November 29, 2016
It’s gunning for the $93 billion U.S. market for credit card issuing, an industry that’s dominated by giants such as American Express and Capital One, with PayPal and ambitious startups in close pursuit. Like PayPal, Klarna is an online-payments platform with an emphasis on “buy-now-pay-later” financing. … His dream is that enough merchants embrace Klarna as a free-floating credit issuer so that millions of shoppers will no longer see credit cards as a first choice for financed payments. ... Siemiatkowski has spent the past 11 years quietly turning Klarna into his home country’s biggest digital-payments platform. Klarna processes 40% of all Swedish online payments. Klarna’s big selling point is ease and simplicity. It lets you skip paying for an item up front–no more squinting at a credit card, typing in numbers and remembering a password. You simply enter your e-mail and delivery addresses. That information, plus your activity on an e-commerce site time of day, the product you’re buying and any Web cookies that can be picked up from your visit? is enough for Klarna to decide whether you’re a creditworthy human. Siemiatkowski calls this a “one click” experience. ... Remarkably, Klarna’s bold bet on people’s honesty and solvency has worked. Its default rates are under 1%. Credit card default rates in the U.S. have averaged 2.2% for 2016. ... Siemiatkowski would rather trust his customers than see them walk away at a checkout: 69% of online shoppers in the U.S. abandon their shopping carts, often because they’re asked to create an account or the process takes too long. That’s around $260 billion in lost orders.
Litigation funding has a checkered past. For centuries it was a crime to fund someone else’s lawsuit, under ancient English “champerty and maintenance” laws created to stop noblemen from meddling in each other’s quarrels. ... By the 20th century, legal and accountancy firms started buying and selling insurance and bankruptcy claims informally, but champerty rules remained a barrier to trading in legal claims. Then, during the late 1990s and early 2000s, a string of British and Australian court rulings held that it wasn’t a bad thing for claimants with legitimate grievances to get external financial help, even if the helpers were out to make a profit. ... Although litigation funding remained impossible in some jurisdictions, it spread quickly in others. Early investors in lawsuits were mostly opportunistic hedge funds and wealthy individuals whose involvement was private and confidential. It was a good deal for litigants, who no longer had to worry about spiraling legal costs; for lawyers, who got paid no matter the outcome; and for the funders, who could get back multiple times what they paid for a share of the suit if it succeeded. ... True to the maxim that lawyers make money in good times and bad, litigation funding is impervious to recessions and other economic shocks. Managed well, litigation funds can offer returns that are hard to find anywhere else.
For years now, social media has been where people go to find out what’s happening during a crisis; even aid agencies and emergency managers have come to rely on hashtags and live video to form a picture of how an event is playing out on the ground. But the hail of updates can be rapid and incoherent. ... sometimes there’s no information coming out of a disaster zone—because the internet has gone down, as happened in large parts of New York and New Jersey when Hurricane Sandy landed in 2012. This is another fundamental problem that Facebook is, almost by coincidence, working to solve. For the past two and a half years, the company has been developing a program to deliver the internet via drone to parts of the world that don’t have it. The business reason for this fanciful-sounding project is pretty straightforward: It will speed up Facebook’s efforts to expand globally and serve ads to even more people in what is already the world’s largest audience. But the team has always had the idea that the same technology could be vitally important in, say, an earthquake zone. ... This new incarnation of Safety Check begins with an algorithm that monitors an emergency newswire—a third-party program that aggregates information directly from police departments, weather services, and the like. Then another Safety Check algorithm begins looking for people in the area who are discussing the event on Facebook. If enough people are talking about the event, the system automatically sends those people messages inviting them to check in as safe—and asks them if they want to check the safety of other people as well.
Cuba has two economies now: the national Communist economy for the majority; and a quasi-capitalist one for foreigners and the elite. Each has its own currency: the Communist economy uses the Cuban peso, and the capitalist bubble uses the convertible peso. Cuban pesos are worth nothing. They can’t be converted to dollars or euros. Foreigners can’t even spend them in Cuba. The convertible pesos are pegged to the U.S. dollar, but banks and hotels pay only 87 Cuban cents for each one—the government takes 13 percent off the top. The rigged exchange rate is an easy way to shake down foreigners without most noticing. It also enables the state to drain Cuban exiles. A million Cuban-Americans live in south Florida, and another half-million live elsewhere in the United States. They send hundreds of millions of dollars a year to family members still on the island. The government gets its 13 percent instantaneously and most of the remaining 87 percent later because almost every place that someone can spend the money is owned by the state. ... A single restaurant meal in Havana costs an entire month’s salary. One night in a hotel costs five months’ salary. A middle-class tourist from abroad can easily spend more in one day than most Cubans make in a year.
He was 5 the first time he saw a pinball machine, at Wally's Burgers in East Vancouver, British Columbia. They had to stand him on a wooden crate just so he could see what was under the glass. The game was called "Twilight Zone." Something in his brain lit up. Even then, they knew he was different. There were doctors at the time who suggested he might never talk, that reading and writing were out of the question, that foster care was an option. His parents remember days when he was content simply to spin for long periods of time in one place. He was drawn to the electricity in exit signs. If he was left alone for a moment, he would bolt. He connected to the world by solving puzzles. ... The IFPA now ranks nearly 45,000 players around the world. A pinball tournament is played somewhere on earth almost every day of the year. Prizes are growing and machines are becoming more technical. ... "It's got flow," he likes to say, which means it's played somewhat chaotically throughout, one combination leading naturally into the next, in contrast to the meticulous catch-and-shoot style it takes to grind down great wide-body games of the '90s like "Twilight Zone." A flow player is thought to be a more natural entity, unpredictable and pure. Robert likes to think of himself as a flow player. And sometimes this instinct gets him into trouble. ... More than his wanting to be the world's best pinball player, Robert wants to be its most charming. Alone in the garage, between the drop catches and target shooting, he diligently practices charm. ... Few subcultures in America are instinctively wired like the culture of pinball to see autism as a gift rather than a disability.