A Swedish fintech backed by billionaire Mohammed al-Amoudi said it has found a solution to one of the biggest nightmares of an increasingly cashless world: What happens if the Internet goes dark and no one can use their phones or cards?
Crunchfish AB, in which al-Amoudi holds 17 percent through investment unit Midroc, is developing software for mobile phones that lets consumers pay merchants in real time, offline and in any currency, including central bank digital currency and bitcoin.
‘LIGHTS OUT’
In doing so, the start-up might have figured out how to help societies function without cash, even “if the lights go out,” which Sweden’s central bank Governor Stefan Ingves once said would require a return to bank notes and coins.
Crunchfish is running a pilot project with Swish, Sweden’s biggest payment services provider. If successful, it could be used for cross-border transactions and help lay the foundation for an e-krona, for which the Riksbank is running its own pilot project.
It works like a checkbook: Consumers place money into a special account that can be tapped to make payments if networks are down. Once back online, payments are registered and users can top up their accounts.
The company has the potential to become another Klarna Bank AB, Europe’s most valuable start-up, Goran Linder, CEO of Midroc in Sweden, said in an interview.
Crunchfish has a market value of US$112 million.
CASHLESS SOCIETY
“Ultimately, I anticipate this to be integrated with all payment schemes, including mobile money,” Linder said. “People who have never been able to open up a bank account, they do have a phone.”
The Bank for International Settlements has dubbed Sweden the world’s most cashless society.
The virtual disappearance of cash in Sweden has spurred a fever of innovation within digital payments, including by the Riksbank itself.
Along with China, Sweden leads major economies in developing a central bank digital currency.
Crunchfish is swimming in a crowded pond. Sweden has as many as 200 fintech companies focused on payments, said Louise Grabo, secretary-general of the Swedish Financial Technology Association.
“Their product is getting more attention nowadays, as we become a cashless society,” she said.
That reliance on digital payments has become a source of concern in some corners.
Swish, which is owned by Scandinavia’s biggest banks, “is a big ecosystem,” said Anders Edlund, head of business development at the firm’s parent company, Getswish.
If the Internet is down, “you can’t do a Swish payment,” he said.
When the Crunchfish app is up and running “we can do payments even if something in the ecosystem isn’t working,” he added.
SPENDING LIMITS
With Crunchfish’s technology, users effectively have money upfront that they can spend, “almost like you have physical money in your wallet,” said Joachim Samuelsson, Crunchfish’s CEO and biggest shareholder.
Visa Inc outlined a similar model in a research paper in December last year.
“The heart of our system is that we maintain that spending limit, that offline balance,” Samuelsson said.
That ensures merchants and banks would not be left holding the bag if consumers spend more than they have: They simply cannot.
The joint project could be up and running throughout Sweden within two years, Edlund said.
That is provided Swish decides “to go the whole way and we have the banks on board,” he added.
TRADE WAR: Tariffs should also apply to any goods that pass through the new Beijing-funded port in Chancay, Peru, an adviser to US president-elect Donald Trump said A veteran adviser to US president-elect Donald Trump is proposing that the 60 percent tariffs that Trump vowed to impose on Chinese goods also apply to goods from any country that pass through a new port that Beijing has built in Peru. The duties should apply to goods from China or countries in South America that pass through the new deep-water port Chancay, a town 60km north of Lima, said Mauricio Claver-Carone, an adviser to the Trump transition team who served as senior director for the western hemisphere on the White House National Security Council in his first administration. “Any product going
TECH SECURITY: The deal assures that ‘some of the most sought-after technology on the planet’ returns to the US, US Secretary of Commerce Gina Raimondo said The administration of US President Joe Biden finalized its CHIPS Act incentive awards for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), marking a major milestone for a program meant to bring semiconductor production back to US soil. TSMC would get US$6.6 billion in grants as part of the contract, the US Department of Commerce said in a statement yesterday. Though the amount was disclosed earlier this year as part of a preliminary agreement, the deal is now legally binding — making it the first major CHIPS Act award to reach this stage. The chipmaker, which is also taking up to US$5 billion
High above the sparkling surface of the Athens coastline, the cranes for building the 50-floor luxury tower centerpiece of Greece’s future “smart city” look out over the Saronic Gulf. At their feet, construction machinery stirs up dust. Its backers say the 8 billion euro (US$8.43 billion) project financed by private funds is a symbol of Greece’s renaissance after the years of financial stagnation that saw investors flee the country. However, critics see it more as a future “ghetto for the rich.” It is hard to imagine that 10km from the Acropolis, a new city “three times the size of Monaco”
STRUGGLING BUSINESS: South Korea’s biggest company and semiconductor manufacturer’s buyback fuels concerns that it could be missing out on the AI boom Samsung Electronics Co plans to buy back about 10 trillion won (US$7.2 billion) of its own stock over the next year, putting in motion one of the larger shareholder return programs in its history. South Korea’s biggest company would repurchase the stock in stages over the coming 12 months, it said in a regulatory filing on Friday. As a first step, it would buy back about 3 trillion won of paper starting today up until February next year, all of which it would cancel. The board would deliberate on how best to effect the remaining 7 trillion won of buybacks. The move
RSS