to be true, or if you are pressured to act quickly, please exercise extreme caution and be aware of the risk that your investment may be lost,” said US Securities and Exchange Commision Chair Jay Clayton regarding buying cryptocurrencies and investing in ICOs. Clayton urged investors to ask several questions before investing in cryptocurrencies.

While he said ICOs “can be effective ways for entrepreneurs and others to raise funding”, he warned that “any such activity that involves an offering of securities must be accompanied by the important disclosures, processes and other investor protections that our securities laws require.”

Why It’s Important

The SEC’s message is clear: while they welcome innovation, the legal basis for regulating securities has not changed. This is quite a contrast from South Korea and China, who both banned ICOs in September.

Regulation of cryptocurrencies has been expanded under Clayton’s watch. Last week the SEC’s Cyber Unit filed charges against an ICO for defrauding investors and shut down a San Francisco based ICO just yesterday.

Cryptocurrency markets are likely to remain largely unregulated, but ICO surveillance appears to be on the rise.

What The Bitcoin Futures Regulator Had to Say

Head of the Commodities Futures Trading Commission (CFTC) J Christopher Giancarlo, who approved the bitcoin futures contracts which recently went live on the Chicago Board Options Exchange, said investors should be aware of the “potentially high level of volatility and risk”. Giancarlo stressed that the CFTC would not be able to protect investors trading cryptocurrencies in many venues.

Keep reading |  2 min read