Short blog
Today the FTC issued an order to Mastercard to Detokenize eCom transactions (detailed order here)
FTC Orders MA to Detokenize
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Category Archives: Uncategorized
Debit, Routing, Tokens and Liability Shift
Short arcane post. Dual routing of debit in ecom is much more complex than I thought. A puzzle and my head is spinning. Hang with me here as I don’t want to write a novel. This only applies to debit in the US.
The key take away? Competing PIN networks have new headwinds in tokenized PANs. Tokenization with a liability shift will protect Visa debit.
Continue readingPart 2 – The Power of Bank Networks
The Bull Case for V/MA (24 pages).
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Part 1 – US Payments Environment covered the complexity of the US payment environment and the challenges faced by top banks in modernizing their systems (where all systems live forever). There are many types of payments: bill payments, A2A, P2P, wires.. Today the focus is on how banks intermediate commerce. Banks MUST have networks as every bank can’t connect to every consumer/merchant. Effective Bank networks (aka rails) are NOT a commodity service, but one that allows the banks to leverage their unique ability to assume risk.
Near Term Impacts of Distributed Ledger Technology to Financial Services – Chain of Trust
© 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.
Continuation of last week’s blog on “binding” and minting of tokens.
I’m currently immersed in DeFi, DAOs, Blockchain, …etc. Selected readings are at the end of this blog. Keeping Current in DeFi/DLT is almost impossible. I certainly invite comments and corrections to anything I’ve written below. While I have teams building services in this area, my perspective is biased. My purpose in writing is to stimulate discussion so don’t be shy in the comments, I welcome disagreement and discussion.
Topic today: What impacts will the $50B invested in FinTech/DLT/Crypto have on existing financial services in next 5-10 yrs? What is the summary CEO/Investor View?
Notifications
Google/TCH Launch – Banks Hire New Network CEO
© 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.
September 7
BEFORE YOU READ. This blog is dated. Key Updates – 21 Jan 2023
- Banks gave up on their own AUthentify Wallet launch and jumped on board a “white label” SRC wallet led by Visa (See 23Jan2023 WSJ)
- Banks have been working on mobile payments for 13 years through TCH (see blog).
- Inital pitch was at Money 2020, big retailers didn’t bite (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 below).
- 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)
- TCH RTP effort focus has move to commercial flows and bill payment.. Forbes Article on Launch of Pay by Bank using TCH. Google’s role seems to be limited to hosting servers in the Google Cloud. This was NOT the big announcement I thought was coming. It looks like the TCH tokens in Google Wallet will be a few more months away.
- TCH’s primary focus this year is an eCom wallet focused on the Secure Remote Commerce Model (see blog)
- 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.
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Something is launching next week (rumor 8/23 pilot) with Google, TCH and at least 4 banks. The banks have just hired a new CEO to run it with a “network background”. This is likely a new consortium, and we will see changes in where the assets of TCH, Akoya and Early Warning line up. This CEO will be tasked with creating a new network to “compete with ApplePay” as the premier mobile payment platform.
TCH Tokens in eCom SRC Model
Part 1 – Current US Routing Rules
© 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.
UPDATE – Nov 29 2022 – Note that I have conflated the relationship between SRC and 3DS 2.0. 3DS 2.0 is the authentication protocol used by SRC. 3DS 2.0 has been widely adopted as a mandatory replacement to 3DS 1.0. Part of the driver for adoption was the EU SCA mandate. SRC has NOT been widely adopted as it is a fairly broken consumer experience at the moment.
Google – Real Time P2P – Rumor
Summary
UPDATE – I no longer beleive P2P is focus, but rather Request for Payment and merchant integration. Blog forthcoming today.
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I have no idea what this looks like, so congrats to Google for keeping this locked down. The following is my best “guess” on a pilot, based upon:
- What Google has launched internationally (Tez) and GPay through India’s UPI (highly recommended read here)
- Changes/Focus Bill Ready put in place before his departure as new CEO of Pinterest. Remember Bill was CEO of Braintree (the most significant acquisition PayPal ever made). Braintree enabled payment APIs for online and mobile merchants (among other things).
- Prior to Bill, Google’s support and advice for FedNow (see article)
- Understanding of what Banks want to accomplish (ex TCH tokens in mobile phones).
- My short time in Google during the creation and launch of Google Wallet. Particularly the exec team’s desire for a global P2P service.
BNPL Travel Example – Short Blog
Short blog today on an example BNPL opportunity and the differences between a consumer BNPL solution like Apple Pay Later and Merchant integrated solutions from providers such as Affirm (or SQ/Afterpay see Three Flavors of BNPL). Today Air Travel and Vacation packages are the focus.
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