<div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div><ul class="summary-list"><li>Emerging markets, led by Latin America, powered 6% growth in global payments revenue last year, according to a brand new report from McKinsey. </li><li>Additional M&amp;A is expected as companies buy their way to more product offerings, capabilities and scale, with deals like PayPal's 2018 acquisition of iZettle.</li><li> Payments-as-a-service can open up new ways to rake in revenue, like Square adding payroll services and lending.</li><li>Banks need to embrace the changes that their customers want, the report said. </li><li><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary" target="_blank" rel="noopener">Click here for more BI Prime stories</a></li></ul>The payments industry has seen revenue steadily growing and new entrants muscling into more areas of the space. That has banks and other long-time players rethinking their approach and scrambling to keep up. And more change is expected as cash and paper checks increasingly become replaced by digital payments around the world. Consulting firm McKinsey &amp; Company published its 2019 Global Payments Map report on Monday at the Sibos conference in London. In this year's report, McKinsey explored those disruptive trends and forecast shifts to come in the payments ecosystem. It flagged strong growth in areas of global payments revenue, and drilled down into changes that legacy financial institutions may need to make to capture some of the broader space. Companies will need to position themselves to capture pockets of growth, and to cater to the various types of money exchanges that need to happen between people, companies selling products and services, and financial institutions, particularly as more and more transaction happen online. It's an area that Business Insider has been busy covering in recent weeks, given new fundraisings and product launches. For one, earlier this month we attended a <a href="https://www.businessinsider.com/mastercard-blockchain-b2b-technology-showcase-2019-9">tech showcase</a> put on by Mastercard, where it highlighted applications of biometrics for digital payments as well as blockchain uses for tracking where things people buy come from. Mastercard early this year ditched the word "card" from its logo as part of a rebranding push to reflect more forms of payments. Here are the key takeaways we got from reading the new report.Read more: <a href="https://www.businessinsider.com/mastercard-blockchain-b2b-technology-showcase-2019-9">We went to Mastercard's tech showcase, which featured biometric sensors and shrimp-tracking blockchain. It's part of a push to embrace a future without cards.</a><h2>1. Emerging markets driving revenue growth</h2>McKinsey expects payments revenues to top $2.7 trillion by 2023. One key factor of growth here is the increase in electronic payments, especially in emerging markets, the report said. Global revenues of the payments industry reached $1.9 trillion in 2018, led by an uptick in Latin America. That total figure was up 6% from the year before, but growth retreated somewhat from an 11% surge in 2017, per the report.Globally, revenues were split almost equally between retail and commercial segments. However, the report shows that Latin America skews toward retail, while EMEA grew more in commercial payments.Electronic payments transactions have surged at a rate of 22% in emerging markets over the last five years. And while the report sees that slowing to a still-robust compound annual growth rate of 14% over the next five years, there still appears to be plenty of opportunity as those areas keep switching over from cash to digital payments.Cross-border payments revenue grew in 2018, largely driven by volume, per the report. Players like TransferWise and Worldlink by Citigroup are competing with traditional banks to offer cheaper and faster cross-border payments for businesses and consumers. Still, margins for payments sent across borders are compressing somewhat thanks to heavy competition in the space, the report said. TransferWise, one of the UK's hottest fintechs, just reported a third straight year of profit. The company, valued at $3.5 billion, facilitate cheap and fast cross-border payments, and offer borderless accounts and a multi-currency debit card. In 2018, TransferWise <a href="https://www.businessinsider.com/transferwise-launches-borderless-accounts-and-debit-cards-2018-1">debuted</a> a borderless account and multi-currency debit card by teaming up with Mastercard. That was originally tested out in the UK, and then the account and debit card was made available to US customers in June.MoneyGram, which has long known for its global cash-to-cash transfers and saw revenues fall in 2017 and 2018, has also been making a digital push. We spoke with MoneyGram execs recently about how the company is continuing those efforts after a website rebrand and launching its own app - for one, <a href="https://www.businessinsider.com/moneygram-and-visa-launch-direct-to-debit-card-payments-2019-9">it's now partnering with Visa</a> to offer peer-to-peer direct deposits via debit card in the US. Read more: <a href="https://www.businessinsider.com/transferwise-reports-third-straight-year-of-profits-2019-9">TransferWise, a fast-growing money transfer startup valued at $3.5 billion, just turned in a third straight year of profit</a><h2>2. More M&amp;A to come as companies buy their way to growth</h2>With more than $100 billion in payments M&amp;A activity since January 2018, the payments industry continues to disintermediate. $35 billion of that total came from just one acquisition this July, when financial technology company FIS bought Worldpay. Deals have brought different parts of the payments system together across borders, and also added scale. Other M&amp;A activity has included PayPal's $2.2 billion acquisition of Swedish payments company <a href="https://www.businessinsider.com/former-izettle-cfo-readly-maria-hedengren-paypal-acquisition-2019-5">iZettle</a> in May 2018, which was PayPal's largest-ever buy and handed it a way into physical points of sale. And in June 2018, PayPal announced a $400 million deal to snap up <a href="https://www.businessinsider.com/paypal-acquiring-hyperwallet-2018-6">HyperWallet,</a> which handles payouts for online sellers.Read more: <a href="https://www.businessinsider.com/former-izettle-cfo-readly-maria-hedengren-paypal-acquisition-2019-5">A tech exec explains how it feels to spend 1.5 years preparing for a $226 million IPO, only to sell to PayPal for $2.2 billion</a>This August, Mastercard's agreed to <a href="https://newsroom.mastercard.com/press-releases/mastercard-advances-its-leadership-position-as-a-multi-rail-payments-company-with-the-acquisition-of-nets-account-to-account-payment-business/">pay nearly $3.2 billion</a> to buy a huge chunk of the corporate services arm of payment platform Net, which added so called account-to-account (A2A) capabilities.And the newest wave of consolidation will likely result in a relatively small number of players with large reach and a wide variety of services, the report predicted. "Traditional B2B payments with high scale and high level of fragmentation might be next," the report said, though it also noted that any economic downturn would likely limit M&amp;A activity.Legacy banks and challenger fintechs are continuing to look for ways to reach customers in several ways. <div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div> <h2>3. Payments as a service (PaaS) opens new revenue streams</h2>Payments as a service (PaaS) companies are growing in prominence. They offer their customers cloud-native payment platforms that can be integrated into an existing bank's website or app."In the past, 85 percent of payments revenues have been earned by players at the endpoints of the value chain," the report said. For example, credit card issuers, who accept the transaction and the associated credit risk, earn 91% of the revenues generated in the payment value chain.PaaS is challenging this concentration of revenue with the emergence of "platform integrators," meaning players who sell and integrate payments software into a business platform.McKinsey suggested that to take advantage of the PaaS opportunity, firms need to get comfortable with outsourcing, attract engineers that can integrate PaaS solutions, and ensure strong governance over PaaS providers.The report highlighted Square as an example of a company doing just that. Though Square started as a payments processing fintech, the firm has expanded its offerings to include payroll services, PoS, and lending. And Square is also now testing a <a href="https://www.businessinsider.com/square-tests-stock-trading-feature-for-peer-to-peer-platform-2019-9">free stock-trading service</a> for its P2p Square Cash platform, Bloomberg reported earlier this month. Read more: <a href="https://www.businessinsider.com/square-makes-updates-across-segments-2019-3">Square is making a slew of updates across its product offering</a><h2>4. Banks need to embrace changes customers want</h2>It's not news that <a href="https://www.businessinsider.com/ai-in-finance-enables-better-customer-service-reduced-fraud-and-cost-savings-2019-7">technology is disrupting global banking</a>. McKinsey's report focused on disruption in the customer experience. Banks are now running the risk of being relegated to "balance sheet providers," the report said, unless they embrace the changing customer needs. New and existing companies need to offer customers a seamless means of connecting to the global financial system. This means a shift to digital, and McKinsey expects digital transactions to increase as much as five times current volumes.Meanwhile, payments processors are making moves into lending. San Francisco-based Stripe earlier this month launched <a href="https://www.businessinsider.com/stripe-capital-small-business-loans-2019-9">small business lending</a> and now also offers a corporate card. And the payments startup also recently <a href="https://www.businessinsider.com/stripe-raises-250-million-35-billion-valuation-2019-9">nabbed a fresh $250 million</a> in funding that valued it at $35 billion. Wells Fargo last week announced data-share agreement with Plaid, a software fintech that powers other fintechs like Venmo and Betterment. Wells Fargo's agreement with Plaid is similar to the one <a href="https://www.businessinsider.com/jpmorgan-announces-partnership-with-plaid-2018-10">JPMorgan signed last year.</a> Wells also announced plans to launch a cash settlement service run with its own distributed-ledger tech, which will allow it to internally transfer cash between locations in near-real time for corporate clients. That comes after JPMorgan earlier this year <a href="https://www.businessinsider.com/jpmorgan-launching-jpm-coin-cryptocurrency-2019-2">announced</a> plans to launch its own cryptocurrency. Read more: <a href="https://www.businessinsider.com/wells-fargo-execs-talk-plaid-and-blockchain-2019-9">We talked to Wells Fargo execs about its blockchain and Plaid data-sharing push. The bank has been balancing new tech investments against spending on cleaning up risk controls.</a><h2><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></h2><h2>5. Consumer credit can be reimagined</h2>Retail payments have been a steady source of revenue for financial firms since the financial crisis, the report explains. That means there is an opportunity for banks to reimagine the credit they would typically issue via cards. Non-bank companies like Affirm, launched by Paypal cofounder Max Levchink, have partnered with merchants to offer real-time credit decisions and loans at the points-of-sale. McKinsey highlighted that banks already have the consumer relationships and data they need to explore this space. "This holistic approach to relationship management provides additional customer value, deepens the relationship, and leverages a strategic angle that an early-stage disruptor would find difficult to match," it said. Read more: <a href="https://www.businessinsider.com/stores-that-accept-affirm">Affirm lets you pay off a large online purchase over time - here are 35 stores across home, fashion, and travel that accept it</a><a href="https://www.businessinsider.com/intelligence/payments-and-commerce-pro?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_subscription&amp;itm_content=paypal&amp;itm_campaign=payments-and-commerce-pro"></a>

Emerging markets, M&A, and new services: here are they key trends to watch in the fast-changing payments space

<div class="KonaFilter image-container display-table"><div><div class="image on-image">REUTERS/Arnd Wiegmann</div></div></div><ul class="summary-list"><li>Business Insider attended the World Economic Forum's <a href="https://www.businessinsider.com/category/davos-2019">annual meeting</a> in Davos, Switzerland, and spoke to more than 40 CEOs and business executives over the course of a few days.</li><li>With President Trump and members of the US administration absent due to the US shutdown, and UK <keyword id="46801" type="COMPANY" weightage="60" keywordseo="prime">Prime</keyword> Minister Theresa May and French President Emmanual Macron also not present, the event was more business focused than in 2018.</li><li>Business leaders had a mixed view on the economy, and were focused on the opportunities and risks presented by emerging technologies. </li></ul>DAVOS, Switzerland - Davos is almost done. The World Economic Forum's <a href="https://www.businessinsider.com/category/davos-2019">annual meeting</a> in Davos, Switzerland, is wrapping up on Friday after a whirlwind few days of forum sessions, meetings, dinners, and night caps. Business Insider had a team of six editors in the Swiss ski resort, who met with more than 40 CEOs and business leaders over the course of the week. Here's what they were saying:<h2>Actually, the economic picture isn't all that bad</h2>The mood was generally pessimistic around the global economy, what with the trade war, a slowdown in China, and the notable absence of several world leaders due to domestic policy challenges. That said, few people said they expected there to be a recession in the next 12 months, and several globally renowned investors told Business Insider they thought the US economy in particular is in much better shape than the mood would suggest, saying economic data doesn't fully capture the benefits of advancements in technology.Specifically, we repeatedly heard about the risk of the US "talking itself into a recession," and one of the investors said that while this could be the 8th inning of the economic cycle in the US, like <a href="https://www.businessinsider.com/red-sox-win-world-series-2018-10">a recent World Series match-up</a>, the game could last 18. As for China, well, sure it's slowing down. But China's likely to introduce measures to juice the economy again, currency outflows are less of a concern than in the past, and even with a slowdown in growth, 5% growth aint bad, several attendees told us."Obviously the China-US situation is probably the biggest threat that could see a slowdown, especially in the Chinese economy," Martin Gilbert, co-CEO of $736 billion Aberdeen Standard Investments, told Business Insider's Sara Silverstein, echoing others at Davos. "We shouldn't overreact to that. Even if there were no exports, the Chinese economy would still grow 5% a year on domestic growth. It's still pretty resilient. Most countries would love to have a 5% growth rate."The mood around Europe was much less positive, in contrast, with the UK facing an extended period of political turmoil, Macron missing from Davos amid the yellow vest protests, and <a href="https://www.businessinsider.com/germany-may-have-avoided-recession-in-q4-2019-1">Germany close to a recession</a>. <h2>Tech's getting ready for regulation</h2>Microsoft, Palantir, Google Cloud, Facebook, AWS, Wipro, Infosys, and Cloudflare all had prominent spots on the Davos promenade, and much of the discussion over the course of the week centered around the possibilities offered by things like AI, big data, and cloud computing, along with the responsibilities and potential regulation of big tech.Google's CFO Ruth Porat set the tone on Tuesday at a panel discussion, highlighting how data could be used for good <a href="https://www.businessinsider.com/google-data-is-more-like-sunlight-than-oil-france-gdpr-fine-57-million-2019-1">before praising European data privacy regulation GDPR</a>. Microsoft president Brad Smith told my colleague Jake Kanter that <a href="https://www.businessinsider.com/microsoft-president-brad-smith-tech-will-never-be-the-same-2019-1">US federal privacy laws are inevitable</a>, and could come into force as early as this year."In a world where we're all working with data I think we all have opportunities to ask how we can manage it better and in a way that sustains the public's confidence," Smith said. <div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Matt Turner</div></div></div>Smith's boss, Microsoft CEO Satya Nadella, also <a href="https://www.businessinsider.com/satya-nadella-on-gdpr-2019-1">praised GDPR later in the week on a panel</a>, saying he hoped the US would have something similar. And Facebook COO Sheryl Sandberg spent the week <a href="https://www.businessinsider.com/facebook-coo-sheryl-sandbergs-message-for-davos-about-regulation-2019-1">telling Davos attendees that Facebook was ready for regulation</a>.<h2>The healthcare industry's excited about the potential of AI</h2>One of the areas where tech has a huge amount of potential is in the healthcare space, from applying AI to data to aid drug discovery, to tracking patients to better measure improvements in their quality of life after treatment. That's lead to some dramatic shifts at drug companies. Novartis for example now has 400 data scientists on staff, according to Jay Bradner, who heads the pharma giant's drug research and discovery as president of the Novartis Institutes for BioMedical Research.And it's triggered lots of conversations between different parts of the healthcare system and the tech sector. Peter Lee, corporate vice president of Microsoft Healthcare, told me that the company's <a href="https://www.businessinsider.com/walgreens-ceo-stefano-pessina-on-partnering-with-microsoft-and-alphabet-2019-1">recently announced partnership with Walgreens</a> would hopefully be the first of several with different parts of the healthcare system. And Marc Harrison, the CEO of health system Intermountain Healthcare, said he was keen to work with tech companies with Microsoft. "We're interested in, not only automation, but how do we understand predictive analytics, how do we understand social biometrics," Harrison said. "How do we really get as complete a non-creepy view of our patients as possible."<h2>Everyone's talking about their company's purpose</h2>You couldn't go far at Davos without hearing someone talking about their company's purpose or mission. Most would tell you that's been a focus for years, of course. But it was put in sharp relief last year just before Davos when <a href="https://www.businessinsider.com/everyone-at-davos-is-talking-about-larry-finks-letter-to-ceos-2018-1">BlackRock chief Larry Fink sent a letter to CEOs</a> stressing the need for a clear long-term strategy and an understanding of the societal impact of their business. At the time, it ruffled some feathers.A year after that letter (and a <a href="https://www.businessinsider.com/davos-indra-nooyi-mark-weinberger-better-capitalism-2018-1">Davos panel on the same theme led by Insider Inc. CEO Henry Blodget</a>), it's clear that the idea's now mainstream. In simple terms, practicing <a href="https://www.businessinsider.com/better-capitalism">better capitalism appears to be good for business</a>. Unilever's chief marketer Keith Weed told my colleague Nich Carlson it's <a href="https://www.businessinsider.com/unilevers-keith-weed-says-business-case-for-operating-sustainably-is-proven-2019-1">proven the business case for operating sustainably</a>, saying that the company's sustainable brands are outpacing its other brands and delivering 70% of its growth. "Companies are realizing that they can have an impact on improving the environment, and improving their quality and growing at the same time," Marc Pritchard, marketing chief at consumer giant P&amp;G, told me. "In fact, the two go hand-in-hand."And the chairman of <a href="https://www.lombardodier.com/home.html">Lombard Odier</a>, a Swiss private bank founded in 1796 with over 274 billion Swiss francs ($275 billion) in assets under management, said this shift represents "<a href="https://www.businessinsider.com/best-investment-opportunity-of-last-25-years-patrick-odier-davos-2019-2019-1">one of the most interesting performance opportunities</a> for our clients than we have ever had for the last 25 years."<h2>Who's going to take responsibility for closing the skills gap?</h2>Regardless of whether you think AI is <a href="https://www.weforum.org/agenda/2018/09/ai-and-robots-could-create-as-many-jobs-as-they-displace/">going to create jobs or displace them</a>, it seems fairly clear the skills required to succeed over the next 20 years are going to be different to the skills required in the last 20 years.The Edelman <a href="https://www.edelman.com/trust-barometer">annual trust survey, published just before the WEF meeting opened, </a>found that 59% of employees worry about not having the training and skills necessary for a well-paying job, and 55% worry automation and other tech will make their job obsolete. A WEF report released a few days after the Edelman survey said 1.4 million US workers are likely to lose their job over the next decade."There is a large part of society that does not feel that this is going to be good for their future," IBM CEO Ginni Rometty, said on a panel. KPMG global chairman Bill Thomas <a href="https://www.businessinsider.com/davos-preparing-jobs-of-the-future-with-skills-training-2019-1#willis-towers-watsons-head-of-human-capital-and-benefits-julie-gebauer-said-its-important-to-realize-there-are-skills-that-cant-be-automated-4">told Henry Blodget that companies need to see investing in internal training programs as a competitive advantage</a>."If you think about the evolution of where our workforce is going, whether that is the needs of our clients, whether that is the recognition that artificial intelligence, some of the disruption from technology that that's going to have on our workforce - the truth of the matter is I'm not going to wait for a government response," he said.And a number of attendees we spoke to highlighted the increased importance and appeal of "learnability," or an ability to continue learning news skills throughout one's career. A certain percentage of employees will always jump at the chance to attend additional training, just as there's a group that won't be interested. The challenge is how to nudge the group in the middle.Ellyn Shook, Accenture's chief leadership &amp; Human Resources officer, said the firm had created a Job Buddy for staff, making them aware of how much of their current role was at risk of automation, and which skills they should pick up given their current strengths. 4 in 5 staff said they'd take up the new training. Still, a heavy weight is likely to fall on governments. According to the WEF study, the private-sector can only profitably reskill 1 in 4 of the 1.4 million workers likely to be at-risk workers over the next decade. With collaboration between companies, that number gets close to 1 in 2. That leaves the small matter of 700,000+ people in the hands of the government.

We spoke to 40+ CEOs and business leaders in 3 days. Here's what excites -&#160;and worries- the world's billionaires and business elite.

In a bid to give an impetus to local hardware and product innovation in the country, <keyword id="176127" type="CITY" weightage="20" keywordseo="Intel-India">Intel India</keyword> recently announced the top 10 finalists of the <keyword id="28115" type="CITY" weightage="100" keywordseo="Intel">Intel</keyword> &amp; DST - Innovate for <keyword id="2868794" type="UNKNOWN" weightage="100" keywordseo="Digital-India-Challenge">Digital India Challenge</keyword> 2.0. 
 The shortlisted solutions were seen as those which could potentially accelerate the country’s Digital India vision. It comprised of projects in healthcare, smart cities, sustainability, and <keyword id="6355165" type="ORGANIZATION" weightage="20" keywordseo="Agriculture">agriculture</keyword>. 
 
The selected teams will now advance to the 8-week NanoAccelerator program at the T-Hub start-up incubator in Hyderabad. 
 
Under the program, each team will receive grants up to Rs. 3,00,000 from T-Hub to create minimum-viable products (MVPs). They will also have access to engineering support and hardware kits from Intel, and access to the Intel® Maker Lab in Bengaluru as well as the IoT Lab at T-Hub. 
 
With inputs from design and user interface firms about developing user experience, the teams will undergo virtual team management and prototype monitoring. They will also receive weekly mentoring by a cross panel of experts from Intel, T-Hub and MyGov, as well as from technical specialists, venture capitalists, and business modelling experts. 
 The accelerator phase will culminate on Demo Day, a showcase event at <keyword id="3401025" type="UNKNOWN" weightage="20" keywordseo="t-hub-hyderabad">T-Hub Hyderabad</keyword>, where the teams will present their prototypes to a panel of venture capitalists, technology experts and industry stalwarts. 
 
Here are the finalists of the Intel Digital India Challenge: 
 
FOCUSING ON SMART CITIES 
 
Oizom Instruments Pvt. Ltd. 
Oizom is an environmental big data company focused on ambient air-quality. Using a dense network of low cost air pollution monitors, Oizom acquires environmental data on real time-basis. Once Oizom has a pool of environmental big data using artificial intelligence and machine learning, it will provide an environmental monitoring and prediction structure for the future. 
 
IoTrek Technology Pvt. Ltd. 
IoTrek is developing an IoT infrastructure to provide Data As A Service (DaaS). The Infrastructure consists of an IoT network and application management in the fields of energy management, asset management and environment management. IoTrek enables devices to talk to each other to bring about intelligent solutions through the LoRa network. 
 
FOCUSING ON HEALTHCARE 
 
AllizHealth 
AllizHealth is a healthcare technology venture in the preventive health space. AllizHealth provides an integrated platform through its proprietary health risk assessment to predict the risk of every individual against various non-communicable diseases by digitally connecting them with various ecosystem partners. 
 
NeuroTech 
NeuroTech is a hardware start-up developing consumer wearables with a focus on Brain Computer Interface (BCI). NeuroBuds is a smart earphone that tracks brain activity with an in-built panic detection mode to predict and detect brain-related health issues. 
 
iNICU 
iNICU is an integrated system which monitors real-time clinical data from connected devices, laboratory, and bedside observational data and presents it in a medically comprehensive and user-definable formats to reduce mortality in NICU environments. 
 
Thyrometer 
Thyrometer is a battery operated portable thyroid measurement solution to encourage non-reported cases in rural and sub-urban areas in India. It allows users to detect thyroid at home and in local dispensaries and works in the direction of reducing time and efforts needed to get thyroid diagnosed. 
 
SUSTAINABILITY 
 
Gayam Motor Works 
Gayam Motor Works is an electric automobile company that designs, locally manufactures and sells electric vehicles. Its portfolio includes electric four and three wheeled vehicles and electric bikes (bicycles). The vehicles have sustainable energy at their core, enabling savings on fuel, zero emissions, cost effectiveness, low-maintenance and reduced noise pollution. 
 
Banyan Sustainable Waste Management Pvt. Ltd. 
Banyan Nation is a waste management and recycling venture that leverages mobile technology to integrate India’s fragmented waste management supply chain from collection and aggregation to recycling of plastics. Banyan’s smart waste technology platform allows cities to integrate the informal sector recyclers as well as manage city waste and recycling operations through on-field sensors like biometrics attendance devices, bin sensors, and GPS truck routing. 
 
Waste Ventures India 
Waste Ventures India offers doorstep waste and recyclable collection services to households, businesses and waste pickers. It addresses the challenges of finding scrap dealers, fixed pricing and service accountability by streamlining India’s $2-$3bn recyclable collection market. 
 
AGRICULTURE 
 
E-DeWeeder 
It offers a service to enhance crop yield with its precision farming equipment. Its vision-based machine creates digital data for weeds and 
controlls it with a radio frequency selective application which delivers precise cell necrosis in weed plants.

Meet the top startups of Intel’s
Digital India Challenge, and know what made them finalists

<ul class="summary-list"><li>In the month since Clint Lorance - the former US Army soldier who was convicted of war crimes - was pardoned by President Donald Trump, he's publicly thanked Trump and even went on stage at one of his fundraisers. </li><li>Lorance was convicted in 2013 on two counts of second-degree murder for the 2012 incident where he ordered his platoon's soldiers to fire at three unarmed Afghan men on a motorcycle, killing two. Lorance has maintained this act was in self-defense.</li><li>Republican lawmakers and conservative commentators welcomed Lorance back - not as a convict who'd redeemed himself, but as a victim of a smear campaign by the US military and progressives.</li><li>Lorance said he believes Trump's comments about a "deep state" in the military. But lawmakers from both parties condemned this assertion as false.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul>It's been nearly a month since Clint Lorance, the 35-year-old former US Army first lieutenant who was convicted of war crimes and later <a href="https://www.businessinsider.com/trump-pardons-troops-convicted-or-charged-war-crimes-restores-rank-2019-11">pardoned by President Donald Trump</a>, emerged from military prison at Ft. Leavenworth in Kansas to the greetings of his family.They weren't the only ones greeting him. Republican lawmakers and conservative commentators went on the airwaves and social media to welcome Lorance back - not as a convict who had redeemed himself, but as a victim of a smear campaign by the US military and progressives."It feels like I have stepped out of the Twilight Zone and back into normal space and time," Lorance told Insider. "I missed swimming and hiking, neither of which I have had the opportunity to do yet."Prior to Trump's executive action, the former Army officer was on his sixth year of a 19-year prison sentence for two counts of second-degree murder. Lorance was convicted in 2013, one year after he ordered his platoon's soldiers to fire at three unarmed Afghan men on a motorcycle.Two people, including a village elder, were killed, and one person was wounded. No US troops were harmed in the incident.After his release, Lorance is trying to settle into life in Texas as the controversy over his pardon lingers. He says he's currently unemployed and is receiving help from United American Patriots, a non-profit that provides legal assistance to service members found guilty of war crimes. He also went on stage at a Trump fundraiser in Florida on Dec. 7.Lorance agreed to an interview about Trump and his life after the pardon on the condition it was over email because he wanted to keep a copy for his records, adding that he is "not exactly the most popular guy in America, and there are those who would do anything to send me back to prison."<h2>'The tragedy of pardoning'</h2>Lorance remains unapologetic about his orders to fire at the three Afghans, and is adamant that the split-second decision was justified."Anyone who calls me a war criminal obviously has not reviewed the evidence in my case," Lorance told Business Insider."I was the one person whose job it was to know the big picture," Lorance added. "The commander on the ground must be able to make combat decisions, as long as they are in good faith."Lorance and his supporters have made several assertions in his defense, including the claim that intelligence reports at the time suggested inbound motorcyclists posed an imminent threat to nearby US and Afghan forces.Lorance's defense attorneys also contend that the Army's prosecution team withheld evidence indicating that the Afghan motorcyclists were associated with enemy combatants. Fingerprints from one of the dead Afghans was linked to an improvised-explosive device (IED), and the lone survivor of the shooting was alleged to have been "involved in hostile action against US forces."But the evidence raised against Lorance during his trial painted an incriminating picture. Members of Lorance's unit, including his company commander, either testified against him or publicly spoke out against the shooting. Lorance's troops also testified that their leader attempted to conceal information and mischaracterized the circumstances of the shooting, according to military court documents."Prior to the engagement, the victims had no observable weapons or radios, and were not displaying any hostility towards US or Afghan forces," a military appeals court said in a ruling in 2017, adding that despite all evidence to the contrary, Lorance at the time told a platoon sergeant that a US helicopter "had spotted the men on the motorcycle with weapons before his troops engaged."In addition to the contradicting statements, Lorance, according to military judges, "was not aware" of the Afghan victim's biometric connection to an IED at the time he gave the order to shoot."The tragedy of pardoning Lorance isn't that he will be released from prison - I've found room for compassion there," former US Army Capt. Patrick Swanson, Lorance's company commander in Afghanistan, told <a href="https://www.nytimes.com/2019/11/15/us/trump-pardons.html">The New York Times</a>. "The tragedy is that people will hail him as a hero, and he is not a hero. He ordered those murders. He lied about them."<h2>'He has my loyalty'</h2>Trump's act of clemency for Lorance, in addition to absolving <a href="https://www.businessinsider.com/trump-pardons-troops-convicted-or-charged-war-crimes-restores-rank-2019-11">two other US service members</a> who were either convicted or were still facing trial of war crimes, has been met with gratitude from the president's allies. Trump frequently claims the three service members were treated unfairly in the military's judicial system, and that their service far outweighed the allegations levied against them.Lorance said Trump's pardon made him profoundly grateful."The President gave me my life back," Lorance told Insider. "He saved my life. He has my loyalty."Lorance has toured the conservative media circuit in recent weeks, thanking Trump and his supporters during interviews with TV and radio hosts. Last weekend, Lorance and Golsteyn <a href="https://www.miamiherald.com/news/politics-government/national-politics/article238150139.html">attended</a> a closed-door Republican fund-raiser, where Trump invited the two former soldiers to take the stage. The two soldiers still keep in touch, according to Lorance, who says he's "honored to call him a friend." Lorance denied that Trump had extended an official invitation to the Republican fund-raiser, and told Insider that he had "no contact with the President's team: campaign or White House."Meanwhile, some veterans have described Trump's pardons as a subversion of military justice. Will Goodwin, the government relations director of the progressive VoteVets political action committee, said the presidential pardons and the overzealous patriotic dogma were damaging the apolitical perception of the military."Now, he's elevating these people and making them cult personalities on the right," Goodwin told Insider. "He's almost incentivizing this type of behavior when he's pardoning these folks and elevate them, and bring them up in front of people who are expected to cheer."<h2>The deep state: 'You know what I'm talking about'</h2>Critics of Trump's pardons, including his own <a href="https://www.businessinsider.com/richard-spencer-trump-doesnt-understand-what-a-warfighter-is-navy-2019-11">military advisers</a>, soon found themselves being targeted by the president's ire.Throughout his presidency, Trump and his ardent supporters have fueled the so-called "deep state" theory - a term lifted from coup-prone Turkish politics about the military who've overthrown elected leaders - and pointed to the steady stream of unflattering leaks from unnamed law enforcement and intelligence officials as unmistakable proof.For the first time, Trump recently expanded the theory to include the Defense Department."Just this week, I stuck up for three great warriors against the deep state," Trump said at a Florida campaign rally in November. "And you know what I'm talking about.""I had so many people say, 'Sir, I don't think you should do that,'" Trump added, mockingly.In the interview, Lorance agreed with Trump's sentiment and said he believed that "senior bureaucrats in the Pentagon who believe they do not answer to the electorate" were also members of the so-called deep state conspiracy."There are no checks and balances in that case. These people are not elected. They are hired," Lorance said, referring to senior US military officials. "And the CEO should be able to fire them if they do not accept the company's agenda. In this case, the company is the executive branch of the US government."One Republican lawmaker, who asked for anonymity to criticize Trump's "deep state" comments, said US troops were more concerned with "having the best training ... to accomplish the mission and come home safe.""That matters far more than whatever comes out of the president's Twitter feed, or the mouth of any other politician," the Republican lawmaker told Insider."Is there a deep state within the military? I don't even know what that means," the Republican added. "I mean, the military is the world's largest bureaucracy, so yeah, there are bureaucrats in the military, some of whom are stealing oxygen. But I think most people who work for [the Defense Department], particularly those in uniform, are patriots. They're doing it not because they want to get rich, but because ... they want to serve their country."Democratic Rep. <a href="https://www.businessinsider.com/seth-moulton-harvard-iraq-war-president-candidate-2019-5">Seth Moulton</a> of Massachusetts, a retired Marine Corps infantry officer, was more blunt."When I was serving in Iraq under George W. Bush, it seemed like a terribly divisive time because we were fighting in a war that many of us disagreed with," Moulton, a combat veteran, told Insider. "But despite my disagreements with President Bush, I never expected him to take the side of a foreign power over our intelligence agencies. I didn't expect him to hold up autocrats and attack our allies. I didn't expect him to fail to follow the law."Trump's proliferation of the deep state conspiracy is "dangerous," said Goodwin from VoteVets."When the president, just as he's done with a host of domestic agencies, demeans those who've worn the uniform for decades ... and questions the integrity of senior leaders in the military, I don't think we can overstate how dangerous that is," Goodwin said. "What he's trying to do is satisfy his domestic political aims, and he's willing to trash anything in the process, and that includes the Department of Justice, the FBI, the State Department, and now, he's going after the military.""If it weren't so dangerous, it might be funny because it's another reminder that this president has no clue when it comes to the US military," Goodwin added.<h2>'Not much offends me'</h2>Lorance brushes off his critics and says he had no regrets from his decision to order the attack in Afghanistan."I try not to disparage people who I've never met and know next to nothing about, but that's me," Lorance told Insider.Lorance referred to his identity as "a gay Christian with two combat deployments, and six years in prison under my belt," and said his "perspective may be a little different than most.""Not much offends me," he added.Lorance, who graduated from the University of North Texas, says he's applying to online graduate schools that focus on leadership and project management. Prior to his exchange with Insider, <a href="https://www.businessinsider.com/clint-lorance-cant-get-job-at-walmart-target-full-pardon-2019-12">Lorance said</a> in a now-deleted tweet that his dishonorable discharge "makes it impossible to find a job. Even at Walmart or Target."Trump "told me my record would be expunged," he said in the tweet. "His staff in the White House must have disagreed. This will be an uphill battle."According to Lorance, his prison experience shaped his new career goals."Ultimately I want to go to law school and do all I can to help police and military members who are accused of crimes while in the performance of their duties," Lorance said.Lorance also hasn't ruled out a future in politics. He said he was analyzing a potential run for office and that he "will announce something soon."

He was sentenced to 19 years for war crimes. After his pardon, Clint Lorance is fueling Trump's 'deep state' conspiracy about the US military.

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Vergence LabsEpiphany Eyewear.</div></div></div>Hundreds of people lined up off Venice Beach boardwalk on a sunny November morning <a href="http://www.businessinsider.com/what-its-like-to-buy-spectacles-snapchat-snap-sunglasses-2016-11">to buy Snapchat's Spectacles from a bright yellow vending machine</a>.It was the first day the $130 camera glasses had gone on sale, and many were there to see what all the buzz was about. Most of them worked or had friends in the tech industry. Some planned to resell the glasses at a hefty markup online.Erick Miller had a different reason to stand in line for Spectacles that morning. He helped invent them. The idea behind Spectacles didn't come from the mind of Evan Spiegel, the visionary and reclusive 26-year-old CEO behind the newly renamed Snap Inc. The genesis of Spectacles dates back to Vergence Labs, a small Los Angeles startup that Spiegel <a href="http://www.businessinsider.com/snapchat-acquires-vergence-labs-2014-12">quietly acquired for $15 million in early 2014.</a>Vergence Labs was co-founded by Erick Miller and Jonathan Rodriguez in 2011. They made their own version of camera glasses called Epiphany Eyewear that, like Spectacles, could subtly record video with the press of a button. Business Insider's Alyson Shontell called the product <a href="http://www.businessinsider.com/epiphany-glasses-2014-3">"a much cooler, cheaper alternative to Google Glass" in 2014</a>. <div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Business InsiderMiller wearing Epiphany Eyewear in 2014.</div></div></div>The real plan Miller and Rodriguez had for Vergence was much loftier than video glasses. The scrappy startup wanted to create a crop of futuristic gadgets, from AI-enabled helmets to gesture-controlled drones, that would effectively give people "superpowers." And the company already had working, if rudimentary, prototypes when it was swallowed by Snap.Today the acquisition of Vergence is just a footnote in the rise of Snap, whose <a href="http://www.businessinsider.com/snapchat-parent-company-snap-inc-files-for-ipo-2016-11">upcoming $25 billion IPO</a> is expected to be the largest internet debut in years. But Vergence's untold story provides a glimpse at what could be the blueprint for Snap's growing ambition to mash wearable cameras, augmented reality technology and social media into a new class of gadgets.Miller abruptly left Snap only six months after joining as director of technology and declined to be interviewed for this story. The other members of Vergence's core team still work at Snap. Rodriguez calls himself the "architect" behind Spectacles on his LinkedIn.Snap declined to make any of its employees who work on Spectacles available for interviews. But Business Insider spoke with other former Vergence employees, early investors, and people close to the startup to get the inside story of the small team that's playing a crucial role in the future of Snap.<h2>Giving people superpowers</h2><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Erick Miller / YouTubeErick Miller (left) with Jon Rodriguez showing off their initial AR headset prototype.</div></div></div>During their time together at Vergence, Miller and Rodriguez's more than a dozen experiments included a helmet display that used facial recognition to identify people in the real world based on their Facebook profiles and a drone that could be controlled with hand gestures.While he was a graduate student at UCLA, Miller imagined a fully immersive, futuristic headset with biometric sensors that would display information over the real world and "give people what would previously be called superpowers," according to <a href="https://www.youtube.com/watch?v=N3lWFnJekYU">an early interview</a>.He ended up pouring his life savings into prototyping the product and attracting the attention of Jonathan Rodriguez, a computer science major at Stanford whose senior thesis described "assembling an augmented reality computer with video screens and headphones as output, and inputs consisting of gaze tracking, EEG, finger tracking, and GPS."They pitched the idea to Stanford's prestigious StartX business incubator program in 2012 and were accepted. In the short video application they recorded, Rodriguez eagerly explained how they wanted to "redefine the future of face-to-face interaction."The only problem was that building expensive hardware was impossible for an early stage startup with no funding. They realized they would have to scale back their ambitions in order to actually ship a product and settled on a discrete, RayBan-inspired pair of glasses that could record video and would sell for a starting price of $300.The duo managed to attract two important first hires in Peter Brook, a Facebook engineer who had worked on the social network's failed Facebook Home Android interface, and David Meisenholder, who had worked on camera glasses that Polaroid tried to sell in 2011 with the help of Lady Gaga.<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">PITME / YouTubeErick Miller (left) with Peter Brook (right) wearing Epiphany Eyewear during an early interview.</div></div></div>After they <a href="https://www.indiegogo.com/projects/social-video-glasses#/updates">ran a Indiegogo campaign</a> that raised $70,000 for Epiphany Eyewear in 2012, Miller and Rodriquez landed a few prominent early investors.One of those investors was Quora co-founder and early Facebook employee Charlie Cheever. He told Business Insider that he invested in Vergence after meeting Rodriquez at a talk at Stanford. Rodriquez showed him multiple augmented reality demos, including a rig made of two iPhones that used cameras to overlay 3D graphics over videos."I could just tell that this was a really smart kid who was pushing the envelope," Cheever said.Miller managed to win over Adam Draper, who now runs Boost VC and is the son of prominent investor Tim Draper. In an interview, Draper recalled Miller showing up late to a 2012 dinner in Palo Alto he attended to hear pitches from other entrepreneurs. Draper had dreamed of building his own Iron Man suit, and when Miller enthusiastically gave his vision for an augmented reality feature beginning with computer-equipped glasses, Draper was sold.Winning over Draper turned out to be instrumental in getting Vergence off the ground, especially given how little most Silicon Valley investors were interested in wearable computers at the time. Erick was a very persistent CEO," according to Draper. That included a relentless approach to pitching. Miller would walk around the exterior of Facebook's campus and try to catch Mark Zuckerberg walking between meetings or to his car, Draper recalled."It was a very cool thing that they were doing, but no one was excited about the space," Draper said. "No one believed in it. No one was excited about this thing. Everyone was doing consumer mobile applications. Glasses with computer vision was not part of the story."<div class="KonaFilter image-container display-table"><div><div class="image on-image">Adam DraperPeter Brook demoing Vergence software that could control a Parrot AR drone with hand gestures.</div></div></div><h2>Spiegel swoops in</h2>Around the time it was acquired, Vergence's team of less than 10 people was working out of a small, crowded office in downtown Los Angeles across from the local police station. They would test the glasses out on the street by secretly recording off-duty cops.While the team was working on the software to power the glasses and trying to overcome manufacturing challenges, Miller asked Eli Morin to help form business partnerships and raise a Series A round of capital, Morin told Business Insider.Morin had worked at a string of tech startups, including Google-acquired AdMob, and had connections at venture capital firms like Sequoia and Accel. The two had met at a conference in San Francisco earlier that year.They brainstormed over Indian food below Vergence's office in the fall of 2013 to figure how they could market Epiphany Eyewear and pitch the glasses to investors, according to Morin."They were looking for someone to help them sell the stuff," he said in an interview. "Very few people saw the visionary potential of this product. Investors didn't. The team was super small. It was difficult."While the Vergence team had been developing Epiphany Eyewear, Google was beginning to promote Google Glass, a stamp-sized screen attached to eyeglass frames that displayed video and email and recorded video. Google Glass initially caused excitement among techies, but soon earned a reputation for being extremely geeky and creepy. Morin recalled how the team wanted to combat the Glass stigma.<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Vergence LabsA model wears Epiphany Eyewear during NY fashion week.</div></div></div>"Our products are simple and Google's is complicated," Miller <a href="http://www.laweekly.com/news/epiphany-eyewear-like-google-glass-but-maybe-even-better-4440837">told LA Weekly in early 2014</a>. "Ours is attainable, yet it's still aspirational. And Google's is sort of out of reach and sort of disconnected with the average consumer."Positioning themselves as the cool underdog to Google Glass failed to resonate with investors, and Vergence never raised its Series A.In early November 2013, Morin proposed they look at partnering with Snapchat, which was based in Los Angeles as well and popularizing video messaging. He said he discussed the idea with Miller over ice cream in Koreatown and gave a demo of how the app worked to the rest of the team the same day."They had never used Snapchat before," he recalled. Once he showed them the app, Rodriguez remembered a connection he had to Evan Spiegel - the two lived on the same floor of their dorm during their freshman year at Stanford.Morin only came into the office every other week as a business advisor and was never involved in conversations with Snapchat, but Spiegel clearly saw the potential. He quietly brought on most of the team, excluding Morin and a few others, four months later for $11 million in cash and $4 million in stock.The details of Vergence's acquisition were never supposed to be public, and they didn't leak until the hacking of Sony's email servers in November 2014 unearthed emails from Snap board member and Sony CEO Michael Lynton.<div class="KonaFilter image-container display-table float_left"><div><div class="image on-image">Samantha Lee/Business InsiderSnapchat CEO Evan Spiegel</div></div></div>Even Vergence's earliest investors were left in the dark about the acquisition. Charlie Cheever, who was the startup's very first investor, received a phone call one day from Miller who said nothing more than, "We sold the company. We can't tell you who. You'll get a check in the mail.""In hindsight, it's a little unusual," Cheever said.Morin is currently seeking to settle contract disputes with Snap over equity compensation in Vergence he claims to be owed. Emails and documents provided by Morin to Business Insider seem to show that Miller agreed to a contract that promised Morin 1% equity in December 2013.The contract was never signed - Morin said he lost contact with Miller after it was drafted, and didn't find out about the acquisition until the Sony leaks almost a year later. "As a startup person you do stuff based on trust and equity," he said. "I didn't get a penny out of all the time and effort I put into that."A Snap spokesman couldn't find record of receiving the demand letters Morin claimed to have sent through his lawyer and declined to comment further. Morin wasn't the only one involved in Vergence to have disputes with Miller. Two early employees who didn't join Snap said that Miller created an intense office environment and was prone to fits of anger."I think for everyone who stayed, they had to do a lot of self-talk and convince themselves that they liked him or that he was doing what was best," one early employee who requested anonymity said. "If you met him out and about you would like him, but under pressure and in closed quarters it was a real challenge."Miller left Snap after serving as its director of technology for six months and now runs a small VC firm in Los Angeles called Hyperseed Ventures.<h2>What Vergence says about the future of Snap</h2><div class="KonaFilter image-container display-table"><div><div class="image on-image">Snapchat/YouTube</div></div></div>The acquisition of Vergence was a foreshadowing of Snap's new identity as a "camera company." Rodriquez, Brook, Meisenholder, and a few other Vergence employees still work at Snap on the Spectacles team and Snap Labs, a secretive division working on other hardware and software products. <a href="http://www.businessinsider.com/what-its-like-to-work-at-snapchat-2016-10">Business Insider previously reported</a> that Snap has looked at various types of wearable cameras in addition to the Spectacles, including small clip-on video cameras, and it has had acquisition talks with several camera companies. Snap has hired hardware engineers from companies like Apple, Nest, and GoPro. The first generation of Spectacles only have one camera for recording video, but Miller and Rodriquez had imagined a three-camera system that could overlay graphics onto the real world."I think there's great potential in the displays we're researching to absolutely erase the lines between virtual reality and real reality," Rodriguez <a href="http://www.stanforddaily.com/2013/04/15/alum-turns-honors-thesis-into-google-glass-competitor/">told Stanford's college newspaper in 2013</a>.Snap has been aggressively <a href="http://www.businessinsider.com/snapchat-world-lenses-update-2016-11">experimenting with augmented reality in its app</a> <a href="http://www.businessinsider.com/snapchat-object-recognition-filters-outlined-in-patent-2016-7">and patents</a>. Early investors like Adam Draper predict that Vergence's small team will play a key role in whatever comes next."They scaled back their vision to take their first step, and that was the step they got acquired on," he said. "It was the first step towards taking over the world." <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/hands-on-snapchat-spectacles-video-2016-11">We got our hands on Snapchat's Spectacles - here's what they're like</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="A3eWVtNzE66m4FSkBq4MLZymOpml9Xvg" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

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We spoke to 40+ CEOs and business leaders in 3 days. Here's what excites - and worries- the world's billionaires and business elite.