Payments Data and Google Attribution

Great articles yesterday

This year, the iab (interactive advertising bureau) labeled 2017 as the Year of Measurement. Understanding why, and what is changing here is key for retail, banking and advertising. Most of us know the adage “measure what you want to manage”. As an engineer, I view measurement as the key feedback loop in any system or process. In order to gain feedback (close the loop), you must know what happened. Continue reading “Payments Data and Google Attribution”

Chase Net 2017

Its tough to find time to Blog as a CEO…. Most of you my blogs are sometimes snarky and tactless (making NOT offending someone a new consideration).

I was taking a look at JPMC’s latest investor presentation and noticed that ChaseNet is gone.. Why? I’ve written on JPMC and ChaseNet a number of times over last 6 yrs. Today I’ll cover my views on the latest developments and my views on JPMC’s ChaseNet strategy. Lets recap first: Continue reading “Chase Net 2017”

Trust – Part 1

No one reads my long blogs.. so my 2017 resolution is to break them up into smaller thought “chunks”.

I can’t believe its been 2.5 yrs since I wrote Brokering Identity. The central element of that blog, and today is to take a “trust” view of Network and Platform strategies. The rules, standards and processes by which trust is managed are critical to the success of networked businesses and markets from eBay to Visa/MA to the NYSE. Continue reading “Trust – Part 1”

ApplePay’s 500% Growth

Most have seen Apple’s earning’s transcript, with following key ApplePay Excerpts:

  • ApplePay users tripled
  • Transaction volume up 500% YoY as Apple expanded to four new countries. It’s now available in 13 markets.
  • 2 million small businesses are now accepting invoice payments via Apple Pay on the Web, and that the “Services” segment to which Apple Pay belongs saw revenue hit $7.17 billion,” up 18 percent year-over-year. category also includes major drivers like Apple Music and the iOS App Store.

Continue reading “ApplePay’s 500% Growth”

Commerce Signals Launches databridge

Press Release

I’m excited to announce the launch of our first product, databridgeTM. It’s no secret that banks, retailers and mobile operators have great data. The challenge for these companies has been in how they let their data “play” in a privacy-centric model that controls both WHO can use the data and HOW the data is used (see Data Leakage). This is the core of databridge, with an initial focus on enabling transaction data to measure marketing effectiveness. Continue reading “Commerce Signals Launches databridge”

The New Economy: Small Wins

I’m more passionate about this topic than anything I’ve ever written about. As an eternal optimist I don’t see a world dominated by Google, Amazon, Chase and Walmart…. But rather a new economy where millions of small businesses thrive. Where every person can employ their creative talent in collaboration focused on value creation. A world where capital flows to great ideas across geographic boundaries lifting the stifling poverty of most emerging markets. Continue reading “The New Economy: Small Wins”

The Ledger.. and a new SWIFT Killer?

Money 2020 was a little short on big announcements. My #1? Visa/Chain announcement. Chain will open its entire platform (software core) to developers enabling distributed innovation (ie investment) by hundreds of start-ups and bespoke networks looking to connect.  My #1 bet is that the first focus area for Visa/Chain will be in replacing SWIFT.  For those not familiar with the intricacies of global commercial money transfer via SWIFT see my youtube video.

SWIFT is a global messaging network that enables all member banks to communicate in common language, it handles no funds, nor does it manage settlement. Swift sends standard messages to banks to settle funds. In the SWIFT model the instruction is normally sent by the originator of the payment to a beneficiary. Originating banks can determine which set of correspondent banks to use (think routing control).

Visa and Mastercard are also messaging networks (see Structural Changes in Payment, and Real Time Payments). The short summary of these blogs:

  • Real time gross settlement (RTGS) is only possible if all parties have funds in a common settlement entity.
  • Fedwire, NYSE, ..have real time settlement as all “members” have funded accounts for a net settlement (think daily margin calls)..  but all other US payment networks are messaging only, with settlement handled as a (daily) back end process.

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The idea of Blockchain “replacing” SWIFT is not new, Ripple has been working with Santander, Bank of America and others (see Finextra). Ripple is both messaging, and real-time gross settlement system (RTGS in XRPs). Ripple’s messaging is called the Ripple Transaction Protocol (RTXP) or Ripple protocol, it is built upon a distributed open source Internet protocol, consensus ledger and native currency called XRP (ripples). Think of Ripples as a private bitcoin. One of the most common criticisms of Ripple is that Of the 100 billion XRPs created, 20 billion XRP were retained by the creators, who were also the founders of Ripple Labs.

Chain on the other hand is blockchain infrastructure (great WSJ article) open for innovation. Chain powers distributed ledger(s) for multiple uses. Think of Chain as enabling each bank to have a local copy of a indisputable record… an incorruptible and infallible accounting ledger. Fund transfer certainly needs such a record, but for “accounting” to be effective there must be trust and settlement. Note that Ripple handles this settlement problem (XRP ownership ledger) trust, but has issuess in conversion to the “common XRP currency”.

Trust among financial intuitions is historically managed by networks and operating rules. For example there are operating rule for NACHA, Visa, Mastercard, … etc. Operating rules also are governed by laws and regulation (ex WHO can transact, how are transactions reversed, how are participants certified).  I would argue that a payment network’s greatest asset is Trust among parties (and devices, form factors), with each participant governed by complex sets of rules, terms, certifications, operations, standards.

Important to note that Blockchain doesn’t require trust to properly record transaction, but rather rules to take action upon the ledger’s data. In other words, it is technically feasible to give a copy of the transaction ledger to every participant (who owes what to whom every day). However it is very hard for banks to take action on the ledger’s data (Transferring money – ex net settlement) without a trust/settlement network. The common ledger is a must improved messaging approach, that still requires a operating rules (Trust) and a Settlement Approach.

Mastercard’s acquisition of Vocalink (the UK’s Settlement network) enables them to lead in commercial (and debit) transactions for both UK and US. This is a brilliant move, but certainly much more of a traditional technology/architecture approach. The challenge with Vocalink is that innovation is constrained by existing customers and services.

Chain/Visa has the opportunity to disrupt the commercial payment landscape, particularly when viewed in combination with Visa’s existing card network and a new settlement system. For example, most Visa transactions were settled at end of day through JPM Chase (every Visa member had settlement account).  For cross border transactions, Visa’s settlement “hubs” have correspondent relationships.

If Visa created a new Chain settlement infrastructure, or had member Bank support to leverage current infrastructure, it could quickly replace SWIFT with a far superior product which would offer transaction clearing times in 24 hrs (vs the 2-7 days with Swift). The biggest unknown is what part of Visa’s current operating rules could be leveraged to create this new settlement infrastructure. For the economic opportunity see this Fed Study

Money 2020 – What to expect

Each year, I make predictions about what to expect during the Money20/20 Conference in October. This year, I expect to see innovation in the following areas:

  • New merchant value propositions
  • Delivering value beyond the payment transaction
  • More collaboration
  • Payment in the OS
  • Transformation of commercial networks

My blog was upgraded to recode today.. see link below

http://www.recode.net/2016/10/13/13243500/mobile-payments-ecommerce-money2020-zelle