Post image for Square’s $Cashtag. Smart. Very Smart.

Smart. Very Smart.

I applaud Square’s introduction of “$Cashtags” for a number of reasons.

First, some of you may know that I am a bit of a nut when it comes to brand names in payments – I think it is incredibly important that the sending and receiving party both know/understand the word being used for the payment. This can be a generic (“small b”) brand – “Do you take checks?” or a “big B” brand – “I’ll pay you with AmEx”. But both parties need to understand the term! This is a surprisingly important barrier to entry for payments startups.

So Square is expanding their Cash service to support merchant payments. By defining a term $Cashtag, they are giving the world a word that both parties will get – brilliantly piggybacking on the worldwide understanding of the term “hashtag”. And the idea of letting the receiver of payment claim their own “pay me” code, and publicize this – should have immediate and visceral appeal. Why isn’t my bank doing this? Where is my “Bankpay” tag?

Cashtag

Secondly, you really have to admire Square for being willing to cannibalize itself. A small merchant claiming a $Cashtag may prefer this to accepting a card with their Square dongle. You can argue about the relative economics for Square of the two transactions, but the more important point, in my opinion, is that Square isn’t falling victim to its own success, but rather embracing new methods of letting merchant get paid.

Smart. Very smart.

This post was written by Glenbrook’s Carol Coye Benson.

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Post image for PoF 16 – Talking EMV in the USA

EMV and its moving parts presents a far more complex payments method for merchants, ISVs, payment processors, and financial institutions than the good old magstripe. It continues to have ramifications throughout the payments ecosystem.

As Executive Director of the Smart Card Alliance and director of the EMV Migration Forum, Randy Vanderhoof has shepherded a sometimes fractious payments industry as well as encouraged a a skeptical merchant community toward EMV adoption. Now that the US EMV deployment is a certainty, Randy and Glenbrook’s George Peabody discuss what got us here, where the challenges are, and how EMV will evolve in the US.

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Post image for Nothing More Social

I read the Facebook announcement of payments through Messenger with interest, and just a touch of “about time”!

After all, there is nothing more social than sending money to family and friends. And although much attention is paid in the press to the friend-to-friend use cases, I suspect that the family-to-family opportunities are much greater. Not just kids’ allowances, but the whole wide world of both occasional and ongoing support payments among relatives. And how nice that it could easily solve that vexing problem of thank-you notes after sending off the birthday check.

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Post image for Pof 15 – Small Business Banking grown from Seed

It’s always intriguing to watch how a good idea evolves into new areas. Such evolution often happens when designers find new applications for their ideas. Brian Merritt and Ryan Hildebrand were part of the early team at Simple that was subsequently sold to BBVA. In mid-February, they announced the formation of Seed, a Y Combinator firm, designed to bring small business banking into the mobile and SaaS-based worlds. Listen to this conversation between Glenbrook’s George Peabody and Seed CEO Brian Merritt. While very early in the company’s development, Brian’s description of the company’s “API first” approach banking makes clear what’s possible when legacy technology and processes are in the rearview mirror.

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Post image for Now What? Immediate Funds Transfer in the U.S.

The Federal Reserve’s recent announcement that it would not build a new payment rail for processing faster payments created some disappointment for many who are unsatisfied with our country’s current payments system capabilities.

In a welcome move, The Clearinghouse (TCH) has announced its intention to fill this void and build new real-time “rails”. There are, however still many unanswered questions about the path forward. How will the new capability work? And what are the implications for other system providers and end users?

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Post image for New POS Security from Old System Topology

Anyone around technology for a couple of decades recognizes how old ideas tend to return. To those folks, using a browser to do data entry into an enterprise database looks a lot like a mini or mainframe system’s terminal application.

Back for another incarnation in payments is an old fashioned topology familiar to anyone who used or deployed stand-beside dial-up terminals. In that mode, the POS terminal is not connected to the merchant’s system in any way. It sits next to the cash register and the sole integration point between the two is the staple the clerk uses to connect the cash register receipt to the print receipt from the POS terminal. The data flow went directly from the terminal to the acquirer’s modem bank and front end system, never touching the merchant’s system.

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Post image for A Different Type of Start Up: Payments in Afghanistan

Imagine a country where less than 10% of the adult population has a bank account and only about half of those account holders have a debit card. Credit cards are virtually non-existent. There are only a couple dozen banks in the whole country. Cash truly is king. Now imagine decades-long political and sectarian conflict that continues to wreak havoc throughout a vast geographic territory. This is Afghanistan.

By any stretch, I’m not an Afghanistan payments guru but I am always fascinated by societal transformation and that’s exactly what’s underway. Let me share my conversation at Sibos 2014 with representatives from the Afghanistan Banks Association. Against this turbulent background, Sibos might seem like an alien planet but for these bankers, it’s a chance to show the world that Afghanistan is open for business and see evolving international standards first hand.

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Post image for PoF 14 – A Ground Level View on Tablet POS

Tablet-based ePOS cash registers are growing in popularity and capability. A boon to smaller retailers who have been laggards in store automation. But without technical support staff on hand, solving issues when they arrive, never mind securing systems, is an expensive proposition. Join Glenbrook’s George Peabody and payments industry veteran Chip Kahn, founder of Boomtown, a marketplace for merchant tech support pros, for a discussion on tablet POS trends, what SMB retailers needs, and the payments programmability.

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Post image for PoF 13 – Lexis Nexis Risk Solutions on Mobile Fraud

Aaron Press of Lexis Nexis Risk Solutions joins Glenbrook’s George Peabody for a discussion on mobile fraud trends based on the firm’s True Cost of Fraud mCommerce report. While the mobile channel presents fraud and risk professionals with a wide variety of tools to mitigate losses, the report concludes that the mobile channel represents a disproportionately large loss vector. In this Payments on Fire podcast, we talk about why and what needs to happen to fix the problem.

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Post image for PoF 12 – Risk Management, Remittances, and Innovation – A Conversation with CBW Bank’s Suresh Ramamurthi

Glenbrook’s Elizabeth McQuerry and George Peabody talk with CBW Bank’s Suresh Ramamurthi on payment innovation, risk management, and international remittances. Suresh is also founder of Yantra Financial Technologies. He and his wife Suchitra Padmanabhan were featured in this NY Times Dealbook article last month. Also quoted in the Dealbook post, Elizabeth found both Yantra’s technology and their use of the CBW Bank business as an innovation platform exciting.

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I am writing this post sitting on the front steps of our house in San Francisco. I have locked myself out three times recently, more than I have in the past three decades. Is it dementia? No, I blame mobile payments.

Last summer I bought a case for my iPhone that had handy little pockets for a credit card. Initially I only used it for my Clipper Card (the mass transit payment smart card we use here in the Bay Area). It was great to simply tap my phone as I boarded the tram or bus rather than fumbling in my briefcase or purse for my wallet. And it had the added benefit of making me look cool – hey, she paid with her phone, how’d she do that? (I know, I know, Pathetic Payments Geek.)

My first-gen mobile payment setup:

FirstGenWallet

Eventually I started putting my credit card in the other pocket. If I was in town, I’d slide in my primary personal card and when I was traveling for work I’d substitute my work card. I even started sticking my drivers license in it, so that I could scan my boarding pass QR code, hand over my license, all without pulling out my wallet. Because I travel so much, I’d squeeze in my hotel key card, too (or rather, substitute it for the Bay Area-specific Clipper Card). I hate carrying a purse, and would simply slip my phone in my pocket and head out. Absolutely bliss. Yes, I am that person who really needs a mobile wallet.

Over the last month or so, I haven’t been traveling as much. Which means that I have to actually use my keys rather than a hotel room key card. And that’s when I started locking myself out of the house. Repeatedly.

I recognize that, eventually, my phone will unlock the car and the front door of our house. But in the meantime, I am going to have to go back to carrying a purse. Getting locked out repeatedly is absurd.

(Afterword: I picked up an iPhone 6 yesterday and immediately started using ApplePay. I stuck my Clipper card between the case and the phone to address the inconvenience of digging through my purse at the tram stop. But am resigned to carrying a purse for the time being to hold my house keys…no more getting locked out.)

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Dennis MoserOn a bright sunny New Year’s Day 2015, we lost our long-time friend and colleague Dennis Moser.

Dennis had been battling a recurrence of cancer – undergoing treatment to battle the disease following the appearance of new symptoms at Thanksgiving.

I remember seeing him in the office just before Christmas – as he was about to complete his last round of radiation therapy. While tired from the treatments, he was as optimistic as ever that this was just going to be a brief battle.

When we heard the news of his passing just a few days later, we were stunned.

Dennis and I have worked together for over 40 years – having first met as IBMers in San Francisco early in our working careers. We both ended up later at Visa – and, ultimately, working together more closely as partners at Glenbrook. Our wives have had a similarly lengthy friendship over these many years.

A good friend, upon learning of Dennis’ passing, commented: “Dennis was one of the truly nice people I’ve known.” Indeed, everyone who has known Dennis must share that feeling – he was an optimist, a very hard worker, one who wanted and did add real value to whatever he was doing.

I remember Dennis also for his passion for reading – he was always quick to ask: “Read any good books lately?” to which I’d typically stumble trying to come up with something I actually had read and could recommend. Mostly, I just said – not really, how about you? – to which he’d always have a couple of great recommendations! I remember him most recently recommending “The Martian” as a recent favorite of his. It’s now on my Kindle and I’m sure I’ll enjoy it based on his recommendation – his recommendations were always the best!

They say with age comes some modicum of wisdom – but it’s still so hard when death of a colleague comes so out of the blue. I know Dennis would want us to remember the good times – and we’ll do that for sure. Meanwhile, we keep Dennis, his wife and daughter in our hearts and minds.

If you knew Dennis, we’d welcome you sharing some of your memories of him in the comments below. He was a very special friend and colleague – and we’ll miss him dearly.

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Post image for Regulation, the Blockchain and Programmable Money

One of the truly interesting presentations at this year’s Money2020 was the speech by Ben Lawsky, superintendent of New York’s Department of Financial Services. Lawsky’s remarks focused on his department’s BitLicense proposal and demonstrated the struggle Lawsky and his team face as they create regulation for Bitcoin and math-based currencies (MBCs) in general.

Released in July, the NYDFS proposed “BitLicense” regulatory framework requires comprehensive reporting, background checks and identity proofing of business leaders, as well as mandatory bonding for all BitLicense holders at rates specified by the NYDFS. The first version was roundly criticized by Bitcoin advocates as overbearing and costly, causing some to declare they’ll do business anywhere but the state of New York. Other stakeholders view the BitLicense as a set of necessary controls appropriate to entities handling citizen monies. But it’s not an easy binary choice. [click to continue…]

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Post image for PoF 11 – Bitcoin, Banking, and Crypto 2.0 Approaches

Glenbrook’s George Peabody discusses Bitcoin and blockchain evolution with Sean Safahi, co-founder and CEO of Bold Financial Technologies, a provider of math-based currency services to the banking industry. Applications that make use of the bitcoin blockchain and consensus-based approaches are proliferating. We discuss these including the newly launched Stellar, a non-profit infrastructure provider for currency exchange and asset transfer.

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Post image for Glenbrook’s Retailing Framework

I’ve been thinking a lot about how payments and payment-related technologies fit into the emerging world of multi-channel commerce or omni-commerce as some people call it. When a lot of companies describe their omni-commerce strategy, they are usually talking about recognizing customers across channels and being able support a sales cycle that starts in one channel and finishes in another.

Instead of parallel channels (store, online, call center) I think a better metaphor is to imagine a funnel where customers move through a wide area, near area, and localized experience right up to the point where it gets personal. At any point along the journey they can consummate the purchase and move on. But often times, one step leads to the next.

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