Sorry for typos here.
As most of you know I love to read the arcane (ex favorite book is Weak Links – related blog) and I love economists. Today I’m reading some of Thomas Phillippon’s research (NYU’s economist and author of The Great Reversal: How America Gave Up on Free Markets). Many of you will recall I covered Dr. Phillppon’s work in my 2015 blog Changing Economics of Payments. My summary of Phillippon’s work:
Note comment June 2022 – This blog did not anticipate the creation of Visa Acceptance Cloud which completely eliminated the device certification requirements.
My track record on Apple is pretty good.. having broken the Apple Pay news in 2014 and Last August I announced the Apple/Mobeewave acquisition. Apple is great at keeping secrets… perhaps the best tech company in the world in this regard. My latest forecast? Apple will enable payment acceptance in the US this October with Elavon as a payment processing partner.
Last week, in his annual shareholder letter (page 28), Jamie Dimon stated “Banks have enormous competitive threats — from virtually every angle,” he said. “Fintech and Big Tech are here… big time!”
101 Blog… probably not for the BNPL experts. Recap at bottom.
While CDBC may impact debit networks in a 5 yr view, I thought I would write a short blog on BNPL’s impact to credit networks in near term (See Insider’s BNPL market Analysis and MRC’s overview of solution providers)
I doubt if this blog will be beneficial for the crypto and CDBC experts. But for my friends, I’ve linked several very detailed articles and reports… which I’ve tried to summarize.
With respect to payments, let me start with the quote of the week
“Tom look at the pace of change in China as a model. 15 yrs ago they were cash. 7 yrs ago they were China Union Pay, Now they are Alipay/WeChat Pay.. 3 tremendous changes in 10 yrs. I believe change will happen much faster than anyone could imagine.”
– Top 5 US Retailer
As always pardon the typos
It seems like only yesterday that 30 members of Congress wrote the acting chairman of the FDIC to stop Walmart Bank.
“Wal-Mart’s plan, to have its bank process hundreds of billions in transactions for its own stores, could threaten the stability of the nation’s payments system,”
30 Members of US Congress, March 2006
Of course, we all know that Walmart pursued a different course to deliver services. Partnerships (MGI, Moneygram, Paypal, …) and banking in a box (literally an isle with prepaid cards). Most analysts discount or “write off” Walmart’s achievements in financial services. Given Walmart doesn’t break out financial performance of Money Center, analysts are left with the tea leaves of MGI and GDOT reports. There is little doubt that comparing Money Center financial metrics to tier 1 banks would leave most unimpressed. However, Walmart has created a portfolio of banking services that supports their overall retail strategy and creates overwhelming loyalty amongst their core customer base.
Happy New Year! Best to you and yours. Having completed the successful sale of Commerce Signals to Verisk last year, this blog is a reflection on some of my lessons learned as well as my predictions on where I see things headed. The thoughts here are guiding my investments and launch of my next venture. I love the interaction, so please take time to write a comment on any of this. Also I ask for your pardon in advance for typos..
Understanding flows of data, and the structures in which it is controlled, provides a map of: value, power and margin. What is changing in the flow of data? What data is still “unique”? Where is power shifting? My past blogs referred to this dynamic as Rewiring Commerce, Value Orchestration and the Transformation of Commercial Networks.
Google just completed a massive “relaunch” of Google Pay this week.
Recommend you read either of these 2 articles to get the details. There are 4 key elements in the launch
Summary – Google is not becoming a bank, but rather enabling:
Over last 6 months or so we have seen several Press Releases relating to Google’s bank partnerships:
“We had confirmed earlier that we are exploring how we can partner with banks and credit unions in the U.S. to offer digital bank accounts through Google Pay, helping their customers benefit from useful insights and budgeting tools, while keeping their money in an FDIC or NCUA-insured account,” stated the release.
Smart, according to Google, because it will provide its checking accountholders with money management tips to optimize and manage the funds in those accounts – funds linked to payments and identity credentials that consumers can use to buy things, pay bills and send money to others in and outside the Google ecosystem.