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…]


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.


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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Post image for Adventures in Attribution – The Apple vs. MCX Dialog

Like many payments industry insiders, we have been following the recent impassioned industry dialog about the relative merits of Apple Pay and MCX’s CurrentC wallet with a combination of amusement and despair. The barbs and accusations being exchanged by the rival camps in this technological holy war between NFC and QR codes suddenly reminded me that many years ago I invested a big part of my academic career to the field in social psychology. I had a particular interest in the sub-discipline of Attribution Theory, which “deals with how the social perceiver uses information to arrive at causal explanations for events.”

In layman’s terms, attribution theory is concerned with how and why ordinary people explain events as they do. Two major areas of contention between Apple Pay and MCX reveal interesting lessons about the way information is released affects the perceptions of observers. Let me explain.

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Post image for Let’s Just Skip Sig and Go to Chip and PIN

Last week I was in Victoria, British Columbia doing one of our Glenbrook Payments Assessments. In anticipation of my trip to the North American Land of Chip andPIN, I had both a Visa and an Amex card reissued in the chip format. Neither of my issuers supported PINs on my credit cards, so I was informed by both of the issuers that I’d be in chip and signature mode.

When in Canada, I used my cards many times and my main impression was that this chip and signature stuff was stupid, and it would have been so much easier to have been assigned and using a PIN!
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Post image for PoF 10 – On Faster Payments in the US

In this interview with Glenbrook’s founding partner Carol Coye Benson, we discuss the prospects for a faster payments system in the US. Responding to the October 22 announcement by The Clearing House, Carol expresses her caution and hope for ways to accelerate replacement of today’s system for credit push payments.


Post image for Considering Bitcoin as a Payment Network

Wikipedia says, “Bitcoin is a software-based online payment system.” But what sort of payment system is it? We get this question all the time when we talk about Bitcoin in our workshops.

At Glenbrook we like to start each Payments Boot Camp talking about payments systems fundamentals and the common attributes that can be used to understand and position any payments system. In every workshop someone will raise their hand in the first ten minutes and ask about Bitcoin. They are always thinking that Bitcoin is so revolutionary it must somehow invalidate how to think about payments systems. We love this because Bitcoin doesn’t refute how payments systems work — it illustrates and reinforces how all payments systems work. Let’s look at some of the specifics: [click to continue…]


Post image for PoF 9 – Realtime Authorization and Messaging

Realtime, consumer-facing authorization of card payment transactions has been available for some time but few of us have it offered to us by our issuers. Today, there’s a number of technology providers selling truly realtime notifications and two-way approval requests based on the live authorization stream. Glenbrook’s Russ Jones takes us through what’s on offer while George gets grumpy over what he’s got today. As more consumers become thorougly alarmed over data and privacy breaches, this could be the time for issuers and independents to offer the “worried” consumer more control and a strong role in fraud management.

Companies mentioned in this episode include:

TSYS Spend Controls for consumers and corporate card administrators

MasterCard InControl

Vantiv MobiMoney

Red Giant Mobile


Post image for A Central Bank Takes on Mobile Payments

Ecuador’s Central Bank has embarked on an ambitious course to launch an affordable and widely available mobile payment scheme.  In fact, it will be the national wallet. With some uncertainty, it appears that Ecuador’s initiative may be the second central bank effort to enter this space. Jordan’s central bank has launched “JoMoPay”, but for those of us who don’t read Arabic, details on the initiative are less than sparse.

But as I return from Quito and the M2Money Andean conference, there are details to share on Ecuador’s effort. The central bank will be both the owner and the operator of the scheme. They chose a proven mobile payment platform that will lend both capability and experience to the new initiative. The vision includes building out an ecosystem that includes P2P, top-up, B2B, cash in and cash out, in-store purchases, and electronic receipts. The plan is to link the mobile payment platform with the banking platform so that mobile accounts can receive funds from and send funds to bank accounts.


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Post image for PoF 8 – Virtual Banking, PayPal, Apple Pay – A conversation with Dan Schatt

Join George Peabody in a conversation with Stockpile’s Dan Schatt on virtual banking, innovation, and the future of PayPal.  Dan is former GM of Financial Innovations at PayPal and the author of Virtual Banking: A Guide to Innovation and Partnering, a new book that includes a chapter on Bitcoin and math-based currencies by Glenbrook’s George Peabody.  We also discuss Stockpile’s innovative approach to equities ownership, a business model that will be fascinating to watch develop.


Post image for ApplePay, NFC, QR (Oh My!) and the New POS

First There is a Mountain, Then There is No Mountain, Then There is…

I’ve been thinking about what the future of the point of sale environment will look like from a consumer perspective. Of course, 10 years ago, we all knew what it was going to look like: consumers tapping their mobile phones to Near Field Communication (NFC) equipped POS terminals, transferring card data that looked a lot like magnetic stripe data. The card issuers loved the vision, the card networks loved it too, and the phone providers (who owned the space on the phone) were dreamy-eyed just thinking about all the new revenue.

Google, and its Android phone operating system (53% U.S. phone share) even signed up — first with an approach that aligned with the original Secure Element based design and later with the Host Card Emulation approach, which wrested NFC from the sole control of the carriers. But Apple (42% U.S. phone share) remained silent.

And our belief in an NFC future waned.

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Post image for PoF 7 – Biometrics, Apple Pay, and Privacy: a Talk with Steve Wilson

Apple Pay’s announcement has brought attention to biometrics and their role in payments security and to the broader, if amorphous, concept of online identity. Steve Wilson of Constellation Research and Glenbrook’s George Peabody discuss local and cloud-based biometrics, identity attributes, and the vexing challenges of privacy.


Post image for The Loosely Woven Threads of Sibos 2014

I’m just back from Boston and the marathon known as Sibos 2014. In a post earlier this week, I shared a couple of observations from the show floor and the conference sessions. Now that the conference has closed, I’m thinking about the themes that spoke to me. And, this year, I didn’t get the sense that there were big new ideas being debated. Don’t get me wrong, there were great conversations and a few interesting products being showcased. But I just didn’t hear or feel a clear consensus on where we are.

With some reflection on the overall experience, however, I do think there are notable threads that create a narrative, albeit loosely woven, on where we are as an industry.

Four key, if loosely woven, threads stand out:

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Post image for Report from Sibos 2014

Time is a vacuum at Sibos. It’s a great time to catch up with old friends and meet new colleagues.  The exhibition floor is overwhelming, even now after banks have scaled back their presence at events like these.  There is a plethora of panels on a broad range of topics to choose from.

It’s a little bit like being at a casino – lots of activity and no clocks.

So, what have I seen so far?  The biggest idea so far has been a demo of a real-time, payment transaction risk-scoring module. You read that correctly: real time, transaction risk-scoring.  This gets to a fundamental problem for banks – what types of activities are my customers up to? Who are they transacting with and what are the implications of those activities for the bank?

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Post image for Out of Africa:  Watching the Evolution of Mobile Money

It turns out you don’t have to be unbanked to like M-Pesa

I had the opportunity earlier this month to visit the mecca of mobile payments, which –with all due respect to the recent accomplishments in Cupertino — remains Nairobi, Kenya.

The “Kenyan miracle” in payments has been well documented, particularly in terms of how Safaricom’s M-Pesa ™ product has brought basic electronic payment capability to millions of formerly unserved consumers in the lower income and geographically remote segments of Kenyan society (the word pesa means “money” in Swahili, so this is literally mobile money, a nice example of the kind of descriptive and explanatory branding we love at Glenbrook).  This is accomplished by adding a prepaid mobile wallet with a cash balance alongside the prepaid value already stored on wireless phones to fund voice and data usage.  The value in the mobile wallet can then be transferred to other wallet holders using a simple set of text-based menu options. m-pesa logo [click to continue…]


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