Lafferty daily briefing

Mary Meeker of US venture capital firm Kleiner Perkins presented the firms’s annual Internet Trends survey this week.

Lafferty News is still waiting for someone to invent an app that reduces the 355 slides to a manageable ten or so. For readers of Lafferty News, there’s no big shockers in here, as technology news has become fairly mainstream.

Big Chinese internet firms are climbing into Top Ten lists previously occupied by American firms: it remains to be seen how much software they will roll out which takes a share of software traditionally dominated by the West. Naturally for Kleiner Perkins, there’s an unstated message that technology provides seamless solutions, which remains unchallenged.

Among the takeaways, for instance: voice search is growing, with 20 percent of inquiries on mobile done by voice. There’s no indication of the amount of correct answers delivered by Siri, Echo and so on. Lafferty News suspects about 25 percent of the enquiries yield correct answers. Another interesting tidbit: In India, mobile phones account for about 78 percent of internet usage (thanks in part to the $25 billion investment by Reliance to roll out a new 4G network). Only Nigeria surpasses that, with 80 percent of internet access via mobile.

Of course, it’s the ubiquity of mobile phones that has forced people to reconsider the future of the POS and in particular the PIN.

In the West, Jack Dorsey of micromessaging service Twitter founded Square, which was one of the first devices to take advantage of the connected computing power of the mobile phone to allow small merchants to receive card payments.

In the East, Tencent reconfigured its own micromessaging site into WeChat, out of which emerged mobile-to-mobile payments for merchants. Now, Edgar Dunn asks: is the extinction of POS terminals nearer than we think? Are we in the middle of another ‘software eating the world’ story? “As with the paperless office or the cashless society the retailer without a POS terminal is not likely to happen in the next 20 or 30 years,” says the report.

“Conversely, PIN-on-glass and contactless devices without a PED [PIN entry device] are more likely to be mainstream within the next five years, but retailers will still want the choice to accept cards with and without the PED. Just as we have seen the magnetic stripe reader is still an integral part of the POS terminal its days are numbered because in the next few years the mag-stripe card will fade away entirely as the chip on the card and contactless technology becomes the only standard. The next ten years will see further advancements in the function of the POS terminal, it will not be comparable with anything we see today but software will take the lead not the hardware.”

Barclays Zimbabwe will be acquired by Malawa-based First Merchant Bank, according to reports, as Barclays moves to divest of its African businesses. Barclays has been operating in Zimbabwe for more than a century.

As the FT reports, “Barclays Bank of Zimbabwe, which has $476m of total assets and made $10.9m of net profit last year, is a similar size to First Merchant Bank, which has $450m in assets and made $10m of profit last year. Barclays will transfer all of the bank’s 700 employees, 25 retail branches and five corporate service centres in Zimbabwe to First Merchant Bank.

The UK bank will reduce its risk-weighted assets by £292m.” Barclays is selling down its African business to concentrate on British and American markets. Barclays employees in Zimbabwe had gone to the courts to prevent the sale of the business, arguing that they deserved first refusal.

For some years now, Italian banking has been in need of a little luck. A lot, actually. The start of summer 2017 seems to be providing brief respite. Someday, a historian may judge that Italy’s luck turned this year. “First-quarter expansion was revised up to the fastest in six years, according to a report on Thursday, with a boost from inventories and solid consumer spending,” says Bloomberg. “While investment and net trade proved a drag, and Italy is still lagging its European peers, the news lifted hopes for the health of the economy.” Perhaps the G7 meeting in Sicily convinced Berlin and Rome that they have a common problem, and would do well to work together. So, Monte Dei Paschi (MPS) will be rescued (again) via a bail-in. Junior bondholders and shareholders will be tapped to contribute, private buyers will take MPS’ bad loans, and the state will assist in the recapitalisation of the bank.

Expect, however, that the bail-in will result in a lot of unhappy tales if more mis-selling of bonds emerges. Margrethe Vestager, EU competition commissioner, said she and the Italian prime minister had agreed in principle to allow state aid. “MPS will undergo deep restructuring to ensure its viability, including by cleaning its balance sheet from non-performing loans,” she said. “I hope this will enable MPS to focus on lending to the Italian businesses and support the Italian economy.”

Speaking of which… Lafferty News’s home town was full of vintage Minis last weekend, many featuring themes from The Italian Job, which sealed the reputation of that chirpy automobile as the getaway vehicle of choice for the Cockney tea leaf. As it turns out, Italy is the capital of bank robberies, though in this case it’s good old heists of cash that we’re talking about.

“Economists Giovanni Mastrobuoni and David A. Rivers studied nearly 5,000 bank robberies in Italy between 2005 and 2007. The average heist lasted 4 minutes, 16 seconds and yielded €16,000 (about $19,800 at the exchange rate of the time). Though each additional minute in the bank, on average, leads to about €1,400 more in earnings, the majority of robberies last three minutes or less because the risk of getting caught increases with time.”