Gamestop, Bitcoin, and The Internet of Value: IoT and Fintech | IoT Insider Podcast Episode 17

Dan Cunliffe
Hi everyone, and thanks so much for tuning into the IoT Insider. My name is Dan Cunliffe. I’m Managing Director of Pangea. And today I’m joined by my good friend and fellow Sales Director, Bernie McPhillips. Thanks for joining us, Bernie.

Bernie McPhillips
Hey Dan, thanks for having me again. It’s a pleasure to be on a podcast with you. I’ve managed to take over a couple of times when you’ve not been available. And it’s been a while since we’ve been able to do one shoulder to shoulder so I’m really looking forward to it.

Dan Cunliffe
Perfect. Yeah, welcome on board. And you’re right, Bernie is definitely better at this than I am. So let’s see how we can take it forward with the, with the rest of the team. But today, we’re talking about a really interesting market and a pretty strange few months in the world of finance. So we’re talking about IoT’s role in the industry of finance, finance tech, and sort of what it can do. Maybe I’ll pass over to you Bernie, if you want to maybe throw out some ideas, you know, what role do you think the Internet of Things can play in Fintech as a start?

Bernie McPhillips
Fintech? There’s another nice term that I’ve not heard an awful lot before, to be honest. But yeah, for those that don’t know, it’s just the abbreviation of financial technology. been around for decades, probably unknown to a lot of us and what has really helped us in the way that we work, the way we interact with our finances, the way we spend the way we save, the way we invest. And yeah, it’s just becoming more and more prevalent in the modern world. IoT is another acronym, you know, just what our industry has always needed. But effectively, you know, fintech would probably sit underneath that umbrella somewhere, definitely got a role to play, because IoT effectively is connected devices, intelligence, AI, putting this technology at people’s fingertips to drive efficiencies, make people safer, save money, environmental benefits are undoubtedly a huge, huge role to play in financial technology going forward. I mean, in fact, as I’m sure we’re likely to discuss on this podcast that has played a huge role in the past, and even today, so yeah, how about you? What do you think, a big, big role to play?

Dan Cunliffe
I think, I think there’s definitely got, I mean, IoT has roles to play in every market, and we’re just picking one at the moment, I think, in the finance world, it’s all really about understanding environmental changes in terms of markets moving and things that can happen. I mean, you know, talks of challenges in countries around water restrictions, or war time, or even, you know, movements in slowdown of, of a vaccine to kind of, you know, get into the COVID mode changes the way currencies are displayed on Wall Street, you know, and how stocks are generated. IoT is all about being able to use devices to give us more automated information, I think if, if, if you learn that quicker and more efficiently, there’ll be many, many financers willing to pay big money to learn about these changes in environment so that they can be ahead of the game. I think it’s quite widespread. And particularly with the Fintech side, I mean, there’s particular reference to how things like you know, when you when you bring it more into a micro level, is, you know, how do things like ePOS, Bluetooth beacons, those kind of things can actually run payments, almost automated, but you know, help a lot of retail environments be able to improve the way they just deal with Fintech in a more micro environment. I mean, I suppose that’s one of the simplest ways you tell a great story about how a sole trader, you know, kind of doesn’t even realise that they’re using IoT, but they could be, you know, they could be actually using it for helping their own business.

Bernie McPhillips
Yeah, the term IoT wouldn’t mean an awful lot to people who aren’t in the industry, as it’s this kind of umbrella term. Thanks for referencing it, it is actually an example of IoT and its adoption. And sometimes it’s sort of conscious adoption that I speak about in just my everyday dealings within Pangea. This was before the pandemic. And it’s a sole trader, you’re right, it’s our local window cleaner. And the cracking young lad runs his own business. He’s a sole trader. And I just noticed one time when he called and asked for payment I didn’t have any cash in the house, you know, which which can happen and he just pulls a debit credit card machine out of his pocket, otherwise known as an ePOS device. Yeah. And it just astounded me I was like, wow, okay. So you know, obviously been in the in the industry and quite interested in the tech and just asked him, you know, why have you got that? And he basically delivered like the perfect pitch back to me, in terms of, he felt as a window cleaner, he makes his money cleaning windows, right? The more houses the more windows he can clean, the more money he collects, he doesn’t want to spend too much time collecting payment because that’s time spent not cleaning windows. And he said, you know, as I as happened to me that day, you know, when he’s collecting payment, it’s often unannounced, we don’t know exactly when the guy’s gonna call. You know, a lot of his business is weather based, etc. So he calls asks for his payment, don’t have cash, whips this card machine out. It avoids him having to go to the same address multiple times to collect payment. You know, oh sorry, I forgot, again, I haven’t got cash, because that takes time. Repeated time. He’s explained all these back to me, he said, then it’s multiple journeys in my van, round all the areas where I clean windows. So I’m putting more miles on the vehicle. So I’m using more fuel, more miles on my vehicle means higher insurance more miles on the vehicle means more frequent service intervals or tire replacements. So yeah, it’s just much easier for him to carry this machine and pay a few pounds a month and customers if you don’t have cash, everyone’s got a debit card or credit card, beep, get my payment and off I go. What a pitch, right?

Dan Cunliffe
Yeah, exactly. I think I think you. Again, as I mentioned before, some really great ideas we’ve heard from you particularly, we you actually said it’d be great, if we could do a live poll with the people listening today, and how many of you actually have cash in your, in your wallet today. I certainly only have leftover euros from a long forgotten trip to Barcelona. Basically all I have, and which is a whole nother story and probably for another podcast. But it’s absolutely true. And I find it really interesting how, from a from a Fintech perspective, though, who has started to dominate the digital wallet? And what is the driving force behind it? You and I both worked in O2 for many years, and I know that O2 had actually driven a, let’s create an O2 wallet environment where you could pay with your tariff, if you wanted, right, you might be spending 20 pounds a month on your, on your phone as your tariff, and then they would have access to let you pay through your O2 account for things. And that was quite a while ago actually wasn’t it. I mean, but today, it’s all about the manufacturers to be honest, that I’ve taken over that market, Apple Pay and Android Pay.

Bernie McPhillips
Yeah, absolutely Dan. You know, I don’t think many of our listeners would disagree. Gone are the days when you’d leave the house and you’d be like, you know, wallet watch, comb etc. The essential now is your mobile device. And if you’ve got that nothing else really matters. Depending on the car you drive, you can open your car and start it with a with a device, you can pay for things with the device, there is now no limit on electronic payments using your device because of the biometric security either a fingerprint or facial ID, facial recognition to authorise that payment. Genuinely just recently I made a small trip out for a number of errands and genuinely did go out without my wallet. My initial instinct was to turn around and drive home for it. And then immediately thought I don’t need it, I’ve got my I’ve got my, my iPhone, other operating systems are available. Because with that device, I’ve got all the different methods of payment, a range of different cards available to me depending on what I’m buying and how I want to pay for it. And a big part of our modern society today is loyalty cards, as well for discounts or collect some form of points, they’re all on your device. So your mobile device now, which invariably we do reach for first when we get up in the morning. And it’s the last thing we put down at night. And it’s the first thing we ensure is in our pocket, when we’re leaving the house, it’s always with us, it’s becoming our wallet, it truly is. Probably be like ID and things like that you’re going to be able to store on your wallet, on your mobile device that anything else that will possibly be in your wallet, will now be on your mobile phone.

Dan Cunliffe
This really, opens up a topic around something you want to talk about which is which is the Internet of Value is something around, it’s still fairly conceptual. But I can I can see it working but needs a lot of in my view Internet of Things, IoT to help it which is, you know, the idea behind the Internet of Value, is that value will be transferred as easily as data is transferred over the web right now. So why do we need and being being South African originally, I find it very frustrating to transfer money home for my for my mom and them to use. It’s a really cumbersome, difficult thing to do. Yet, I have an account in South Africa. And I have an account here. And I’m and I’ve been vetted through several biometric tests on both sides yet, it’s still not possible to just do it at the touch of a button. And one of the things for the company, our CTO, Chris Romeika, and I went to Israel a couple of years ago to work on some interesting deals around around smart containers. And you can listen to that podcast, which we’ll send a link in the bottom on that. But basically, we spoke to a company which is all about how can you use devices, the Internet of Things to authenticate the the sort of high value transactions in a in a very, sort of different way. So I’ll give you a bit of explanation. So for example, if you had sensors around the world that could give you information like you know, what is the current air temperature, just as a very simple example. Why couldn’t you query those at that time of the transaction trying to take place and compare it to what it should actually be? Because what you’re using now is you’re using something that is pretty much unobtainable by a threat, call it what you want. And this is a real life test of something that is happening implicitly rather than sort of, you know, using digital methods to send information backwards and forwards and different types of keys, which eventually through brute force methods, and, you know, improvements in nanotechnology will get broken by security methods. But I think using IoT sensors, the ability to test implicit things across a variety of sensors, but also millions around the world, could be a really nice way to think of ways to test security for transactions across the internet. It’s a bit out there, I get that, but it’s actually quite useful way to think of how can the environment or what a sensor is trying to do give us granular information about what’s actually true when making a decision around high value transfers in the in the kind of finance game?

Bernie McPhillips
Yeah, I totally agree, it is kind of totally like mind bending in terms of you think of where that potentially all ends up in the future, the Internet of Values is an exceptionally incredible concept. And just actually, that that kind of transfer of value, not necessarily monetary, in its traditional sense, or how value is currently calculated. So if you think of more traditional methods of banking, and even if you know, for those people, many of our listeners who do actually have any form of currency in their wallets, it’s often referring to the Bank of England, etc. And then that currency, that note that you have, and the value that that is perceived to hold, in some way, shape, or form and very traditionally links back to probably some form of like precious metal, or something that is held somewhere within the Bank of England. And this, you know, entitles the bearer to, and those types of wordings that you would often see on forms of currency. Where as the value, the Internet of Value, you’re really then starting to get into like blockchain type technology is built on an entirely different concept altogether, where value is not something physical, or based on as a form of precious metal, market trends. Outdated expense is based on perception, and the value of something is purely based on what someone is prepared to pay for it. But what we see, you know, when you start working, for me personally, I start thinking about Internet of Value. So I think about blockchain, I immediately start thinking about crypto currencies. And those types of things, then it’s just look back over recent months and years of news. And you can see, it is because it’s not based on something physical, or the way wealth was and value is calculated traditionally, it is quite volatile, and scary to be honest. Incredibly exciting as investments can you know, I read recently about somebody who threw away a form of memory device like a memory stick or an external hard drive and it had all the keys on it to his Bitcoin. And it’s worth something like 30 million pounds today, the Bitcoin that he bought years and years ago. And he knows it’s on a rubbish dump somewhere. He’s trying to pay the local authorities, millions of pounds, if it’s found, to allow them the permission to employ people to go back and dig it up and try and find it. And that type of thing. So I think with with the technology, whether it’s contactless payments, or cryptocurrency that requires passwords, etc, and keys to be stored somewhere else, we have to start thinking about things differently. So I suppose that storage device that held those keys to this gentleman’s Bitcoin, that’s the modern day stuffing your mattress with cash. How people used to opperate decades ago if they didn’t necessarily 100% trust high street banks. It’s the same type of concept but just using tech now.

Dan Cunliffe
There’s a great story where you mirror the whole crypto with a real life example of things you can buy. And you know, Tesla is now taking Bitcoin as part of payments for their vehicles and that you know, there’s nothing more tangible than a car, you know, it’s been around for a very long time. Still made of metal and now batteries and lots of other different things, but actually, you can pay with it with something that you can’t physically really touch is insane. But it’s not insane. This is the world we live in the ability to have the trust to do that. The Internet of Things has to support not just authorisation and authentication of that product but also needs to be able to watch the market and make sure that when Elon Musk is you know, charging whatever amount of bitcoins he wants for his cars. He’s not taking a huge loss in about three seconds because of the change in value. You know, these are these are pretty interesting ways in which, how do you price a car on a cryptocurrency? You know, this word of like, do you would you would you ever buy something based on perception is pretty interesting in a sales environment because quite often we do right? We pay over the odds for things that have brand value to us, but may not have brand value to someone else.

Bernie McPhillips
Example, you mentioned that volatility there Dan, you know, you could go in and make a payment for that vehicle using Bitcoin, walk away the 100%, legitimate owner of that vehicle, but the value of that Bitcoin plummets, the next day, you’re gonna, you as the buyer are going to feel like you’ve got a wonderful deal. If it goes the other way and the value of that Bitcoin soars over that short term, you can end up, what was worth £50,000 is now worth a million, you’re gonna end up feeling like you’ve paid a million pound for your Tesla.

Dan Cunliffe
But this is now the perception isn’t it?

Bernie McPhillips
It’s that volatility, yeah, to kind of help us understand how that how volatile these markets are, and how volatile finance is in general. But when you put tech in there, maybe a little bit more. There’s other things that have made the news recently, I’ve never heard of GameStop.

Dan Cunliffe
I just stopped going to game because I can’t buy a PS5.

Bernie McPhillips
As soon as you’re allowed, you can come and play with mine. With GameStop I’ve never, I’ve never heard of them. So for those that didn’t know they’re a video games retailer, they were hit pretty hard by the pandemic. But effectively, a large group of amateur investors basically sent the share prices into a frenzy. So for those that may have seen, you know, films based on it or understand what kind of short selling means effectively real kind of big investors, the big boys, the Wall Street establishment and that type of thing. These hedge fund investors, there’s a very clever way, though entirely legitimate, entirely legal for almost betting that shares and stocks won’t perform well. And you know GameStop they’re a retailer, High Street presence, not great online presence, struggling during a pandemic, a fairly safe bet, if you’re inclined to invest in that way that the stocks weren’t going to perform particularly well. But all it takes is a group of amateur investors to start to buy those stocks to buy those shares to send things either way. And it’s it’s it’s almost like the modern day David versus Goliath story. People just using online forums grouping together to create this army of amateur investors to take on the multibillion dollar hedge funds, basically, give them a bit of a kicking. Yeah. For the people who bet against the performance of those stocks. It actually went entirely the other way. So yeah, hedge fund, you’d like to think these guys get it right, more often than not, volatility is evident more than ever, I would think because I think that the man on the street is now quite savvy, can get a hairdryer on these things. And they think actually if we get together and do this, we can outwit and outmanoeuvre the big boys.

Dan Cunliffe
100%. I mean, the access to information is just so prevalent, I often say this, you don’t always have to remember everything, you just have to remember where to find it. Which is actually where to go, but um, just to sort of, you know, bring it, bring it, bring it home and sort of move on from there. The really interesting thing for our market in the in the in the finance world has been, you know, we’ve been when you talk about volatility, we talk about volatility of connectivity for devices that need to make critical decisions in finance, we’ve been, we’ve been fairly successful working with clients, right around the world, particularly at the moment in the Caribbean, where we’re supporting many ePOS devices, 1000s of them to connect to multiple networks on the islands, where, you know, you’ve got some fairly high net worth people constantly using the islands, and looking to make payment processes, you know, things like that. Where one of the one of the strengths of what we try and bring into this market is the ability to connect anywhere you are, and particularly with your ePOS device, or whatever device it might be. So yeah, that’s something that I think you know, if anyone is in finance, or trading or actually finds this sort of stuff, interesting, do, head over to our website and check out our IoT blog, where we will be putting this particular podcast up or you know, contact the team. If you think that you know, there’s something that you’d like to learn a little bit more about. Great. I’m gonna sign off on that, Bernie, anything else from you wanna add?

Bernie McPhillips
Nothing for me, thank you, Dan. I really enjoyed recording the podcast with you. And I look forward to doing another one another one soon.

Dan Cunliffe
Thanks for joining me, I do appreciate it. If you do want to know more about us, where our website is pangea-group.net. We’re available on all social channels, LinkedIn, Twitter. And please do give us a call if you are interested in anything else. Thanks so much, Bernie. And thank you very much, the listeners. We will speak to you again shortly.