"I was once one of them," writes Michael Kimani: "An educated Kenyan youth at university, armed with a laptop, internet and an appetite for an extra buck. The year was 2009, and I was in my second year at university." Kimani wrote essays for UK university students. "Working was the easy part," he writes. "Getting paid was a task." He traces the evolution of online payments through PayPal and how online commerce links informal and formal economies. But then the UK education secretary Damian Hinds got involved, and in the effort to close down the service, he called on Paypal to reject payments to "essay mills". Paypal has responded by making payment more difficult. "This case with the UK highlights another problem, one of political interference with the internet and technology," writes Kimani. "The real issues with online payment services are foundational, which is why Kenyan virtual workers at the frontier of the web economy began flirting with Bitcoin and cryptocurrencies." An unmissable read.
The IPO rush in the next months should be interesting, with Japan's Softbank playing outsider to the Silicon Valley money pits. The logic of Uber depends on total dominance and the fact that Lyft got to market first must be a worry. A few bright sparks are defying the model, or not playing along entirely, including Bhavish Aggarwal, co-founder of Indian ridesharing service Ola. "Bhavish is spurning SoftBank money as he doesn't want to get diluted out of Ola," says Mohandas Pai, who is a venture capitalist and former chief financial officer of Infosys Ltd, Bloomberg reports. "Founders become employees when someone sits on your board and tells you how to run the show." Uber's uber-all strategy started to fall apart years ago, and now it has retrenched into partnership mode in several countries, where it can still build a good business around its mobile wallet. It was forced to back out of China, doing a deal with Didi Chuxing, and the same thing happened in the Middle East, where it acquired local rival Careem. Now local rivals are springing up everywhere, including Indonesia. Some Lafferty sources maintain that Uber remains a taxi company with an app. Others see the mobile wallet as an extension of transport services into all aspects of modern life. Who will be right?
While investors are being suckered into parting with piles of cash to go into the maw of Uber et al, the payments business offers something more substantial. Amid all the news of the allegedly super-profitable Aramco, Network International yesterday quietly produced the biggest IPO of the year so far in London. "A structural shift away from cash payments has led to rapid growth in the sector, and also encouraged a wave of merger and acquisition activity," writes the FT. "2019 has already become the biggest year for payments M&A on record, as measured by total value of deals, following US group FIS' $43bn purchase of Worldpay last month. Dubai-based Network enables digital payments for merchants across the Middle East and Africa. Chief executive Simon Haslam said: "The Middle East and Africa are at an early stage in the shift from cash to digital payments and our new listing on the London Stock Exchange will enable all new shareholders to benefit from this structural growth opportunity." The FT ends the piece by speculating about Network's new suitors, given the rapid consolidation in the sector.
Google shifts payment processing to Dublin ahead of Brexit
Global value of e-commerce deals in 2018 hits $1.1 trillion
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