10.3.17 Your morning briefing

Enjoy complimentary access to top ideas and insights — selected by our editors.

The information you need to start your day, from PaymentsSource and around the Web:

Cashless shack: Shake Shack is opening its first cashless location in Astor Place in Lower Manhattan. Instead of cashiers, the location will deploy "hospitality champs" who will focus on customer experience, CNBC reports. Consumers will use mobile phones to place orders and will receive a text from the restaurant when the food is ready, a process that can happen entirely outside of the restaurant and can eliminate lines and other "friction," the chain told CNBC. While acknowledging that many of its customers still use cash, the chain hopes to gain data on how a cashless store will perform. The concept is similar to Starbucks, which supports order ahead on its mobile app, and the Amazon Go cashierless concept store. Amazon also introduced an order ahead app this past summer. Shake Shack has also partnered with Square on a mobile delivery service.

Ron Antonelli/Bloomberg

Owning up: Nikolay Storonsky, the CEO of cross-border payment and P-to-P app maker Revolut, has apologized for a server failure that interrupted payments at the end of last week. "You will get no excuses from me. We have let you down and I take full responsibility for what happened. It is never acceptable for our customers to ever be without access to their funds, period," Storonsky wrote on Revolut's site. The company has resolved the issue, which followed a malfunction in its transaction database. The backup server then slowed down and began struggling to process live transactions, a problem made worse by an unexpected surge of about 50% in user activity. That left between a quarter and 75% of transactions "timing out" before completion. The company's engineers were able to build a new server for an emergency migration. Revolut also added live agents to handle incoming queries, Storonsky wrote.

A trust gap for PSD2: The new PSD2 regulations in Europe are designed to boost competition by requiring banks to share data with technology startups at the request of consumers. But there may be a problem, as consumers don't necessarily trust these third parties with the data, reports Trading.com. The site reports a majority of U.K. consumers are unwilling to share financial data with retailers and social media platforms. And 93% are do not want to share banking data with social media firms such as Twitter and Facebook. Also, 58% said they would be unwilling to initiate a payment via online platforms and 82% expressed a similar reluctance for paying via social media companies. While early in the process, PSD2 doesn't go into effect until next year, and the findings bode well for the argument that banks can take advantage of PSD2 as well as technology companies.

Moneyball: The Oakland A's aren't in the playoffs, which begin today, but they are moving to make it easier for fans to get into the ballpark when the new season begins next spring. The team has tested Apple iPhone Near Field Communication (NFC) to support stadium entry by tapping an iPhone or Apple Watch near the turnstile. It's a similar experience to using Apple Pay, reports TechCrunch. Tickets.com, a unit of MLBAM, has built the technology to power NFC entry, an early example of Apple's decision to allow developers to access the iPhone's NFC chip. The Athletics tested the technology at a recent homestand, and it's expected that the full network of 23 teams that work with MLBAM will deploy the technology next year.

From the Web

Small businesses are cyber targets whether they know it or not
The Hill | Mon Oct 2, 2017 - In the payments world, where the incentive is financial reward, we’ve been dealing with this for several decades as payment breaches cost an estimated $445 billion per year according to the 2017 PwC Global Risks Report. For the business community, cybersecurity is now front and center in their minds. A 2017 MetLife and U.S. Chamber of Commerce Small Business Index survey found that nearly 60 percent of all small business owners are concerned about cybersecurity threats. Despite that concern, the same survey found an astonishing 59 percent of business owners do not have a contingency plan for how to deal with a data breach.

American Express wins dismissal of lawsuit over lost Costco contract
Reuters | Tue Oct 3, 2017 - American Express Co has won the dismissal of a lawsuit accusing the credit card services company of defrauding shareholders about the loss in 2015 of a lucrative co-branding relationship with Costco Wholesale Corp. In a decision made public on Monday, U.S. District Judge Paul Gardephe in Manhattan rejected claims that American Express improperly downplayed the risk its 16-year relationship with Costco might end, and concealed how the warehouse chain had generated 8 percent of its revenue and 20 percent of its loans. While the proposed class-action complaint alleged that Costco might have viewed American Express as “just another vendor” that could be shunted aside for a “cheaper” rival, the judge said American Express merely viewed such statements as evidence that Costco would “drive a hard bargain,” not walk away.

IMF Head: Cryptocurrency Could Be the Future. Really.
Fortune | Mon Oct 2, 2017 - Christine Lagarde sees a path ahead for cryptocurrency. The managing director of the International Monetary Fund, or IMF, talked up the potential of virtual currencies to supplant traditional monies in coming decades on Friday. Cryptocurrencies, or virtual currencies, are a new class of digital assets powered by blockchains, distributed ledgers that made their name underpinning networks like Bitcoin and Ethereum. Unlike JPMorgan Chase CEO Jamie Dimon and billionaire hedge fund founder Ray Dalio, who have recently disparaged Bitcoin, the world's most well known cryptocurrency, Lagarde shared a rosier vision of the general technology's future with attendees of a Bank of England conference in London. "In many ways, virtual currencies might just give existing currencies and monetary policy a run for their money," she said.

More from PaymentsSource

Two weeks after Maria, Puerto Ricans struggle to move money
The desperation in Puerto Rico for life's essentials — food, gas, water and electricity — in the wake of Hurricane Maria illustrates the need for payments providers to move as quickly as possible to get the U.S. territory in a position to reinstate some semblance of modern commerce.

The SSN infestation: How bad is it, and can it be solved?
The recent Equifax breach wasn't just a failing of one company's digital defenses — it exposed a fundamental weakness of how the entire financial services industry handles consumer identity. What's surprising is how deep the problem goes.

India's open payments competition can spread to other markets
Competition between card networks, tech titans Facebook and Google, Chinese fintech proxies Paytm and Hike, and M-Pesa will be fierce, and offer signs how other large emerging payments markets may evolve, writes Eric Grover, a principal at Intrepid Ventures.

Will EMV stragglers be swayed by free Bluetooth?
Two years after the EMV liability shift date, many merchants still aren't EMV compliant. By some counts, about half of U.S. merchants are still swiping cards despite the risk.

PR's not enough to recover from the coming 'global' breach
Equifax mismanaged its recovery by asking for personal information to determine if a user was affected and then issuing a predictable PIN code to those who requested a credit lock, moves that diluted confidence in the company, writes Timothy Crosby, senior security consultant for Spohn Security Solutions.