Dorado Industries TrendWatch 2.0 Q1 2014

TrendWatch 2.0
Q1 2014
Payments System Industry
Synopsis
Notice: Materials contained in this document are drawn from several media sources, and Dorado Industries is not responsible for their accuracy. Opinions expressed
herein are presented without warranty. Brand names are the trademarks of their respective service offerors.

Dorado Industries
655 Deep Valley Drive, Suite 125-P
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jmacallister@doradoindustries.com
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Random Thoughts
Super Saturated Liquids
Welcome to Spring! Every school kid knows that supersaturated liquids experience
solution breakdown when a foreign element is introduced. Well, the payments industry
seems to have become supersaturated by a number of factors in recent years – EMV,
commonly-agreed mobile technology, transaction pricing, and consumer data ownership
supremacy, to name a few.
So long as our payments industry “solution” continues to swirl through propulsion
provided by advocates on both sides of these critical issues, nothing crystallizes and no
progress is made.
Fortunately, a number of critical events (foreign elements, if you will) have occurred
recently that may actually lead to progress. The unfortunate Target experience will likely
result in the EMV logjam being busted. EMV Common AID agreements between the
debit networks, processors, and card brands will help clear the way for merchant-
directed routing specified in Regulation II and give EMV another bump forward.
Blessing of the Host Card Emulation gambit by Visa and MasterCard may carve an
acceptable path around excessive rents demanded by NFC Secure Element landlords.
We have yet to resolve the question of what amount of interchange, if any, a debit
transaction is worth or what level of data sharing, if any, brings about a better customer
shopping or banking experience. Unfortunately, these portions of our supersaturated
industry continue to be addressed with the cynicism and skepticism reflected in the facial
expression of this quarter’s TrendWatch cover page mascot. A pity.
Yet, all in all, despite a dearth of new product announcements and VC houses sitting on
their wallets, Q1 2014 turned out to be just fine and may have set the stage for some
serious progress throughout the remainder of the year. Unless, of course, you’re a big
Bitcoin investor, then you can write off the rest of the year.
Elementary school is part of the dim, dark past for most of us so here’s an illustration of
the supersaturated liquid experiment Mrs. Magillicuddy led at PS 24.
Until next time.
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Table of Contents
2014 Predictions 4
TrendWatch Scorecard/Summary 6
2013 Payments Industry Yields 7
Interesting Quarterly News That Got No Respect 8
Q4 M&A/Investor Activity 13
Useful Links for More Information 21
Back in the Day 22

Dorado Industries
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2014 Predictions
• Beacons of all variety and stripe will gain considerable traction and ink. Department, mid-to-high end clothing
stores, and the hardware trade will lead the way.
Mar: Lots of new and old players joining the fray; so far, no privacy complaints.
• HCE will be anointed as an equal amongst the other mobile payments options – NFC, 2D barcodes, etc.
Mar: V/MA have fallen into line. Waiting to see what the real NFC bigots have to say. Isis? Not sure yet.
• The Target and Neiman Marcus hacks will light a fire under the U.S. EMV rollout (albeit for all the wrong reasons)
and one of the combatants will blink.
Mar: Was it the breaches or the unified front put up by DNA? Anyway, things are moving haltingly ahead.
• MCX will announce a roll-out plan and schedule that will leave more than a few pundits confused.
Mar: [Sound of crickets] Come on, guys.
• Regulation II will remain virtually unchanged.
Mar: Nothing wrong with a favorable Appellate Court ruling every now and then. Merchants were probably hosed
but time will tell on the routing rule front.
• Regulators will take a serious look at Visa Authorized PIN Debit.
Mar: This one’s a stretch but someone ought to take a look-see at its effects on PIN debit networks.
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Dorado Industries
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2014 Predictions
• FRB will announce plans for a pan-industry working group to sort out the “US Payments System Improvement”
initiative. Won’t happen until late in the year.
Mar: May not happen at all based on the highly PC-packed responses filed by 200 respondents – “yes, but have
you thought about . . . .”
• Apple will enter the payments industry in a big way.
Mar: January patent for NFC-compliant WiFi/Bluetooth in-store payments suggests a move is underway.
2013 Holdovers:
• One of the remaining EFT networks will change ownership.
• One or more of the non-traditional dongle-centric merchant services providers will be acquired by a mainstream
POS terminal industry leader.
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TrendWatch Scorecard/Summary – Q4 2013
Market & Industry Situation
1 – Very quiet Q1 again this year.
2 – EMV compliance date has come and gone. Now what?
3 – Usually a slow Q1, this year things are picking up faster than in the past.
4 – No big show stoppers but it’s early yet.
5 – We only hear crickets in the payments start-up sector. Game over?
6 – Time for the big guys to pay the tab for 2008.
7 – Lots of Beacons being cranked out; not much else.
8 – Heartbleed gaff couldn’t have come at a worse time.
Industry Players To Watch
WU and MoneyGram: Walmart is now providing low-cost money transfer
services. Lots at stake so a response is certain.
Parking Sector: Does it follow that several dozen vendors of mobile
parking payment services are merely going to play a pat hand as they tap
out their respective markets? We think M&A is just around the corner.
DNA: New linkages between debit networks and Visa/MC mean what,
exactly?
VC and PE: After a lackluster Q4 and a dormant Q1, the dam has to burst
soon.
The Fed: Responses to the “Faster Payments” survey didn’t result in a
mandate to proceed; so now what?
Bitcoin wannabes: This quarter’s price crash isn’t sustainable so lots of
folks are running to fill the void created by a (mortally?) wounded player.5. New Venture Growth
4. Legal/Regulatory Issues
1. New Payment Forms
2. ATM Restructuring
3. POS Volume Trend
Low
Med
Med
Med
Low
Med
Low
Positive
Mixed
Negative
6. Earnings Announcements
7. Industry Investments
8. Payments Industry SecurityHigh

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2014 Payments Industry YTD Yields
Sources: Company releases, Morningstar.com, Bloomberg.com, Coinbase.
2014 YTD yield excludes dividends; based on 12/31/13 and 3/31/14 closing prices.
Nothing lasts for ever (Governor Jerry Brown’s campaign for a California bullet train, aside), so this
quarter’s claw-back of Q4 2013 gains was pretty much assured from the get-go. Still, with the Dow
and S&P giving up or gaining teensy single digits, our minor aggregate drop of 6.6 percent isn’t
disturbing. Indeed, the gains posted in the first few days of April brought quite a lot of our equities
back to year-end levels. Astute readers will note the addition of Bitcoin closing prices; we feel your
pain.
Industry Player 12/31/2013 3/31/2014 Price r Cap Value r YTD 2014 Yield
Alliance Data Systems 262.93$ 272.45$ 9.52$ 566.4$ 3.6%
American Express 90.73$ 90.03$ (0.70)$ (756.0)$ -0.8%
Blackhawk Network Holdings 25.26$ 24.39$ (0.87)$ (45.5)$ -3.4%
Cardtronics 43.45$ 38.85$ (4.60)$ (187.2)$ -10.6%
Discover Financial Services 55.12$ 58.19$ 3.07$ 1,476.4$ 5.6%
Euronet Worldwide 47.85$ 41.59$ (6.26)$ (315.5)$ -13.1%
Fidelity National Information Services 53.68$ 53.45$ (0.23)$ (43.9)$ -0.4%
First Data (Future Use)
Fiserv Inc. (stock split adjusted) 59.05$ 56.69$ (2.36)$ (600.6)$ -4.0%
Global Cash Access Holdings 9.99$ 6.86$ (3.13)$ (241.3)$ -31.3%
Heartland Payment Systems 49.84$ 41.45$ (8.39)$ (313.8)$ -16.8%
Jack Henry & Associates 59.21$ 55.76$ (3.45)$ (289.5)$ -5.8%
MasterCard Worldwide 84.36$ 74.70$ (9.66)$ (15,552.6)$ -11.5%
MoneyGram International 20.78$ 17.65$ (3.13)$ (181.1)$ -15.1%
Total System Services 33.28$ 30.41$ (2.87)$ (566.5)$ -8.6%
Western Union 17.25$ 16.36$ (0.89)$ (506.2)$ -5.2%
Vantiv 27.94$ 30.22$ 2.28$ 565.4$ 8.2%
Visa 222.68$ 215.86$ (6.82)$ (5,769.0)$ -3.1%
Bitcoin Closing Price 747.6$ 459.5$ (288.07)$ -38.5%

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Interesting News This Quarter
Subject Source/Date Substance
Louisiana House of
Representatives
PayBefore
April
“One small step for cost-cutting, one giant leap (backwards) for customer convenience.” The
Louisiana House votes 90-0 to abandon the current practice of automatically dispensing tax
refunds via prepaid cards. Believing that mailing a check is safer and avoids the risk of a security
breach, the House opted to have recipients wait for their checks, deposit them or use a check
cashing service, and incur related service charges. Worse yet, authoritative sources indicate that
two other states are considering following Louisiana’s lead. Talk about lemmings.
Crytpex Card Inc. PayBefore
April
Crytpex Card is designed to enable conversion of Bitcoins to greenbacks (or their equivalent in
80 countries) via ATMs or over the Discover and UnionPay rails. Note the order of things:
Bitcoin-to-cash. An afterthought in the press release addresses the rare bird wishing to go the
other way, a function that will be supported this summer when the full roll-out occurs.
Mpay Pymnts.com
April
The Oakland Athletics and San Francisco Giants have almost nothing in common save for the
way they have embraced in-stadiumordering and payments through Mpay and the MLB app.
Fans will be greeted upon arrival via Beacon technology, can upgrade seats when better ones are
available, and can order and pay for the occasional beer and hot dog. All this convenience in
exchange for allowing promotions to be pushed to patrons’ smartphones. Something to take the
tedium out of a pitchers’ duel ballgame, perhaps.
Google PayBefore
March
Google Wallet takes another zig in its evolutionary path and announces its endorsement of Host
Card Emulation. This, from the once most stalwart supporters of NFC, or was it prepaid cards, or
was it . . . , well whatever. Suffice to say that yet another mid-course correction has been
executed (bad choice of words, we know). At this rate, fears expressed by the merchant
community about Google purloiningconsumer transaction and purchasing data via Google Wallet
seems a bit overblown. By the way, if your Android phone is not runningKit Kat, you’re out of
luck anyway.
Best Buy
7-Eleven
Computerworld
March
Mega merchants Best Buy and 7-Eleven are reportedly switching off NFC at their registers due to
lack of use. Or so the story goes. An alternative theory floated by industry observers is that Best
Buy and 7-Eleven are readying themselves for the MCX mobile offering. If true, a bowl of
popcorn and a beverage might be in order as the anticipated battle royal between MCX and Isis
mightbe entering its Beta phase. Stay tuned.

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Interesting News This Quarter – Continued
Wocket PYMNTS.com
April
For those looking for a smart device that isn’t a phone but can execute electronic payments, NXT-ID,
a biometrics company, offers Wocket. This 3.5” by 3” device looks like it was designed by the
engineers at Porsche and contains all the data necessary to make purchases, redeem rewards, and gain
access to venues. Wocket supports all the whiz-bang technologies including Bluetooth and claims to
be bulletproof from all forms of intrusion. Swipe transactions are handled via a single companion
programmable card that is used in lieu of the myriad mag stripe cards found in most wallets and
purses. Pricing hasn’t been set as yet but the dazzle factor alone makes Wocket worth a look-see.
Swedbank Finextra
January
Not all failed mobile payments programs can be laid on the NFC doorstep. Swedbank, the Nordic
quasi-private bank, has shut down its “Bart” mobile payments app for lack of interest. The QR code-
based system garnered a mere 20,000 users and only a handful of merchants willing to accept the
scheme. Instead, Swedbank will concentrate its efforts on promoting Swish, a bank-teaming effort
being rolled-out in the region. Harkens to the old days of Citibank’s Magic Middle versus mag stripe
cards. Going it alone can be pricey.
Royal Canadian Mint Finextra
April
Speaking of aborted take-offs, Royal Canadian Mint has pulled the plug on MintChip, its failed
effort to concoct a cloud-based digital currency. Despite engaging some pretty seriously smart players
in the effort – SecureKey and Ingenico – an RCM spokeswoman told reporters that the plans behind
the effort have “matured” and that it was time to hand the project off to the private sector. It seems
that there wee a bundle of assets assembled during the effort that go along with MintChip’s “mature”
plans. We don’t expect a land office rush occurring when the auction opens for bidding. Talk about
your Brooklyn Bridge gambit.
PCI ATMMarketPlace.com
February
It’s been reported in other places before, but bears repeating. According to Verizon, only 56 percent
of card accepting businesses in the U.S. are PCI compliant. So much for the stick approach to
incenting organizations to toe the line. Penalties and fines just don’t seem to work in the payments
world so what chance does EMV have? Just as damningis the study result indicating that the most
arduous task for merchants is that of protecting stored sensitive data (55.6 percent of survey
respondents said they weren’t quite there.) Excuse us? If retailers get all the rest of PCI right but
can’t protect stored data (which they really shouldn’t have in storage anyway,) what’s the point?

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Amazon and Apple Various A number of industry observers published articles and blogs within three days in late January about the
prospects of Amazon and Apple jumping into physical site payments for tangible (non-digital)goods. Some
view recently placed employment ads for payments technologists as a sign that Amazon plans to enter the
merchantservices/in-store payments realm. When asked, the company confirmed its plans to leverage its e-
commerce expertise in the general commerce world. A new Amazon checkout system utilizinga Kindle and
card reader, coupled with recently acquired GoPago assets, seems to strengthen the assertion that the uber
retailer plans to take on PayPal et al. in the space. The jungle drums on Apple are a bit more theory-based
and rely upon the company’s recent application for a patent on technology covering payments for goods
through a signal sent from a phone to a wireless receiver. These smoke signals also suggest that the recent
move by Jenifer Bailey from her position runningApple’s online stores to a new payments-building role
means, for sure, that we’ll see an Apple payments option in, say, Best Buy, soon. Time will tell.
Card for Coin PayBefore
January
Readers who have given up caffeine now have a way to cash in the balance on their Starbucks cards. Card
for Coin is a new website launched by a 25-year-old tea drinker that enables cardholders to enter their card
information and receive an offer in Bitcoin. Be prepared to take a pretty stiff haircut since Card for Coin
offers fall in the 60 to 70 percent of remainingbalance range. You might get a better deal at PlasticJungle.
Balanced Payments NetBanker
January
“There’s one born every minute,” or pretty shrewd? We first wrote about Balanced Payments one year ago
when it raised $2.0 million in VC funds to finance the launch of its online payments processing service.
Nothing special about the rates charged or the supported payment types. What was unique was its use of an
escrow account to ensure safe delivery of funds. Apparently Balanced has received a lot of interest but could
use a few extra bucks. The company crowdfunded through Crowdhoster looking for $50,000. Subscribers
were offered significantly reduced transaction rates that get better as the amount of money pledged increases.
Result? Balanced Payments raised over $50,000 in one day. Naïve or shrewd merchants? You be the judge.
DeviceFidelity Finextra
January
Really want to use Isis but you’ve got an iPhone without an NFC chip? No problem, now. DeviceFidelity
has built a range of NFC-ready sleeves for your iPhone and they’re available through AT&T now. Pricing
starts at $65 for the basic model and scales to $129 for the tough-as-a-truck version. Boy, you really, really
need to want to use the Isis network to pay that kind of money.

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T-Mobile Finextra
January
T-Mobile received advice from a host of very smart people before launchingits pre-paid Visa card and app.
The business case probably looks very appealing – a great distribution system of stores and agents, a huge
number of users of its mobile phone network, and an even bigger market potential based on the number of
underserved Americans. But really, does the Venn diagram of mobile network operators and financial
services truly overlap? Moreover, given the recent round of scrutiny being applied to the prepaid card
industryin general, does leaping in now justify an almost certain Congressional request for testimony in a
couple of years? No matter, the Mobile Money card by T-Mobile is now available through the company’s
store network. Doubt that AT&T is worried much about losing share.
Wells Fargo Bank Various
February
Isis steps up its enrollment and usage campaign through a new relationshipwith Wells Fargo Bank. WF
customers receive a 20 percent discount on all purchases and a $20 statement credit the first time they buy
through the Isis network. The campaign runs through April, 2014 so time is of the essence. Oh, that 20
percent discount on purchases? It’s limited to $100 per month. Major buzz kill. On the other hand, this offer
beats the free Jamba Juice smoothie promotion offered last quarter by a mile.
Clutch Business Wire
February
Clutch made it into TrendWatch six months ago when the online gift card system and wallet operator raised
$5.3 million in VC money to enter the offline acceptance game. Now we learn that Clutch has teamed up
with Mobeam to provide barcode beaming capability to users’ smartphones. Samsung Galaxy S4 and Note 3
users avoid the need to have multiple store apps to redeem rewards, coupons, and gift cards because they all
integrate within the Clutch app. The Mobeam technology beams the benefit to store scanners while the
Clutch benefit tracking system adjusts for additions and subtractions.
Weve Finextra
February
Weve, a joint venture of UK telephone networks, takes heed of the time-tested lesson that new payments
schemes take twice as long and cost twice as much than planned to reach critical mass. To combat the
problem, Weve has partnered with MasterCard to gain access to the 300,000 contactless readers deployed in
the market. Weve intends to compete with Zapp, the VocaLink-owned m-payments system that rides on the
Faster Payments rails and bypasses MasterCard. Should be interestingevent to watch – the Weve partners
represent 80 percent of the mobile phone users in the market. Yet another bankers v. MNOs battlefield.

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Ribbon TechCrunch
January
Got lemons? Make lemonade. For the better part of 2013, Ribbon was primarilyknown for having Twitter
shut down its in-stream commerce capability (i.e., Tweets for payments). From the outset, Ribbon has been a
merchant-facingservice with enrollment in the 10,000 range. Nothing special, really. However, early 2014
sees the company reviving itself with a “free” P2P service. Well, its free if you use funds from your Ribbon
account or a debit card. Credit card remitters pay 3 percent. Another fine example of corporate reinvention.
Walmart Finextra Based on its earlier efforts to support financial services via its Money Center locations, it should come as no
surprise that Walmart has entered the money transfer services business in a big way. Walmart shoppers may
transfer funds between the retailer’s 4,000 U.S. store sites on the cheap. Up to $50 costs $4.50 while up to
$900 rolls out at $9.50. No word yet on internationalservices or how Ria, the MTS backbone provider and
Euronet subsidiary), will accommodate transactions other than Walmart-on-Walmart. We doubt this is going
to be a one act play; best to stay in your seat through the intermission.
Visa PYMNTS.com
February
Never one to throw away a good idea, Visa re-tools the old Card Alert Services model and is offering a
centralized database service to track fraudulent prepaid debit card transactions. Prepaid Clearinghouse
Service (PSC) seeks input from FIs, processors and program managers for sharingof information about
fraudulent transactions, enrollments, and squirrely load funding. Ever present is the age-old approach to
enrollment: Visa FIs must begin reporting by June, 2015.
Massachusetts Office of
Consumer Affairs &
Business Regulation
Bizjournals
March
Early and long-lastingpundits having a problem with the pricing structure of prepaid debit cards now have a
friend in Boston. The MOCABR has published the results of its survey concluding that most consumers
would be better off by opening a checking account with a bank or credit union than opting for prepaid card
usage. As in previous such reports, the authors point to extreme instances of price gouging while discounting
to zero consumers’ ability to think for themselves. Still, putting a spotlight on the most egregious fee chart
offenders from time to time has served to help rationalize pricing. Are you listeningKardashians?
Merchant and Financial
Services Cybersecurity
Partnership
Pressers
February
March
Financial Services Roundtable, a host of other financial services trade and advocacy groups, and an alphabet
soup of similar organizations on the merchant side of the aisle have formed the Merchant and Financial
Services Cybersecurity Partnership. This collaborative effort is designed to promote data sharing, plans for
stemmingcard present and CNP fraud, and better handling of breach notifications. All well and good and
decent first step. So why have the two credit union trades – CUNA and NAFCU – opted out? There may be
more here than the press releases are telling us.

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M&A/Alliance Activity
Buyer/Investor Target Payments Emphasis Possible Strategy
Ceyuan,
Madra Capital,
VentureLabs,
Others
OKCoin Bitcoin exchange OKCoin is China’s largest Bitcoin exchange. Multiple investors
toss $10 million on the table to support team growth and R&D.
Pretty odd investment in a country that has outlawed Bitcoins,
we think.
Seedcoin Fund BTC.sx Bitcoin exchange Just in case readers have become complacent about the level of
risk associated with investing in Bitcoins, along comes a real
crap shoot. BTC.sx claims to be the first exchange prepared to
deal in Bitcoin derivatives. It seems the number of risk-averse
investors is relatively small since BTC.sx has only handled $44
million in trades since its founding in April 2013. The $8.5
million invested in BTC.sx represents Seedcoin’s sixth plunge
into cryptocurrency. Others include : Cryptopay, CoinSimple,
MexBT, Hive and zSIM. Diversification? Not so much.
Cervin Ventures,
Serra Ventures,
Central Coast Angels,
TiE LaunchPad
PayStand Online merchant services PayStand receives $1.0 million in seed funding to promote its
“new way to pay.” Turns out this payments-as-a-service
approach comes with zero cost to the online merchant for credit
and debit card acceptance, eChecks, and Bitcoin. Instead, the
PayStand app charges the consumer 2.99 percent. Seems easy;
waiting to see the hordes of buyers lining up for that model.
Global Payments Payment
Processing,
Inc. (PayPros)
Merchant services Twenty-year old merchant services processor, PayPros attracts
$420 million in acquisition funds from Global. PayPros serves
58,000 small-to-medium business through vertical emphases
(legal and veterinary medicine) and general merchandisers. The
deal brought along “tax assets” so you can guess what earnings
look like.

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M&A/Alliance Activity - Continued
Sequoia Capital,
Founders Fund,
Allen & Co.,
Khosla Ventures
Stripe Credit card API Behind-the-scenes payments API developer Stripe raises another $80 million
in expansion funds bringing its total haul to $130 million and creating an
imputed valuation of $1.75 billion. Stripe powers FourSquare, dribble,
Rockspace and other high-powered consumer interaction players. The
company claims that 130 separate currencies are supported through its
systems. Worth a look-see if you’re selling online or thinking of supporting
new P2P or P2Anyone applications. At this rate, Stripe is moving in on
Square, currently valued at $5.0 billion.
GSV Capital,
August Capital,
Khosla Ventures,
Maveron and True
Ventures
PayNearMe Online purchases Not all Americans can both shop and purchase goods online. Those living
off the credit/debit/charge card grid rely on companies like PayNearMe to
handle cash-settled online transactions. GSV and other VC houses have
invested another $20 million in PNM to expand both sides of the shop/settle
equation. Family Dollar now accepts PayNearMe cash deposits, bringing the
total number of cash-in sites to over 17,000.
New York Angels,
Caerus Ventures
Dash Restaurant payments Similar to Tabbedout, MyCheck, and others, Dash specializes in app-based
restaurant checkout services. Also like the others, Dash has started small
with 15 locations in New York City but has growth plans in place. A recent
injection of $1.2 million will enable expansion into the Chicago market. The
Dash cool factor for hospitality barons is the app’s full integration of iBeacon
code embedded in iOS7. The Bluetooth Low Energy feature enables
automatic check-in upon arrival at the eatery. Slow and steady wins the race,
they say.

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Xoom BlueKite Cross-border payments If you became frothy when reading about BlueKite in TrendWatch in 2012,
you can back off. Xoom, the mega-money transfer service paid $15
million to acquire the Guatemalan technology firm to expand its 31 country
footprint into Central America. BlueKite is unique in its approach to
allowing residents in the U.S. to pay family bills back in their hometown or
to top up family member cell phone accounts remotely. Cool.
BBVA Simple Online bank Back in February, the industry swooned when BBVA, Spain’s second-
largest bank acquired Simple, the online-only bank and transaction
processor for $117 million. So, good or so-so deal? Clearly, a good deal
for the three VC guys that put up $15 million to get things moving, but
what about on the grander scale? True, 100,000 “customers” is nothing to
sneeze at but we’d feel better if “depositors” was the descriptor used
instead. And, when was the last time you saw a bank sized by the value of
the transactions it processed? Could it be that Simple ran into the
proverbial growth “wall” most Internet banks hit and just cashed out?
Perhaps.
Bearing Capital Pango Mobile parking payments Bearing Capital invests $6.5 million in Pango Mobile Parking to fund
market expansion as the parking industry modernizes through smartphone
technology. Pango operates municipal cellular parking services in VA and
PA plus in-garage services in NYC. The trouble Pango and others in the
business faces is, once you’ve tapped all the meters, you’re done. Hence,
the need to expand service territories. Bidding war coming? Count on it.
Susquehanna Growth
Equity,
Carmel Ventures,
Greylock,
Vintage Venture
Payoneer Cross-border payments Cross-border veteran Payoneer raises $25 million in Series D equity
financing. Payoneer is the poster child for B2C payments enablement and
is used by companies reliant upon globally-distributed contract labor.
Payoneer was impressive eight years ago and continues to thrive in a very
competitive market. Nice work.

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Benchmark,
Fortress Investment
Group,
Ribbit Capital
Xapo Bitcoin wallet/vault Xapo arrives in the nick of time to prevent future thefts of Bitcoins.
Insured by Meridien, the Xapo wallet and cold storage vault promises
to keep your completely theoretical investments, well, real. Investors
put up $20 million to back Wences Casares’ new “safe deposit box”
approach to keeping Bitcoins in a safe place. Readers may recall that
Mt. Gox, the bankrupt Bitcoin exchange, mislaid 500 of the digital
darlings and caused an instant 30 percent drop in its value. Casares is
the founder of the Lemon wallet, now owned by LifeLock and so
named. Vault storage isn’t cheap – 12 bps annually for each deposit
made. Not quite bank safe deposit box pricing, right?
Bitcoin Shop,
Crypto Currency
Partners
GoCoin Digital currency merchant
services
While we’re on the subject, GoCoin offers up a currency-agnostic
approach for merchants wishing to accept various forms of virtual
currency – Dogecoin, Litecoin, BTC, etc. $1.5 million in the form of
C-notes (naturally) ought to get things moving and enable GoCoin to
hire some engineers and a sales staff. The VentureBeat headline tells
it all; “Oh god, not another Bitcoin-related funding story.”
Cachet Financial DeviceFidelity’s
Moneto unit
Prepaid mobile payments Cachet, one of the major remote deposit capture players, acquires the
DeviceFidelity Moneto platform bringing with it relationships with
Visa, MasterCard, MoneyGram and Navy Federal Credit Union.
Terms were undisclosed although it’s pretty clear that Cachet is vying
to avoid the one-trick-pony syndrome and now addresses both inbound
and outbound payments for consumers and financial organizations.

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Investors like us Q2 Holdings Banking services Q2 pulls off a $101 million IPO with shares priced at $13 and closing at
$15.17. The cloud-based banking services processor supports 300
community banks and credit unions. Q2 faces some interesting headwinds
stemming from IP infringement allegations which the company is vigorously
defending. The market remains cautious – shares are trading 10 percent off
the opening day close.
Foundation Capital,
JBM Ventures
Partner, Greenback
Ventures, Texas
Pacific Group,
others
Ziploop Shopping platform Ziploop (not to be confused with Loop Pay) promotes itself as “built for
women, by a woman” although it’s CEO’s name is Peter. Ziploop is a
receipt and coupon organizing app designed to remove paper clutter from the
purchasing/returning cycle. Investors put up $2.2 million in seed money to
carry the company beyond the major stores now supporting the bar code-
based service. Now, if Home Depot or Lowe’s would play, what a
wonderful world it would be.
Discover Financial
Services, others
Buzz Points Debit loyalty scheme
operator
DFS participates in a $19 million funding round for Buzz Points, long-term
partner with Pulse Network, one of Discover’s sizable payments assets.
Buzz Points operates a merchant-funded debit loyalty reward platform
designed to encourage repeat shopping with participating merchants and to
stimulate debit card usage. While transaction volume on Buzz Points
remains in the ~$2.0 billion range, the recent uptake by both FIs and retailers
connotes what can happen when the two often-feisty groups (retailers and
banks) collaborate directly or through third parties.

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18
Valar Ventures
(Peter Thiel),
Square Peg Capital
Vend Online merchant services Looking for a new online merchant services processor with a 100-
country footprint? You might consider Vend, a cloud-based POS
software developer currently supporting 10,000 e-tailers globally.
PayPal co-founder Peter Thiel and others have invested another $20
million in Series B funding for market share expansion and
increasing its industry partner base which currently includes Xero,
Stitchlabs, Swarm, and SelfPay, all behind-the-scenes payments
stream engines. PayPal handles secure in-store payments in concert
with Vend.
Merchant
Warehouse
Opticard Prepaid gift and loyalty
program operator
Merchant Warehouse, a merchant services and related technologies
provider, acquires Opticard, a twenty-year old provider of reward
and loyalty card operations for small to Fortune 500 companies.
MW, an ISO operation dating back to 1998, will utilize Opticard
resources to build deeper and stronger relationships with its base of
retailers. As seen the past, these business combinations run in packs
so there’s likely to be a few more later this year.
Accel Partners WorldRemit Money transfer service All too often we forget that about the movement of cash between
two points. As a reminder, two-year old player WorldRemit lands
$40 million in expansion funds to accelerate growth from its current
base of 35 sending and 100 receiving countries. Meanwhile, another
UK-based remittance house, Azimo, closed a $10 million round led
by Greycroft Partners. The World Bank estimates the remittance
market to be worth $519 billion, sufficient incentive to attract
competitors for the two most dominant players – Western Union and
MoneyGram. Fortunately, both market leaders see the challengers
coming and are rapidly moving to transform their respective
businesses.

Dorado Industries
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19
Leonard Schrank
and host of others
Circle Internet
Financial
We’re not really sure Circle attracts a gaggle of investors in a $17 million funding round
on top of the $9 million raised in October of last year. While details
are tightly controlled, the company claims its plans include
“democratization of the Bitcoin movement by making it easier for
the general public and businesses to switch in and out of fiat
currencies.” Sounds like Ripple or BitMint, doesn’t? An interesting
side note is that one of Circle’s board members is Raj Date, the
former first deputy director of the CFPB. Go figure.
Cardtronics Automated
Financial
ATM ISO Cardtronics strengthens its presence in Arizona by acquiring
Automated Financial and its 2,100 merchant ATM contracts. Looks
like EMV is working for a select portion of the payments industry.
Terms were not disclosed.
MasterCard C-SAM, Inc. Digital wallet technology MasterCard steps up big time in the wallet wars through its
acquisition of C-SAM, developer/operator of more than two dozen
digital wallet systems around the world. What’s interesting about
this transaction is that C-SAM is not wedded to one technology and
supports HCE, NFC, bar code, and the rest of the alphabet soup that
wireless payments has become. Your move, Visa.
NBS Payment
Solutions
Equinox Payments Merchant services
technology
Canada-based NBS acquires the assets of Equinox Payments,
formerly the U.S. terminal operations for Hypercom (international
operations were acquired by VeriFone in 2011). The Equinox
acquisition gives NBS entry into the U.S. market and access to
mainstream terminal design and sales capabilities.

Dorado Industries
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20
Undisclosed Mogl Merchant funded rewards In the “kinda cool” category, we have Mogl receiving $5.9 million
in VC funding. Mogl is the ultimate in merchant funded rewards.
When enrolled debit and credit cards are used at participating
restaurants, the user’s Mogl account is credited with 10 percent of
the tab. Users have the option of keeping the rewards or donating
them to local food banks for use in suppressing hunger. Presently a
California and Phoenix operation, the VC money has been
earmarked for expansion to other markets.
AccountNow Prepaidwireless.com Prepaid phone plans Prepaid card giant AccountNow branches out to enter the prepaid
wireless phone arena in the belief that both synergistic and symbiotic
benefits can be gained. Both companies target the underserved
market and believe that marrying the branded prepaid debit card
segment to that prepaying for phone time will help both distribution
systems. We’re thinking they’re right. AccountNow’s CEO, Jim
Jones, is one smart businessman.
Kroger You Technology
Brand Services
Digital coupons Kroger acquires the vendor of its digital coupons, You Technology.
You has thousands of stores and brands using its couponing platform
to entice and reward shoppers throughout the U.S. Time will tell if
the new ownership status will curb Kroger competitor appetites for
continuing to use the once-independent supplier. Interesting
strategy.
Unemployment line Clinkle Sonics-based acceptance It’s getting tougher to remain inspired by what Clinkle plans to do
with its sonics-based approach to electronic payments acceptance.
Former Netflix exec Barry McCarthy has bolted from his COO
position after just six months on the job. Meanwhile, the new VP of
engineering lasted just one day. Seems the Clinkle CEO might have
a loose wire somewhere? A pity.

Dorado Industries
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21
Useful Links for More Information
We threw a lot of new names out again this quarter. Here’s a list of links for you to
learn more.
Company Role Link
Wocket Standalone digital wallet www.thewocket.com
Card for Coin Starbucks card conversion www.cardforcoin.com
Balanced Payments Online payments acceptance www.balancedpayments
Weve UK mobile payments consortium www.weve.com
Ribbon Merchant acceptance www.ribbon.co
PayStand Merchant acceptance www.paystand.com
PayNearMe Cash settled online transactions www.paynearme.com
Dash Restaurant payments/reservations www.dashwith.me
Payoneer B2C international payments www.payoneer.com

Dorado Industries
(310) 544-1316
Back in the day!
Congratulations to Paul Reimer at Clearkey
Consulting and Jason Darlington at UBS for
correctly identifying last quarter’s photo as a Zon
Jr. XL POS terminal. Still available on eBay for
$20; still working, sorta.
No contest this quarter, just proof that even blind
squirrels can find acorns when they’re really
hungry. Three old (one really old) payments guys
strike it big at Magdalena Bay, Baja Mexico.
22

Dorado Industries TrendWatch 2.0 Q1 2014

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