Busy 2 weeks!
Bank and network earnings, FedNow launch, stabilizing inflation, Fed and ECB rates increases, …etc. There are several excellent analysts for all the details. My takeaways:
July Payments Summary
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Category Archives: payments
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
- Summary
- Survey of global identity initiatives
- How identity works in eCommerce today
- Technical example
- How identity improves CX and eCommerce payment flows
- Four future scenarios of identity and payments
- What should investors track
Payments and Identity – UPI continues to lead the world
Short 4 page blog
I’ve written heavily on payments, trust networks and identity. Today I’m providing an example of how UPI, powered by UIDAI’s centralized identity, is creating a new cannon for next-generation payment networks and trust.
I believe that mobile platforms are well placed to learn their lessons in India and create a new phone based network agnostic identity platform that will drive a significant change to payments, the internet and how we manage trust with counterparties.
Wallets, APIs and Trust
6 Page Blog
Top of mind today are Wallets, Identity and Application Program Interfaces (APIs). APIs are the core concept behind many new business models investors must decipher:
- Software as a Service (SaaS)
- Payments as a Service (PaaS)
- Banking as a Service (PaaS)
- Open Banking – PISP, AISP, ..etc
- Account Aggregation – FDX, Plaid, Akoya, … etc
- Payment Service Provider (PSP) – Stripe, Adyen, PYPL/Braintree, … etc
Previously, I’ve covered this topic in Open Banking and Open Payments and Trust Networks (2020) Part 3 – Internet 2.5 (2022), Modularity and Trust (2022) and Evolution of V/MA – Moving Beyond Cards (2021). Summary points from these previous blogs:
Continue readingBack from Europe
Sorry for the long quiet period. My youngest just graduated High School and as a WWII history buff, his gift was the Band of Brothers tour from Normandy to Salzberg. We came away with a new appreciation for the cost of freedom and the sacrifices made all of those in the armed forces.
European Payment Insights
Covid had put a long pause on my travel to Europe. In the 6 countries we visited I was pleasantly surprised at the broad acceptance of contactless and tap to pay. Beyond tapping with my iPhone, most restaurants first attempted to tap cards before a “dip”. Contactless now comprises ~60% of POS transactions, a behavior 3-5 yrs more advanced than the US and certainly one of the drivers of card GDV growth in the EU. The V/MA position is Europe is perhaps stronger than in any other market, as any new scheme would also need to integrate seamlessly into this acceptance (and presentment) infrastructure.
Continue readingFuture of Retail Banking – Part 5
This is the last of my 5 part blog series that started over 6 months ago. As a pragmatist, my views will likely be unpopular (and perhaps incorrect), but they are informed. Most of this blog will be obvious to US Retail Bankers and payment teams; the more interesting parts may be around Fintech and Asia. The exec summary captures the entire blog, it’s a new format.. I’m going to break down the detail of these points in separate posts. Today is Part A
For quick reference, I’ve listed the links to the previous blogs.
- Part 1 – US Payments Environment – Drivers of Change
- Part 2 – Power of Bank Networks
- Part 3 – Last Mile: Internet 2.5 – Embedding Financial Services
- Part 4 – Network Innovation – The Efficacy of V/MA
- Part 5 – Future of Retail/Commercial Banking … What Will Define Bank Success?
The reason for this blog is to interact and challenge… please feel free to do so.
Visa Launches Visa+ with PayPal as Anchor
Short Blog
https://usa.visa.com/about-visa/newsroom/press-releases.releaseId.19621.html
Today Visa announced a major expansion of Visa Direct called Visa +, with PayPal as the anchor launch partner. “help individuals move money quickly and securely between different person-to-person (P2P) digital payment apps” without requiring the recipient to have a Visa card.
Visa+ expands Visa’s role as the meta-directory of payments connecting consumers, wallets and accounts with a master “payname”. If I were to write the marketing one-liner for Visa+ it would be “pay people in the way they want to be paid”.
Continue readingIdentity Driving Payments
Great article in today’s MRC Journal Moving identity authentication earlier in customer flow/
Short Blog. Summary. US issuers are creeping into identity and eCom data as they seek to build a non-network auth. The only model which will work is where networks are the enablers of identity. From a payments perspective, there are only 2 options for owners of identity and authorization 1) V/MA or 2) Apple/Google.
I was fortunate to go to MRC-Vegas this year. Whereas M2020 is filled with Issuers/Fintechs/Investors MRC is filled with payment operators (merchants), and the companies supporting them (ie Visa/Cybersource, Stripe, Adyen, …).
Continue readingApple 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.