I see significant shifts in eCommerce today and in next 5 yrs. This short blog will lay out a few predictions and assess their impact across the payments sector.
This week, I outlined several of the friction points in the US card payment network in US Payments Where to Invest. Today let me try to articulate a few reasons why US banks are attempting to build a new eCommerce Wallet (Paze) as well as some additional merchant commentary on their efforts.
New Payment Experiences
Topics today (pardon the typos)
- Are US payments still an attractive area for investment and growth? If so, where are the opportunities?
- High level view of the payment landscape and areas of friction
- Consumer Journey – how to unlock new consumer experiences
- Where will innovation come from?
- Core areas for improvement?
- Who are the best providers? Wallets as the new metaphor
- Challenges with Issuer-led innovation (ie PAZE)
The top questions coming out of Money 2020 were: is the US payments environment maturing? Are there still opportunities for break out growth? Where? Who is best positioned and why? Today I will be taking part of that on.
Before listening to anyone on this topic its important to get a feeling for experience. I’ve been fortunate to run two of the largest online banks: Citi and Wachovia. Wachovia was the very first customer of Yodlee (1999), a service our customers loved. My banks were also scraped endlessly, representing over 30% of our traffic and 20% of our call center complaints. We were also the largest PFM bank (think MS Money and Quicken), keeping our OFX servers up and running was key. After my banking life I spent time rearchitecting payment data flows from point of sale to payment at Google. Then spent 8 years creating Commerce Signals, a payment data business.
CPFB’s Proposed Rule
CCCA (Credit Card Competition Act) has been a topic of late, with questions such as: will the bill pass? What will be the consequences? Who will win?
Today I’m providing a brief update on where the CCCA bill stands, and my view on industry consequences in the unlikely event that it passes (previous blog July 2022). The summary? I don’t think the bill will pass. What elected representative wants to be seen killing consumer card rewards in an election year? If CCCA does pass, it will take 6 yrs to implement and the consequences will be borne by Issuers (and consumers) with some added volatility to V/MA. V/MA win when interchange is reduced (ex EU IFR in 2015 – see blog).
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My good friend Dave Birch wrote a piece in Forbes last week on Account to Account transfer threat to V/MA. I wanted to provide an alternate view. This will likely be a multi-part blog.. today I’m starting with the consumer and the merchant (from a US perspective).
No new information for my frequent readers, just pulling together some of the latest data (see PIX below).Continue reading
It’s hard to believe I’ve been writing about payment tokenization for 11 yrs. Tokenization is an overloaded term with multiple definitions. Last week McKinsey wrote a fantastic article on crypto tokenization, this note is about the tokenization of card numbers (PAN to DPAN) performed by network tokenization services like Visa Tokenization Service (VTS) and Mastercard Digital Enablement Service (MDES).
This week the US DOJ opened a probe into network tokenization services (Bloomberg). The specifics of the probe are not known
© 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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Over the last 5 yrs I’ve written 9 blogs on PAZE/SRC, and over 20 on the TCH’s 13 yr effort to own mobile payments. Today is my update and latest best guess at what they are building. This is a 70% confidence guess based upon my discussions with Merchants, Early Warning alumni, former bank execs, and previous releases (ex Authentify).Continue reading