Digital banking is growing in popularity with 53% of consumers using or willing to move to an online or mobile only bank — 27% have moved already, while 26% are considering the switch. This is according to research commissioned by Relay42.

The reasons for this shift included receiving a better online experience and functionality (58%), more attractive finance rates or fees (29%) and better quality of service (28%). In addition, just 13% of respondents said they weren’t interested in exploring new technologies to help them manage their money.

“The banking sector is undergoing significant change, in terms of shifting customer demands and expectations, as well as factors such as legislation and regulation. Customers are on the precipice of embracing future technology and new products, which means their existing banks need to keep pace with demands and innovation to ensure customer loyalty and competitiveness . Very often, the solution lies in orchestrating technology to create a relevant online experience and deliver personalised offers and service quality” says Julius Abensur, industry head: finance, Relay42.

More than half (56%) of respondents said they would actually remain loyal to their banks if they were sent customised offers based on their personal interests and behaviours. While this approach is reliant on data, this presents another operational and regulatory challenge as 41% stated they didn’t know how their data was being used by banks, while 29% expressed concerns regarding how it was being used.

“The appetite that consumers are showing for online or mobile only banking further demonstrates that convenience is shaping customer experience, which actually strengthens the relationship banks have with their customers.”

However, the research showed that 69% of respondents would change banks given the right motivation. Considering that 26% would change to digital-only banking, there is a definite desire for more convenience from customers.

“This openness for new services and offerings suggests they won’t remain loyal to one bank for very long,” says Abensur. “As a result, banks can’t afford to be complacent and must engage with their existing customers, streamline their journey and ensure complete relevance and personalisation on every touch point along the way.  Financial institutions need to focus on the customer experience and build that loyalty in order to ensure their future success.”

The research, conducted by Censuswide, independent survey consultants, was aimed at understanding consumer attitudes towards traditional banking, the role of technology in its future, and the idea of customer loyalty. 2,019 people across the UK participated in online interviews in September and October 2017.

For the full findings of the research, download the report here.

(Source: Relay42)

Below Simon Cadbury, Director of Strategy and Innovation at Intelligent Environments, answers a question many have been asking themselves for years now, what is the actual difference between a building society and your regular bank?

Becoming an adult is an important moment for anyone. However, it’s perhaps now significantly less so for the millennial generation, a demographic that views travelling abroad as their biggest priority ahead of home ownership, buying a car, and even paying off debt.

In fact, recent research has also found that most millennials only see themselves as an adult once they have turned 30 years old, with some even agreeing that 40 is a more reasonable estimate.

And this delay in ‘becoming an adult’ is having a significant impact on this generation’s knowledge of financial planning – frequently resulting in a lack of clarity when it comes to getting the best deal in the retail banking sector.

The Building Society Enigma

Building Societies are one example of organisations that remain a mystery to millennials. Our research, which surveyed 2,000 UK millennials on their attitudes towards the building society sector, discovered that very few knew the benefits of opening a building society account.

Worryingly, just under half (48%) were unable to name a single advantage, with a third (33%) agreeing that they could see no reason to use a building society.

Part of this uncertainty lies with millennials’ confusion around the difference between a building society and a bank. Around three-quarters (73%) admitted that they did not know the difference between the two, while nearly half (45%) unsure of when or in what circumstance they’d use a building society instead of a high street bank.

The Difference

So, what exactly is the difference? Key to understanding the distinction between banks and building societies is to be clear on exactly how, and for who, they operate. Because banks are listed on the stock market, they are businesses and therefore work in the favour of those who invest in them, specifically their shareholders. Building societies, however, are not commercial businesses, they are ‘mutual institutions’ – owned by, and working for, their customers.

As a result, building societies’ interest rates generally tend to be a lot higher than banks as they are not required to pay dividends to any shareholders. In fact, upon learning of this community-focused and member-ownership aspect, over a quarter (27%) of the millennials surveyed noted this as a real advantage.

Whilst building societies do focus more on financial products like savings and mortgages, they are still able to offer the same services that banks provide, such as current accounts, for example. However, with the exception of Nationwide, building societies’ services are only available on a regional basis, which is clearly a factor that significantly influences a generation always on the move.

Nevertheless, for those millennials who are settled in one place and like the community focus that building societies offer, there should be every reason for building societies to be considered as an alternative to banks. And really, like most things in life, the choice should be focused on which provider is giving the best customer experience – not on whether the provider is a bank or building society.

Understanding Millennials

Clearly, more needs to be done to educate millennials on building societies, and part of this responsibility should fall on the sector itself. To effectively engage a demographic that has grown up in the digital age, surrounded by technology and the internet, more needs to be done to move away from the traditional model. It should be a priority for building societies to better meet these expectations by providing more engaging digital tools, improving both their internet and mobile offerings. The building society should no longer be seen as a forgotten institution, but one that is considered alongside banks – and that can offer financial products just the same as its business-minded brother.

Bangalore-based software company Ezetap has developed a platform that makes it easy to pay anywhere with any device you like. It has created software allowing a merchant with a smartphone to accept any type of payment and see that money moved seamlessly into their own bank account.

When adopting new payment methodologies, banks must strike a challenging balance between ease of use and access and the need to put in place stringent levels of security. With technology evolving at ever-increasing rates, it’s increasingly difficult to keep on top of that challenge. Below Finance Monthly hears from Russell Bennett, chief technology officer at Fraedom, on this challenging balance.

Banks first need to put in place an expert team with the time, resource and capability to stay ahead of the technological curve. This includes reviewing, and, where relevant, leveraging the security used on other systems and devices that support access into banking systems. Such a team will, for example, need to look at the latest apps and smartphone devices, where fingerprint authentication is now the norm and rapidly giving way to the latest facial recognition functionality.

Indeed, it is likely that future authentication techniques used on state-of-the-art mobile devices will drive ease-of-use further, again without compromising security, while individual apps are increasingly able to make seamless use of that main device functionality.

This opens up great potential for banks to start working closely with software companies to develop their own capabilities that leverage these types of security checks. If they focus on a partnership-driven approach, banks will be better able to make active use of biometric and multifactor authentication controls, effectively provided by the leading consumer technology companies that are investing billions in latest, greatest smartphones.

Opportunities for Corporate Cards

This struggle to find a balance between security and convenience is however, not just about how the banks interact directly with their retail customers. We are witnessing it increasingly impacting the wider banking ecosystem, including across the commercial banking sector. The ability for business users to strike a better balance between convenience and security in the way they use bank-provided corporate cards is a case in point.

We have already seen that consumer payment methods using biometric authentication are becoming increasingly mainstream – and that provides an opportunity for banks. Extending this functionality into the corporate card arena has the potential to make the commercial payments process more seamless and secure. Mobile wallets, sometime known as e-wallets, that defer to the individual’s personal attributes to make secure payments on these cards, whether authenticated by phone or by selfie, offer one route forward. There are still challenges ahead before the above becomes a commercial reality though.

First, these wallets currently relate largely to in-person, point of sale payments. For larger, corporate card use cases such as settling invoices in the thousands, the most common medium remains online or over the phone.

Second, there are issues around tethering the card both to the employee’s phone and the employee. The 2016 Gartner Personal Technologies Study, which polled 9,592 respondents in the US, the UK and Australia revealed that most smartphones used in the workplace were personally owned devices. Only 23 percent of employees surveyed were given corporate-issued smartphones.

Yet the benefits of e-wallet-based cards in terms of convenience and speed and ease of use, and the potential that they give the businesses offering them to establish competitive edge are such that they have great future potential.

One approach is to build a bridge to the fully e-wallet based card: a hybrid solution that serves to meet a current market need and effectively paves the way for these kinds of cards to become ubiquitous. There are grounds for optimism here with innovations continuing to emerge bringing us closer to the elusive convenience/security balance. MasterCard has been trialling a convenient yet secure alternative to the biometric phone option. From 2018, it expects to be able to issue standard-sized credit cards with the thumbprint scanner embedded in the card itself. The card, being thus separated from the user’s personal equipment, can remain in the business domain. There is also the opportunity to scan several fingerprints to the same card so businesses don’t need to issue multiple cards.

Of course, part of value of bringing cards into the wallet environment is ultimately the ability to replace plastic with virtual cards. The e-wallet is both a natural step away from physical plastic and another example of the delicate balancing act between consumerisation of technology and security impacting banking and the commercial payments sector today. There are clearly challenges ahead both for banks and their commercial customers in striking the right balance but with technology continuing to advance, e-wallets being a case in point, and the financial sector showing a growing focus on these areas, we are getting ever closer to equilibrium.

Traditional banks are lagging behind when it comes to technology and we are increasingly seeing non-financial services companies, like Facebook and Orange moving in into the territory of traditional banks. Below Daniel Kjellén, Co-Founder and CEO of Swedish fintech unicorn Tink, looks at how Facebook is currently adding P2P payments to their services.

You would have to have your head in the sand not to notice that huge change is afoot across the banking and personal finance sectors. Earlier this month, Facebook announced that it was making its first foray into finance in the UK, with the launch of a new service which will allow users to transfer cash with just a message.

Facebook is not the only tech giant moving in on the territory of traditional banks, with Apple also set to launch its own virtual cash payments system and telecoms behemoth Orange recently announcing the launch of its online banking platform. This is just the tip of the iceberg. Fintech firms like Mint, Moneybox and Tink are taking this concept beyond payments, creating a sophisticated consumer led money management ecosystem.

So why is this happening? The launch of Facebook’s P2P payments service is evidence of the wave of technological and legislative driven disruption sweeping toward the retail banking market that change the shape of the sector beyond recognition. Consumers in 2017 are platform agnostic and don’t care whether they manage their money through their bank or their phone company or social media account.

Across the world, we are witnessing a move to the model of ‘open banking’ which will blow open the retail banking sector and create competition in the form of tech firms, who are already making a play for the territory traditionally held by banks. This hasn’t happened in a vacuum, it is just one symptom of the enormous transformation the industry is undergoing.

The fintech invasion

The current wave of tech companies offering in-app personal finance capabilities is just the beginning. The success of fintechs such as Monzo and Transferwise has demonstrated beyond doubt that today’s consumers are looking beyond their bank to manage their finances.

Until recently, banks have enjoyed a monopoly over their customers’ data and have operated in a market which by design, discourages competition and transparency. The result has been a mismatch between people and products, with consumers having to settle for high cost, low quality financial services. It’s not surprising that nimble tech companies are moving in on the space previously occupied by the banks. So long as their investments in fintech yield results, these ambitious and visionary companies will continue to pioneer new solutions that transform our relationship with money.

Banks who don’t innovate and create customer led products, will risk losing their customers who, through tech solutions will automatically be filtered towards a smorgoesboard of banking products which suit their needs. Third party platforms will become the main interface for money management, regardless of who the consumer actually banks with.

A nudge in the right direction

Facebook’s mobile payments feature will be supported by M Suggestions, a virtual assistant which monitors Messenger chats and nudges consumers to use the payments feature whenever the subject of sending money comes up in conversation, aiming for a seamless integration between social interaction and finance. The smart technology which underpins Facebook’s virtual assistant is a glimpse of the future of personal money management.

Today’s apps are nudging consumers in their day-to-day choices, encouraging them to save a little every month, offering tailored advice based on their economic habits, pointing them towards better deals and products, helping them to prepare for life’s big financial commitments - all with the aim of improving users’ financial happiness.

Money on autopilot

Facebook’s payments service aims to remove friction from the transaction - friction in this case being the need to leave Messenger. We are witnessing increasing numbers of tech companies offering these in app capabilities, the ultimate aim of which is to allow users to do everything in one place.

PSD2, which comes into force in January, will open the floodgates for third parties to build financial services apps which aggregate, enabling consumers to do everything in-app from paying their bills to comparing how much they are paying for access to financial products like credit and mortgages.

Technology is ushering in a new era where money management is frictionless and simple. Many people today have a difficult or distant relationship with their finances. There is often a mismatch between people’s needs and the product they are offered by their bank. This means money management can often feel like a chore rather than a choice.

In-app personal finance services such as those offered by Facebook, Tink and Apple, will offer consumers the ability to effortlessly manage their personal finances while going about their daily business. People’s relationship with their money will become a lifestyle choice, with financial decisions being akin to the choices they make about their health or their hobbies. Eventually, money will be on autopilot.

A bank by any other name

Today it is rare to find an individual who is loyal to their bank. With the ties between consumers and their bank becoming increasingly weak, smartphones will become the interface between people and their money. The entity sitting behind this engagement will become little more than an afterthought.

Tech companies who have built a strong consumer facing brand - underpinned by best in class technology - are waking up to the opportunity and are planting their roots in the fertile ground left wide open by the traditional banks. As the line between banks, fintech, social media and telecoms becomes blurred, the banking market as we know it will soon be unrecognisable. The banks who will survive and thrive are those who embrace the disruption and invest in the power to innovate through technology.

Farida Gibbs, CEO of Gibbs Hybrid, discusses the pressures on banks to update their processes with new technology.

Following the first increase in interest rates in ten years, banks have been under extreme pressure to pass on profits to customers. This pressure comes from a growingly savvy customer base educated in its financial rights by easier access to online news and financial advice.

Technology is changing the nature of banking much more directly. Customers now interact with their banks far beyond the branch, through online banking on computers and mobile devices, communicating with chat bots as well as real personnel, and using a variety of apps to do this. They expect their financial services providers to keep up with the pace of this change.

In January 2018 the Second Payment Services Directive will come into play, meaning banks will have to share their data with other rival financial providers and aggregator sites, and allow third-party developers into the back-end of their processes, taking payments directly without the intercession of the bank – all with the consent of the customer, of course.

In other words, aggregators and financial services providers will have access to customer’s data and be able to show them how best to spend their money, and which providers to entrust it with. Tech giants like Facebook and Amazon will be able to make payments directly, without the bank’s help. 

With competition more clear and fluid, and money much easier to move around between providers, established banks will be greatly exposed to competition from FinTechs and new rival financial services companies.

A large number of new, agile FinTech challengers have emerged to challenge more established banks in recent years. Competing on grounds of personalised service, low rates, and the speed and convenience provided by taking the upmost advantage of new technology, these new providers threaten to take away the established customer bases of larger banks.

The key advantage banks have over these new challengers is their large, established customer bases. At the moment, these are relatively immobile, with customer account switching reaching a new low in September this year.[1]

But as regulations like PSD2 begin to take effect, banks will face mounting competition from FinTech challengers, as switching becomes easier and the reasons to change providers for a better deal will become clearer. Many banks currently rely on outdated legacy systems that cannot support the pace of change required by this.

To deal with this, an increasing number of banks are turning to cloud-migration programmes, shifting their existing processes from these legacy systems to the cloud. This gives them the agility and efficiency to stay up to speed with the constantly changing innovations in technology.

But to do this they need digital expertise, in order to ease this kind of transition in an informed way. This means that more banks are turning to partnerships with outside experts, to help them modernise in the most efficient way possible.

However, although one in three people in the UK use a mobile banking app, banks should not respond to this drive for modernisation by compromising on in-person service.[2] Many banks have seen the increased use of app-based banking as a sign to cut back on branches, with a record number of 762 closures this year in the UK.[3]

In fact, moving processes to the cloud offers the chance to free up staff to focus on more in-person services; the other key advantage established banks hold over their FinTech competitors. This presence of real staff lends credibility that FinTechs still lack. Forty-three per cent of customers who have used a FinTech service are worried about being defrauded, according to a study by Blumberg Capital.[4] 

To future-proof their businesses, banks need to juggle the best of both worlds, making the most of their inherent advantages, whilst catching up with the speed and efficiency of tech-enabled FinTechs. A variety of established banks are now turning to outside consultants to help them do this, uploading their outdated processes to the cloud to provide a more streamlined, agile service that responds to customer’s changing demands. But in using this external expertise, they must not lose sight of what their own staff can offer. Cloud programmes allow traditional providers to get the best of both worlds: not only improving the agility and convenience of their offering, but allowing them to make the most of their personal staff.

To learn all about Plutus - a mobile application for making contactless Bitcoin payments, this month Finance Monthly reached out to the company’s CEO - Danial Daychopan.

What is Plutus?

Plutus consists of two interconnected applications:

Plutus Tap & Pay is an Android and iOS app for paying with Bitcoin & Ethereum at any contactless-enabled debit card terminal already in use today. Additionally, every deposit you make rewards you in Pluton, a loyalty rebate token which can then be used to make further purchases without fees.

The PlutusDEX is a one-way peer-to-peer exchange (smart contract) that provides liquidity for the Tap & Pay app. The way this works is that PlutusDEX traders can escrow fiat currency such as GBP or EUR to purchase Bitcoin and Ethereum from the users of Tap & Pay mentioned above. 

Our favorite aspect, however, is that the Bitcoin and Ethereum can be bought by other users with zero fees through the PlutusDEX. Our person-to-person system it much easier to add new currencies (both fiat and digital) depending on demand, and a 0% fee trading experience encourages exchanges and blockchain enterprises to use our API as well. 

Tell us a bit about yourself. How did the idea about Plutus come about? What were some of the challenges that you faced when setting up the company?

My journey in FinTech began in 2013 when I first started one of the first licensed Bitcoin exchanges, followed by a cryptocurrency merchant payments platform called LazyPay.

Earlier that year, I had seen an invoice get filled within seconds across different timezones, all without the need for a centralised party. After this, I was immediately attracted to Bitcoin and fascinated by the features it had to offer.

At the time, there was already a growing niche of Bitcoin supporters and early adopters who wanted to spend the coins they had earned. However, merchant adoption proved far more challenging than anticipated, stalling due to the logistical and volatility issues. Even the largest Bitcoin companies couldn’t move it forward. Unswayed by rising hype, merchants decided that cash and debit cards worked just fine for them. It was and still is an uphill battle.

We were undeterred and still wanted to be able to spend our digital currencies wherever we wanted. And if possible, without having to get merchants involved altogether. After much deliberation, we finally found a way to do it.

In 2015, Plutus first set out to circumvent the issue of merchant adoption by connecting the blockchain to the Visa and MasterCard networks. This gateway makes digital currencies valid for payment at over 40 million debit-enabled points-of-sale worldwide.

This means that even though you are using digital currencies, the store owner or merchant will receive a bank transfer as usual and will not see any difference when compared to a regular debit card transaction.

What have been the company’s major achievements thus far?

Plutus has come a long way since our inception. When we began, we first wanted to gauge community demand. We knew that we needed the app we were making, but we didn’t know whether other people knew it too. From this idea forth, we decided to crowdfund the project. In a surprising result, we raised over 1 million USD from over 1000 users, and have grown to thousands of subscribers since.

We’ve also built an incredible team of tremendous people, from management to development, and entered into partnerships with leading service providers. Now we are right in the middle of the BETA programme, testing and tweaking our platform with the help of our community, drawing ever nearer to the first production-ready release of Plutus.

What kind of device is required to use Plutus? Do merchants need anything to accept Plutus payments or Plutons? 

Pretty much all (relatively) new smartphone have built-in NFC. In fact, finding a smartphone without it

Is actually quite difficult nowadays.

To support Plutus, all merchants need is the regular contactless payment terminal that they most likely already have. This makes Plutus payments valid at over 40 million compatible points of sale in the world by default.

What can you tell us about your in-app cryptocurrency called Pluton?

Our platform Plutus Tap & Pay has an in app token called “Pluton”, which act as loyalty reward points on the platform. However, it is important to note that this is not intended to be a competitor of Bitcoin or Ether.

Rather, Plutons (or PLU for short) are actually a cashback program similar to frequent flier miles. This means that they can be used to make purchases on our platform just like BTC and ETH, with the added advantage of faster deposits and absolutely zero fees. Every time you make a purchase with BTC or ETH, you get 1-3% of your purchase back in Plutons.

Could you tell us more about where you see blockchain technology in the future?

We believe there is huge potential in blockchain technology to positively disrupt our standard methods of payments, trading, and other aspects of our lives. The industry is rapidly growing with a never-ending drive towards more automation, more decentralisation, and less friction. Over the coming years, we believe the use case will reach mainstream products where consumers could have a better user experience without the need to understand or be aware that the blockchain was utilised.

However, that said, private blockchains do not rely on a peer-to-peer network but if an organisation intends to utilise the technology for improved governance, automation and transparency internally then it can work if done right – for now, we remain skeptical.

Do you look at others in the FinTech industry as competitors or do you take a different view?

I have a different view - they help push the industry forward and help us to learn from their mistakes. In many ways, we are doing something completely different.

When you charge your Plutus account with digital currencies, you are actually transferring them directly to a trader on the DEX who has created an order to purchase them in return. This means that our customers can sell and buy digital currencies directly to and from other customers. As a result, Plutus never stores any digital currencies on the platform.

And with recent security concerns on the rise, the benefits of not holding funds are becoming increasingly clear as the blockchain space develops.

What have been the biggest hurdles faced by the company?

Red tape and creating a winning team - both in development and in management. In the blockchain space everyone is competing for talent, while regulators are still very skeptical. This creates a challenging environment.

What is your vision for the future of Plutus? Where do you see the company in 2-3 years?

The aim is to enable users to pay using crypto currency directly with smartphones at any merchants of their choice. And lower the barrier of entry for anyone wanting to buy Pluton, Bitcoin and Ether. This is why we created Plutus Tap and Pay and the PlutusDEX. We also wanted to create decentralise loyalty reward system called Pluton that awards customers for every deposit, which they can then spend anywhere. In the future, we believe the platform will be one of the largest platforms that enables payments via the debit card network in the peer-to-peer market.

We also aim to enable users to make a direct deposit in their Plutus account, using direct bank transfer instead of crypto, who will also receive a reward in Pluton, introducing new users to the blockchain ecosystem.

Initially, we will be releasing physical debit cards, NFC stickers. Our main product will be an iOS and Android app for making contactless purchases, trading and managing your wallets. We plan to add online payments and other nifty features as well.

What are you currently working on?

We are currently working on Plutus Tap & Pay, and the PlutusDEX. Both parts are interconnected and fulfill important roles in our ecosystem. Currently, our live payment systems are already undergoing internal testing. Once the stress-tests have been completed, the PlutusDEX will be released, followed by shipment of the official Plutus Debit Cards.

We are also looking to grow Plutus with new members in key roles - we are currently hiring.

If you could share one piece of advice with young FinTech entrepreneurs, what would it be?

Don't be scared to fail and be prepared to live “the ramen life”.
Website: https://plutus.it

If helping test the platform and coordinating how the future of Plutus Tap & Pay and PlutusDEX will look, why not join the BETA waiting list? http://beta.plutus.it

 For more information about Plutus’ long-term ideas, please take a look at “Slingshot from Orbit: The Future Vision of Plutus.it”: https://medium.com/@PlutusIT/slingshot-from-orbit-the-future-vision-of-plutus-it-cf7b69f827ef#.wajh88j3e

Case Study: An Interview with Plutus.it’s CCO - Filip Martinka

Recently, Plutus has been making rounds in London and Berlin, presenting their technology for instant, peer-to-peer, decentralized payment platform. The company’s CCO - Filip Martinka tells us about how the project is coming along.

Why use Bitcoin over Ethereum? 

We believe that there are useful aspects to both. The main reason we are using Bitcoin is for its already widespread usage, and Ethereum - for its ability to automate business logic. We want be able to adapt based on demand. Fortunately there are many other projects on the horizon that aim to be natively compatible with the Ethereum virtual machine, so porting the platform may be possible as well.

Why should more merchants accept Bitcoin as payment? What about Ethereum? 

We believe that at such an early stage of Bitcoin’s development, convincing merchants is quite challenging. This is why our app is mainly intended for Bitcoin and Ethereum users who are tired of waiting for merchants to accept digital currencies and want to wield the ability to pay regardless of whether the merchant is involved.

Are you planning to integrate with other Decentralized Exchanges?

Initially, our platform will launch with an open API, meaning that 3^rd party applications can interface with some features of our system. At the present moment, our development team is focused on finalizing our product. However, once we have a production-ready release, we will look into available options to expand our cooperation with other exchanges, developers and SaaS providers.

What is the reason, in your opinion, that merchant adoption of Bitcoin and cryptocurrencies has been so slow?

It appears that mass adoption is a slow process, and not necessarily a straight line.

Accepting digital currencies still takes a lot of effort, involves friction and regulation, and is often cost intensive. The main problem is that it is not possible for merchants to accurately predict how many Bitcoin purchases they will get in the early stages of adoption. Many get discouraged when they get none, or remove Bitcoin as a payment option for a combination of reasons including training expenses, fees, or technical difficulties.

What can Status do for Plutus?

We appreciate integration into any 3rd party apps, exchanges, or services. All we want is for our users to have optimum interoperability with platforms, and liquidity for our traders. If you have other suggestions please let us know.

How does Plutus benefit from the use of Ethereum?

Our one-way trading gateway integrates an Ethereum smart contract, which makes our platform more transparent and decentralized. Over time, we want to optimize costs, reduce friction, and make the platform more autonomous.

What is the goal you’re hoping to achieve with Plutus?

We want Ethereum, Bitcoin, and other digital currencies to become regular payment options in daily life.

Which other DApps do you think Plutus can benefit the most from?

Exchanges can plug into our platform as well. It will be interesting to see the result.

What do you see as the biggest hurdle(s) in gaining a critical mass for Plutus?

We have to wait for society to get more familiar with digital currencies - until it becomes a topic one can talk about without getting weird looks from strangers. In the beginning, people who earn their income online will be the first to fully adapt to digital currencies. But we believe that this will take less time than most people think.

How do you see Plutus helping people's lives?

Our main goal has always been to provide a convenient payment method, and an easy and affordable way to buy digital currencies.

Is there a level of technical knowledge required by the end-user in order to use Plutus?

Ideally, there will not be more than few clicks required to use any feature. Our team is always thinking of new ways to make Plutus easier to use and navigate.

What is the most exciting feature of Plutus in your opinion?

How it all comes together. The Tap & Pay users deposit Bitcoin and Ethereum, while traders purchase them on the PlutusDEX, and the merchants receive their usual payment from the traders. This makes it possible to add currencies based on demand, and connect other platforms.

What do you think is the most important factor that differentiates Plutus from the non-blockchain(/Ethereum) applications in your field?

The fact that Plutus does not hold any digital currencies, and simply acts as a gateway to connect users with each other and match their trades. This makes the platform more secure and adaptable. And in some ways, the peer-to-peer nature of our exchange makes it more like “localbitcoins” for example, rather than a regular centralized exchange.

What can people in the Ethereum community do to help Plutus?

The main thing would obviously be to use our app, or to purchase digital currencies through our gateway. If you are a developer or entrepreneur, note that our decentralized exchange will have an open API and 0% trading fees for buying any digital currencies, making it ideal for integration in 3^rd party software.

Statistics released by the Republic of Estonia show that the number of e-Residency applications now exceeds the yearly number of births in the country. According to official data, the total number of 2017 births to November was 10,269, compared with 11,096 e-Residency applications for the same period.

“With over 27,000 e-Residency applications to date, we’ve seen the initiative’s popularity grow steadily since launch.” said Kaspar Korjus, Programme Lead, e-Residency. “e-Residency offers the freedom for every world citizen to easily start and run a global EU company from anywhere in the world, and as of October 2017, our e-Residents own over 4,000 enterprises.”

The project has attracted applications from over 150 countries from across the globe. Finland topped the applicant list, with the UK coming in 5th place for the total number of submissions when ranked by country. Of those applying for e-Residency, 41% submitted an application in order to start a location independent international business, 27% were looking to bring business to Estonia, 13% stated they were advocates of the initiative and 8% applied to benefit from the programme’s secure authentication technology.

Kaspar Korjus concluded “Estonia is the first country creating a borderless digital society for global citizens by offering e-Residency. Anyone, regardless of nationality or location, can apply for the transnational, government-issued digital identity and benefit from a platform built on inclusion, legitimacy, and transparency.” Companies founded by e-Residents work in a range of industries. Of these sectors, business and management consultancy, computer programming, non-specialised trade, tech consultancy and business support services proved to be the most popular.

“By launching e-Residency, the Estonian government aimed to make Estonia bigger – to grow our digital economy and market with new customers, to spark innovation and attract new investments. We’re delighted with e-Residency's progress to date; but are even more excited to see how the project will grow in the future.”

About e-Residency

Estonia is the first country in the world creating a borderless digital society for global citizens by offering e-Residency. Everyone can apply for this transnational government-issued digital identity and benefit from the e-Residency platform, which is built on inclusion, legitimacy and transparency. E-Residency allows access to Estonia’s public e-services and a variety of e-services provided by international service providers. This provides the freedom for every world citizen to easily start and run a global EU company fully online from anywhere in the world.

E-residents can: open a company within a day and run the company remotely, apply for a business banking account and credit card, conduct e-banking, use international payment service providers, declare taxes, and sign documents digitally. E-Residency does not provide citizenship, tax residency, physical residency or the right to travel to Estonia or EU. The programme was launched in beta mode in December 2014 so that improvements could be made based on the experience of real e-residents already benefiting from the programme. At first, four visits to Estonia were required in order to become an e-resident, establish a company and open a bank account.

In recognition of the potential of e-Residency to help unleash the world’s entrepreneurial potential, the programme has also partnered with the United Nations Conference on Trade and Development to launch eTrade For All, which uses e-Residency to empower entrepreneurs across the developing world and help them access e-commerce.

(Source: the Republic of Estonia)

Here John Milliken, Chief Operating Officer at Infomedia, delves into the statistics and facts of online, mobile and digital payments, how they differ between regions, and why.

According to a report by UNCTAD - the United Nations body on international trade and development - online, mobile and digital currency payment systems are set to overtake credit and debit cards as the most popular ways to pay in e-commerce worldwide by 2019. The research suggests that the share of credit and debit cards in global payments will drop to 46% by 2019 from the 51% forecasted three years ago.

Last year, China’s mobile revenue hit $5.5 trillion, a figure that is 50 times more than the size of America’s $112 billion market, according to consulting firm iResearch. Similarly, in the last year alone, Japan’s e-commerce market was valued at $89 billion, with half of that coming from mobile.

By comparison, in the UK and US, many brands, from retailers to publishers, continue to struggle to deliver a mobile experience that enables a convenient and simple payment method and encourages consumers to spend. As a result, despite the fact that mobile devices have consistently driven the highest levels of engagement compared to any other platform, it continues to experience the lowest conversion rates.

So, what is it the East is doing differently to the West that has caused mobile revenue to sky rocket?

The Asian Mobile Market

The Asian technology industry - particularly mobile - has pulled ahead of what we’ve seen in the West. China and Japan, like many other developing markets, have not followed the pattern of the West in going from physical shops to PC to laptop to smartphone. Instead many consumers are going straight to smartphones without previously owning a fixed internet connection.

According to Zenith’s Mobile Advertising Forecasts for 2017, mobile accounts for 73% of time spent using the internet globally, however in the UK this figure is just 57%. By comparison, in China, internet users reached 668 million in June 2015, and 549 million of those users (almost 90%) access the internet primarily via their mobile devices. In other words, the number of internet users in China is more than twice the population of the US and almost the population of Europe, and most of those individuals are walking around with a smartphone.

With these figures in mind, it’s clear that mobile is prevalent in China - it’s a way of life, not just a medium of communication. On mobile, consumers talk, text, shop, order food, hail taxis, book travel, pay for products and services, deposit money into their bank or transfer money, amongst other things. Most Chinese companies have recognised this, and build their advertising and marketing, customer communication, shopping, purchasing, and even their payment programmes around mobile. In fact, about half of all e-commerce in China happens on mobile, compared to just over a fifth in the US and around a third in the UK.

As a result, rather than focusing on card payments, merchants and mobile operators in China and Japan have worked together to develop truly frictionless mobile payment processes. In China in particular, much of this is driven by mobile payment services via social messaging service WeChat and AliPay, its paypal equivalent. In fact, Alipay recently signed with Starbucks to enable e-payment at all 2,800 Starbucks locations, while at a KFC, diners can pay via Alipay using facial recognition technology. In Japan however, DCB is the most popular payment method accounting for more than 50% of all ‘online’ transactions - a number that has risen consistently over the past five years as more consumers move away from card payments.

It is clear there is an opportunity for brands to deliver the same conversion rates on mobile seen in Japan and China if they are able to adapt to behavioural change. And although the Chinese market appears to be different to the West, it has actually just reached the predicted next stage for all markets quicker. By acknowledging that consumers want the quickest and easiest payment processes, we can also deliver an experience that is frictionless and encourages customers to convert from browsing to spending on mobile. In summary, it is only when brands begin to deliver and offer a mobile first experience that they too, will be able to maximise on the mobile opportunity.

Recent reports indicate some of the biggest household brands have signed up to a new buying service, by which grocery bills could be cut up to 30%, and the need for supermarkets could be eliminated completely.

Companies such as Unilever, Mars, and Reckitt Benckiser have signed agreements to sell directly to their consumers via a new digital platform and tech company, INS. This could also have a direct impact on how brands are able to use customers’ data for loyalty scheme and rewards.

Here, Rob Meakin, Managing Director at Loyalty Pro, comments for Finance Monthly: “The move by brands to offer a more convenient, cheaper service to consumers and cut out supermarkets is a clear attempt to gain some of the market share – and power – of grocery leaders like Tesco and Sainsbury’s and now Amazon, of course. In being able to gather data from their customers more easily, brands are going to create recommendations, rewards and loyalty schemes based on consumer buying patterns. With consumers’ allegiance shifting more away from brands and towards service (same-day and even same-hour delivery), this is an opportunity for brands to reclaim customer loyalty and our advice to retailers is to watch this development very closely and make sure they are prepared to fight for their consumer.  

“As data becomes the fuel for any business, retailers need to be actively trying to grow their customer loyalty by utilising the customer data at their fingertips to offer rewards schemes in the same way brands are now likely to. Loyalty points and rewards are a currency themselves, and with household budgets squeezed, consumers will be looking for the best possible deal. They also want to feel valued wherever they shop, rewarded for their custom and loyalty through points, offers and even charitable donations. We live in a society where loyalty can appear dead, but the truth is that it’s simply changed. Consumers still value great service and that can absolutely be delivered by anyone – from a single store high street retailer to a multinational online service. The key is to use data to understand what they want and deliver an experience using personalised and relevant communications which will encourage customer loyalty.  With brands about to cut out the middle-man, no retailer can afford to rest on their laurels.”

Russia’s plan to launch its own cryptocurrency, dubbed the ‘CryptoRuble’, is currently unfolding as President Vladimir Putin has given the green light for its go ahead.

This move will put Russia on the digital currency market and consequently allow Russian currency to rival the current cryptocurrency leaders such as Bitcoin, Bitcoin Cash and Ethereum.

Minister Nikolay Nikiforov, the Russian government’s Top Communications Official, says the authorities plan to completely regulate the ‘CryptoRuble’.

“I am so confident to declare that we will run CryptoRuble just for one simple reason: if we don’t, our neighbours in the Eurasian Economic Community will do it in a couple of months,” He told Russia Today.

“When buying and selling a CryptoRuble, the rate will be 13 percent from the earned difference. If the owner cannot explain the reason for the appearance of his CryptoRubles, when converting them into Russian rubles, the tax for him will be 13 percent of the total,” he continued.

However, Andrei Barysevich, Director of Advanced Collection at Recorded Future, seems to think Russia has missed the mark on this matter:

"With the widespread introduction of supporting infrastructure only available to the government-backed cryptocurrency and swift oppressive regulations aimed at bitcoin and other blockchain currencies, the Russian government is frantically attempting to regain the control of the “runaway train" by introducing a legitimate alternative.However, Russian lawmakers seem to be missing the main point.

“Aside from criminals, the majority of the people purchase bitcoins, not because of convenience or anonymity, but rather the staggering profit levels it provides. The Russian Government is unlikely to see a widespread adoption of the CryptoRubles unless Moscow is able to convince people that the value of it will surge."

Do you think governments introducing cryptocurrencies is a strong move in opposition of digital currencies, or that it may actually function via central regulation and oversight?

Odds are that you’ve been hearing more and more about cryptocurrency as digital tokens like bitcoin and ethereum have become valuable commodities. Converts (and investors) say that cryptocurrencies built on blockchain technology represent the future of money, finance, and commerce.

But skeptics say that digital currencies represent crowd-sourced pyramid schemes or are fuel for another tech bubble. We met with Olaf Carlson-Wee, who was the first employee at the cryptocurrency broker Coinbase, where he famously took his entire salary in bitcoin. Now, Carlson-Wee runs a hedge fund that deals exclusively in crypto-assets. We talked with Carlson-Wee in San Francisco about money, trust, and how he made his friends rich.