Category Archives: Regulation

APIs – More Banks to Follow JPM – Pricing Implications

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As I stated in my Monday blog, Open Banking is dead in the US. Pay by Bank (and open banking) is effectively dead in the US. This follows JPMorgan’s move to push out its new API pricing structure to data aggregators and other third parties in the first week of July. This development comes as the “new” CFPB seeks to vacate its Section 1033 rule.

The latest is that we can expect most other major banks to roll out their own pricing within the next two weeks. These banks will have different pricing, as there was no coordination among banks. JPM has always been the most forward in protecting consumer data. A new pricing floor for data access has been established. Now that other analysts have weighed in, I can recap the pricing framework. 

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Open Baning is Dead in the US

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Last week, I shared the news that JPMorgan has started charging for API access, a move that many see as a death blow to pay-by-bank and open banking in the US. While this might sound dramatic, I believe it’s a necessary reset. The truth is, the current model was never sustainable, and with the CFPB’s recent move to vacate its unlawful 1033 rule, the writing is on the wall. Open banking as we know it is dead in the US.

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Retail Banking and Stablecoins

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Friction, Float, and the Future

As a Banker, Founder and Payment Historian who has spent too long watching icebergs melt, I’ve seen many technologies promise to upend the banking industry. Most have been evolutionary, not revolutionary. But the advent of digital dollars, particularly consumer-facing stablecoins, are unique. Payments are the core of retail banking and profitability. Payments are a networked business, not just in card but in every consortium and association. As I outlined in The Power of Bank Networks, these networks are the engines that drive economies and how banks connect to the environment. For my colleagues in banking and payments, understanding how (or if) stablecoins impact payments is very important.

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B2B Payments: Cards, RTP, and Stablecoins 

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Exec Summary

  • B2B payments are a great source of growth for card and RTP networks, with 90% of volume remaining on check and ACH. But investors and innovators hoping to flip volume must assess the market with a great deal of skepticism. No one wants to pay a bill more quickly. There are 2 key factors to look at when assessing B2B payments: 1) Who holds the power in the relationship (ex Supply Chain Channel Master) and 2) How is it sold and bundled with other services (ex Quickbooks/SAP procurement).

  • I don’t see this as an impact to any current GDV flows in next 3 yrs, only growth impairment. It takes time to change contracts.

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Sling Money – StableCoin Model that will be the future of P2P and more

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One of the 3 business questions I ask myself every day is, “what is gaining traction”? At the top of the list this week is Sling Money. Launching Nov 14 in the US, its growth is asymptotic

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DOJ Complaint – ?Is Visa is a Debit Monopoly?

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First Reactions 

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The DOJs complaint was formalized last night

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CCCA – Durbin II – Complex Politics and Consequences

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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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CFPB probe of Apple Pay

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© Starpoint LLP, 2022. No part of this site, blog.starpointllp.com, may be reproduced or retransmitted in whole or in part in any manner without the permission of the copyright owner.

The CFPB issued a new report last week on the impact that Apple/Google have on payments. Some key excerpts below

I see this as round 4 for Apple. The first rounds were fought with mobile operators and their GSMA TSM vision. The next with Australia (2016) then EU (2019). I find the timing of this report very interesting. As CFPB report came just months after US Issuers pushed Apple to eliminate its 15bps fee (a fee they voluntarily signed up for). I wonder if the CFPB knew that the Issuers collectively sought to eliminate the fee, or that they would like to expand PAZE to NFC/POS in order to lock a new wallet app which would DECREASE BANK COMPETITION (and cut out Apple).

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