Tag Archives: visa

Processors: Understanding Competitive Dynamics

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Warning – Big Blog 12 Pages

The last three weeks gave us a full sweep of processor earnings, and the results were a mixed bag (a phrase that undersells what actually happened). What we saw was not the processor sector moving together with a common tide. It was a sector splitting apart. Adyen raised guidance and jumped 16% in a day. Toast added a record number of locations and raised its full year outlook. On the “bad side of town”, we have Fiserv, which cut guidance, missed consensus, and is now down roughly 23% for the year with a brand new CEO. FIS is down about 36%. The gap between the best processors and the worst has never been this wide, and I do not think most investors have a working framework for why.

That framework is what I want to lay out here.

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Apple – Klarna: Equipment Financing

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Last week, Apple launched Apple Upgrade, a device leasing program for iPhone, Apple Watch, Mac, and iPad in the United States, provided by Klarna. Apple simultaneously retired the iPhone Upgrade Program (financed by Citizens Bank) and iPhone Payments.

This is a very big deal, and it is the culmination of a strategy I first outlined over a decade ago. Equipment financing has always been the prize. Everything else Apple has done in consumer finance (Apple Card, Apple Pay Later, Apple Card Monthly Installments, the savings account) was either a stepping stone, a learning exercise, or a partner accommodation. Apple Upgrade is the main event.

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Visa Stablecoin Platform

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Exec Summary

  • Consumers never wanted stablecoins, they wanted 5% yield or a crypto off ramp, BIS data confirms retail use is under 1% of volume
  • Stablecoins are a settlement innovation, networks did not hijack them, incumbents always adopt new tech to compete
  • Visa’s value is governance, operations, and distribution, VSP is just the next network in the network of networks
  • VSP = single Visa managed environment to mint, burn, move, and manage OUSD, with wallet as a service, passkeys, maker/checker controls
  • OUSD first because compliance and trust win, banks trust banks, not Circle, 63% of corporates want stablecoin access via their bank (EY Parthenon)
  • Use cases anchor on ramps and off ramps, treasury funding, global payouts, merchant settlement, stablecoin linked cards ($7B settlement run rate, 160+ programs)
  • VSP is to stablecoin what Visa DPS is to debit, same playbook, different rails and connection points
  • Visa enables Bank Issuers without picking winners, Mastercard bought BVNK and owns a single roadmap, overlap is real but philosophies differ
  • Enablement models win, every member becomes an investor in the network’s growth
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Hypothetical Scenario — Using Star as Entry Point for Zelle at POS

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Summary. This is my best case scenario for a STAR acqusition and as a banker I still wouldn’t do it. PIN networks are archaic. I would externalize Zelle for POS and sell it to merchants based on value (ex instant funds availabiltiy, liability shift at POS and eCom). For the tech, I would subcontract the service to Visa while I own the network.  Don’t bother reading this blog unless you are a payment geek that wants to think about the macro options on a “new debit network”. Remember, even if the top 3 banks moved to a new debit network, it would only be a 2% revenue hit to Visa. This is almost noise.

Background

I’ve spent this week writing about what a top‑4 bank consortium buying Fiserv’s Star network would and wouldn’t accomplish. On Monday I laid out five business and political reasons the deal is unlikely to happen. Tuesday’s blog explained how ApplePay/PIN-debit works within a technical deep-dive. This blog outlined why owning Star doesn’t buy the tokenization and provisioning path that Visa still controls. Yesterday’s retailer and industry feedback captured what I heard from the merchant and processor side stakeholders. One of the stakeholder ideas surfaced with a new idea worth sitting with: what if you didn’t buy Star to run PIN debit at Durbin-exempt rates — but instead as the on-ramp for accepting Zelle at the POS?

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Understanding ApplePay in PIN Debit

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Payment Geek detail on the EMVCO Dependencies of Debit and How Cap One Solved It

This is a technical addendum to today’s post on the reported JPMorgan/BofA/Wells/PNC exploration of buying Fiserv’s Star network. That post laid out five business and political reasons the deal is unlikely to happen. This one goes underneath the business case to the technical architecture that makes the wallet portion (ie ApplePay, GPay, SamsungPay) of the problem particularly ugly for any bank that thinks owning a PIN debit network gets them out from under Durbin.

The short version: an issuer that buys Star cannot simply route its ApplePay volume through Star. The tokenization and provisioning plumbing that makes Apple Pay work belongs to Visa and Mastercard, sits inside a standards body (EMVCo) that issuers are not members of, and is architecturally structured around the card brand on the card (not the issuer that issued it). A bank that owns Star still can’t put a Star token in Apple Pay; it is a new AID in the phone.

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Are US Banks Really Considering a Durbin End Run with FISV’s Star?

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(Paid Subscriber Research)

Yesterday’s WSJ story that JPMorgan, Bank of America, Wells Fargo and PNC have held “preliminary and tentative” talks to buy Fiserv’s Star debit network is being read as the opening shot in a big-bank campaign to escape Durbin. My first reaction: this is a bit of old news. Fiserv and its private equity suitors have been shopping Star as a spin-off for the better part of four years. Every time the pitch surfaces, the same five objections surface with it. Nothing about the current version of the deal has removed those objections; if anything, the political climate has made them harder.

Before I get to why I don’t believe it will happen, a quick refresher on the business logic, because that logic is real, and it explains why Fiserv can keep the pitch alive.

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Open USD – Stablecoin’s New Gold Standard for Trust, Compliance, Governance and Economics

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July 1, 2026

Executive Summary

  • 140+ institutions — Visa, Mastercard, Stripe, BlackRock, Google, Coinbase, and major global banks form the largest stablecoin consortium ever assembled

  • Shares reserve economics — Partners receive yield from underlying reserves, not the issuer; flips the Circle/Tether model

  • Zero-fee minting at scale — No volume limits, no enterprise penalties

  • Pre-transaction compliance — Transfer hooks block sanctioned transactions before settlement, not after

  • Burn and clawback authority — Architectural ability to freeze/burn for OFAC compliance built into Token-2022 implementation

  • Confidential transfers with regulatory visibility — ZK-encrypted balances for corporate privacy; viewing keys for auditors

  • Neutral governance — Independent board of ecosystem partners; no single corporate controller

  • Stripe default — “The default stablecoin for businesses running on Stripe”

Yesterday, we witnessed the launch of what may become the most consequential stablecoin ever: Open USD (OUSD). With over 140 financial, technology, and crypto institutions signing on—from Visa and Mastercard to Stripe, BlackRock, and Google. This isn’t merely another stablecoin entering a crowded market. This is the emergence of a new trust network architecture that I’ve been writing about for years.

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Agentic Apocalypse — How to Stop It

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Company Spotlight: Delta Network

June 30, 2026

In my recent posts on Agentic Data Battle: Intent and Agentic – Intent and the New Data Games, I’ve emphasized that the trust challenge in agentic commerce goes far beyond authenticating the consumer and the agent. We must verify the action itself (the fourth pillar of any transaction). But no one is willing to budge. Platforms don’t want to give out intent to banks or networks (even with explicity consumer consent), they don’t want to be measured. While networks are the right neutral party, network VAS means loss of control. Today’s blog outlines the hard data on agent intent failure (28%) and best in class example of how to fix it.

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Agentic Data Battle: Intent

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Key Friction Point in Agent (M2M) Transactions. Example of why real agentic transactions are 2-3 yrs away. We have a new party in a transaction that everyone needs to trust: the agent. Mastercard/Google Verifiable Intent is a LONG WAY from satisfying the need. It’s a self-attestation (see the Technical Addendum at the end of the Blog).

My prior blogs have focused extensively on the trust challenge in agentic commerce: authenticating the consumer and the agent (the actor). As I discussed in EMVCo and DPCs, financial institutions must verify and authenticate the four pillars of a transaction: the User, the Instrument, the Actor (Agent), and the Action (Payment). Today, I want to dive deeper into the fourth pillar—the Action—and the emerging battle over intent data.

A New Party to the Transaction

For decades, payment transactions have involved a familiar cast: the consumer, the merchant, the issuer, and the network. Each party has well-defined roles, risk allocation, and data flows governed by established rule sets. Agentic commerce introduces a new party: the Agent.

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Can Processors Win a Role in Agentic?

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Adyen’s stock is down over 40% this year. Investors aren’t just punishing one company; they’re repricing the entire processor category as agentic commerce threatens to restructure who controls economics and merchant relationships. The market sees what I’ve been writing about for 18 months: processors are at risk of becoming dumb pipes.

Yesterday, Adyen announced Adyen Agentic a suite of modular APIs encompassing Agentic Feed (product/inventory), Agentic Cart (checkout orchestration), and Agentic Payments (authentication, fraud, tokenization). The positioning is explicit: a “universal translator” that lets merchants integrate once and participate across every agent platform, protocol, and payment method.

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