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Facebook’s Apple Problem, SoftBank’s TikTok Interest, Airbnb’s Price Tag

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Late summer seems to ring in a fight between Apple and Facebook ahead of the iPhone maker’s fall update to its mobile operating system. Driving both to the mat this time: a change in iOS 14 that will ask users if they want their information shared with other apps for advertising purposes. Analysts expect most consumers to say no. The result, says Facebook, will severely cripple a part of its business that places ads in non-Facebook apps.

Discontent about the upcoming update has simmered for weeks, as Tom and Alex noted earlier this month. On Wednesday, Facebook took the fight to the next level, publishing a blog post that warned it could stop its ad service for other apps, called Audience Network, altogether on iOS 14. 

If Facebook makes good on this threat, such an outcome could be more disruptive to other companies that rely on Facebook ads—gaming companies and media publishers, for instance—than to Facebook itself. The business generates only about $3 billion a year for Facebook, a sliver of the $70 billion Facebook makes from advertising in its own apps. 

The fight over iOS updates echoes last year’s scrap, when we reported Apple’s iOS 13 would restrict a feature used by Facebook Messenger, part of a broader iOS change that included pop-up alerts about the data used by apps running in the background on iPhones. Facebook seemed worried enough to publish a blog post explaining what it does with location data. 

That clash blew over, but there’s a chance things play out differently this time. Apple says the iOS 14 change is intended to give people more control over the information they share with advertisers. Companies like Facebook see it as something else: an attack on their business model.– Laura Mandaro 

Onto the news…

Source: https://www.theinformation.com/articles/facebooks-apple-problem-softbanks-tiktok-interest-airbnbs-price-tag

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New study reveals the struggles many businesses face in getting paid during the COVID-19 pandemic

getting paidA new report from Forrester and payments unicorn GoCardless highlights the struggles businesses have faced in getting paid during the pandemic.

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96 per cent of businesses have had outstanding payments for 10+ days over the last year, according to a new Forrester Consulting study commissioned by GoCardless, a leading fintech for recurring payments. The study, ‘Rethink Your Payment Strategy To Save Your Customers And Bottom Line’, examines how companies can use recurring payments solutions to boost their payments strategy, shorten DSO (Days Sales Outstanding), and protect their bottom line.

Forrester surveyed 700 payment decision-makers in organisations that serve a mix of businesses and consumers, or business customers only. The results highlight the extent to which lengthy DSOs and failed payments can impact customer churn and bad debt.

The study found that having a high DSO is a key operational challenge for many businesses. While only 4 per cent of businesses have a DSO of less than 10 days, the research shows four out of five Australian businesses have wait times of 20-30 days to receive payments. In addition to this, almost half (47 per cent) of businesses say that the time taken to collect their accounts receivables has increased in the last 12 months – this demonstrates the struggle for many businesses to get paid in the current challenging environment of COVID-19.

Another key finding is that failed payments continue to impact customer churn. In Australia, on average, failed payments result in churn 11 -15 per cent of the time. A Forrester Consulting study found that 50 per cent of firms experienced payment failures for 7 per cent or more of their payments in the last 12 months, and two in three businesses surveyed are seeing failed payments turn into churn more than 10 per cent of the time. This can negatively impact customer relationships, with over half (54 per cent) of decision-makers surveyed saying that payment failures lead to an increase in customer dissatisfaction.

Payment failures are also costly and labour-intensive for businesses to collect, with the average B2B business spending 16 – 20 per cent of the payment value to recover it. Half (51 per cent) of the businesses surveyed said that failed payments led to an increased cost of recovery, while 45 per cent of businesses say that payment failures turn into bad debt.

Hiroki Takeuchi, CEO, GoCardless said, “Forrester consulting findings demonstrate exactly why payments are high leverage. There are clear connections between failed payments and negative business impacts such as bad debt, churn and customer dissatisfaction. In this environment in particular, firms recognise the importance of recurring payment solutions that optimise their payment strategy and prevent failure, to avoid increased costs and damaging customer relationships. That’s why we developed Success+, which helps businesses efficiently recover an average of 76 per cent of failed payments.”

Further findings include:

  • 86 per cent of enterprise companies have more than 20 full-time employees to handle recurring payments, primarily relying on CRM, billing, and accounting systems

  • 59 per cent of businesses say that higher churn rates result in increased chargeback rates, whilst 57 per cent of businesses say that higher churn rates result in an increase in customer service contact

  • On average, B2B businesses spend 16 – 20 per cent of the payment value to recover the payment. If a business has $100m in annual revenue, with a 7 per cent payment failure rate, and it costs 16 per cent of that value to attempt to recover, that’s >$1m.

Source: https://australianfintech.com.au/new-study-reveals-struggles-businesses-getting-paid-during-covid-19/

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A digital revolution: Australian Fintech secures first crypto IPO

crypto IPOThe crypto IPO by STAX is the first in Australia to raise IPO funding via cryptocurrency, meeting tight Australian regulatory standards.

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Australian Fintech STAX has completed a A$5million IPO fundraise for West Coast Aquaculture (WCA), an international fisheries company with a strong Asia Pacific presence. WCA is expected to commence trading on the Sydney Stock Exchange (SSX) on Tuesday 24th November 2020.

Of the amount raised, 89.07% or A$4,478,591 was USDT, otherwise known as Tether, a stable cryptocurrency pegged to the US dollar. The remainder of the funds were raised in AUD.

This is the first company in Australia to raise IPO funding via cryptocurrency, meeting tight Australian regulatory standards.

Kenny Lee, CEO of STAX says that the acceptance of cryptocurrency in an IPO is a significant and transformative step forward for investment in Australia.

“The successful WCA capital raise and IPO, paves the way for the future of capital markets in Australia”, says Lee. “We are allowing access to a market which has been hard for overseas investors to get into, and it will only benefit Australian businesses longer term.” Lee adds.

The STAX platform is Australia’s first capital raising platform to accept both AUD and cryptocurrencies. STAX have partnered with the SSX to be able to offer a faster, reliable method for companies wishing to go public.

Following its IPO, WCA plans to use funds for expansion. This will include the purchase of hatchery and nursery facilities to allow further control of the supply chain.

Neo Ching Hoe, CEO and Founder of WCA, says: “WCA has always been an innovative organisation and we are proud to be part of this historic moment in Australian investment history. We hope this bold initiative helps open the door to more global investment for local companies.”

WCA’s IPO has been managed by Agile Legal and STAX to ensure all legal and regulatory compliance has been met in accordance with Australian law.

Source: https://australianfintech.com.au/a-digital-revolution-australian-fintech-secures-first-crypto-ipo/

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The Tech Industry’s Diaspora: The Information’s Tech Briefing

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The stock market is acting like the Covid vaccines have already been administered. Meanwhile, in the real world, what could be a long-term consequence of the pandemic is unfolding: there are signs the San Francisco Bay Area is losing its iron grip on the tech industry.

We ran a story today on high-profile tech CEOs such as Dropbox’s Drew Houston and Splunk’s Douglas Merritt relocating to Austin, Texas. Meanwhile, the Wall Street Journal ran a complementary story about smaller tech firms scattered around the country getting more applications from employees with big-tech experience in places like San Francisco and New York.

Source: https://www.theinformation.com/articles/the-tech-industrys-diaspora-the-informations-tech-briefing

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