Part 2 – The Power of Bank Networks

Last year I made a provocative statement “Visa and Mastercard have NEVER lost share in a market where they have gained a foothold”. Today I will work to give a basis as to why.  V/MA continue to succeed despite the efforts of regulators and Nobel winning economists. Why?

The Bull Case for V/MA (24 pages). 

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Part 1 – US Payments Environment covered the complexity of the US payment environment and the challenges faced by top banks in modernizing their systems (where all systems live forever). There are many types of payments: bill payments, A2A, P2P, wires.. Today the focus is on how banks intermediate commerce. Banks MUST have networks as every bank can’t connect to every consumer/merchant. Effective Bank networks (aka rails) are NOT a commodity service, but one that allows the banks to leverage their unique ability to assume risk.

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