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Home » Daily Briefing » Daily briefing - 04 October 2018

Daily briefing - 04 October 2018

So who is winning the battle of the Financial Times vs Wirecard? So far, it has to be Wirecard, which has kept on growing despite the FT's predictions that the House of Wirecard will fall. In fact the House of Wirecard just keeps on growing, while its namesake House of Cards is becoming a footnote in TV history. Maybe it's a German thing? Many financial people find it hard to believe that anything good can come out of risk-averse Germany, but Wirecard appears to have its face firmly to the future of digital payments. In fact, observers watched with astonishment as Wirecard entered the DAX Index of the top 30 quoted businesses in Germany by elbowing sclerotic Commerzbank out of the way. In mid-August, Wirecard surpassed the market capitalisation of Deutsche Bank, though admittedly Wirecard's valuation is soaring upwards while Deutsche's is headed the other direction. And while Wirecard continues to grow at 25 percent per annum, analysts such as Bob Liao at Macquarie question where the growth is coming from — or how to find it in the company's financials. Other analysts are more sanguine. Markus Braun, the chief executive and main shareholder, sees plenty more runway as the world switches over to digital (smartphone) payments, with cash and cards the losers. "Over the next five to 10 years, the entire payment volume in physical retail will be re-distributed," he told the FT. Incidentally, FT Alphaville's 'House of Wirecard' blog is available here, though it is behind a paywall.

When Apple first launched its wallet, many found it greatly confusing. Many still do. What to put in there, for a start? And how? At first, the only thing that could reasonably go in a wallet was something with a QR code, and Apple didn't even put QR code readers on its phones until last year. But now Apple wallet is making strides as Apple doggedly stuck to its method. In the US, Apple is roping in a new generation of third-level students who can now add their student IDs to the wallets, and use their phones or Apple watches to touch in and out of dorms and libraries and pay for meals and books. Apple's VP of Internet Services Jennifer Bailey said, "By adding transit, loyalty cards and contactless ticketing we have expanded the capabilities of Wallet beyond payments, and we're now thrilled to be working with campuses on adding contactless student ID cards to bring customers even more easy, convenient and secure experiences." Apple has also, very gradually, been opening up the infrastructure around its wallet. Making a payment no longer requires a POS terminal, as any IoT device can now trigger a card-not-present payment. "In an IoT world, a consumer could go to a gas station and pay at the pump seamlessly, with the pump initiating the signal to start the payment via the consumer's iPhone. Paying for parking could be as simple as holding up an iPhone to an NFC-enabled sign," notes What Apple is doing here is recreating the physical wallet, complete with payment instruments and IDs.

Identity, online and offline, is proving to be a vexed issue. Perhaps you've seen the short but breathless WEF-produced videos about Estonia and its all-singing, all-dancing e-everything, but the country has been in the news recently for all the wrong reasons, including the horrow show that is Danske Bank's one-branch Estonian operation. (The US is now taking an interest since dollars apparently flowed through that branch.) In a recent story, we hear that the Estonian police force is taking a claim against digital security business Gemalto, after a security flaw emerged in the Citizen IDs provided by the company. "The vulnerabilities to hacker attacks found in government-issued ID cards supplied by the Franco-Dutch company marked an embarrassing setback for Estonia, which has billed itself as the world's most digitalised 'e-government'. Estonia's Police and Border Guard Board (PPA) said in a statement Gemalto had created private key codes for individual cards, leaving the government IDs vulnerable to external cyber-attack, rather than embedding it on the card's chip as promised."


Commerzbank and Deutsche Bank both received two stars in the 2017 Lafferty benchmarking report. The top score is five stars.

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