Tuesday, 16 April 2013

The Future of Payments Part Two: Digital Cash

What is money? The coins and notes in your wallet or purse? The numbers on your bank statement? What currency? GBP, euros or US dollars perhaps? Computer numbers? Digital currency?

Take Bitcoin for example, which since 2009 has grown to become the largest alternative currency and has the monetary base in excess of $1bn (as at April 2013) and already thousands of merchants accepting Bitcoins instead of regular currency. Unlike currencies Bitcoin doesn’t rely on a nation’s government or central bank, rather Bitcoins are “mined” by computers in a digital version of gold mining.

Early security issues and also concerns about the way in which Bitcoins are created has made it difficult for the average consumer to put their trust in the currency. But Bitcoin is gaining momentum and nascent integration with traditional banking methods is helping. Recently French regulators gave approval to Bitcoin-Central, a payment service where customers will be able to deposit their funds into the service in either euros or Bitcoins and convert the funds easily between the two currencies. How long before you can take out a Bitcoin loan?

Amazon are set to launch their own Amazon Coins virtual currency in Q2 2013, for use in purchasing games, apps, content, and in-app purchases on its Kindle Fire platform. How long before you can buy a book with Amazon Coins? Even the Canadian government is getting in on the act with Mintchip which, unlike other digital currencies, is backed by real money, in this case the Canadian dollar. Mintchip allows secure transactions to be performed without an intermediary - that’s right, no bank, no payment processor. Some might argue Mintchip isn’t really digital money, it’s simply about making official money easier to use online.

Right now there’s a lot of public debate about digital money, especially Bitcoin. Is it a fad or something more serious? Only time will tell. But whether it’s Bitcoin or another option, you can bet that digital money is here to stay and very soon a good proportion of consumers will be likely to be transacting in digital currencies in one way or the other. For businesses the question is how and when to join this revolution? Creditors and the debt industry participants should watch this space carefully – the ability to purchase mainstream goods or services and pay bills with some form of digital currency is likely to be just round the corner.

By Carlos Osorio - Director, e-collections and payment services, 
TDX Group 

Wednesday, 10 April 2013

How Great Teamwork Overcomes Obstacles


What comes to mind when you hear that word?
Predictable, Regular, Procedural?

or maybe,
Monotonous, Mundane, Tedious?

I’ll confess, for me it is the latter. I’m an IT guy but most definitely a projects guy. So I need my challenges to have a start, middle and most importantly an end. I need closure, a result, an outcome, something to look back on, hopefully with a proud sense of achievement, but at the very least to feel that I’ve learned something.
So when I took on running our IT Operations and Service Management team I was a little nervous about how well I could cope with shifting my mind set. Running an operations team requires one to value the positive side of routines, recognising the importance of stability and repetition, rejoicing in the bliss of calm normality.

Three years on and I’m still in awe at the professionalism and passion that I see from my team every day in tackling numerous challenges in the knowledge that there will be more of the same the very next day. They work tirelessly, often at unsociable hours, with the only measure of success being that no one really notices anything different. Then on one cold Tuesday morning in January my new life of successful normality was shattered. Clicking through my regular news feeds I came across an article that ruined my customary bowl of muesli. Our data centre provider had entered into administration. This was not predictable, certainly not normal, and far from maintaining any sense of stability.
During the week that followed a bad situation developed into and increasingly worse one as it became clear that the administrators were struggling to find a buyer for the business. This culminated in a demand for their top 20 clients to each pay a substantial fee to keep the data centre running for just one week. Clearly an unsustainable position, and so a plan was required - this was certainly not going to be routine.
Rather than bore you with the technical details, impressive that they are, I will save that for another day and for another blogger to articulate the complexity of what we achieved.

Instead, I would like to focus on the phenomenal teamwork that I observed over an intense 48 hours. I saw everything from utter despair through to complete joy. Individuals often diametrically opposed on pretty much everything working tirelessly to help each other into the small hours.
Tensions rose, patience wore thin, moods plummeted, but never for long. Such was the enormity of the task at hand that no one was under any illusion that in order to succeed an extraordinary effort was required. Individual brilliance had to be coupled with selfless support of others in order for the goal to be achieved. There was a plan, in fact there were many plans, but these were constantly re-written as the complexity of the task required quick thinking to adapt to emerging challenges, regroup and then move forwards.

The team, which was spread across several sites, became united by a common goal, and demonstrated that, given the right resources, good communication and a positive attitude, anything is possible.
What I personally learned that weekend is this:  I know routines are absolutely necessary to get through life. They provide structure and certainty to an otherwise chaotic world. But they are largely over-looked. The teams that deliver the flagship projects are in the spotlight, living or dying by their results which are there for all to see. I know. I’ve built a career on it.

However in a crisis, when all seems lost, when plans are constantly being torn up, it’s not the project guy that you need, it’s the operational one. They know that nothing is routine, nothing is quite what it seems. Plans are good but rarely last beyond the time it takes to write them down. Expertise, teamwork, speed of thought, perseverance and determination, these are all qualities that help you in the small hours to pick yourself up, dust yourself down and try and find another way forward.
To succeed a great company needs great products and services, created by talented, innovative individuals. But equally it needs these to be delivered on a daily basis without fail by exceptional, assiduous but most of all reliable teams.

TDX Group has both, in abundance.
By Martin Shaw, Director of IT, TDX Group

Friday, 5 April 2013

The Demise of Debt Sale? Under the US Influence

The latest US trends in debt sale should give us all pause for thought. Last month the Federal Trade Commission (FTC) published The Structure and Practices of The Debt Buying Industry, a report it describes as “the first of its kind” empirical study of debt purchasers.

The FTC already receives more complaints about the debt collection industry than any other and, as the industry has expanded, so has the number of complaints. What the study seeks to do is explore if there is a link between debt buying and consumer protection problems.

We could debate why the US market is not reflective of the UK market, but that really does not matter. What matters is that, in the eyes of regulators and legislators in the US, there is a perception that, at all stages of the collection process, there are serious concerns about the quantity and quality of information that debt buyers have and ultimately how American consumers are treated. At the recent Debt Buyers Association Annual Conference in Las Vegas, the mood in the coffee shops and bars (where the real debate is held!) was decidedly downbeat. The view was expressed that the secondary debt sale market is all but over. As for the primary market, the hypersensitivity to negative media exposure fuelled rumours that the larger, high-profile lenders may withdraw entirely from the market in order to address the perceived risk to brand value and reputation.

I know the political and regulatory environments are different in the UK, but there are enough historical parallels in debt sale to suggest that, in this case, it is reasonable to hypothesise that ‘what goes on over there will ultimately come over here’. As an industry, I think we have a choice: await the reputation-driven withdrawal of key players and the slow but sure demise of the debt sale industry in the UK as we know it, or be proactive and provide an alternative method of ‘de-risking’ by putting in place systems and processes to provide detailed information to all parties about every single interaction with every single individual we deal with and that ultimately put the debtor at the heart of what we do.

By Mark Wright, Director of Debt Sale, TDX Group

Read the full article, originally published in the March edition of CCR, here.