New MA Rate Tier for Installments (ApplePay Later)?

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Quick 18 Aug update to Aug 1 blog below. This new rate tier was confirmed by Bloomberg this week. According to Bloomberg, Settlment product acceptance is optional for merchants (does not operate in Accept All Cards rule). Optional acceptance is quite surprising. I surveyed 3 top 10 merchants (non-grocers) and couldn’t find one that plans to sign up for the product (other than Apple).

Note that card based BNPL (consumer BNPL) has no proven market data showing increased conversions. My inclination is to believe Card based BNPL conversion will closely mirror a normal credit card. See the rationale in my blog Three Flavors of BNPL.

As I outlined in June, Apple Pay Later will be (est Oct)  is the first major launch customer of Mastercard Installments. A large retailer just related that Mastercard plans for a new rate tier to support this product. 

“Somewhere around 300 bps” – Top 5 US Merchant

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BNPL Travel Example – Short Blog

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Short blog today on an example BNPL opportunity and the differences between a consumer BNPL solution like Apple Pay Later and Merchant integrated solutions from providers such as Affirm (or SQ/Afterpay see Three Flavors of BNPL).  Today Air Travel and Vacation packages are the focus.

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Apple Finance – ?Tipping Point?

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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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Apple Tap and Pay – Square and Why It is a Big Deal?

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6 June 2022

Square’s stock (aka Block) took a big jump after last week’s announcement that they would also be a partner in ApplePay’s new ability to accept payments. Today I thought I would cover what this will (likely) look like and 5 reasons why Apple Tap and Pay is a big deal. 

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CBDCs – Growth Opportunities for US Banks

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The future for a US CBDC is uncertain. While President Biden signed an executive order in March 2022 directing the government to “Explore a U.S. Central Bank Digital Currency (CBDC) by placing urgency on research and development of a potential United States CBD”, US banks seem dead against it.

This is my third blog on CBDCs, today the focus will be on the societal benefits of CBDCs, current bank resistance, and the opportunities for banks if they embrace it. The previous 2 blogs are blow and I’ll try not to repeat myself:

  • Digital Dollar (March ‘21) – Inventory of Central bank efforts and drivers with key detail on China’s digital yuan. 
  • Case for CBDC – Market Efficiency (June ‘21) – Is focused on the benefits to the unbanked and in reducing friction in low-value payments. 

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Consumer Data Bureau?

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Short blog today as opposed to the 9 page monster in identity and attribution Friday.  Today I’m providing my thoughts on what a consumer data bureau would look like.  Summary: Banks have a unique opportunity to create a consumer data bureau and be the key “switch” for regulated and permissioned data. Will they seize it?

Per blog yesterday, everyone has a partial view of you based upon their observations and what you trust them to hold (see Payments and Observer Effect). The more often you interact with a single entity, the more they learn about you. Today Google and Amazon know you much better than your bank. Any unique insights that a bank may have is limited by their ability to take part in that transaction. Thus entities, with the ability to initiate transactions, have the most control (summary of Identity will Define Future of Trust Blog).

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