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.

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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

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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”. 

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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

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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. 

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Apple Finance – ?Tipping Point?

Bloomberg beat me to the punch with their great article last night on Apple Pay Later and Apple Finance LLC (must read). Well, I was certainly wrong about one big thing in my Project Breakout blog “Apple doesn’t want to be a bank”. Quite frankly I believe even Goldman Sachs was surprised by the scale of what Apple is building. Last night I outlined the key points:

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Tipping Point for Plastic (Card)?

Will Visa Acceptance Cloud (VAC) be a watershed event that simplifies merchant acceptance and embedding payments into iOT? Changing the merchant side of the network has been a nightmare for all. VAC enables a radical expansion of merchant network capacity with one big asterisk. (Sorry for Typos)

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