As reported in the WSJ today, the Fed is proposing new debit card rates for non-exempt banks (ie over $10B in assets), further reducing the debit cap from $0.21 + 5bps.
Fed Proposing New Rates for Durbin
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Category Archives: Regulation
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).
CFPB probe of Apple Pay
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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).
FedNow Hurdles and Opportunities
Short Blog – Follow Up to Last Week’s FedNow Update
I’ve got 4 blogs in queue with Part 5 – Future of Retail Banking coming next week. I’ve been asked to expand beyond my pro-network bent into areas like FedNow, PayPal, Stripe and Asia… etc and I will oblige. For today, drilling down on FedNow’s opportunity and the key barriers for “break out growth” (expanding on the last 2 bullets within 22 Feb FedNow blog). Feedback appreciated.
Short Blog – Key developments this week
I hope to finish part 2 – Power of Bank Networks tomorrow (12-15 pages). In the meantime I have to recap a few key developments this week.
Continue readingPay By Bank – Where does it work and why?
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Friday I was a tad “let down” in the Sionic/TCH/MX release of Pay-by-Bank. Per my blog on Google/TCH launch and Google P2P I was anticipating something much bigger. To be clear I firmly believe that TCH is working on an “ApplePay Competitor”, which will entail TCH tokens inside of Google’s phone, but this will be 3-6 months out. Per the blogs above, I see neither pay-by-bank nor TCH Tokens in Google Pay as a threat to V/MA.
Today I thought I would drill down into “pay by bank”, the dynamics of why it works in some markets, and why I see little threat to V/MA in replacing core cards in eCom or at POS.
Durbin 2 – Impact on “Wrapping” 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.
A highly technical “what if” scenario involving a long-sought after change by top US card issuers. I’m fortunate to have the exec teams of just about every payment network, processor and FinTech read this blog. I have 3 main drivers for writing today:
- Start a community discussion
- Assess the potential for a much more strategic driver behind the proposed Durbin bill
- Most “change” in US payments is driven by 7-10 players: networks, top issuers, Google, Apple, … etc. These changes have an enormous impact on the FinTechs building around them. I’m hoping to help these small companies plan around these changes as the only advantage of a start is speed.
Note I DO NOT think this scenario is likely, but rather possible (30% probability). Historical context is key and the only reason I’m spending time on this today is that 27 bank CEOs have been discussing this for over 10 yrs.
Dual Routing for ?Credit?
FedNow
Very short Blog – Recapping a few tweet streams.
I think FedNow is a great effort to provide an open alternative to TCH’s RTP. I’ve spoken with, and consulted for, the KC fed on a number of occasions and provided my input to the FedNow service back in 2013. Per my blog last week the survey result from the Fed’s efforts found “emergency bill payment” as the top consumer use. Paying someone faster brings on risk. The Fed depends on banks to manage risk and price that risk. As a former banker running payments at 2 of the largest banks I have a view here.
A2A, Fed Now and Real Time – Threat to V/MA? Nope.
Sorry for typos
My good friend Dave Birch wrote a piece in Forbes today 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).