Monday global payments news includes a look at trends shaping the financial industry including artificial intelligence, blockchain and open banking. Speaking of blockchain, unknown hackers stole $32 million in Ether cryptocurrency from Parity Wallet, the second major theft of Ether within a week. Friendly hackers prevented an additional $75 million from disappearing.

PayPal expanded its payment services with Citi and Chase banks and added a loyalty program to go with the new services. US mobile P2P payments will grow 55.0% this year to reach $120.38 billion and an estimated 63.5 million will use P2P at least once a month in 2017. Visa Australia says consumers will soon be paying by fingerprint, eye scans, voice and perhaps even heartbeat in the near future.

Customers will be loving McDonald’s new mobile payments and pickup service launching in the US and available in all US locations by the end of the year. Swedish fintech Klarna raised $250 million in new venture capital adding to $225 million raised seven weeks earlier. Uber-like Grab is finding Singapore consumers increasingly like using cashless payments.

Swatch updated its mobile payments chip and partnered with Union Pay in China to introduce Swatch Pay. Bloomberg featured a look at China’s cashless payments society where consumers made more than $5.5 trillion in e-payment transactions last year. Chinese rivals Alibaba and Tencent are fighting a pitched battle for dominance of SE Asia’s  payments and e-commerce market.

Reinventing the World of Banking

Finance and trade are one of the oldest skills that mankind has developed after shaping the most preliminary forms of community. Since then, finance has undergone developments and revolutions to match the evolution of the human society.

As the next industrial revolution matures, many areas in banking and finance are being transformed. Here are some of the trends that are helping reshape the future of the industry.

Artificial Intelligence
There’s virtually not a field that Artificial Intelligence hasn’t touched, and the financial industry is no exception. Machine learning algorithms are particularly adept at analyzing huge amounts of data and finding patterns that would go unnoticed to humans.

Already, hedge funds and stock exchanges are making use of AI algorithms to become more efficient in forecasting the stock market and make smarter decisions. Numerai and Sentient are two Silicon Valley–based hedge funds that are challenging the giants of Wall Street with their AI-powered trade systems. Via thenextweb

$37 Million in Ether Stolen as People Refuse to Learn Their Lesson About Cryptocurrencies

http://gizmodo.com/37-million-in-ether-stolen-as-people-refuse-to-learn-t-1797075264Unknown hackers made off with an estimated $32 million in hot cryptocurrency from Ether, one of the most popular of the innumerable successors to Bitcoin, this week.

According to CyberScoop, hackers discovered a vulnerability in Parity Wallet, one of many services which offer bank account-like wallet services for users to park cryptocurrencies in. Exploiting the vulnerability allowed the hackers to escape with approximately 153,000 Ether in three separate transactions.

As the attack progressed, a group of white hat hackers (ethical programmers who look for security holes in software) caught on to what was happening. CyberScoop reported they were able to use the same exploit to protect approximately 377,000 Ether worth an estimated $75 million from the thieves.

The attack follows a separate theft of an estimated $10.3 million in Ether from trading platform CoinDash earlier in the week, though the attacks are far from the first to hit the Ether community: In June 2016, hackers attempted to steal some $53 million in the cryptocurrency from venture capital fund Decentralized Autonomous Organization. Via gizmodo.com

PayPal expands partnerships with Citi and Chase to include reward points and more

https://techcrunch.com/2017/07/20/paypal-expands-partnerships-with-citi-and-chase-to-include-reward-points-and-more/PayPal today announced an expanded partnership with two of the largest bank issuers, Chase and Citibank. The agreements include a number of increased integrations between the companies, including easier access to Chase and Citibank cards in the PayPal wallet; permitting Chase and Citi customers to take advantage of cards’ rewards points anywhere PayPal is accepted; integrations with PayPal subsidiary, Braintree, and more.

In the expanded relationship with Citi, PayPal says Citi’s 14 million ThankYou Rewards cardholders will be able to redeem points at merchants that accept PayPal online and in-app. This will roll out in 2018, beginning with U.S. customers. PayPal notes this agreement alone has the potential of reaching millions of existing and new PayPal customers in the U.S.

Meanwhile, the partnership announced with JPMorgan Chase is more extensive, as Citi had already signed a deal similar to JPMorgan’s in December. PayPal says it will make it easier for Chase-issued cards to be added to PayPal accounts. This involves allowing PayPal users to add Chase cards to PayPal directly from Chase’s properties. And, when using PayPal, they’ll see a digital representation of their Chase card, making it easier to select it. Via techcrunch.com

P2P Payment Transactions to Exceed $120 Billion This Year

https://www.emarketer.com/Article/P2P-Payment-Transactions-Exceed-120-Billion-This-Year/1016187The use of mobile peer-to-peer (P2P) payment apps such as Venmo in the US will continue to grow by double digits through 2021, according to eMarketer’s latest mobile banking and payments forecast.

The transaction value of US mobile P2P payments will grow 55.0% this year to $120.38 billion. This figure is on pace to double by 2021.

In 2017, 63.5 million US adults will use a P2P payment app at least once a month, equating to nearly one-third (32.6%) of smartphone users.

This year in particular, use of P2P payment apps is expected to grow considerably with the rollout of Zelle—a network of more than 30 banks (including Bank of America and JPMorgan Chase) as well as credit unions that will allow banking customers to transfer money to others within the network. It will be rolled out over the next 12 months. Via emarketer.com

Say goodbye to your PIN number and prepare to scan your fingerprints, heartbeat or VOICE, Visa tells consumers

https://www.thesun.co.uk/tech/4058288/youll-soon-pay-for-shopping-by-scanning-your-thumbprint-voice-or-heartbeat-instead-of-typing-out-pin-numbers-visa-says/You’ll soon be withdrawing cash and making payments using your thumbprint, voice, retina and even heartbeat, Visa has claimed.

The credit card giant is currently working with the rest of the payments industry on new standards for migrating from PIN to thumbprint and consumers should see the technology by the end of the year.

Rob Walls, head of product at Visa Australia, said customers are now “tech-hungry and very savvy in terms of how to use that technology”. Via thesun.co.uk

McDonald’s unveils new pay, delivery options

http://www.ajc.com/news/national/mcdonald-unveils-new-pay-delivery-options/0ijbW57rLmL0lOlXO76AqN/McDonald’s will begin offering customers a new way to pay for their Big Mac and fries, and a new way to get its popular fast food. Last week the company unveiled a plan to begin taking orders and payment by mobile phone through its app and announced a new curbside pick-up program.

Customers will be able to place an order and pay through their mobile phone and pick-up their orders at the drive thru or through curbside delivery.

Restaurant officials said the new options are expected to be available at all U.S. locations by the end of the year and at thousands of other McDonald’s around the world, according to the Chicago Tribune. The fast food chain is also expanding its delivery services, testing out a new program through UberEats in Florida. It already uses other third parties for deliveries in some markets, the Tribune reported. Via ajc.com

Fintech startup Klarna taps Permira for around $250M at $2.5B valuation

https://techcrunch.com/2017/07/21/klarna-permira/Klarna, the Swedish startup that works with e-commerce businesses and retailers to provide financing and other payment services, today announced that it has picked up yet another large investment, its third inside of two months. Permira, the private equity firm and prolific late-stage tech investor, has taken a minimum 10 percent stake in the fintech business. Klarna and Permira are not confirming the exact amount getting invested, or the valuation. But TechCrunch understands that it is more than $225 million, and the FT is reporting a value of $250 million.

Klarna the startup was last valued at $2.25 billion in 2015 and a source confirmed to us that this valuation has gone up as the business has grown. If a $250 million investment works out to 10 percent of its valuation, that would mean Klarna’s overall value has ticked up to $2.5 billion.

Today’s investment follows another cash injection worth at least $225 million from Brightfolk, an investment firm tied to fashion retail magnate Anders Holch Povlsen, at the start of June. Later that same month, Visa also announced that it was making a strategic investment in Klarna, without revealing the size of the funding. Added up, this means that Klarna has raised somewhere in the region of $500 million in the last 7 weeks. Via techcrunch.com

Grab driving cashless payments in Singapore, Banking News & Top Stories

http://www.straitstimes.com/business/banking/grab-driving-cashless-payments-in-sporeSingapore is likely to soon become Grab’s largest market in terms of cashless payments, said company president Ming Maa yesterday.

The ride-hailing firm, which has greatly expanded its presence in the region, disrupting traditional players in the process, is now turning its sights on the finance industry. Mr Maa told a forum yesterday: “Singaporeans recognize the value of cashless payments, they are used to using Nets, to using cashless payments for taxis.”

There has been a concerted effort to push payment innovation here, with systems like the recently introduced PayNow, which lets users transfer money to each other using mobile phone or NRIC numbers. Via straitstimes.com

Swatch updates mobile-payment watches for China, linking with UnionPay to keep sales ticking

http://www.scmp.com/business/companies/article/2103296/swatch-updates-mobile-payment-watches-china-linking-unionpay-keepSwatch Group, which claims to be the world’s largest watch maker, has launched the second generation of its chip-embedded devices that can be used for mobile payments in China, after teaming with UnionPay to offer “Swatch Pay”.

The new watches can be linked with credit cards issued by 11 partner banks – including Bank of China, Industrial and Commercial Bank of China (ICBC), the country’s largest commercial lender, China CITIC Bank and Minsheng Bank – in addition to debit cards.

Swatch unveiled its first-generation of watches with payment functions in October 2015, also in partnership with Unionpay, China’s dominant currency-clearing company and credit-card issuer.

Unlike Apple Pay under which transactions are conducted through an online payment process, the Swatch Pay system – based on the Quickpass technology by UnionPay, the mainland’s dominant bank card clearing business – is workable even when the watch has run out of battery while no wireless connection is needed. Via scmp.com

China’s Cashless Revolution

https://www.bloomberg.com/view/articles/2017-07-19/china-s-cashless-revolutionOn a recent trip to Shenzhen, in southern China, I came across a subway busker with two tip jars. The first was a cardboard box filled with coins and bills; the second was a small QR code taped to the box that allowed passersby to leave a tip by smartphone. On one level, this was simply smart business: Chinese made around $5.5 trillion in e-payment transactions last year. But it also offered a glimpse of the future.

By the time Tencent Holdings Ltd. released the social media app WeChat, in 2011, it was clear that QR codes had a lot more potential. WeChat offered users personalized codes that could be used to exchange contact information. When combined with the app’s built-in wallet, they could also be used for payments. Sending money through the app has since become a way of life: During this year’s Chinese New Year holiday, WeChat users sent 46 billion cash gifts via virtual “red envelopes.”

That success shows why QR code payments are likely to take off in emerging markets. For one thing, they don’t require credit cards, which few people in poorer countries have. Apple Pay and other such services, which use Near Field Communication technology, are uneconomical for many of these consumers. (Apple Pay’s market share in China is in the single digits, despite a recent marketing push.) And the small-scale merchants that predominate in the developing world — restaurants, corner markets, buskers — have little reason to invest in expensive payment terminals for the equivalent of $0.50 transactions. Via bloomberg.com

Alibaba and Tencent are carving up Southeast Asia’s startup ecosystem

https://techcrunch.com/2017/07/22/alibaba-tencent-southeast-asia-game-of-thrones/Rather than Google, Facebook or Microsoft, increasingly Chinese duo Alibaba and Tencent are the driving forces behind the importing of large sums of capital and vast business experience into Southeast Asia’s most promising startups.

In today’s digital era, smartphones have been a key catalyst. Like India, Southeast Asia’s internet users are primarily on mobile, with most having skipped the PC altogether and jumping straight to phones and tablets.

Ant Financial’s global investment spree has included a $1.2 billion deal for U.S.-headquartered Moneygram and Korea’s Kakao Pay, but in Southeast Asia it has done deals with Thailand-based Ascend Money, Mynt in the Philippines, Emtek in Indonesia, and Singapore’s M-Daq.

Tencent, meanwhile, has a long-standing investment in Thailand-based media company Sanook, while it invested $19 million in a joint media venture with Ookbee, another Thai company. On the product-side, it has aggressively pushed its free-to-play music service Joox in Southeast Asia as a rival to Spotify, while it recently invested in U.S. karaoke app Smule which has strong traction in the region and plans to expand in Asia. Via techcrunch.com