FinTech Daily: Amazon Launches Amazon Cash; Uber Rival Grab Makes First Major Acquisition To Build
Amazon Launches Amazon Cash, A Way To Shop Its Site Without A Bank Card
Amazon this morning announced the launch of Amazon Cash, a new service that allows consumers to add cash to their Amazon.com balance by showing a barcode at a participating retailer, then having the cash applied immediately to their online Amazon account. The service will support adding any amount between $15 and $500 in a single transaction, Amazon says. Amazon Cash will be available at brick-and-mortar retailers across the U.S., including CVS Pharmacy, Speedway, Sheetz, Kum & Go, D&W Fresh Market, Family Fare Supermarkets, and VG’s Grocery. Other stores will be added in the future. The service is not all that different from a similar effort by PayPal, whose PayPal My Cash Card lets you add funds to your online PayPal account, using cash from your wallet. It also has a barcode-only service, powered by Green Dot. Like PayPal, Amazon Cash is also meant to appeal to the same general demographic who may not yet be shopping online – those who get paid in cash, don’t have a bank account or debit card, and who don’t use credit cards. This “cash customer” (the unbanked or “underbanked) accounts for around 27 percent of consumers, said a 2015 report from the FDIC. While they may have money to spend online at times, there isn’t an easy way to do so. Until today, they would have to buy an Amazon Gift Card in a designated amount or add cash to prepaid payment cards, to be used at checkout.
Uber Rival Grab Makes First Major Acquisition To Build Out Its Payments Platform
Grab, Uber’s biggest rival in Southeast Asia, has completed its first major acquisition after it bought up Indonesian startup Kudo to boost its nascent mobile payments platform. The deal is a mix of cash and equity. It is potentially worth $80 million-$100 million in total, according to one source with knowledge of the deal. Grab began working on a payments platform — GrabPay — last July, with an initial focus on Indonesia. The company announced plans for an R&D center in India devoted to developing its payment push further, and GrabPay is major focus for a $700 million investment program it recently revealed to develop its position in Indonesia. Grab believes that offering digital payment services can give it a stronger foothold in Southeast Asia’s ride-hailing market, which is forecast to grow from $2.5 billion in 2015 to $13.1 billion per year by 2025, according to a report co-authored by Google. That’s where it believes three-year-old Kudo can boost it. The startup enables people in Indonesia who don’t own a credit card — the large majority of the country — don’t have a bank account or even lack internet access, to buy items online. Initially it used point-of-sale kiosks located in public areas, but it later broadened its focus to support an agent model. The firm claims to have 400,000 agents across 500 towns in Indonesia. To cement its push, Grab has also announced that it has brought in a dedicated executive to lead GrabPay. Jason Thompson, formerly Managing Director EMEA & Asia for Euronet, will head up the division.
Bitcoin Price Hits $1,130, Japan Legalizes Bitcoin, Scaling Progress
Bitcoin price surpassed $1,130 on most global Bitcoin exchanges including Bitfinex and Bitstamp earlier today as a result of the Japanese government’s recognition of Bitcoin as a legal payment method under its new set of regulatory frameworks. On April 1, a Bitcoin legalization bill drafted and proposed by the Japanese Financial System Council (FSC) was taken into full effect. According to The Japan Times, the bill was proposed in December of 2015 with the intent of preventing unregulated Bitcoin exchanges like Mt. Gox from mishandling user funds and operating with weak Know Your Customer (KYC) and Anti-Money Laundering (AML) systems. In 2015, the FSC noted that the proposed bill would require Bitcoin exchanges and service providers to be approved by the country’s largest financial regulator the Financial Services Agency before offering services to the public. The approval process entails an extensive overview of KYC and AML systems. Since then, the FSC has been collaborating with the Financial Service Agency and other lawmakers to draft appropriate and practical regulatory frameworks for Bitcoin exchanges and companies in order to recognize Bitcoin as a legal payment method within the country. On April 1, the bill was activated and Japan officially recognized Bitcoin as a legal tender. Almost immediately after the bill was taken into full effect, Bitcoin price began to surge. More importantly, the activation of the bill meant that consumption tax for Bitcoin trading will be exempted starting July of 2017. The official legalization of Bitcoin and the exemption of tax for traders led to the surge of price in the Japanese market and the global Bitcoin exchange market.