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.
Adios 3DS “Step up”.. Hello FIDO2
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Tag Archives: apple
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
Apple Launches Pay Later
https://www.apple.com/newsroom/2023/03/apple-introduces-apple-pay-later/
Apple Pay Later was announced at Apple’s WWDC on June 6, 2022 (Youtube – ~21:00 in). I covered the details last year in Apple Pay Later – What is it?
Today it is going live in a limited rollout. Summary points
Payment Authorization – Under The Hood
Retailers should tread very carefully in direct issuer connections
My focus over the last 18 months has been identity, trust, authorization and assertions. Today I thought we would get under the hood a little on the technology of authorization and the current operational issues with a key network service: 3DS.
Tap to Pay – Growing the Network – $700B GDV Opportunity
~$700B GDV opportunity for breakout volume growth as the network could “double” in scale as every cardholder could become a “merchant” in 20-30 min.
This month was a first! During my 25 yrs in payments, I could accept a card payment (in person) with no additional hardware. Enrolling as a Square merchant took only 30 min and I was then live with Apple Tap and Pay. A fantastic experience! (see Square). This is a tremendous “team effort” by Visa (VAS), Apple (See Mobeewave blog) and Square (as PayFac).
Continue readingFedNow 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.
Innovation in Networks – Part 4
The Strategic Innovation Era
© 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.
This blog has been sitting at 80% for almost 3 months. Sorry for the delay. This was a 30 page blog that I slimmed down to 16. Thus the long summary section. This blog is focused on networks and their ability to: 1) internally charter their own evolution, 2) grow network of supporting stakeholders, 3) stimulate network growth, and 4) encourage investment/innovation. Why read this? Payment innovation is set to grow Global GDV by 50% (above baseline) over the next 5-7 yrs. Today’s blog is a basis for this hypothesis.
A very long blog with 3 page summary below
Apple Launches High Yield Savings
Apple and Goldman Sachs announced the forthcoming launch of high yield deposit account focused on increasing the value of Apple Card’s Daily Cash rewards. Operating as a kind of rewards sweep account, customers that register for the new account will have “their Daily Cash [move] into a new high-yield Savings account from Goldman Sachs”.
Apple – #1 Payment Innovator
As Apple is set to launch the iPhone 14 today, I was thinking about the significance of ApplePay’s innovations to V/MA and how these innovations benefit the entire network of merchants and consumers. Making payments easy is hard… Apple is the lead “innovator” within the V/MA networks at the consumer touchpoint (with Google, Samsung, PayPal and others in the mix). Their “wallet” and branded integration into both POS AND mCom is unrivaled and represents 93% of all mobile wallet payments in the US (2021).
This 2021 Pulse Network Debit Whitepaper provides the best public view on performance (US Only), with TPV CAGR over 50%. Quite frankly, when it comes to mobile payments, it’s silly to talk about anything else by ApplePay in the US
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.