On your way to an important meeting, you rush down to the subway. After fumbling for your wallet, you unsuccessfully swipe your MTA card multiple times before the payment is accepted – only to see the train’s doors slam shut.
If this experience sounds familiar, you’ll be pleased to hear that New York’s MTA is recognizing that payments are causing far too much friction for riders. As soon as this spring, riders of NYC subways will be able to tap a contactless bank card or mobile wallet at turnstiles. The development portends a future of contactless payments in the U.S.
However, contactless is old news internationally. In Australia, the UK, Canada and South Korea, for example, contactless cards account for more than 20% of all retail transactions. In the U.S., contactless payments are less than 1%.
Why has the U.S. lagged behind in contactless payments?
The short answer is that cards in America have been burdened with technical debt. In order to have contactless, you need a chip with a small NFC (near-field-communication) antenna. In the U.S., the card networks have only been pushing cards with chips for a few years. It’s been slow going to get merchants and card issuers (primarily banks) on board.
However, we may be reaching a tipping point where more opportunities for contactless payments are opening up and lame excuses like "I did not have the correct change, Mr. Vader" will be met with "you are part of the rebel alliance and a common fare dodger...take her away"
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TAP-N-GO AMERICA
Coming soon: A world without cash - As soon as this spring, riders of NYC subways and buses will be able to tap a contactless bank card or mobile wallet at turnstiles. The developments portend a future of contactless payments that is already commonplace outside the U.S. Read more
17% of the population would struggle to cope in a cashless society, review finds - The FT digs into recent report that says the UK’s cash system is on “the verge of collapse” and bank branch closures are “the tip of the iceberg”. The report states that 17% of the population would struggle to cope in a cashless society. Read more
INDUSTRY NEWS
JPMorgan launches a challenger to Affirm, the US consumer finance start-up - The latest battleground between established banks and upstart financial technology companies is over who will finance consumers’ purchases at the moment they are made, online or in
physical stores. Read more
JPMorgan outspends itself on ‘change the bank’ fintech - Buried among the deluge of news from JPMorgan Chase's investor day last week was a surprising fintech nugget. The Wall Street giant expects to spend $600m more on tech this year than the industry leading $10.8bn it deployed in 2018. Read more
Raisin acquires German banking provider MHB Bank - MHB provides Raisin with account management and customer identification, as well as powering transactions and services that require an underlying bank license. Read more
Omidyar spins off Flourish - Omidyar Network, the impact investment firm created by Ebay founder Pierre Omidyar, is spinning off its fintech investment practice into a new firm called Flourish. Flourish is initially managing $500m in AUM - including a $200m portfolio and $300m in fresh capital. Read more
FINANCINGS
Betterworks - SF based HR software platform has raised $27m of incremental Series B financing led by Kleiner Perkins and Emergence Capital. Read more
FutureFuel.io - Boston based provider of student debt employment benefit solutions has raised $11.2m in Series A funding led by Rethink Impact. Read more
Shift Technology - Boston and Paris based AI-driven fraud detection platform for insurance carriers has raised a $60m Series C led by Bessemer. Read more
Tagomi - New York based one-stop prime brokerage and execution system for institutional crypto traders has raised $12m in additional funding led by crypto venture fund Paradigm. Read more
Wefox - Germany based insurance contract automation platform has raised a $125m Series B led by Mubadala. Read more
FinTech Collective Newsletter
Curated News with Context
Delivered every Saturday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.