Day Headlines in Shopping news: 2011-03-17

  • Data-driven finance: Go figure (The Economist Online Shopping 2011-03-17 11:53:59)
    Print sectionIssue: The falloutFly Title: Data-driven financeLocation: ASKING a friend for a loan is a quick way to tide you over till the end of the month. But Wonga, a British internet firm, is almost as fast. Those in need of cash give the service some basic information about themselves. If Wonga considers them trustworthy, the money—as much as £400 ($641) for up to 30 days for first-time users—arrives in their accounts within 15 minutes.Consumer advocates are highly critical of the service: its annual interest rate currently exceeds 4,000%. But Wonga, which uses funding from its venture-capital backers to make loans, is attracting attention for other reasons. The firm is one of a growing number of internet start-ups that mine unconventional forms of data to offer financial services.Klarna, a Swedish company that counts Sequoia Capital, a noted venture-capital firm, among its financial backers, allows consumers to shop online by simply typing in their date of birth, name and address. Klarna fronts up the payments and charges retailers a fee for making online purchases easier. Shoppers pay only once they have received the goods. ...