At its Payments Connect conference BAI assembled a dream ACH panel, consisting of:
Jan Estep, CEO NACHA Rich Oliver, EVP Retail Product Manager, Federal Reserve
Rossana Salaris, SVP, Payments Products, The Clearing House
Stephanie Sturgis-Griffin, CEO Pariter Solutions
The session was moderated by Fred Brothers of eCom Advisors.
On stage yesterday afternoon we had all the necessary folks to not only define the future of ACH but make it reality: the NACHA rule making body, the two largest network, and the largest processor. I was eager to hear what they had to say and impressed by the candid discussion of competitive pressure from alternative payment providers and the imperative to settle ACH transactions faster.
I was featured in Financial Women’s Association of San Francisco (FWA SF) Winter Newsletter. The Q&A is reprinted here, with permission from the FWA.
FWA: What are the current trends in the emerging and alternative payments space?
McCune: Well, they aren’t all that alternative or so emerging anymore, for one. In the online domain, emerging payments poster child PayPal has been around for ten years, and continues to innovate, even though it is now an incumbent with new solutions (like Zong for mobile payments or Intuit’s Payment Network for small businesses) eagerly nipping at its heels.
I am honored to be on the board of the Financial Women’s Association of San Francisco (FWA SF). Each year we award approximately $100,000 worth of scholarships to undergraduate and graduate women studying finance and accounting at Bay Area colleges and universities. Graduate students receive $10,000 and undergraduates receive $5,000.
This year’s deadline is March 17th. If you know any potential candidates please have them visit the FWA Scholarship website. Please spread the word!
The Fed announced this morning that 99% of checks are now clearing electronically between banks. During a period of unremitting bank-bashing, let’s take a moment to applaud a real home run by the bankers. The radical transformation of the check infrastructure, accomplished over the last six years, is due to some very smart law-making (the Check21 law is a miracle of simplicity – a small tweak in law which resulted in an enormous multi-party transformation) and effective collaboration by banks and processors. Congratulations!
Now that checking is another electronic payment system, there are all kinds of things we can do with it – we don’t have to shoot it! As I’ve written about before, I’m cautiously enthusiastic about electronic payment orders – and there may be more innovation to come.
John Stewart of Digital Transaction News moderated an open discussion exploring the most pressing issues in e-payments. It picked up on the list of 10 pressing themes raised in the November issue (pgs. 26-32). The panelists were:
Aaron Fine, Oliver Wyman
David C Stewart, McKinsey
Andrew Frisbie, First Manhattan Consulting Group
The audience fielded questions and the panelists, moderator, and even other audience members chimed in. Highlights are as follows:
Green Dot’s IPO plans revealed that they are becoming a bank holding company. This is completely fascinating to me – and gives, I think, a peek at what may come for retail banking in the future.
At Glenbrook we’ve been talking, thinking, and writing for some time about two related issues. One is the problems retail banks have with their economic model: in a nutshell, that consumers expect “free checking,” and that too much of the bank’s revenue comes from either customer-invisible (interchange, NII) or customer-antagonistic (overdraft fee) sources. The other is the growth of the open-loop prepaid card industry, and the potential for these “banks on a card” to serve not only the unbanked, but the unhappily banked as well. [click to continue…]
If you have been fortunate enough to travel internationally lately, you will have noticed the efficient use of payments in many city transit systems. From the Oyster Card in London to the Octopus card in Hong Kong and many other urban centers, smart cards are being used to make ticketing more efficient and commuting easier. Many US cities including Washington, D.C., San Francisco, and Los Angeles transit agencies are also working to move commuters to contactless smart cards.
Mass transit is the fastest growth area for contactless smart cards globally and is forcing technology improvements to lower costs and improve processing speeds.
Glenbrook’s Bryan Derman is in Las Vegas for the 2010 Prepaid Expo.
Clearly, you know that an industry has “arrived” when it is able to attract (and afford!) a former U.S. President to speak at its annual convention. Well, any lingering doubts about the importance and sustainability of the prepaid card industry were probably addressed by yesterday’s appearance of former U.S. President Bill Clinton at the 2010 Prepaid Expo USA in Las Vegas. Mr. Clinton showed a surprising knowledge of the developments and issues in the prepaid arena and provided useful frameworks for thinking about how the business fits in the broader context of governmental and macroeconomic policy.
The former president began by laying out the two great questions that politicians struggle with and offered a perspective about them that I have frequently heard from friends who have served in government: [click to continue…]
When it comes to mobile payments in the U.S. market, there’s a lot of talk and action around P2P and remote purchasing (bill to carrier models, etc.). But the biggest potential is our huge POS (point of sale) market. This market today is arguably the best-served payments market in the world, with extensive merchant terminalization and multiple cards in the hands of all banked and many non-banked consumers.
The assumed path forward for mobile at the POS has been NFC (near field communication) technology. The technology is reasonably stable and has been extensively trialed around the world, with encouraging consumer reactions. Despite this, there has been little in the way of commercial launches – and none in the U.S. market. That may be about to change – rumors are rife in the industry that major mobile NFC/POS announcements are imminent – possibly through a consortium of carriers working with a single or a group of card issuers.
Last week’s announcement by TSYS of its new hybrid card marks the latest application of the decoupled debit technology first made popular by Capital One in 2007 (though arguably pioneered by PayPal some years before in an online, non-card form). In fact, depending on how it is ultimately deployed, the TSYS product could provide a compelling version of a promising concept that has largely been a disappointment in the marketplace.
To review, under the typical decoupled debit approach, a deposit account at nearly any financial institution can be linked to another bank’s payment card that is used at point-of-sale, and the funding will ultimately be drawn from the deposit account via ACH debit. The card issuer must provide an immediate authorization response to the merchant, and must do so without the benefit of knowing the status or balance of the deposit account (the ACH system lacks those capabilities). A very low cost overnight batch process is used to perform the funding leg of the transaction, withdrawing the funds from the consumer’s depository bank.
Written by Jacqueline Chilton based on a speeches and panel discussion at ATPS 2009 – Airline and Travel Payments Summit (Link to presentations) – Save the date for ATPS 2010 in San Francisco, Nov 30 – Dec 1, 2010
Localization is one of the key trends influencing the future of payments. At Glenbrook we believe that although businesses and consumers travel, sell and source globally, payments are inherently local. Many merchants are looking to expand Internationally and as they do so are confronting domestic payment options in foreign markets. Many are wondering whether or not acceptance of these incremental payment methods will improve the bottom line.
The most important thing in selling anything – a service, digital goods or physical goods – is to get paid. Lower cost is nice, but growing the top line is even more important than reducing expenses
So why consider local payment alternatives? There are three reasons: 1) the promise of increased sales, 2) lower transaction costs and 3) improved processes.
Where are you? What did you buy? How much did you pay? Did you get a deal? This might sound like your teenager on their phone, but it’s what a new company called Blippy hopes to answer with a new Web 2.0 service.
Here’s the basic premise. What if you could broadcast everything you bought in real-time to friends that breathlessly follow your whereabouts? I’m at Starbucks and just ordered coffee. I just swung by Best Buy and got a great deal on an LG flat panel. I’m at Macys and just bought a new Le Creuset pot. You get the idea. Sort of like Mint meets Twitter. Yeah, the company says, there might be some privacy issues, but what if you logically separated your payment cards into ones for private purchases and ones for public purchases? A designated Blippy card so to speak!
Lets set aside whether this idea will get, or deserves, any traction and focus instead on how it works and the compromises that had to be made to get this sort of a service off the ground. Broadcasting something to a community of friends or followers in real-time in today’s hyper connected, super integrated world is easy if you know what to broadcast. And knowing what to broadcast only requires access to real-time purchase data. Ah, there’s the rub.
I spent most of 2008 and early 2009 completely obsessed with the credit crisis (evidenced by this index of the best crisis coverage I created just over a year ago). Reading this Andrew Ross Sorkin piece in tomorrow’s New York Times got me all riled up again:
What the Financial Crisis Commission Should Ask
NYTimes’ “Dealbook” column by Andrew Ross Sorkin
Tuesday, January 12th 2010 The Financial Crisis Inquiry Commission hearing on Wednesday will partly be political theater, but used correctly, it could help direct the national conversation.
On Wednesday the commission’s opening witnesses are chief executives from Goldman Sachs, Morgan Stanley, JPMorgan Chase and BofA. [click to continue…]
Editors note: This post describes the third in a series of panel discussions on mobile payments. The series is organized by MPay Connect and seeks to tap innovators in Silicon Valley and link them to mobile payment pioneers overseas, fostering understanding and discussion of how to apply lessons from the developing world to other markets. See also our Payments Views posts from the first and second events in the series.
Thursday evening a group of Wharton, Harvard alumni and payments professionals met at Google to discuss “Will Mobile Payments replace cash in the last mile?” Money in is the “first mile” of using cash to fund a mobile account and Money out or payment for goods is the “last mile.” Today, typically agents – called human ATMs – are receiving the cash to get it into the mobile payment scheme and a subscriber must go to an agent to get the cash out. Agent commissions make these programs difficult to scale as costs grow as volume grows, unless the mobile money transfer network can move to electronic payments in or out.
The session was moderated by Menekse Gencer from mPay Connect Consulting. The panelists were
Glenbrook launched this Payments Views blog back in February as a place to debate and discuss the Payments News of the day. We’re thrilled with your participation in the comments and pleased with the steadily climbing traffic. Looking back over the past year, seven popular topics and recurring themes stand out: [click to continue…]
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