Groupon announced its first-ever quarterly profit this week, but its stock is down more than 25% on the year. The business model for Groupon — and competitor LivingSocial, among others — is flawed in so many ways. For starters, merchants that take part in a daily deal give up as much as 75% of each daily deal sale to participate. This creates a high participation cost for the merchant, which does not know whether the daily deal will result in an incremental lift in overall sales from new customers or repeat business. Groupon and LivingSocial have yet to report the … Continue Reading →

Just last month I published a report, Quasi-Merchant, Meet the Quasi-Terminal: Merchant Acquiring Growth via the Mobile Device, in which I wrote that providing payment acceptance solutions to self-employed individuals would yield almost US$1 billion in net revenue by 2016. I also wrote the following: “Bank acquirers, in particular, seem well positioned to deliver solutions to this market. Their extensive distribution capabilities across consumer and small-business markets, pre-existing relationships with all different types of consumers and small businesses, extensive risk management capabilities, core competencies in the merchant acquiring space, and branding infrastructure should make them ideal candidates to penetrate this … Continue Reading →

Argentina takes what it wants. Whether it’s defaulting on sovereign debt or expropriating an oil company, the Argentine government eats when it’s hungry and doesn’t care what’s in the way, be it the World Bank or Repsol or, for that matter, collective denunciation by, well, everybody. Yesterday, the Argentine Congress passed a bill that will put majority control of YPF (YPFD.B), Argentina’s biggest oil company, back into the coffers of the country’s federal government. The problem with this is that Spain’s flagship energy company, Repsol (REP.MC), owns 51% of YPF, and that Argentina’s action essentially amounts to the legalized theft … Continue Reading →

As a consumer I have always been skeptical of some of the intangible cardholder benefits associated with certain credit cards. Typical among these benefits are purchase protection plans, car rental loss and damage insurance, lost/stolen baggage insurance, and delayed trip insurance. I never perceived a real value in these services and thought I would never have the occasion to use any of the benefits. I also typically do not like paying annual membership fees on credit cards that offer these benefits. All of that changed recently. I booked a flight to Italy with my American Express card, which provides trip … Continue Reading →

This week saw the official launch of a new lobbyist body focused on promoting data transparency within regulatory and government quarters. Dubbed the Data Transparency Coalition (DTC — not to be confused with the other DTC), the group is spearheaded by ex-Securities and Exchange Commission legal eagle and government counsel Hudson Hollister. According to the PR, the group is all for “advocating for common sense initiatives that encourage the productivity and transparency necessary for government reform”; hence, the legal entity identifier (LEI) initiative has been added to the group’s list of objectives. The DTC (no, not that one) is a firm … Continue Reading →

Last week, with surprisingly little fanfare as America was winding down for the holiday weekend, President Obama signed the JOBS (Jumpstart Our Business Startups) Act into law. The law is certainly among the most promising pieces of bipartisan legislation introduced during this term and is certain to increase President Obama’s chances for re-election, especially given that his presumptive opponent’s strong suit is his success in business and his promise to repair the economy. It is said that a rising tide lifts all boats. The U.S. insurance industry stands to benefit as much, and perhaps even more, than its counterparts in … Continue Reading →

On March 20, the U.S. Senate failed to renew the charter for the U.S. Export-Import Bank, which provides significant financial support to parties that encourage global trade activity and thus benefit the U.S. economy. While the Ex-Im Bank offers some direct loans to international buyers of U.S. exported goods, the majority of its activity is in the form of guarantees and insurance-backing loans made by banks to small businesses. Government-sponsored guarantors are critically important to the ability of small businesses to trade internationally. Since the Ex-Im Bank does not contribute to U.S. debt, the Senate’s decision may well prove short-sighted. In fact, … Continue Reading →

One thing I learned during my recent research effort on the road traveled thus far toward establishing a new global legal entity identification (LEI) standard was that there are still real hurdles ahead of the ISO-proposed standard on the table. Much like previous efforts gone by in the area of data standardization, adoption of ISO 17442 beyond its use as a mere cross-reference point for regulatory reporting will be key if it is to make a difference to financial institutions’ risk teams and their day jobs or client account management or, well, anything else. Regulators and the data management community might … Continue Reading →

Yesterday, I was giving a webinar with the Head of the RSA FraudAction Research Labs, Etay Maor. He shared some interesting intelligence about Citadel, one of the latest ZeuS offspring. The RSA research labs performed analysis on the Trojan and translated some language in its “user agreement,” which says, “Important: Our software does not work on Russian-language systems. If a Russian or Ukrainian layout is detected, the bot terminates. This is done to prevent installs on CIS systems. You may disagree, but that’s taboo for us.” This is indicative of a couple of things: It underscores the fact that many of the cybercrime … Continue Reading →

The performance of the U.S. property & casualty insurance industry is more counterintuitive and potentially troubling today than ever before. And yet, across all products — including in personal and commercial lines — in a static market with paltry investment returns, in a soft pricing environment where price increases are hard to come by, and with year-over-year industry growth in 2011 of little more than 1%, most of the largest P&C carriers have continued to grow and profit. Unless you live under a rock like Rick in one of GEICO’s offbeat commercials, it is hard not to have noticed that the biggest auto … Continue Reading →