Jim's Journal

There was so much happening this week in the P2P world – people to people.  There was the announcement that Square will be providing free P2P payments via email joining so many others in that market and the land grab that is about becoming a part of our financial interactions with each other.  They are giving you a free service to become a part of your life; they are buying access. There was the expansion of PayPal into Europe via Uber another example of these payment companies just wanting to be a part of the way we interact with others. In fact, with 143 million active accounts in 193 markets and 26 currencies around the world, PayPal enables global commerce, processing more than nine million payments each day. BBVA – a huge bank HQ in Spain already huge in the US with the acquisition and rebranding of Compass Bank – bought little old Simple, an experiment in personalized, mobile only banking – just trying to be a part of our on the go mobile lives.  Simple is about mobile banking but its also about improving the buying experience by simplifying payments with their Simple Swipe approach – the idea impressed me but I didn’t see much value in it.  Lets see what BBVA does with it.  ClearXchange adds Capital One as a member and owner – this is now a P2P network that covers over 50% of the US Mobile Banking space and %35 of all deposits.  Its a big deal – they just bought into a pretty big financial community.

Finally – everyone was so excited about the $19 Billion acquisition of WhatsApp by FaceBook – its all about getting in the mix people. They are all about being a trusted part of our lives. We interact with each other every day – banks build branches in communities to be a part of that. Now they have to be in our virtual and mobile communities.  People don’t meet in the square anymore, they meet online.  People don’t go to the mall anymore they shop online.  So its crazy to think that these numbers are worth it – they aren’t but how many malls, bank branches, city blocks would you have to buy to bring together 500 million people and be a part of their everyday, personal conversations?   The fact that there is so much private equity and public equity out there is another story – its scary.  Private equity assets under management probably exceeded $2.0 trillion at the end of March 2012. Imagine what they are now.  Facebook is valued at $170 Billion with over a billion users – so that’s like $170/user.  If WhatsApp has 500 million active young and fun users – all willing to provide their mobile number and pay $1/year for that service – that’s only $38/user.  Hmmmmm.

This is a fast moving world – a land grab for your personal interactions with other people, and the money is out there to pay for access to it.