How PSD2 is set to shake banking up as we know it …

May 22, 2017August 1, 2017 marcabraham1 Comment

Fig. 1 – A prophetic vision by Bill Gates!? – Taken from: https://www.slideshare.net/patrickpijl/how-square-is-disrupting-banks/6-Bill_GatesBANKING_ISNECESSARYBANKS_ARENOT

“Banking is necessary. Banks are not.” Yep. Bill Gates said it. Back in 1994. And 28 years later, it’s it’s set to become reality. From the 1st January 2018, banking will no longer be the exclusive domain of banking institutions because PSD2 is going to drastically alter the way in which we bank.

The biggest consequence is that more than 4,000 European banks will need to open their legacy (mainframe) data stores to Third Party Players (‘TPPs’) and allow them to retrieve account information (‘AIS’) or initiate payments (‘PIS’). Both capabilities will be facilitated through APIs. I wrote about the scope and ramifications of PSD2 a few months ago, and I’ve been thinking ever since about the implications for existing banks and whether they’ve got reason to be scared.

It would be surprising if some of the traditional banks weren’t nervous about the extent to which they’ll have to open their kimonos under PSD2. And even if the Facebooks, Googles or Amazons of this world don’t become banks overnight, I expect the traditional, lifelong bank-customer relationship to slowly evaporate as a result of PSD2 (and subsequent versions of PSD).

Fig. 2 – PwC: PSD2 providing third party access to data and payments via APIs – Taken from: https://www.finextra.com/finextra-downloads/newsdocs/catalyst-or-threat.pdf

Facebook could easily decide to become an AISP (Account Information Service Provider – see Fig. 2 above), which would enable them to offer an aggregated view of a user’s bank accounts. As a result, they would be able to analyse spending behaviour, understand their users’ financial profiles and personalise a user’s banking experience. This isn’t that revolutionary, as virtual assistants like Cleo and Treefin have already starting offering this functionality, and I believe it’s highly likely that we’ll see it roll out across Facebook Messenger or WeChat in the near future. If you need more convincing, Facebook made their first move two years ago by appointing David Marcus, former CEO of PayPal, to head up Facebook Messenger, so watch this space. Similarly, US bank Capital One integrated with Amazon’s virtual assistant Alexa last year. This integration enables Capital One customers to pay their credit card bills and check their balances, by talking to their Alexa devices.

Fig. 3 – PwC: Six API-powered banking business models – Taken from: https://www.finextra.com/finextra-downloads/newsdocs/catalyst-or-threat.pdf

In addition, any remaining doubters about the power of APIs are likely to be converted as a result of PSD2. In the current Fintech landscape, there already are large number of banks that are either using APIs to hook into existing banking infrastructures (e.g. Varo Money) or offer additional services (e.g. N26). PwC recently conducted a study into the strategic implications of PSD2 for European banks and they listed no less than six API-powered banking business models (see Fig. 3 above).

Main learning point: It will be interesting to see what the actual impact of PSD2 will be, but if I were a traditional European bank, I’d be working as hard as I could to open up my APIs from today and start working on the creation of strong alliances with 3rd parties and their developers. As Nas once rapped on “N.Y. State Of Mind”, “I never sleep cause sleep is the cousin of the death.” If I were a traditional bank I’d follow Nas’ advice and give up on sleep completely …

Nas, lyric on “N.Y. State of Mind (Illmatic, 1994) – Taken from: https://uk.pinterest.com/MrConceptz/hiphop-101/

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How Alipay and WeChat are setting the tone for payments

December 29, 2016December 29, 2016 marcabraham2 Comments

I recently had to think back to the words of a well-known London-based Fintech CTO who talked about how in Asia, the Fintech playing field is miles ahead compared to some of the things that are happening in Europe and in the US. His comments came to mind when I overheard a conversation between two, ‘more traditional’ shall we say, senior financial service people, talking about “definitely worth having a mobile app, since that’s what people want and expect.”

To be clear, I’m not trying to knock apps, especially if you look at the amazing apps that the likes of Revolut, Simple and Monzo have created. However, I can’t help try to look ahead and figure out what could be around the corner. For example, I recently looked at PayKey, which integrates payments with messenger apps. The likes of KakaoTalk and Line are already doing this successfully.

I do feel though that all these products are simple dwarfed by the scale with which WeChatPay and Alipay have been adopted, predominantly in Asia:

WePay by Tencent (Tencent is known as Weixin in China)

Even though the functionality of the continental version of WeChat feels quite limited, it’s easy to see how WeChat has evolved rapidly from just a messenger app to platform which incorporates gaming, shopping and payments. WeChatPay, the payment functionality built into WeChat, enables peer-to-peer money transfers, make payments online and with participating offline retailers.

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Fig. 1 – Screenshot of WeChat payment interface – Taken from: https://walkthechat.com/wechat-payment-5-reasons-tencent-might-kill-alipay/

There are a number of different types of WeChat payment applications:

App Payment – For Android / iOS apps wanting to include WeChat as a payment option
Offline Payment – WeChat Offline Payment is meant for brick-and-mortar stores wanting to add WeChat payment via QR codes
Official Account Payment – This application is used in order to embed WeChat payment within a mobile website

By integrating with WeChat messaging and payment functionality, brands are creating a very seamless user experience and are interacting where their (target) customers already are. Soapnut Republic and its integration with WeChat’s payment functionality is a good example (see Fig. 2 below).

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Fig. 2 – WePay screenshot, once a user has completed shopping, she can either use her card to pay or use WeChat’s mobile wallet – Taken from: https://www.clickz.com/how-coach-and-moleskine-use-wechat-for-ecommerce/100300/

JD.com – a big Chinese ecommerce platform – has got redirects with WeChat. For example, when customers following the Moleskine account on WeChat want to make a purchase, they are redirected (within the WeChat app) to the brand’s mobile-friendly store on JD.com (see Fig. 3 below).

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Fig. 3 – WePay screenshot, once a user has completed shopping, she can either use her card to pay or use WeChat’s mobile wallet – Taken from: https://www.clickz.com/how-coach-and-moleskine-use-wechat-for-ecommerce/100300/

I can imagine that when WeChat launches its new “mini-apps” service in a few days time, its market presence will increase even more. These mini-apps are a type of app that one can use immediately, without having to download or install anything. Users scan a QR code or search and can immediately open an app.

Fig. 4 – Example of WeChat mini-app as created by Walkthechat – Taken from: https://walkthechat.com/wechat-mini-apps-look-like/

As WeChat has only launched a developer Beta version of its new mini-apps, I haven’t yet had a chance to play with the apps. However, I’ve learned that through mini-apps users and businesses will most probably be able to (1) do voice recording (through the WeChat API) (2) login (the app will also enable voice recognition) (3) send messages to users and (4) build web apps and services on top of the app.

One will be able to access mini-apps through a special panel, which will be accessible from the “Discover” section of a user’s WeChat account. These mini-apps enable storage of some of the data and code directly on one’s phone, which no doubt will help with app performance and speed.

Alipay by Ant Financial

Forget about traditional banks, Alipay’s ascension and reach has been incredible. Its parent company Ant Financial is controlled by Jack Ma, the founder of ecommerce platform Alibaba. This gives Ant Financial access to all of Alibaba’s ecommerce businesses and the merchants who sell through the platform. Through ownership of Alipay, Ant Financial plays a part in about 65 per cent of China’s online payments and about 80 per cent in the mobile space.

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Fig. 5 – Screenshot of Alipay’s mobile wallet – Taken from: https://www.techinasia.com/day-with-wechat-payments-in-stores

Given the role that Alipay plays in the ecosystem of online buyers and sellers, it’s interesting to look at how Alipay facilitates cross-border mobile payments and how it supports settlement with overseas merchants in 12 foreign currencies (see Fig. 6 below).

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Fig. 6 – Introduction to Alipay’s cross-border mobile payment capability – Taken from: https://global.alipay.com/product/mobilepayments.htm

Until writing this piece, I hadn’t realised that Ant Financial has a stake in Paytm, which is claimed to be India’s largest mobile and ecommerce platform (see Fig. 7 below).

Fig. 7 – Screenshot of Paytm’s iOS mobile wallet

Main learning point: Call me a clairvoyant, but I can see how the likes of Alipay and WeChat will soon take over the world – from a payments perspective at least – purely because of the scale at which they operate and the way they’re nested in a large, diverse ecosystem of online services and users.

Related links for further learning:

App review: Zuora

November 23, 2016December 5, 2016 marcabrahamLeave a comment

One of the product areas I’m keen to learn more about is billing; understanding how small businesses go about (recurring) billing. A few years ago, I used Recurly to power subscription management and payments for a music streaming service. I’ve now discovered Zuora, who aspire to “turn your customers into subscribers.”

“The world subscribed” – I really like Zuora’s vision – “the world subscribed” – and its 9 keys to building a subscription based business (see Fig. 2 below). Zuora aims to make managing subscription payments as intuitive as possible. For example, when I look at the info that Zuora provides on a specific customer account, it feels clear and clean, enabling the user to digest key account information at a glance (see Fig. 3 below).

Part of an ecosystem – The thing I like best about Zuora is the numerous integrations it has with partners and marketplace apps. As a result, Zuora users can integrate easily with payment gateways such as Adyen and link with accounting software packages such as QuickBooks. Similarly, there’s a whole host of apps and plug-ins that Zuora users can choose from.

Main learning point: Even though subscription management / billing forms the core of Zuora’s value proposition, I feel that there’s much more to it: helping people run their business operations as efficiently as possible. I don’t know whether the people at Zuora would agree with me on this vision, but I believe that, especially through it’s 3rd party integrations, Zuora can support its users more widely in their day-to-day operations.

Fig. 1 – Screenshot of Zuora’s “Quotes” overview – Taken from: https://www.getapp.com/finance-accounting-software/a/zuora/

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Fig. 2 – Zuora’s 9 keys to building a subscription based business – Taken from: https://www.zuora.com/vision/the-9-keys/

Price – Find your sweet spot. Dynamically adjusting pricing and packaging is the surest way to attract and retain customers, and multiply the value of your relationships.
Acquire – Boost subscription rates with tools like flexible promotions, integrated quoting and multi-channel commerce.
Bill – Subscriptions mean more invoices and more payments. Automatically generate fast, accurate bills and deliver them online.
Collect – Get paid. Collect payments instantly through automated and manual channels, while maximising completed transactions and minimising write-offs.
Nurture – Build beautiful relationships. Keep your customers engaged and happy. Seamlessly manage rapidly changing upgrades, conversions, renewals and other orders.
Account – Measure everything. Twice. Zuora plugs straight into your accounting software and General Ledger. Register subscription and process deferred revenue with ease.
Measure – No paper, no worries. Analytics make forecasting, accounting close and audits a breeze. Plus, it gives you the right insight your subscribers, so you can make smarter decisions.
Iterate – Try something new every day. Subscriptions can involve complex customer relationships. Zuora lets you iterate and test what’s working with just a couple of clicks.
Scale – Get growing. Zuora is built on a secure, scalable technology infrastructure. So wherever you start out, we’ll keep the system running as you grow.

Fig. 3 – Screenshot of Zuora’s “Customer Accounts” page – Taken from: https://www.crunchbase.com/organization/zuora#/entity

App review: Swish

October 8, 2016 marcabrahamLeave a comment

New payment technologies seem to be springing up left right and centre … Swish is another innovative payment platform which I encountered recently. About two years ago six Swedish banks launched Swish. Swish is a mobile app that lets people use their mobile phones to make payments and transfer payments to someone else’s banks. The money gets sent in real-time between the bank accounts and consumers subscribe to the service via their bank.

swish_app

Fig. 1 – Screenshot of Swish – Taken from: http://www.windowscentral.com/send-and-receive-funds-easily-swish-windows-phone

“Payments. Anytime. Anywhere.” is Swish’s motto. I can see how Swish’s mobile point of sale functionality competes directly with the likes of Square, iZettle and Klarna. The biggest difference between Swish and iZettle is that for the later retailers need to have a card reader to accept payments. With Swish this isn’t strictly necessary, provided you’ve authenticated your account details via the Swish app (see step 3 in Fig. 2 below).

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Fig. 2 – Swish Mobile POS – Taken from: http://swishme.com/mobile-pos/

Other competitors in Swish space are Whywallet and Seamless. With Seamless for example, consumer payments are encrypted and secured through one’s PIN code. As a result – similar to Swish – there’s no longer a need for a user to enter her bank or credit card details when paying (see Fig. 3 below).

downloadproces_01092015_ie_eng

Fig. 3 – Onboarding process for Seamless’ SEQR mobile wallet – Taken from: https://www.seqr.com/nl/en/faq/

Main learning point: Even by just looking at the number of competitors in the payments space, it’s easy to see how payment experiences will become ultra seamless in just a few years’ time. With its focus on simplifying payments as much as possible, Swish is no exception in this respect.

Related links for further learning:

Site review: Carspring

March 28, 2016 marcabrahamLeave a comment

I like cars. I like marketplaces. I worked at carwow. It’s fair to say that cars and marketplaces is a good combination for me. I was therefore very excited when I came across Carspring, a UK based marketplace for used cars. My initial thought was “why do we need another platform for selling and buying new cars, we’ve already got loads of those!.” However, I then looked into Carspring and this is what I learned:

My quick summary of the site (before using it): Another site where I can buy or sell used cars. Given that lots of people in the UK own a car, there are currently about 40 million cars on the UK roads, I’m not surprised to see another player enter the market for used cars.

How does the site explain itself in the first minute? – “A car for every journey” is what it says at the top of Carspring’s homepage. The strapline below that intrigues me though: “Hand-inspected, personally delivered.” This suggest to me that Carspring does more than just being an intermediary which connects buyers and sellers. It gets really interesting when I scroll down the homepage and see a section titled “How it works”:

Choose a Carspring certified and inspected car – Carspring guarantees that all the cars on their site will have gone through a 128 point inspection by the AA and an additional inspection by Carspring’s in-house team before they arrive at the customer.
Select a payment method (finance or buy) – Interesting to see that customers can apply for financing through Carspring, given that this service is heavily regulated.
We deliver the car straight to your doorstep – This reminds me of Shift, a US based online platform for used cars which also does delivers cars to your doorstep. I listened to a talk by Minnie Ingersoll, coo-founder and COO at Shift talking about door to door delivery of cars to their customers.
Relax with our 14-day money back guarantee – Especially when it comes to buying a used car, I can imagine that customers will feel reassured by Carspring’s 14-day money back guarantee.

Carspring 1

Carspring 2

Getting started, what’s the process like (1)? – After I’ve clicked the “Show all cars” button on the homepage, I land on a page which features a list of cars, with the top of the page saying “162 results.” I can see a “Sell a car” call to action in the top right hand of the page, which in my view could be more prominent in order to encourage more people to sell their cars through Carspring. There seem to be a number of cars that are “Coming soon” but I’m unsure as to when these cars will actually become available for sale. I believe Carspring could do a better job explaining what ‘soon’ means for each individual car and alerting the interested buyer as soon as the car has become available.

Screen Shot 2016-03-26 at 15.22.43

Getting started, what’s the process like (2)? – I look at the product page for a 2012 Fiat 500, I’m presented with a rather large image of this car and a sticky footer encouraging the user to click on ‘buy’ or ‘finance’. There’s something to say for keeping the product page simple for the user to navigate, but the large picture and the footer feel quite overwhelming. As a result of the large image and the sticky footer, it’s not immediately apparent to me that this is a carousel which lets me see one more picture, that of the car’s dashboard. Having thumbnail images of the car e.g. its interior and exterior below the hero image would be more intuitive.

Screen Shot 2016-03-26 at 15.32.14

I like how Roadster does its product pages, providing all relevant information at a fingertip. To be fair, the product page contains the same info that Roadster offers, but purely because of the way this detail has been laid out I feel I have to work harder to get to this information before deciding to buy the car.

Screen Shot 2016-03-26 at 15.42.22

Getting started, what’s the process like (3)? – The filtering function on Carspring works well; the filtering options are clear and I can see at a glance the number of available cars per filter. However, because the supply of certain makes and models is still relatively small, filtering and sorting doesn’t feel as helpful as it could have been if there had been a larger number of cars on offer. For example, when looking at BMWs I started with 7 models and finished with 2 cars after I’d done all my filtering.

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Getting started, what’s the process like (4)? – Given that Carspring is a two sided marketplace it’s just as important that the seller of a car has a good experience. For me, Carspring’s biggest differentiator is that it inspects and grades your car. As a buyer, this gives me confidence about the quality of the car that I’m buying. As a seller, the process needs to be transparent and this will come from Carspring inspecting and grading your car upfront, providing sellers with a guaranteed sale price.

Screen Shot 2016-03-27 at 08.55.56

How does Carspring compare to similar services? – Carspring does feel very similar to its US counterparts in the aforementioned Shift, Carvana, Beepi and Vroom. The points of differentiation between the various used car marketplaces seem minimal. For example, Vroom offers a 7-day money back guarantee and Beepi does the same within 10 days. What I liked about Beepi is the ability for the consumer to get in touch with person who’s certified the car in question.

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Did the site deliver on my expectations? – Yes. I can see Carspring’s model scaling rapidly, and I expect to see their car offering expand very quickly. The site lets users down in some places with usability issues that could be fixed fairly easily. I believe that the ultimate success of using Carspring won’t necessarily lie in the site’s experience, but will depend on the quality of the car delivered to a user’s doorstep. This ‘offline’ experience will determine whether people will come back to Carspring to buy their next used car and spread the word to their friends.

Related links for further learning:

App review: Touchnote

December 18, 2015 marcabrahamLeave a comment

When I was looking at Deloitte’s annual “Fast 50” 2015 winners, I saw that Touchnote, was ranked 9th, based on a 2312% growth rate (!). Touchnote was described as a “postcard sending service” on Deloitte’s listing, which made me curious to learn more about how a postcard sending service can enjoy such phenomenal growth. Let’s have a look at the app in more detail:

My quick summary of the app (before using it) – I expect an app which makes it easy for me to create and send postcards.

How does the app explain itself in the first minute – As soon as I open the app, a modal appears with a picture of a smiley couple wearing Santa hats. The description on the modal screen reads “Christmas cards – Turn photos into beautiful Christmas cards.” It’s clear that the app lets me take my pictures and convert them into postcards.

Getting started, what’s the process like – By clicking “next” on the modal screens, I get a good flavour of the different cards and frames I can create through Touchnote. However, once I’ve seen the last modal screen and land on the main screen of the app, I’m not entirely clear about how Touchnote works. For example, I’m not quite clear about how Touchnote’s credit packs work and what the benefit is of buying credits instead of buying per card or set of cards. Also, I’m wondering whether I need to sign in or create a Touchnote account to use the service. However, it’s clear where I need to click to create a (Christmas) card or a framed picture.

After indicating that I’m happy for the app to access the pictures on my phone, the process feels very intuitive and straightforward. For example, changing layouts felt very simple. As a user, the last thing I want to do with an app like this is fiddling endlessly with layouts and customisation.

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Again, selecting, rotating images, adding a caption and selecting an address – it all feels very easy and I end up with a postcard that I’m happy with.

I’m now told that I need to buy 1 credit to buy (and send?) the card, but it looks like I need to sign up with Touchnote to be able to do that. Why can’t I use Touchnote as a guest? It would be great if I could sign up at a later stage when I’m clearer about the quality of the service and about how Touchnote works.

Payment through Touchnote feels very easy, even though I would have liked to have know about the price of 1 credit prior to arriving at the payment screen. All in all, a very easy and seamless purchase process, followed by a nice confirmation email in my inbox.

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How does the app compare to similar apps? – Out of the similar apps that I looked at, Postdroid felt the least elegant. Apart from struggling to manipulate images, the thing that struck me most is that the first screen on the Postdroid app is a login one, which doesn’t make me feel particularly welcome to say the least. In contrast, creating a postcard through Postino felt just as easy as doing it through Touchnote, the main difference being that Postino lets you choose from a number of borders to add to the picture, so that you don’t have to have to worry about empty spaces or padding.

Did the app deliver on my expectations? – The whole process of creating a postcard through Touchnote felt incredibly easy, and I wondered whether Touchnote are looking to apply this seamless experience to personalising and sending other items such as mugs or plant pots (yes, plant pots). Given how easy the Touchnote app was to use, I was wondering why the app doesn’t work harder on explaining early on how pricing works or why it doesn’t let customers purchase cards as a guest. But yes, all in all, the app definitely did deliver on my expectations.

What’s happening in ‘content commerce’?

November 27, 2015November 29, 2015 marcabrahamLeave a comment

Last week I wrote about Grabble and reviewing their app spurred me on to look at other apps in the ‘content commerce’ space. In essence, content commerce is about obtaining revenue from your digital content, irrespective of the form the content comes in (e.g. blog, film, music, etc.). These are some of the content commerce examples I looked at:

The Hunt

The Hunt‘s strapline reads “Style & Shopping” and that’s exactly what you get. Very much image driven, the user can search for fashion and styling ideas. I didn’t find the app the easiest to use, and I wasn’t sure about the ‘return of investment’ I was getting on the effort I had to put in to find a piece of clothing ‘similar to this’ (see Fig. 1 below). I can see, however, that The Hunt does help users discovering new fashion items and sharing these with their friends for input.

Fig. 1 – Screenshot of an exact match for Dark Maroon Nike’s – Taken from: https://www.thehunt.com/the-hunt/dhXw8s-dark-maroon-nike%2527s

The Hunt 1

Gilt

Gilt is a member’s only community which offers products from the world’s biggest fashion and accessory brands with discounts of up to 70 percent. I can imagine that Gilt acts as a trusted style adviser in the eyes of its community members and I can therefore imagine its curated ‘top picks’ section to get a higher clickthrough rates than similar sites (see Fig. 2 below).

Fig. 2 – Screenshot of ‘Top Picks’ on Gilt – Taken from: http://www.gilt.com/

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Spring

Spring is another good example of an eCommerce site with a strong curated feel about it. Spring offers an Instagram-like photo feed of products to purchase, with a curated community of brands that includes luxury labels and emerging designers. The collections displayed have been curated by influencers and editors (see Fig. 3 below). Spring has no shopping cart. After users have initially filled out credit card and shipping info, they just swipe beneath an item to buy it. And after users like an item, the relevant seller can send them push notifications.

Fig. 3 – Screenshot of collection on Spring – Taken from: https://www.shopspring.com/

Spring

Product Hunt

Product Hunt is one of my favourite places when it comes to finding out about new gadgets and technologies. The combination of a dedicated community curating the products shown based on votes and related conversations between community members works really well. I know that the good people at Product Hunt are looking to expand into non-tech areas, and it will be interesting to see if and when they’ll be able to build up a community around fashion for example.

Fig. 4 – Screenshot of ‘products’ screen on Product Hunt’s iOS app

Mumsnet

If we take the definition of content commerce at its most basic level, then I would say Mumsnet is a great example. Mumsnet is a large community and acts a go-to place for lots of mothers and mothers to be. Below example of a page where users can read trike and ride-on reviews as well as engage in ‘discussions of the day’ is a really good example of how you can combine relevant content with eCommerce (see Fig. 5 below).

Fig. 5 – Screenshot of Mumsnet product reviews page – Taken from:http://www.mumsnet.com/reviews/on-the-move/trikes-and-ride-ons

Mumsnet 1

Related links for further learning:

As I learn …

This site is about everything digital, giving an update on new things as I learn

Category: eCommerce

How PSD2 is set to shake banking up as we know it …

How Alipay and WeChat are setting the tone for payments

WePay by Tencent (Tencent is known as Weixin in China)

Alipay by Ant Financial

App review: Zuora

Fig. 3 – Screenshot of Zuora’s “Customer Accounts” page – Taken from: https://www.crunchbase.com/organization/zuora#/entity

Related links for further learning:

App review: Swish

Site review: Carspring

App review: Touchnote

What’s happening in ‘content commerce’?

The Hunt

Gilt

Spring

Product Hunt

Mumsnet