Tap to Pay – Growing the Network – $700B GDV Opportunity

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~$700B GDV opportunity for breakout volume growth as the network could “double” in scale as every cardholder could become a “merchant” in 20-30 min. 

This month was a first! During my 25 yrs in payments, I could accept a card payment (in person) with no additional hardware. Enrolling as a Square merchant took only 30 min and I was then live with Apple Tap and Pay. A fantastic experience! (see Square). This is a tremendous “team effort” by Visa (VAS), Apple (See Mobeewave blog) and Square (as PayFac). 

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FedNow Hurdles and Opportunities

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Short Blog – Follow Up to Last Week’s FedNow Update 

I’ve got 4 blogs in queue with Part 5 – Future of Retail Banking coming next week. I’ve been asked to expand beyond my pro-network bent into areas like FedNow, PayPal, Stripe and Asia… etc and I will oblige. For today, drilling down on FedNow’s opportunity and the key barriers for “break out growth” (expanding on the last 2 bullets within 22 Feb FedNow blog).  Feedback appreciated.

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FedNow Update – Short Blog

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My last blog on topic was less than a month ago Real Time Payments in US – Strategic Shifts (Jan 2023), and also FedNow (Dec 2021). Will thus keep this blog to summary bullets. 

  • FedNow launching this summer with almost 100% of US merchant focused banks participating. At launch, both credit and debit ( Request for Payment -RfP) transactions will be supported.

  • Great summary interview last week from FRB’s Mark Gould

  • Back in 2013, the Fed requested comments on a real-time payment system. In general, consumers don’t seek to pay their bills faster, nor do consumers have issues in receiving their payroll deposits late. The card environment works very well, particularly for debit. Emergency bill payment has been the only well-defined consumer need for speed (see Starpoint’s 2013 response to Fed). 

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Identity, Authentication and Risk

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Bridging Domains – Short Blog – Random Thoughts

This is a “Random Thoughts” blog, which means there are many points that I’ve left hanging (not finished cleanly). The blog’s objective is to stimulate discussion, so please don’t hesitate to comment.  Identity is a hot topic for me with 15+ years of previous bosts. Here are a few updates … as well as my evolving perspective. 

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SRC – Why Now and What is the Opportunity?

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Short blog. What opportunity are top US issuers chasing with an SRC wallet?

During my talks with top acquirers, I gained new insight into eCommerce volumes. As a committed ApplePay user I was shocked to hear that ApplePay use in browser is significantly under 5% (even in iOS/Mac devices). Per my blog on intersections, the dynamic is due to both Chrome vs Safari and merchant adoption.

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Innovation in Networks – Part 4

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The Strategic Innovation Era

© Starpoint LLP, 2022. No part of this site, blog.starpointllp.com, may be reproduced in whole or in part in any manner without the permission of the copyright owner.

This blog has been sitting at 80% for almost 3 months. Sorry for the delay. This was a 30 page blog that I slimmed down to 16. Thus the long summary section. This blog is focused on networks and their ability to: 1) internally charter their own evolution, 2) grow network of supporting stakeholders, 3) stimulate network growth, and 4) encourage investment/innovation. Why read this? Payment innovation is set to grow Global GDV by 50% (above baseline) over the next 5-7 yrs. Today’s blog is a basis for this hypothesis.

A very long blog with 3 page summary below

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Real Time Payments in US – Strategic Shifts

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Short Blog. I’ll expand on this next month. 

As I’ve written about since September, and seen in yesterday’s press (WSJ), top US issuers are have created a new consortium with a first phase product centered on a white labeled SRC wallet. For investors, 100% of payment types in this wallet will be existing cards (no new retail payment network). Their partners are the key eCom gateways (Stripe, Square, Shopify, …etc). 

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Banks Launch “Wallet” (again)

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Short Blog

Per the WSJ Article this AM, US banks have launched a new wallet (again). For frequent readers of my blog, very little new news. Also, I’m just wrapping up a 15-page part 4 “Innovation in Networks” that will be out very soon. 

Quick Summary

  • TCH Banks have been contemplating a mobile wallet and a new network for 13 yrs (I have over 20 blogs on topic, see overview here). 

  • Today we gain clarity that Banks gave up on their latest Authentify Wallet launch and jumped on board a “white label” SRC wallet led by Visa (See 23Jan2023 WSJ). I outlined this in my SRC blog (Sept 2022) and TCH RTP Update.  

  • Inital pitch for this wallet was not well received by big retailers at Money 2020. It entailed a liability shift if wallet was offered and all COF were tokenized (see blog)

  • The wallet is not owned by EWS, but a new payment network led by James Anderson. The ownership of this new network is the same at EWS (see blog ). Lets call this wallet EWS SRC to shorten the name. 

  • Competitor is Apple.. the banks want to own the mobile payment experience. Google is working with the TCH banks and is also working with FedNow (long blog coming on this one). It is likely that Apple is not involved in any of these activities, yet Google is working to pilot both FedNow and TCH RTP to leverage their India UPI success.

  • Now that the largest TCH banks have jumped on board SRC, the TCH RTP effort focus has shifted to commercial flows and bill payment.

  • i provided a detailed strategic discussion on the reasoning behind this move in Part 2 – The Power of Bank Networks.

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