PAYMENTS INSIDER: Square IPO Delayed -- Bitcoin Malware -- Macy's 'Buy Online, Pickup In-Store' Program

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SQUARE IPO DELAYED. In 2013, rumours circulated that Square would IPO this year. It looks like that isn’t going to happen though, according to a report from Fox Business. It seems that the public market would be unlikely to support Square’s $US5 billion private valuation, according to people familiar with the matter. Square is reported to generate over $US100 million in revenue a year, but is not yet profitable. (Fox Business)

VIRUSES FOR STEALING BITCOIN. Software developed to steal cryptocurrencies like Bitcoin will become one of the fastest-growing categories of malware, according to security researchers at Dell SecureWorks Counter Threat Unit. The researchers found that over 100 families of malware currently exist for stealing cryptocurrencies like Bitcoin. The explosion of malware for exploiting Bitcoin is comparable to the period during the late ’90s and early ’00s when computer viruses were a serious problem on PCs. If Bitcoin continues to catch on, we should see a handful of companies spring up specifically to deal with this problem. (Dell SecureWorks)

And in further news from the first high-profile Bitcoin exchange collapse, Mt. Gox, which filed for bankruptcy last week, has launched a call center where former customers can dial-in for information. Of course, a help center is only as good as the help it provides, and with over 700,000 missing bitcoins, it’s not clear how much useful advice Mt. Gox can offer the former owners of these missing bitcoins. (ZDNet)

But the collapse has not really stalled the pace at which Bitcoin becomes more widely understood and accepted. The U.K. has announced that they will reverse a ruling levying a 20% VAT tax on digital currencies, which treated the currency as a gift voucher. (CoinDesk)

MACY’S ROLLS OUT ‘BUY ONLINE AND PICKUP IN STORE’. Bricks-and-mortar retailers are worried about growing competition from e-commerce sites like Amazon that can offer vast inventory and competitive pricing. Macy’s is confronting this problem head-on by attempting to make both its online and in-store shopping experience better. They’re rolling out a new program to their 675 retail locations, which will allow their customers to make purchases online and then pick their items up at physical stores. In this way, customers can avoid crowds, get products the same day, and still potentially shop for additional items once they are in the store. The idea is to enable customers to shop in whatever way they want to.

But Macys’s strategy doesn’t stop there. One of the goals of the program is to collect data on customers’ shopping habits and gain a company-wide view of inventory both in stores and in distribution centres, which will be then be used to launch a same-day delivery service. Amazon is also working on a same-day delivery program. Macy’s effort is another example of the way merging online and in-store channels can create other companywide operational efficiencies (Internet Retailer)

A UKRAINIAN BANK IS MOVING FORWARD WITH MOBILE PAYMENTS. Prior to the release of Android KitKat 4.4, NFC-based mobile wallets needed access to the “secure element” on smartphones in order to work. (The secure element is a highly protected part of the phone.) This was a problem for developers because access to the secure element is controlled by mobile carriers. Many carriers offer their own mobile wallets and therefore have a vested interest in limiting access to the secure element in order to weed out competition. But Android 4.4 includes a feature called host card emulation (HCE), which we recently covered. The feature allows NFC-based mobile wallets to work without accessing the secure element of Android mobile phones. Ukraine’s PrivatBank recently announced that it would be providing its customers with an NFC-based mobile wallet that uses HCE, making it one of the first financial institutions to offer such a service. (Payments Journal)

A Spanish bank is getting on board as well. Bank Inter, a Spanish bank, has a mobile wallet app that supports both EMV contactless payments and NFC-based payments, and uses HCE. The addressable market for Bank Inter’s app is large because in Spain 70% of smartphones run on Android. This video is worth a watch just to see how the mobile wallet functions. (YouTube video from Visa)

A GOVERNMENT-BACKED BITCOIN? As we’ve reported, a number of governments are creating their own digital currencies. Canada is developing MintChip and Venezuela has Sucre, for example. The collapse of Bitcoin exchange Mt. Gox will inevitably lead some to suggest that governments should develop their own centrally controlled digital currencies in order to provide people with benefits such as fast, cheap payments without the risks. But for many, the biggest advantages of Bitcoin and other digital currencies is that they are not centrally controlled. A government-controlled digital currency could potentially offer greater security, but it would also remove competition, which incentivizes people to innovate and create better technologies. (Payments Source)

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