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). 

You need to be logged in to view the rest of the content. Please . Not a Member? Join Us

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. 

You need to be logged in to view the rest of the content. Please . Not a Member? Join Us

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

You need to be logged in to view the rest of the content. Please . Not a Member? Join Us

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. 

You need to be logged in to view the rest of the content. Please . Not a Member? Join Us

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. 

You need to be logged in to view the rest of the content. Please . Not a Member? Join Us

PayPal’s Shock to the world

Short Blog. I’m sorry for the delay on part 2 of the Govenance models for identity. I’m on my 14th update.. Will get out soon.

In the news today. PayPal’s Alex Chriss said ““There hasn’t been a lot to celebrate over the last few years. Innovation has been slow,” Chriss responded. “I love being an underdog. I will take all of that feedback and we’ll shock the world.”.

PR Today

https://investor.pypl.com/news-and-events/news-details/2024/PayPal-and-Venmo-Unveil-Six-New-Innovations-to-Revolutionize-Commerce/default.aspx

Shock is the right word.. Just not what Alex was hoping for as the stock dove 5% immediately after the announcement. IMHO the market reaction is spot on. I’ve spent 15 yrs in retailer data, offers, wallets and etc, founding Commerce Signals (now part of Transunion).

You need to be logged in to view the rest of the content. Please . Not a Member? Join Us

New Blog Series – The Economic Models of Identity (and Trust)

Free Content

Happy New Year. I’m starting a new blog series in 2024 – The Economic Models of Identity. 

Identity is the #1 shaping force in new payment schemes, Web3, blockchain/crypto and more broadly “trust” interactions in government, commercial and social (see Trust Networks). Most investors haven’t spent much time thinking about identity because it was the realm of tech geeks or bundled into the services we use (see Separating Identity and Payments). The reason to pay attention today? Identity is shaping a redesign of the internet’s infrastructure AND governments are defining new LAW on what constitutes a digital identity (ex India’s UIDAI and Europe’s eIDAS/eID).

Let’s unpack the word Idenitity to ensure a consistent taxonomy. While most people relate a drivers license or passport to identity, it is much more than that. Who are you? And who can answer that question? Are you a US citizen? Licensed Driver? Doctor? Skier?  Great credit risk? While your SSN or DL# are legally issued identitiers that only the government can issue and authenticate, you are also biometrically defined and have credentials, behaviors, preferences and other attributes. Identity and the contexts in which it is used are the foundation of trust, contracts and relationships. 

Continue reading

Adios 3DS “Step up”.. Hello FIDO2

Short Blog

There are significant changes brewing in eCommerce authentication and authorization. Today’s blog is more of a headline summary of key points that I hope to break down over Thanksgiving. 

You need to be logged in to view the rest of the content. Please . Not a Member? Join Us