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Home » Daily Briefing » Daily Briefing - 24 July 2017

Daily Briefing - 24 July 2017

Jack Ma visits one of the HEMA stores

Does Elon Musk really want to go to Mars? Or is the whole thing a distraction from Elon Musk's real ambition, which is to build the world's first satellite-based internet provider, with Tesla as its main customer? Trying to make sense of the Tesla strategy, Irish journalist Gavin Sheridan notes that Tesla's battery-powered fleet would benefit immensely from always-on connectivity and the huge data capacity of a satellite network, not least the GPS guidance needed for autonomous driving. Writing in the Sunday Business Post [paywall], Mr Sheridan notes that manufacturers such as Toyota are already working hard to turn their cars into mobile satellite dishes, working with Kymeta, whose CEO notes that when we want limitless channels of HDTV, we turn to satellite rather than terrestrial distribution systems. It's not the first indication of Mr Musk's internet plans — though they are sometimes portrayed as fundraising wheeze for Mars. The Internet of Things suddenly looks a lot more formidable.

Amazon's purchase of Whole Foods sent news departments into a tizzy, and even Lafferty News speculated about the benefits that might accrue to Amazon as it offered a chic way to roll out several new programmes, including Amazon Go, the checkout-free shopping experience, and ramp up its e-commerce offering by delivering fresh groceries. But now the idea is not looking so original. Cue Jack Ma again, and the "new retail experience". Although Ma says that Alibaba's Hema supermarkets are closer to proof-of-concepts than a new business line, the supermarkets integrate online and offline shopping — using an app downloaded on entry to the store, with the barcode delivering information to the shopper via the app. Here's a short video from Tim Brennan of Alizila. For those who doubt that the two companies keep an eye on each other, Alizila explains itself as Alibaba's news outlet (in the same way that some people — including the US President — consider the Washington Post to be Amazon's news outlet). At heart though, Alibaba is a data business — with slick integrated mobile payment as the commercial lubricant.

And, as Alipay's north American president Souheil Badran tells, China is about to boost its digital payments system further, with Cashless Week in China beginning on August 1 next. Cashless Week is promoted by Ant Financial. Five cities — Hangzhou, Wuhan, Tianjin, Fuzhou and Guiyang — with a total of 40 million people, have signed up for Alipay's program. It's all about ubiquity, and Mr Badran is working on the challenge of bringing that ubiquity to China's travellers. "From Alipay's perspective, Badran said the first step is to make Alipay more ubiquitous across all types of merchants and transactions," writes Karen Webster. "In a spate of recently forged relationships, Alipay has linked with First Data to gain presence in North America, and Verifone in both North America and Europe. The relationships broaden geographic reach and also enable the QR code scanning, making it possible, then, for Chinese consumers to use their Alipay apps at merchants ranging from Nordstrom's to the tiniest of pastry shops." Western businesses must be wondering what they missed when it comes to the power of barcodes.

The big US banks are back to making 2007-level profits, indicating that regulations designed to rein in excessive lending and spending are not the drag that detractors insist. "'It shows that the legislation we passed in no way retarded the ability of the banks to make money,' said Barney Frank, the former congressman whose name is on the 2010 law tightening industry oversight. Banks are supporting the economy, he said. And 'very specifically, it refutes Trump's claim that we cut into lending. How do banks make record profits if they can't lend -- especially when they're down in trading?'" Share prices at Wells Fargo and Goldman Sachs have hit record highs this year, notes Bloomberg. The 34 major banks all passed the stress test. "'That's all good news for Main Street -- continued economic growth and ultimately more broadly shared prosperity,' said Dennis Kelleher, president of Better Markets, a Wall Street watchdog. 'However, that is also what is directly threatened by the mindless deregulatory zeal of too many in Washington, who are baselessly attacking Dodd-Frank for almost every ill in America'."

And finally — here's a short introduction video to our next London event, the Lafferty International Cards & Payments Conference. Feel free to share!

MasterCard wins blocking of UK class action attempt

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