TCH Tokens in Apple/Google – Launch of RFP in US

TCH tokens will be in Apple/Google in next 6 months with Request for Payment as the primary scheme

Part 1 – Current US Routing Rules

Note: Revisions in progress (forgive the typos). This is a long 10 page blog, I realize most of you won’t bother to read, so I’ve tried to summarize. Why should you read this? The top ~25 banks have been working on this for over 10 yrs and now Google and Apple are involved.

As a follow-up to Google Real-Time P2P (Aug 7), this blog evaluates 6 payment flow scenarios likely near term. Key hypotheses

  1. TCH tokens will be in Apple/Google payment schemes in next 6 months (80% confidence)
  2. TCH Request for Payment will be primary scheme leveraging these tokens. To be clear this is a debit scheme, with no integration to credit. (~40% confidence)
  3. RFP will operate in a premium to a non-exempt debit of approximately 150bps. The RFP product will be exempt from Durbin as it does not involve a network, swipe fee with gateway as optional (60% confidence)
  4. While operational, the product and scheme will not gain substantial traction due to a lack of consumer incentives, efficacy of the current payment networks, and inability to define what “problem” this service solves (60% confidence).
  5. Large merchants, with a high credit mix will have the greatest chance to benefit from this scheme (ex Airlines) as they have steering ability and have significant control of their processing.
  6. As Jamie Dimon said “Banks have enormous competitive threats — from virtually every angle,” he said. “Fintech and Big Tech are here… big time!” If banks can’t differentiate the core of banking, they must differentiate the networks where their products operate.
  7. The most logical place to start RFP would be in non-card recurring payments. Google has had fantastic success in India in this category. HOWEVER, given that the banks are working with top gateways I am reluctant to believe that non-card payments are the focus.

Biggest unknowns?

  1. Will focus be non-card payments?
  2. Why would banks want to create a V/MA competitor?
  3. Is it possible that TCH will address bank participation, merchant participation and registered consumers with a network alliance?

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Driving Vision of Durbin? Bi-Lateral Connections?

My latest G2 from people involved in shaping Durbin is that retailers see an opportunity to end-run networks in bilateral deals AND direct (alternate) routing. To be clear, issuers have always been able to strike bilateral deals directly with a merchant. What they have not been able to do is route these transactions off-network. 

I now have 70% confidence in the forces shaping Durbin (still no threat to V/MA). 

© 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.

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Durbin 2 – Impact on “Wrapping” Rules?

A highly technical “what if” scenario involving a long-sought after change by top US card issuers. What if Durbin credit routing bill were designed to eliminate network wrapping 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.

A highly technical “what if” scenario involving a long-sought after change by top US card issuers. I’m fortunate to have the exec teams of just about every payment network, processor and FinTech read this blog. I have 3 main drivers for writing today:

  1. Start a community discussion
  2. Assess the potential for a much more strategic driver behind the proposed Durbin bill
  3. Most “change” in US payments is driven by 7-10 players: networks, top issuers, Google, Apple, … etc. These changes have an enormous impact on the FinTechs building around them. I’m hoping to help these small companies plan around these changes as the only advantage of a start is speed.

Note I DO NOT think this scenario is likely, but rather possible (30% probability). Historical context is key and the only reason I’m spending time on this today is that 27 bank CEOs have been discussing this for over 10 yrs.

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BNPL Travel Example – Short Blog

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.

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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Identity Will Define the Future of Payment Networks (and more)

How others accept and validate our identity is core of payments (see Trust Networks and Authentication in Value Nets). The structure, exchange and assertions associated with identity are also defining: web3, DeFi, Crypto, CBDCs and the Metaverse. These are not separate silos, but rather overlapping ecosystems that must interact, thus the importance of bridging identity across networks/domains (see Blog – Trust is domain specific). 

©Thomas Noyes, May 2022

My blogs last week have me thinking about the changes going around in Identity. This will be a long blog. Typo warning.. I’m still revising. 

The number one thing I look for in payments is change: volume, technology, behavior, data, …etc. Effective networks are notoriously hard to change, but they are also very resilient (see blog). Small changes in data flows, can lead to significant changes in margin and “control”.  Margin and control guide both public and private investment (see Evolution of Visa and Mastercard Beyond Payments). 

Identity is our most important asset — it’s literally who we are

Our complete “identity” is known to no one, as each entity we interact with has a partial view of us based upon what we chose to give them and what they observe. How others accept and validate our identity, and how others share insight about us, is the core of payments (see Trust Networks and Authentication in Value Nets). The structure, exchange, and assertions associated with identity are defining: web3, DeFi, Crypto, CBDCs and the Metaverse. These are not separate silos, but rather overlapping ecosystems that must interact, thus the importance of bridging identity across networks/domains (see Blog – Trust is domain specific). 

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Google Wallet Re-Launch

I was a small part of the initial Google Wallet launch in 2011 and have been a hopeful champion for last 11 yrs (20+blogs). I’m a big fan of the strategy here, a much bigger platform/enablement strategy than the previous flex/p2p effort.  

Last week we saw a major relaunch of Google Wallet at Google I/O. See

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Secure Remote Commerce – May 2022

Short Blog. I wanted to follow up on the last point I made in Bank ID Service – What Is It?

Some US Banks are refusing to jump on board SRC. As managers of risk, Banks are reluctant to accept network services which level the playing field in both managing risk and “diluting” their brand.… In some respects Authentify is a response to SRC.

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eCom Innovation Success – Shop Pay

Short blog as follow up to yesterday’s blog on Acceptance Hurdles in eCommerce. Successful innovation requires a great new customer experience and/or economic model. The most recent success in the US is Shopify’s Shop Pay.

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Authentify – Bank ID Service

Apologize in advance for typos.. did not proof yet

Press Release

Today’s WSJ Article on Zelle.

Congrats to Early Warning and their participating banks in the Launch of the Authentify wallet! A service 6 yrs in the making and driven by my good friend and former EWS president Eric Woodward.

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