Frank Young – Contributor
What are banks talking about this week? How did Apple’s announcement impact them? While 15bps on 2% of eCom GDV is a nuisance, 15bps on 15% of eComm GDV is an earthquake.
eCom – Politics and Scenarios
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Apple Wallet “2.0” in iOS18 – What’s In It?
Winners: Consumers, Merchants, Banks, Networks and Affirm
Losers: Branded PayPal and Venmo
Apple’s WWDC is on Day 2. Today we will see significant enhancements to ApplePay and Wallet in forthcoming iOS18 (to be released this fall). Here are the highlights in order of impact.
1 – ApplePay in eCom
ApplePay will be supported in every browser. This will be a game changer and dramatically increase payment volume flowing through Apple wallet (and their platform). Just last week, the WSJ published a great piece on why retailers hate that consumers make large purchases on their computers. Apple will expand ApplePay to support all browsers AND provide a major upgrade in experience, security and fraud.
Continue readingBank Transformation – Actions for Banks to Succeed in the Storm of Disruption
A Framework for Collaboration – Taking Part in Consumer Journeys
16 Page Blog – 3 Page Exec Summary
Part 2 of Future of Retail Banking (2023). This blog has been sitting at 60% for 2 months now. Sorry for the delay. A bull case for V/MA and service expansion.
A storm is brewing that will dwarf the impact the internet (V1/V2) had on established business models. There are multiple transformations occurring simultaneously: AI/ML, Web3, Digital ID, DLT, open mandates, FinTech, Wallets, ….etc. (see Web3 and Small Wins). While large orchestrators and big tech dominate today due to their virtuous cycles, new forces push for the “break up” of Big Tech and centralized data stores to make the internet more democratic and more privacy friendly.
Fastlane and FIDO Enabled Checkout
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PayPal’s bulls are building a case that Fastlane will drive new growth. My perspective after talking with many of the large US eCom merchants,
ApplePay gets iOS Competition – Curve
© Starpoint LLP, 2024. No part of this site, blog.starpointllp.com, may be reproduced or retransmitted, in whole or in part, in any manner without the permission of the copyright owner. Also see our Legal/Disclaimer (this is a highly opinionated and partially informed blog).
The Times (London) Article – May 29 2024
In January of this year, Apple offered commitments to the EU to assuage their concerns about NFC payments and mobile wallets related to the EU’s Marketplace Fairness Act (MFA—see blog). Apple’s approach follows Google’s model in Host Card Emulation (HCE—see Apple Developer Doc).
Visa Expands the Pipe
Flexible Credentials
© Starpoint LLP, 2024. No part of this site, blog.starpointllp.com, may be reproduced or retransmitted, in whole or in part, in any manner without the permission of the copyright owner.
Background
Visa’s network is the largest commercial network in the world, moving over $15T in volume over 4.3B cards in over 200 countries. Visa’s core is called VisaNet, a real-time messaging network between banks. They don’t move money but send instructions to and from banks, merchants, consumers and other approved third parties. The banks move the money, primarily through net settlement on ACH. The beauty behind Visa’s network is its operating model, which allows thousands of partners to invest billions of dollars. To defeat Visa, you not only have to create a better network, but you must also create a better economic model for EVERYONE to switch, AND overcome the combined investment of all current stakeholders. This is why SEPA failed (see Power of Bank Networks).
Future Scenario – Impact of “Perfect” Authentication
A follow-up to my previous post covering Identity, Authentication and Risk
FIDO2, eID, Mobile Wallets, and other initiatives are rapidly advancing to a future of passwordless authentication. “Perfect Authentication” will be highly disruptive to all payment networks, methods and stakeholders. This blog outlines the rough economic impact, winners and losers in a future scenario. Today’s blog is not a dissertation but a “framework” providing puts and takes on disruption due to better authentication.
Short Blog – DOJ/Apple and Visa/MA Settlement
Apple/DOJ
Updated 3/28 to cover Honor All Wallets
Most of us saw the news on Friday that “The Justice Department, 15 states and the District of Columbia sued Apple on Thursday, alleging the tech giant makes it difficult for competitors to integrate with the iPhone” – WSJ 3/21
CapOne Buys Discover
Quick Take
Discover has been looking for a buyer for some time. Back in 2012 they were the launch partner for the Google Plastic card and positioned the opportunity with Google. While Google was interested in the network, there was no interest in taking on banking licenses and credit risk. Finding a buyer for the BUNDLE of Discover was their ongoing problem, with many BigTechs interested in the network only.
PayPal Innovation Opportunity – “All In” on the Consumer
I’m usually just a cynic. Today, I’m constructive with specific suggestions for PayPal’s new executive team. Note that about 80% of your large institutional investors will read this..
Exec Summary
- Wallets are a core battlefield for Issuers, BigTech, marketplaces, and governments.
- PayPal’s previous “super app” strategy failed because there was no clear consumer value proposition.
- The most significant consumer value proposition to be unlocked is the unbundling of financial services, with the wallet providing the common UI to manage the complexity. In this future state, a “super wallet” would enable bank competition for every account and every transaction.
- PayPal is well positioned to execute on a super wallet, but it must go ALL IN on a consumer-focused value proposition without regard for issuer relationships.
- For example, Curve is the best-in-class Wallet providing aggregation, transaction, loyalty and analytics across all account types, networks, POS, eCom, P2P and banking services.