Anyone else noticing an unusual number of stories about cyberattacks, particularly by Russia and China, in recent weeks? While Russian spies appear to exhibit rising levels of comic incompetence, China's efforts look slick and strategic. A major story by Bloomberg yesterday will have executives at some of the world's biggest businesses quaking in their boots, and go very much to the heart of digitalisation issues and data privacy. But let's start with the uncontested fact that with globalisation, the world has outsourced its manufacturing to China over the last decades, building up Chinese expertise in the manufacture of computers, from mainframes to smartphones to microchips. Bloomberg today carries a story suggesting that Chinese intelligence services spent several years implanting microchips onto motherboards widely used by Amazon and Apple (the world's two trillion-dollar companies) in their data centres. The Bloomberg story says that one major US bank was impacted, though further details have not emerged. Apple and Amazon are denying the story.
Point of sale instalment loans are making a comeback, with Square the latest to offer consumer lending. As an alternative to credit card payments, POS instalments can offer clearer details on cost and duration of paying back a loan, which Square is offering on purchases ranging from $250 to $10,000. Payments business Square has been lending to merchants since 2014, leveraging its knowledge of business data flows and inventory, and now it will try to apply that expertise to consumer lending, encouraged by its success on the merchant side. With installment loans, Square will be exposed to consumer defaults. "We feel very comfortable with the type of risks we're taking," head of Square Capital Jackie Reses said. She noted that Square targeted markets where it had "unusual access to data". "Square plans to hold the consumer loans on its balance sheet, but as it lends more, it could sell them to outside funds, as it does with its loans to merchants," writes Payments Source.
Convenience store 7-Eleven will provide banking services for Government Savings Bank in Thailand in a pilot programme that starts next month. Bank president Chatchai Payuhanaveechai said customers can use the mobile app to authorise transactions at the counter. "The launch of convenience-store banking was seen earlier this year as a way for commercial banks to scale down spending on branches and personnel. Chatchai said his customers shouldn't fear that their neighbourhood branch is going to close anytime soon." He said the bank would not close branches nor open new ones. "Collaborating with 7-Eleven on our banking services will make it more convenient for our customers in the countryside."
Also in Asia, Tencent is investing in Voyager, the fintech that emerged from the Phillippines state telecoms operator. "The deal would bring Tencent into direct competition with arch-rival Alibaba, which entered the Philippines 18 months ago when its fintech affiliate Ant Financial invested in Mynt, a financial venture from Globe Telecom which is a competitor to Voyager," writes Techcrunch.
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