Card Holder Present Update

Presented yesterday at KBW’s annual Payment Conference.. have a few updates in the rumor mill..

I predicted September of this year for CHP in in previous blog Card Holder Present last month. Issuers don’t like this one bit.. as there is no upside.. Merchants with large numbers of cards on file (Amazon, Google, Paypal, Walmart, …) will not tokenize until they obtain a risk based rate (Companies like Amazon manage fraud down to under 3bps).

Rumor is that one large issuer has been quite vocally against the new CHP rate coming into effect. My guess is that the issuers just funded $60M at The Clearing House (TCH) for them to create a new token utility based upon Bell ID…. and the banks want to use this beyond “faster payments”….

My view is that the networks should push this now.. so that they can own the tokens first. Particularly with the Banks that are NOT aligned to the TCH plan. My first hand experience in these interactions is funny, sad and exhausting.

TCH has been telling the Cards on File merchants that they are ready for last 4 yrs. When they engage in discussions, TCH brings in an issuer.. when the issuer comes in.. they are not ready. It goes on and on for last 4 yrs and is now a running joke.  For Tokens to route.. they processors must also be engaged. TCH has been approaching all the large ones… and they are FAR FROM READY… so not only will the Bell ID project have to be complete.. they will have to create a business case for processors to implement. As one processor told me

“TCH has been coming to us for last 4 yrs.. saying we need this.. We told them to come with 4 issuers and committed volume and we would be glad to prioritize…. until then is it the lowest (unfunded) project in our queue….”

My new guess at CHP timing is 2017.

ACH rumor…

Banks seem to be working to make ACH much harder for non-banks to use.. with new rules coming. If you want speed you will have to go through TCH or EWS/ClearX and pay a fee.

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