đź’ł Banks come for Apple Pay

Tuesday, January 24, 2023 by Snacks
No wallet, no problem (Duane Prokop/Getty Images)

No wallet, no problem (Duane Prokop/Getty Images)

No wallet, no problem (Duane Prokop/Getty Images)

No wallet, no problem (Duane Prokop/Getty Images)

Yesterday’s Market Moves
Dow Jones
33,630 (+0.76%)
S&P 500
4,020 (+1.19%)
11,364 (+2.01%)
$22,932 (+0.96%)

Hey Snackers,

Calls to curb gun violence are growing again after yet another shooting in California left at least seven people dead yesterday. Tragically, 2023 is off to a historically fast start for mass shootings.

In markets: the Nasdaq led gains yesterday, rising 2% ahead of upcoming earnings from big names like Microsoft and Tesla. Investors hope inflation will cool at a historic pace.


1. Big banks plan a digital wallet to rival Apple Pay as plastic-free payments take over

Forgetting the CVV digits… Big banks are joining forces to launch a digital wallet that could rival Apple Pay and PayPal and allow their 150M+ card holders to check out online without grabbing their plastic. Banks have teamed up before: in 2017 JPMorgan Chase, Wells Fargo, Bank of America, and others launched peer-to-peer payment biz Zelle — which surprisingly moves more $$ than Venmo and Cash App combined. Now…

  • Same squad: Big banks are planning a digital wallet that’ll be run by Early Warning Service, the bank-owned company that runs Zelle.
  • Fresh wad: It’ll start as an online checkout option (with a physical card for in-store purchases), but could eventually work as a swipe-less wallet Ă  la Apple Pay.

Tap-to-pay anxiety… Banks are wor­ried about los­ing customer loyalty as companies like Apple and PayPal promote their own financial products (Apple’s even working on a savings account with Goldman Sachs). Apple Pay has surged in popularity since its 2014 launch: an estimated one in six US consumers uses it at least once a month. Meanwhile, PayPal has 400M+ global users and controls over a third of the online payment market share.


If you can't beat ’em, join ’em… or at least launch a competing product. With deal revenue shrinking, it’s more important than ever for banks to keep their retail customers loyal — especially at the digital checkout aisle. Over half of US consumers tried a new payment method last year, with many using digi-wallets for the first time. The global contactless payment market is forecast to quintuple by 2030.


2. Genesis follows other crypto lenders into bankruptcy, signaling the end of crypto lending as we know it

More like terminus… One of the last big crypto lenders standing officially threw in the towel. Genesis, part of the DCG crypto conglomerate, declared bankruptcy late last week with plans to get the restructuring ball rolling by May. The goal: break itself apart and sell the pieces to repay creditors — of which there are plenty.

  • Towering: Babel Finance, which offers mining and crypto-lending services, says Genesis owes it $150M.
  • Gemin-high: The Winklevoss-helmed crypto exchange Gemini says Genesis owes its customers $900M. It also reportedly announced job cuts yesterday.

The end of a chapter… and the beginning of Chapter 11. Genesis was a major player in the crypto-lending world, lending out $130B+ in 2021 alone. Cracks appeared when crypto hedge fund 3AC collapsed in July, taking $1.2B of Genesis' funds with it. FTX's November implosion, which jolted the market, widened those already deep fissures. Now Genesis follows Celsius, Voyager, and BlockFi into bankruptcy.


Crypto lending's “Wild West” days could be over… For years crypto lenders acted like banks — lending out customer deposits — but without the same regulations and controls that banks are subject to. As high-profile bankruptcies pile up, regulators are cracking down. The SEC charged Genesis with offering unregistered securities this month, and lenders like Nexo are paying multimillion-dollar settlements. Experts say that to stage a comeback crypto lenders will need to up their risk-management game — or risk going the way of the cowboy.


3. Heard on the Block: "crypto yield"

đź’¸ When someone promises to pay you back "and then some"...

Money deposited in a bank usually doesn’t just sit there. Banks can lend out idle $$ and offer their customers interest payments on deposits. Crypto lenders proposed a similar model, attracting deposits by advertising "yield" — (in)famously as high as 18% — on deposited crypto. Now, as crypto lenders topple, some customers are struggling to get their deposits back.

What else we’re Snackin’

  • Official: Microsoft’s piling even more $$ into ChatGPT maker OpenAI with a multiyear, multibillion-dollar investment. The Office icon said it plans to integrate genAI tools like DALL-E into its products.
  • Fried: Inflation is broadly cooling but eggs aren’t cracking: US egg prices soared 11% in December from November, and Americans are scrambling to smuggle cheaper eggs in from Mexico.
  • Shed: The latest tech layoffs are at Spotify, but tech isn't the only industry cutting: Ford plans to slash up to 3.2K European jobs, says a German union, which threatened to disrupt production in response.
  • Vat: Farm raised or lab grown? The US could allow restaurants and retailers to sell lab-grown meat as early as this year, following Singapore as the second country to approve sale of cultivated meat.
  • Green: Mars is replacing its popular M&M’s “spokescandies” with actress Maya Rudolph after criticism from conservatives over the cartoon mascots’ makeovers. M&M’s said "even a candy's shoes can be polarizing."

Snack Fact of the Day

“Avatar: The Way of Water” is the third James Cameron movie to rake in $2B


  • Earnings expected from 3M, Microsoft, Johnson & Johnson, Verizon, Raytheon, Lockheed Martin, and General Electric

Authors of this Snacks own shares: of Apple, Microsoft, and Tesla

ID: 2696798

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