CCCA – Durbin II – Complex Politics and Consequences

CCCA (Credit Card Competition Act) has been a topic of late, with questions such as: will the bill pass? What will be the consequences? Who will win? 

Today I’m providing a brief update on where the CCCA bill stands, and my view on industry consequences in the unlikely event that it passes (previous blog July 2022).  The summary? I don’t think the bill will pass. What elected representative wants to be seen killing consumer card rewards in an election year? If CCCA does pass, it will take 6 yrs to implement and the consequences will be borne by Issuers (and consumers) with some added volatility to V/MA. V/MA win when interchange is reduced (ex EU IFR in 2015 – see blog). 

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MRC Learnings – September 2023

Merchant Learnings

This week I was invited to speak at the Merchant Risk Council’s (MRC) – Santa Clara event. As a former banker, I never gave much throught to retailers. Fraud was something I worked to manage with Account Opening/KYC as a core focus because of the potential for regulatory hot water and NCLs as #2 because it drove reserves, profitability and investor scrutiny. Card transaction fraud was something we worked to keep under a threshold. 

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CFPB probe of Apple Pay

© Starpoint LLP, 2022. 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.

The CFPB issued a new report last week on the impact that Apple/Google have on payments. Some key excerpts below

I see this as round 4 for Apple. The first rounds were fought with mobile operators and their GSMA TSM vision. The next with Australia (2016) then EU (2019). I find the timing of this report very interesting. As CFPB report came just months after US Issuers pushed Apple to eliminate its 15bps fee (a fee they voluntarily signed up for). I wonder if the CFPB knew that the Issuers collectively sought to eliminate the fee, or that they would like to expand PAZE to NFC/POS in order to lock a new wallet app which would DECREASE BANK COMPETITION (and cut out Apple).

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A2A, Fed Now and “Instant” Payments – Threat to V/MA? Nope

Short Blog – Free Content

© Starpoint LLP, 2023. 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.

My good friend Dave Birch wrote a piece in Forbes last week on Account to Account transfer threat to V/MA. I wanted to provide an alternate view. This will likely be a multi-part blog.. today I’m starting with the consumer and the merchant (from a US perspective).

No new information for my frequent readers, just pulling together some of the latest data (see PIX below).

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DOJ Probe – Network Tokenization – 2023

It’s hard to believe I’ve been writing about payment tokenization for 11 yrs. Tokenization is an overloaded term with multiple definitions. Last week McKinsey wrote a fantastic article on crypto tokenization, this note is about the tokenization of card numbers (PAN to DPAN) performed by network tokenization services like Visa Tokenization Service (VTS) and Mastercard Digital Enablement Service (MDES). 

This week the US DOJ opened a probe into network tokenization services (Bloomberg). The specifics of the probe are not known

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Short Blog – US Paze and RTP – Consumer Terms

New consumer terms rolled out at several banks this week. As the former head of online and payment services at Wachvoai (40%+ of Wells) I had managed these agreements. Changes are a very big deal, usually less than once per year. Given my history with Wachovia I chose to review the Wells Fargo below agreement (JPM, BAC, and COF all have similar).

https://www.wellsfargo.com/online-banking/online-access-agreement/

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Paze Update – 4 Elements of the PAZE Wallet (70% confidence)

© 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.

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Over the last 5 yrs I’ve written 9 blogs on PAZE/SRC, and over 20 on the TCH’s 13 yr effort to own mobile payments. Today is my update and latest best guess at what they are building. This is a 70% confidence guess based upon my discussions with Merchants, Early Warning alumni, former bank execs, and previous releases (ex Authentify). 

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Separating Payment and Identity

15 pages (summary is 4)

Follow blog from Payment Authorization – Under the Hood (ie working on a car engine), Trust Assertions – Identity will Define the Future of Payments and Role of Identity and Trust in eCommerce.

Today’s blog is one of my personal favorites, not only because of the topic but because of the leading experts in retail, identity, networks, and payments that collaborated and provided editing (thanks all). While I’m no longer the tech expert, I do have a unique view on the “inside baseball” incentives and realities of what is actually happening (behind the rules). Payments are not like a brand-new Ferrari operating to spec, they are a very messy business with complex rules, worn-out systems, unresponsive drivers and a broke racing team with no sponsor. This is a get-your-hands-dirty blog. Note that I’m open to feedback in case I’ve missed something

Outline

  1. Summary
  2. Survey of global identity initiatives
  3. How identity works in eCommerce today
  4. Technical example
  5. How identity improves CX and eCommerce payment flows
  6. Four future scenarios of identity and payments
  7. What should investors track

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