For introducing trust to an unsteady economy. Microfinance banks generally give small loans to people with no credit scores, but that means "there’s no real data to answer the question, ‘What’s my basis for investing in this person?’" says Shivani Siroya. She’s the CEO of InVenture, a certified B Corporation with an inventive solution: software that prospective borrowers willingly download onto their Android phones, which monitors and crunches 10,000 indicators of each person’s level of responsibility. For example, are the majority of someone’s calls longer than four minutes? Good: They may have stronger relationships and be a better credit risk. And this is helping Siroya make the right bets. In 2014, the software’s first year, InVenture accepted 50% of applicants, for a total of more than 6,000 loans. Most were between $20 and $100, with no fees and just 5% interest. The repayment rate was 85%, and more than 75% of applicants returned for a repeat loan. InVenture currently operates in Eastern Africa, India, and South Africa, where 2.5 billion people have no credit score—and where, because many banks won’t help these data-free borrowers, loan sharks have free rein. Siroya observed this during her years working on emerging markets and microfinance at investment banks, the UN, and UNICEF. "I just wanted to solve this problem," she says. And now InVenture goes even further, offering mobile and web tools for individuals to help manage their finances, their businesses, and, eventually, their newfound savings.
For making payments so easy that online merchants don’t need to think about it. Stripe is a huge winner in the highly competitive online-payments space, but it isn’t something consumers can use. Rather than being a product, it is a facilitator—a back-end system that other companies use to process their transactions. And that was in high demand in 2014. Both Twitter and Facebook chose the startup to power the "buy" buttons consumers click on to purchase goods from their newsfeeds. It also forged a deal with Alibaba, the Chinese e-commerce group, to help online retailers located outside China receive payments from customers in China. Other high-profile clients include TaskRabbit, Instacart, Kickstarter, and Lyft. Venture capitalists are racing to put money into Stripe, including $70 million in December, giving it a heady valuation of $3.5 billion, double from earlier in the year. The secret to Stripe’s success? Simplicity. And the ability to anticipate what merchants need. It now supports 139 currencies and has added debit cards to its portfolio. And, yes, it was one of the original partners working with Apple Pay.
For creating behavior-based security so powerful the Department of Defense's research arm has given money to fund the company’s work. Expect to hear more about BehavioSec on this side of the pond: the Swedish company just raised 5 million euros to expand its presence here and in the U.K., after being nearly universally adopted by Nordic banks, says CEO Neil Costigan. But you won’t hear about BehavioSec while being a bank customer, even though that’s when you’ll be experiencing it: When users log in to a financial site, the software studies the way users type at their desktops, move their mouses, or touch their phones. These movements are unique, like fingerprints, and help the bank identify whether the user is an imposter. Machine learning and supersensitive cell phones, rich with information, enable BehavioSec to have a high degree of confidence in its work, says Costigan. The technology may be first class, but Costigan says BehavioSec is traveling a well-worn path. During World War II, fellow Morse coders could identify one another simply by listening to the tapping style. "They would know what unit and which trooper was sending by the type of signal."
For building a global rail system on the Internet to instantly transfer value without a middleman. Ripple CEO Chris Larsen is on a mission to create nearly instantaneous transactions. "You can’t do that now," Larsen says. But Ripple is cutting down the transfer time from days to seconds—and enabling customers to digitally exchange anything of value, be it digital or traditional currencies, gold, or even airline miles. It accomplishes this by essentially rewiring the way transfers are happening. Unlike innovative competitors like Google and Square, Ripple isn’t simply a service; it’s a protocol, which essentially is the system by which something happens digitally. (Bitcoin also operates on its own protocol. Larsen sees Ripple as the next logical step in the Bitcoin-led movement, in which the traditional financial system is circumvented.) And Ripple is gaining traction. Last May, Fidor Bank announced it would become the first bank to deploy the Ripple protocol. AstroPay, a leading Latin American P2P lender, is also partnering. Another deal with a Mexican utility is empowering Mexicans living abroad to pay bills for family back home—cheaply and almost instantaneously.
For turning your receipts into a concierge-like service. Expensify, as the name suggests, is an app that helps users organize their expenses. But when you scan, photograph, or email your receipts into the Expensify app, you’ll get more than just an organized expense account: You’ll be getting updates on your flights, your GPS will track your car mileage, or an Uber driver will appear at your door ready to whisk you to the airport. (That last one is due to its new SmartRides function; all a user needs to do is say "yes" when the app asks, "Do you want an Uber?") Expensify CEO David Barrett describes all these functions as "ambient computing," and the company has grown because of his knack for infusing fun and functionality into previously cumbersome bits of paperwork. And if you’d like (and who wouldn’t?), you can even set up the app Yo! to signal you when you’ve been reimbursed—easily one of the most satisfying uses for the monosyllabic hottie. That kind of creative touch is just one of many reasons that, last year, the seven-year-old start-up notched more than 2 million users in 169 countries, and is used inside more than 300,000 companies.
For entering the Bermuda Triangle of payments—the mobile wallet. Google, phone companies, and purveyors of credit cards have been angling for years to master the one-tap checkout, but nobody has inspired widespread usage. Apple Pay’s chances to change that are promising. Apple’s timing is exquisite: Merchants across the nation are on the verge of updating their systems to accept EMV technology, a chip-based system geared to limiting credit card fraud. As long as they’re hitting the refresh button now, many merchants may consider also integrating NFC, the near-field communications system that enables a closely held cell phone to communicate with a cash register. It won’t be easy: About 10% of merchants have deployed NFC so far, and Walmart, the nation’s biggest retailer, is notably AWOL. An alliance of phone companies, meanwhile, is pushing a competing standard. But Apple boasts 800 million credit cards on file via iTunes and, to the chagrin of rivals, is the cool kid in town with the power to mold consumer behavior.
For giving PayPal a fighting chance in the battle to become the sovereign ruler of mobile payments. PayPal purchased payments processor Braintree for $800 million in 2013—a clear indication of PayPal’s strategy to bridge mobile, online, and brick-and-mortar. It came with immediate benefits: Braintree is the system that fuels payments for mobile-first companies like Uber and TaskRabbit, which PayPal is now tapped into. And Braintree continues to expand its offerings: Last year it also launched One Touch payments, eliminating the pesky task of typing in credit card information and passwords every time a user wants to buy an item on a phone. It has already been adopted by big names like Airbnb, ticket purveyor Stubhub, and Boxed. Merchants are reporting double-digit growth in mobile shopping conversation rates. And as the nature of payments shifts, Braintree is already well-positioned: It can process Apple Pay, and last fall began accepting Bitcoin as well.
For bolstering fraud detection while eliminating all the stupid questions used to identify you. Once, only the name of your best friend in high school stood between you and financial fraud. That wasn’t much of a barrier: Skilled fraudsters can induce call center operators at your favorite bank to spill your private beans at least 20% of the time, says Jade Kahn, solutions marketing manager at NICE Systems. That’s why the Israel-based tech company has introduced a new line of defense against identify theft: Your voice. Operators sometimes give hints to callers who scream or cry that they can’t remember their PIN numbers. But these human weak links in the security chains can’t give hints on how to talk. Your voice is unique, like a fingerprint, and financial institutions just happen to have decades of recordings on file. The NICE biometrics typically verifies voices within 10 to 15 seconds, shortening calls by one minute (and saving millions in costs). It also keeps a bad-guy voice watch list, identifying fraudsters in real time. Kahn expects financial charlatans to focus their efforts increasingly on call centers in the coming years as the credit card industry upgrades its technology, making the hack attacks on retailers like Home Depot a lot harder. Monetary fraud is a sophisticated $500 billion industry globally, according to McAfee, with well-developed best practices; Kahn says, "It’s an arms race." Your best friend won’t be able to protect you.
For creating an international brigade of data collectors to monitor prices on key goods in undeveloped countries. The California-based Premise is making an end run around government reporting systems, which are often unreliable and slow purveyors of information. The company calls its system an inversion of the typical "top-down economic storytelling" we get from the government, in which farmers and part-time workers use their mobile phones to report not just on food prices but also on corruption and the quality of services. In return, the data collectors earn rewards and gain access to data that others have collected on the system. Lenders and investors are hungry for accurate, timelier data, as are the policymakers and relief agencies that track food security and political stability. A UN agency recently reported that Premise anticipated food trends in Brazil 25 days before government trackers. Premise recently partnered with Standard Chartered to bring its crowdsourcing skills to Nigeria and Ghana, adding to its presence in Asia and South America.
For enabling small businesses to piggyback on the creditworthiness of their customers. Everyone likes to say that mom-and-pop shops are the engine of the U.S. economy, but banks are more likely to turn down their loan requests than to say yes—and as any small-business owner can tell you, managing cash flow can be a big headache. Sometimes, there’s a gap between when customers pay and when bills come due. BlueVine cofounder Eyal Lifshitz knows this firsthand: He says his father sometimes paid for the overhead of his physical therapy business with credit cards because it took so long to get paid. This is where BlueVine steps in, offering small businesses cash advances against 85% of the money their customers owe. The BlueVine process is simple—completely online and cloud-based. When customers pay their outstanding invoices, the money flows behind the scenes directly to BlueVine, without the customers even knowing. Credit decisions are typically made within 24 hours (and within minutes for repeat users with a steady clientele); the company says it will soon double its lending limit to $100,000 for users. BlueVine is starting the new year with sweet news: The company, which launched its beta in March 2014, just got $18.5 million in financing, led by Lightspeed Venture Partners and 83North.