Summary

• Primary driver of finicity/Plaid deals is not open banking, but in support of the “network of networks” strategy.
• The owner of the consumer directory, will rule payments. Tokens are the central battle field for trust networks (and payment network) consolidation as well as new services. 
• MA lost out on the Plaid purchase, but is likely to end up far better off for it. 
• The Visa/Plaid deal is likely to fall through as the retain consumer credentials for 5yr (claimed by class action).
• V/MA will likely own the payment token directory 
  • Visa is leading – 1B tokens issued by Visa (acquisition of BellID/Rambus)
  • Mastercard Track  successfully leads the market in global B2B Least Cost Routing
• V/MA have substantial hurdles in expanding the directory beyond payments
  • Few direct consumer or merchant relationships
  • Bank and Apple/Google leadership in Customer Identity/Trust
  • Trust is the core of bank risk management (and Bank margin)
  • Network effects decrease transaction costs for established services and increase value (acceptance). However they have the reverse effect on new services.
  • Value/Margin is migrating to the ends of the network and many new networks are forming. 
  • The energy to manage participation in multiple networks is dropping (with Mobile). Enabling specialized networks that cater more finely to precise needs of each node. 
  • V/MA will see substantial growth in core payment volume with continued network effects and the breakdown of Payment silos.