Rishi Taparia - Issue #53
This week we explore the Trump administration’s take on fintech, Kroger showing Visa the door, Indonesia’s crack down on illegal lenders, Apple’s path to T, LeBron going back to school, the importance of sleep and more. Enjoy!
FinTech
Trump Administration Embraces Fintech Startups
Let the race for bank charters being. This week the Department of the Treasury released a long awaited, 222 page report on fintech and innovation. The TL;DR version: the government wants to fuel more innovation in fintech through loosening regulations and removing bureaucracy. In addition, the government wants to make it easier for companies to operate in all 50 states along the same standards as banks, which could potentially mean that startups can get access to special banking charters. No word yet on whether the banking charters will allow for deposit taking (which frankly, is the biggest benefit of being a bank) but regardless, a major reason to continue being bullish on fintech disruption in the US.
Jack Ma’s Giant Financial Startup Is Shaking the Chinese Banking System
“Ant Financial, which grew out of Alibaba, controls the world’s largest money-market fund, handled more payments last year than Mastercard and is more valuable than Goldman Sachs.”
Not bad for a company that started less than 20 years ago and only really found it’s footing in the last 3-4 years. I’ve long maintained that the biggest risk to Ant is an uncertain regulatory environment. Navigating this appropriately, not only in China but in international markets where they are increasingly pushing for market share of the wallet, whether Ant or local, needs to be a top priority.
Indonesia cracks down on 227 illegal P2P lending companies, most of them originated from China
Indonesia is experiencing nothing short of a revolution when it comes to financial technology capabilities and innovation. However, with the good must come the bad and, in the fourth most populous country in the world with a huge digital native, youth population, conditions that a lot will try to take advantage of. Indonesia is experiencing the same growing pains that other markets like China, India and Japan have gone through, finding bad actors that are trying to take advantage of consumers while skirting the law.
Indonesian financial service authority’s (OJK) special task force for investors protection discontinue the operations of 227 illegal P2P lending companies in the country, due to concerns about consumer protection and money laundering practices. More than half of the companies are originating from China; they have no legal entity and representative office in Indonesia.
Credit-Card Backlash Mounts as Kroger Weighs Expanding Visa Ban
Sometimes in order to make a point and win a negotiation, you simply have walk away. Kroger is considering expanding a ban on Visa credit cards imposed by one of its subsidiaries, which would make it the largest retailer (to my knowledge) to completely cut off the payment method. Now, given it’s Kroger’s and Visa has generally had the upper hand, I don’t think the payment network is shaking in their boots. That being said, it’s a ballsy move that others will take a long look at. My guess is after a bunch of hemming and hawing (and a considerable number of meetings), cards will remain, Kroger continuing to pay the cost of customer convenience.
Commerce
Out of Stock Online? Zara Hopes Shipping From Stores Will Boost Sales
Fast fashion, meet fast delivery. Zara is implementing what should be one of the bedrocks of the modern commerce experience, starting to equip its stores to also ship online purchases. They are betting that the move will drive sales of full-priced items that can be delivered to customers from a location closer than the nearest warehouse while also providing customers with more opportunities to buy lines that might be falling out of fashion. The right move and one that should be table stakes for the industry.
Technology
Apple CEO calls $1 trillion value a 'milestone' but not a focus
Stock applications everywhere need to be updated. For the first time ever, the letter “T” needs to append a company’s market cap. Apple this week made history with a trillion dollar plus market cap, crazy to think about on a lot of dimensions. Now I’m just waiting for the time when startups say they have a trillion dollar idea and investors say they aren’t thinking big enough!
Alibaba and Tencent have become China’s most formidable investors - Feeding frenzy
Alibaba, Tencent and Baidu are the kings of Chinese technology (which, in turn, makes them major players on a global scale). Over the last 10 years they have amassed a network of companies and services either by development or investment that have made them omnipresent in the market. All the investments are pieces in a 4 dimensional chess game being played around the world and will have impact well beyond the relatively short, decade long time horizon most investors think through.
Random Tidbits
LeBron James has one more career-defining moment in his home state, opening a public school in Akron
LeBron long ago attained the status of single name celebrities, joining the likes of others including Beyonce, Madonna and Ronaldo who have global appeal. However, unlike many others, his skills extend far beyond his seemingly god given talent. This week he opened a school in Akron, OH, his home town. Taking from the best of what has been done before, his public school caters to those students who have struggled and have fallen behind in what I found to be quite novel ways.
The school’s “wraparound” services help reduce stress kids might feel when their parents are struggling financially. That includes job and family services, a GED program, a food pantry from which they can shop and choose their meals, and help with housing if needed. They have a seven-week summer camp program to help avoid the trouble that comes with too much free time.
Now, I don’t know enough to know how much of what is being done is first of its kind or unique, but I must tip my hat to the man who has proven his prowess and intelligence both on and off the court. What he is doing should only be applauded, and he is without question, “more than an athlete”.
After Eating at 99 of the World’s Best Restaurants, a Gourmet Whiffs at 100
Talk about putting your money where your mouth is. Paul Grinberg, just a dude who wants to eat, has made it his mission to dine at the world’s top 100 restaurants, and has gone to great lengths to get there. He has crossed off 99 spots, with one small, membership only Japanese restaurant left to go. A pretty cool story that had me craving a snack…
Sleep Science: In the Era of Screens, Rest is Crucial
I’m currently on a business trip through Asia that has taken me to 5 cities in 7 days. Needless to say, there hasn’t been a lot of sleep thanks to jet lag and general busyness. This, turns out, is a major problem (and trust me, I tell myself “duh” all the time, and yet still don’t change it). This is a tremendous article that does a great job of explaining the importance of sleep, what happens while we sleep and how it keeps us healthy. Well worth a read.
Quote I’m thinking about: “A mind too active is no mind at all.” Theodore Roethke