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Daily briefing - 06 September 2019

Stripe makes a long-anticipated move this week by launching Stripe Capital. In fact, it's a model that has been tested in recent years by Square and it's at the heart of Alipay's success. "Square Capital is a service for advancing cash to customers that in turn gets repaid out of their future sales made through Stripe's payment platform, with loan amounts and repayments based on the customer's transaction activity on Stripe itself," reports Techcrunch. "The launch of Stripe Capital is coming at a key time for the company: We understand that Stripe is gearing up for a bigger push to diversify into other financial services, specifically with the launch of its first business credit card product (akin to Brex, from what we understand)." Stripe's co-founder John Collison said the capital was being provided by an as-yet unnamed banking partner. Most of the other online platforms from Kabbage to Square use Celtic Bank in Utah as originator of their loans, which are backed by the Small Business Administration. For all their originality, the Collison brothers are exceptionally good followers, and Square often looks like a model for them. But they've a way to go before catching Jack Dorsey.

On a recent tour of Australia, Dorsey told the Australian Financial Review that Square will eventually be more of an internet company than a finance company. Can anyone imagine a bank chief executive saying this with a straight face? "In the long term cryptocurrencies will help us be more and more like an internet company where we can launch a product ... and the whole world can use it, instead of having to go from market to market, to bank to bank to bank and from regulatory body to regulatory body." That doesn't mean Square becoming less physical. Quite the contrary. The company plans to advance its hardware manufacturing, and will focus on payroll and lending, expanding further into the SME ecosystem. He took time to comment on Facebook's Libra project, suggesting that 'open internet standards serve every person better than ones controlled or started by companies'. Hmm. Who could he be talking about there?

Apple also sees potential, and financial services VP Jennifer Bailey shows that Apple is making the same connections between digital identity, mobiles and finance. It's a point Elon Musk made last week in conversation with Jack Ma, and also shows why no-one should listen to Ray Kurzweil. We're already cyborgs, said Musk. Leave your phone at home and it feels like you're missing a limb. "We're watching cryptocurrency," Bailey said at a CNN event last week, AppleInsider reports. "We think it's interesting. We think it has interesting long-term potential." Indeed. Apple loves all things closed loop, but she's not wrong. Like Facebook, Apple appears to be a convert to decentralised digital identity, realising that states and regions are moving on the idea too. "Germany is planning to take advantage of iOS 13's NFC stack so an iPhone could be used in place of physical identification cards and passports. Japan also intends to use an iPhone to serve as a resident's 'My Number Card', enabling the government to streamline access to several social programs."

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