What is Fintech?

Fintech is the new financial industry that improves the current financial system and our everyday life with innovative technologies.

New technologies in the financial sphere

The field of financial technology is developing rapidly. Every year, there are more sites and applications that simplify the payment for goods and services, the receipt and repayment of loans, as well as the usual process of money transfer.

Payment services are the most popular in fintech today, which significantly save the time for making payments. With their help instant transfers within a country and fast international ones are made. Payments using a QR code also relate to financial technologies.

What financial technology allows to increase

Financial technology is designed to speed up the process of carrying out any banking procedures.

Conceptual approach to the development of the fintech ecosystem

Forming the financial ecosystem will help financial and credit organizations in the competition for customers and increase business income. However, a conceptual approach to the development of such ecosystem requires the development of IT systems in order to collect, store and process huge amounts of data both online and offline.

Innovative financial technology

The development of financial technology began in 2009 after the crisis. Banks used robots to reduce costs, began offering credit to their customers online, and moved financial payments to the Internet. Much greater impact to the development of financial technology made the mobile Internet. As a result, several major financial technologies and capabilities emerged:

  • delivery of services via the smartphone;
  • delivery of services via social networks;
  • alternative payments;
  • marketplaces;
  • innovative business models;
  • artificial intelligence;
  • digital identification and biometrics;
  • open API.

Investing in fintech

For the period from 2010 to 2015 only, the volume of investments in fintech increased to almost 20 billion, which is 10 times more in terms of investments before 2009.

According to KPMG auditing company, the volume of investments in the first half of 2018 amounted to $ 57.9 billion, which outweighed the volume for 2017.

The Fintech boom

Today, many startups do not meet the expectations of investors, although in 2014 the situation was completely reversed. The revolutionary Boom of financial technology fell exactly on that year, in which no name players at that time stood out, and today they are world famous giants of the financial industry such as Square and Stripe payment services, which had raised $ 150 million, Renrenda startup, that had collected $ 130 million, and p2p lending platform.

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WSJ: Visa and Mastercard Plan To Raise Fees on Credit and Debit Cards

According to The Wall Street Journal, two biggest card networks in the world, Visa and Mastercard, will raise up fees on credit and debit cards in April this year. The new change relates to interchange fees.

Source: The Wall Street Journal

Merchants are financial institutions that maintain accounts for sellers, the biggest merchants in the US are JPMorgan, Bank of America, Citygroup.

Interchange fee is paid by merchants to banks when a consumer purchases any item using a specific card from card network which actually sets that fees. As such fees increase, merchants have to secure their profits, hence, they raise prices for items.

About 1.5-2% from the price of goods and services cover card fees. Consumers often pay for such fees whether they pay in cash or by card, while merchants pay billions of dollars for interchange fees every year.

According to the table on the left, merchants paid about $64 billion dollars last year to Visa and Mastercard for interchange fees on credit and debit cards. The number is 77% higher than it was seven years ago. And this year in April Visa will also push the fees up again.

The representative of Visa said to the WSJ:

“Visa’s network fees are paid by our financial institution clients and used to enhance the safety, efficiency and innovation of our platform, and are set based on market conditions and to reflect the value we deliver.”

In addition, she said that the new price changes will have an influence on fees which Visa has not adjusted for about three years. Mastercard, in his turn, declined to comment on this statement.

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JPMorgan Develops Its Own Cryptocurrency To Speed Up Transactions: Details

One of the biggest American banks, JPMorgan Chase & Co, announced that it developed its own digital coin, JPM Coin, to speed up payments between customers. The statement also said the coin is based on blockchain, that is why improvement is about to come.

Why would the bank create JPM Coin?

JPMorgan explains that clients often faced trouble with the speed of transactions. Sometimes, it takes much longer time to send money than they expected, therefore it is an urgent problem for bank to solve. The head of digital treasury services and blockchain, Umar Farooq, said:

“Many of our clients move money in different ways and they’re looking for a more real-time way to move value around.”

The amount of payments JPMorgan moves every day accounts for more than $5 trillion, thus a number of client demanded to develop digital coin on blockchain to implement instantaneous value transfer. The bank started the development of JPM Coin about a year ago.

Main details of the coin

JP Morgan has become the first American bank to introduce its own digital coin in public. However, it is not a usual cryptocurrency in its true sense.

Ordinary cryptos usually use public blockchain technology that is in open access to everyone. Yet, a JPM Coin uses private blockchain of JPMorgan Chase & Co, and the price of the coin is pegged to one U.S. dollar.

The company said:

“When one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalents amount of U.S. dollars, reducing the typical settlement time.”

It is still unclear when the launch of the JPM Coin will be, all we know, there will be a small number of coins in a few months to test the technology.

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A Major Japanese Bank Is Developing a Blockchain-Based Payment Network Due in 2020

Mitsubishi UFJ Financial Group, Inc. (MUFG) is on the most prominent financial institutions in Japan, moreover, it is the world’s fifth largest bank in the world. Located in Tokyo, MUFG has branches in 50 countries all over the globe and over 150 thousand employees.

The financial group provides services in the various fields like leasing, asset management, commercial banking, credit cards, securities and others. It also constantly collaborates with the largest banking establishments in America, Europe and Asia.

MUFG and blockchain

Following the example of its competitors and partners, Mitsubishi UFJ Financial Group decided to involve innovative technologies in order to upgrade and advance its payment systems.

According to the official press release of the bank, it is partnering up with the Massachusetts-based company Akamai Technologies, which is a leading provider of content delivery and site accelerating services.

MUFG and Akamai Technologies, Inc. (“Akamai”) announced today that they have agreed to strengthen their strategic alliance towards the full-scale launch of a new payment network business and establishment of a joint venture, Global Open Network, Inc.,” is mentioned in the press release.

The main purpose of the collaboration, the development of a blockchain network for payments, is planned to be launched in 2020.

As stated by the bank representatives, they want to experiment with “diverse payment schemes” which will allow to expand their range of services.

We remind you that another global financial establishment, Abu Dhabi Commercial Bank, is also working on implementing cutting-edge technologies and launched a financial management app.

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Coca-Cola Will Release New Flavour: Stock Prices Have Popped Up

Worldwide brand Coca-Cola announced its release of a new flavour on February 25. It is the first release in more than a decade. Orange Vanilla Coke and Orange Vanilla Coke Zero Sugar will be available only in the US.

Source: www.coca-colacompany.com

The company has considered three other favours – rasberry, ginger, lemon – but, in the end, it chose orange and vanilla taste. Coca-Cola brand director, Kate Carpenter, stated:

“We wanted to bring back positive memories of carefree summer days. That’s why we leaned into the orange-vanilla flavour combination – which is reminiscent of the creamy orange popsicles we grew up loving, but in a classically Coke way.”

Such a big event inevitably had an effect on brand name and its stocks. According to the second-largest stock exchange in the world, Nasdaq, the beverage behemoth popped 5 percent in the last two weeks.

Coca-Cola Company (The) Price and EPS Surprise
Source: Nasdaq

Moreover, the stock prices are expected to rise even more after Coca-Cola’s report on earnings which is supposed to be published on February 14. The company often exceeds analysts’ expectations in terms of earnings; the company’s volumes have been improving year-by-year as Coca-Cola improves its beverages.

In 2018, Coca-Cola was seen declining revenue trends, as of February 10, 2018 the company stock was rated as a “buy” by 13 out of 24 analysts (or 54%). As of the end of the past year, the price was increased to $51 for one stock, implying a potential rise of ~5%. Since the start of 2019, Coca-Cola stock price has raised 4.5%.

Carter Worth, head of technical analysis at Cornerstone Macro, said:

“What I find interesting is that this sell-off [into the Dec. 24 lows] basically comes down and finds support, plus or minus, and comes to life. Finally, if you leave the bottom trend line on and put in a descending upper line, you have the set-up that I think is, ultimately, the breakout. Simple chart, simple breakout bet, earnings coming, and I like Coke long.”

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Report: Blockchain Investments Cannot Overcome Fintech Funding

European blockchain companies set a record in 2018, however, they are unable to overcome funding that comes to financial technology companies.

Blockchain boom in 2018

At the end of 2017, the rate of Bitcoin skyrocketed to incredible price of $19,000. As the first cryptocurrency began gaining popularity, people started to wonder about the technology that stayed behind. After that people understood that blockchain can be used not only in crypto, but also in other spheres of life.

Some companies began to create their own blockchain and implement it into financial sector, political sector, etc. For example, Western Union supports cryptocurrency and blockchain, and it seeks the ways of their implementation; LG Uplus released a blockchain cross-border payment system.

After the cryptocurrency prices collapsed, the blockchain technology remains to be quite popular topic on different IT conferences and summits.

Blockchain investments cannot overcome fintech funding

According to Innovate Finance’s ‘2018 FinTech VC Investment Landscape‘ report, blockchain and cryptocurrency industry in Europe has witnessed a series of significant deals, but notably just four deals amounted to over $300 million. These deals include such projects, as Paxos (Bankchain), Dfinity, SEBA Crypto, Bitfury. They raised from $65 million to $103 million in different periods of the year.

Analysis shows that fintech companies are much more popular among investors than blockchain. European challenger banks Revolut and N26 alone raised $461 million across 7 deals. They closely followed by personal finance and wealth management ($333.61 million), and alternative lending and finance ($306.64 million) industries.

Fintech’s big picture

If we take the investments of all financial companies all over the world, we will see that they raised $36.6 billion from venture capital investors.

The leader in fintech investments is China, Chinese company Ant Financial set a record for  both fintech and venture capital, raising $14 billion. In overall, China led with $18.9 billion invested across 90 deals.

Next place is taken by the United States; it has raised $10.6 billion across 1,042 deals. The United Kingdom followed on in third place with $1.7 billion invested across 261 deals.

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How To Read Trading Charts

Cryptocurrency exchanges work on the same principle as traditional exchanges. Potentially, it is possible to earn very good money on these platforms, but for this, it is needed to be able to correctly read the cryptocurrency coin chart. Of course, in order to become a professional trader, it needs to learn and practice a lot, but if your goal is to understand the basics, this article will be an excellent starting point in the exciting world of trading for you.

There are a huge variety of different charts, but the most common is the “Candlestick chart”. The chart is a much more informative tool than digital or text analysis. Using graphics, it is possible to quickly navigate and understand the current mood of the crowd, as well as the balance of power between sellers and buyers of a particular asset. Based on the obtained data, it is possible to calculate the potential profitability or unprofitability of a particular deal.

1. The main types of stock charts

As it was mentioned above, there are a huge number of different types of charts, but the main ones are lines, bars, and candlesticks. All of these tools (with the exception of the line charts) can tell about:

  • price at the beginning of the selected period (1 minute, 5 minutes, 15 minutes, 1 hour, 1 day, 1 week, etc.);
  • price at the end of the selected period;
  • the minimum and maximum rate of the selected period.

By and large, the crypto chart clearly shows the history of the struggle between bulls and bears. In the process of this confrontation, a large number of deals are made. It should be understood that even a slight fluctuation of the price means that some have already earned on it, while others, on the contrary, have suffered losses.

2. “Candlestick chart”

Let’s take a closer look at the most common version of charts, namely “Candlestick chart”. It was invented almost 400 years ago by a rice seller from the country of the Rising Sun. The process of observing a line chart is not entirely convenient; for this reason, the construction of “Candlestick chart” is based on the principle of dividing the total time into specific periods. This principle helps to quickly navigate what is happening on the market and, accordingly, to give the Bitcoin trend prediction or any other financial asset forecast.

3. How to read the chart “Candlestick chart”?

One candle represents the range of prices for an asset for a certain period of time. The boundaries of the candle are the lowest and highest asset price in this period of time. If the candle`s color is green, this means that the asset has increased in value over a given period of time; if it is red, then, on the contrary, it has fallen.

Source: https://www.tradingview.com/

If you look closely at the above chart, you will notice:

  • the candle corresponds to the time interval – 60 minutes;
  • the minimum asset price was $3485,24;
  • the maximum asset price was $3733.58;
  • This hour began with a price of $3506,42 and ended with the price of $3687 (for this reason, the candle is green).

The main parameters that should be paid attention to when reading cryptocurrency charts are:

  • asset price;
  • time;
  • trading volume.

By and large, the entire analysis of charts is an ordinary calculation of the balance between supply and demand. It is possible to estimate the level of the strength of bulls or bears through the asset price (vertical axis) and the volume of transactions (horizontal axis). These skills allow experienced traders to take the right position in advance and earn money on any price movement.

4. Conclusion

In this article, we talked about how to read cryptocurrency charts. As it was mentioned above, there are a huge number of different types of charts, but the most popular and often used is the option “Candlestick chart”. The basic principle of this type of charts is to divide the time into certain periods. It is quite informative and easy to read. If you want to start trading, then you definitely need to get a deeper understanding of this topic.

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