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2016 Question of the Year: Is there any startup that is not a payments company?

 
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Leave a founder and a calculator alone in a room for 10 minutes and out comes a unicorn payments company. Let's test this theory.

1. UberDidi Kauaidi, Lyft. Uber and most of its competitors are classic biller models. Some, such as Uber, may actually be going further and becoming MSBs. The Uber Gift Card terms, for example, allow a payer to deliver up to $2,000 of value from one user to another through a promotion code. Uber still has no FinCEN registration.

2. Airbnb. Using classic biller model language, Airbnb terms state: "Airbnb Payments serves as the limited authorized payment collection agent of the Host for the purpose of accepting, on behalf of the Host, payments from Guests [...]." Airbnb has had its FinCEN MSB registration since 2014.
 
3. Palantir. According to Techcrunch reporting, one of the three industries serviced by this big data company is the finance sector, making Palantir payments support business.

4. Snapchat. With Snapcash, a Paypal collaboration, Snapchat hops on the band-wagon of other startups eyeing the presumed billions in P2P transactions.

5. Flipkart. Ebay & PayPal for India? This India-focused platform for sellers and buyers includes the following in its Terms of Use: "You have specifically authorized Flipkart or its service providers to collect, process, facilitate and remit payments and / or the Transaction Price electronically or through Cash on Delivery to and from other Users in respect of transactions through Payment Facility."

6. WeWork. WeWork is perhaps the unicorn that best distinguishes itself from a payments company, because its members are tenants of WeWork and actually purchase WeWork services, as per its terms of service.

7. Stripe.  At first blush, Stripe looks like a plain, vanilla PSP. Stripe is, however, registered with FinCEN as an MSB despite the fact that Strip's terms of use say: " Stripe is not a bank or a money services business (“MSB”) and Stripe does not offer banking or MSB services as defined by the United States Department of Treasury."

8. ApplePay. In the inverse of all the other examples, everyone thinks of ApplePay as a payments business except Apple itself which thinks it's just a gateway. The ApplePay terms refer to it as creating a virtual representation of a card for which Apple is not responsible.

Wishing readers a
healthy and happy holiday season and New Year!

Adam Atlas Attorney at Law is licensed in New York and Quebec. Nothing in this e-mail should be construed as a legal opinion or commentary on laws other than in the two jurisdictions where the author is admitted.  
Adam Atlas Attorney at Law

 
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Nothing in this update shall be construed as a legal opinion. No link in this update shall be construed as an endorsement of the entity linked or a legal opinion as to its status.  Adam Atlas is la lawyer licensed in the State of New York and the Province of Quebec.
Copyright © 2015 Adam Atlas Attorney at Law. All rights reserved.

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