Carpadium Consulting

• The High Street Bank Re-Imagined: NewBank http://bit.ly/9I710d /via @bankingreview #
• Regulators turn up the heat on social media-linked scammers: http://bit.ly/d6qsCp /via @finextra #
• Our Monetary Future: Is gold moving from West to East? http://bit.ly/aGPyY9 /via @jonmatonis #
• Time to go short on gold? http://bit.ly/aqQYdl /via gata.org #
• Is this Fiserv's version of the Australian Mambo P2P payment service? http://bit.ly/bzIVBQ Or perhaps that should be the other way around… #
• Is Banking's contribution to the economy overstated? http://bit.ly/dzZIin #
• Big banks need IT reform almost as badly as regulatory change: http://bit.ly/9Z9dJN #
• CurrencyFair cuts out banks for foreign currency exchange: http://bit.ly/9vbFs4 Kind of like a swap meet for currency. #

• Can this work? "Bitcoin is a peer-to-peer network based anonymous digital currency" http://bit.ly/cG19ME #intrigued #
• More next-gen banking concepts RT @peterc @al3x http://www.bbc.co.uk/news/10614802 #

• Sydney Morning Herald says "online ID fraud losses explode to $1.3bn a year" http://bit.ly/bmP1v6 #
• Here's a novel micropayment system: Flattr http://bit.ly/bl6veC The way their biz model makes payment recipients participate is very clever. #

• Groklaw unpacks the US Supreme Court's decision on business model patents: http://bit.ly/ap7ZbU Finally, some sense on obvious patents? #
• Steeling millions of dollars, 25c at a time: http://bit.ly/anRWPj /via spectrum.ieee.org #
• The "PayPal Upgrade Calculator" helps businesses compare PayPal fees with merchant account fees: http://bit.ly/b7cgm6 /via @hackernews #
• Perhaps there's less in PFM than we thought? Personal finance startup Wesabe prepares to shut down http://bit.ly/bazun5 /via @venturebeat #
• As Wesabe closes new startup InDinero launches as the "Mint for Business" http://tcrn.ch/bojPh4. Will Business PFM work? #
• MasterCard’s Take on the Future of Electronic Payments http://bit.ly/9KZcre /via pymnts.com #
• Success with the M-Pesa in Kenya suggests mobile money can work, but can it go mainstream? http://bit.ly/c8ViXA /via pymnts.com #

• Visa's payclick takes on PayPal for micropayments: http://bit.ly/d89MF5 #

• We've been using @medleysystems to handle timesheets and expenses for about 6 months or so and its a great product. Well worth a look. #

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• RBA to "keep an eye on fees" http://bit.ly/blrz4i because "industry progress not enough for Board to abandon pricing role in the industry." #
• Carpadium quoted in PaymentsSource.com re: interchange fee regulation: http://bit.ly/aNTkYO #

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• This is a surprising result: UK card fraud trending *down* http://bit.ly/9qud2R #

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There have been rumours for a while now that @jack from Twitter was working on a new payments venture. Well, it seems that those rumours are true with today’s announcement of SquareUp.

The home page has some information about what they are doing, but the service is in soft-launch / invite-only mode at the moment so full details are not yet available.

Straight away, SquareUp looks cool, and from what limited information is available on the site, it looks like it has the potential to shake-up the way small businesses work with credit cards to accept payments.

Two things stand out. Firstly, it looks like it is designed only for card-present transactions (as far as I can tell), and secondly, it uses a magnetic stripe reader to acquire the card details. The first point means that its not likely SquareUp can be used for online payments, and the second point will probably mean that it does not handle chip cards.

However, this does not mean the system is without a security overlay. One neat feature is that it supports a form of photo id check. When a merchant accepts a payment, the iPhone application shows them a photo of the cardholder, which they can use to verify against the payee. I have to assume that this only works for cardholders that have pre-registered a photo with SquareUp.

To some extent (but certainly not all), this gets around the need to use a chip card, although I wonder what the card schemes will have to say about this as they roll out chip cards and readers everywhere.

One final note about SquareUp that is specifically relevant to the Australian market (although I have no information about plans to roll-out the service here) is what it might look like against the proposed MAMBO payments service.

Is this another payments innovation that the big banks should take notice of, or something with a limited niche for use by small businesses currently lacking in ability to work with credit card payments?

My first impression is that it will certainly be successful in that niche, however you have to wonder what they might have up there sleeve. If we have learnt only one thing from the history of Twitter its that they understand how to build a platform.

M@

Update 1: Here’s some words from the Man himself. Pretty much confirms my initial thoughts. Still no CNP option, as far as I can tell.

Today’s Sydney Morning Herald has an article about how Murdoch’s The Times in the UK will start charging web readers for news. You can see the (amusingly headlined) article here: Times are a-chargin’ for web browsers.

Along with many, many, (many!) other commentators, I’ve blogged about this topic before.

Apart form the beautiful irony [2] in this article from the Herald, I am pretty sure that this whole paywall argument is a dead-end for newspapers. Why? Because readers have never really paid for news. It’s the advertisers that pay. I could be wrong, but trying to make readers pay for something that can quite easily get elsewhere for free seems crazy.

The problem that newspapers face is not that readers (or aggregators) are stealing content, its that the business model upon which 20th Century newspaper journalism is based has collapsed. Advertisers chase eyeballs, and have simply followed the punters online. Not to mention the fact that their other major revenue stream – classifieds – has also left the building.

This is good and bad. If newspapers can’t generate revenue at their traditional scales, then neither will they be able to generate quality news. This will create opportunities for others (eg ABC) but it will almost certainly see a shake-up in the business of news making. And to be perfectly honest, it really does need a bit of a shake-up given the quality of “news” in some of the major dailies around this part of the world.

The underlying effect at work here is what I refer to as “the end of distribution”, which I blogged about some time back. The fact is that traditional newspapers assume their businesses are a scale play founded on the distribution of physical newspapers. The Internet removes distribution as a factor, and so almost self-evidently, traditional newspapers must struggle as their founding assumptions crumble.

Unless of course, they can change. But charging your readers for something that they have essentially always taken for free [3] when those who really pay your bills are running away seems like a pretty dumb idea.

M@

[1] If you want a really insightful analysis of this whole debate (without the vested newspaper interests) check out Mike Masnik’s blog: TechDirt. It’s a fantastic read.

[2] If it’s not obvious, the clear irony is that we have one newspaper (SMH) reporting on a story in another newspaper (The Times). There is little difference between this and what bloggers and other web commentators do on a regular basis, yet it is precisely the kind of thing that newspaper publishers call “stealing”, and then put forth as the motivation for establishing their paywalls.

[3] Or at the very least, heavily subsidised.