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This week in fintech

March 8 · Issue #50 · View online

A weekly summary of the latest news in our world of finance, design, and technology.


Also: 🛃 Big tech and non-existing customer service 🍎 Apple crypto wallet? 💐 The NFT bubble still going strong 💍Square + Tidal 💰 Klarna Europe’s most valuable startup

🛃 Big tech and non-existing customer service
Last week Dustin Curtis reported, Apple Card disabling his iCloud App Store and Apple id accounts. More people reported similar situations with Google where missing credit card payments blocked their whole digital life like email and calendar. This raises the question if it would be ok for a bank to kick you out of your digital life in milliseconds if they didn’t receive payments? Curtis’s situation was based on a misunderstanding and is now resolved. But it still shows one of the problems when Big Tech moves into finance and has more or less non-existing customer service.
🍎 Apple crypto wallet?
Speaking of Apple: Analyst Mitch Steves from RBC Capital Markets believes that they could create a sizable new market for growth if they developed Apple Wallet into a crypto exchange. It’s an interesting idea, especially considering Ark Funds CEO and Founder Cathie Wood last week stated that digital wallets are going to gut banks. She believes digital wallets will be responsible for customer’s banking and loans, debit and credit cards, and buying crypto and stocks.
If Apple Wallet opened up for cryptocurrencies, this could do for cryptocurrency what GUIs did for personal computers, and the web did for the internet. One of the things currently staying in the way for cryptocurrencies going mainstream (apart from regulations) is that cryptocurrency experts are proud of their mastery of the currently difficult user experience and therefore won’t improve it, according to the founder of Hacker News and Y Combinator, Paul Graham. Maybe Apple could change this if they ventured into this space?
💐 The NFT bubble still going strong
The NFT bubble is still going strong. Creators see the potential for earning money fueled by the current all-time high in cryptocurrencies. Non Fungible Tokens is an interesting premise for creating scarcity on digital products. As it stands now, there doesn’t seem to be much more to it than speculation. Case in point people is buying NFTs of Tweets for millions of dollars. Even though it’s fun to watch the movement and people being creative, this unfortunately also has a dark backside:
THE REST OF US are going to pay for NFTs for a very long time. They use an astonishing amount of electricity to create and trade. [..] And so creators and buyers are then hooked in a cycle, with all of us up paying the lifetime of costs associated with an unregulated system that consumes vast amounts of precious energy for no other purpose than to create some scarce digital tokens.
Seth Godin in NFTs are a dangerous trap
As usual, people are arguing that the environmental issues with crypto art will go away soon, or that artists selling NFTs actually releases far less CO2 than if they sold the equivalent dollar amount of t-shirts with their art on it. But the best read of this topic so far is aptly named: «HERE IS THE ARTICLE YOU CAN SEND TO PEOPLE WHEN THEY SAY “BUT THE ENVIRONMENTAL ISSUES WITH CRYPTO ART WILL BE SOLVED SOON, RIGHT?"»
Square 💍 Tidal
Luckily the world is more normal when it comes to the financial sector. 😜 As we wrote about almost a year ago, Square has gotten a banking license, and this week they announced that they had started their banking operations. Three days later, they bought a majority share in the music streaming service Tidal and had JAY-Z joining the Square board. As the CEO of Square (and Twitter) says: Why would a music streaming company and a financial services company join forces?!
💰 Klarna Europe's most valuable startup
The Swedish buy-now-pay-later firm Klarna has closed a $1bn private fundraising round, bringing the company to a $31bn valuation and tripling what it was worth six months ago. The round makes Klarna Europe’s most valuable startup and the second most valuable fintech worldwide after Stripe.
The next market we will launch a banking product in will be ScandinaviaKlarnas digital product manager David Fock
Klarnas digital product manager states that one of the reasons for their success has been their structure of building “internal startups”, while the management team worked as investors. Each team was handed one problem to solve and given full autonomy to solve it - inspired by Alphabet and Amazon.
🔨 Low tech hacking
We’re often speaking of cutting-edge technologies, but the fact is that a lot of the banking industry often is run on old technology or needs to support older systems. Last week Per Thorsheim, together with three friends, proved that it was possible to misuse DNB’s paper form for a power of attorney to get full access to their accounts. NRK Beta has done a deep dive into the (now solved) security issue.
🙏 Don’t keep it a secret!
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Marius Hauken, partner Stacc X
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