Zelle Under Pressure to Handle Payment Fraud More Like Cards

August 8th, 2022|Payments|

On July 20, 2022, there was an article on payment fraud in Digital Transactions, “So-Called Friendly Fraud on P2P Payment Systems Has Caught the Attention of the CFPB." The article was based in part on a prior article in the Wall Street Journal, “CFPB to Push Banks to Cover More [...]

Should the Federal Reserve Create a Digital Currency?

February 9th, 2022|Cryptocurrency, Governments, Payments|

In January 2022, the U.S. Federal Reserve released a long-awaited discussion paper on its thinking about a central bank digital currency, or CBDC.  The paper builds on prior work by the Bank of International Settlements (BIS). At the end, it provided a list of questions for public comment. I thought [...]

Payments 101, Part 8 – Enterprise Payments

September 7th, 2021|Enterprise Payments, Payments, Payments 101|

With this installment, we come to the end of our tour of major payments systems with a description of enterprise payments, which brings them all together.  You can read the earlier installments here. I hope it has been clear throughout these essays that all payment systems share a common structure, [...]

A Realistic Path for NFTs

June 15th, 2021|Cryptocurrency, Digital Goods, NFT, Payments|

There has been a lot of hype around non-fungible tokens (NFTs) lately, and a lot of confusion, so I thought I had better address it.  As it happens, I am involved in my spare time with electronic music production, and that is where a lot of interesting discussions are happening.  [...]

Payments 101, Part 7 – Checks

April 6th, 2021|ACH, Checks, Legal issues, Payments, Payments 101|

This is part of an ongoing series.  For previous installments, go here. Before we wrap up our tour, there is one more payment method we have to cover, which is the check.  The oldest non-cash payment method, it is also the only one that is on the decline, although its [...]

Payments 101, Part 6 – ACH, Wires and Faster Payments

February 26th, 2021|ACH, Payments, Payments 101, Wires|

We are nearing the end of our initial excursion into the basic payment methods with what are the most fundamental ones, albeit the least familiar to the average person.  ACH and wires are the plumbing behind all the other payment types, as well as their own products.  Faster Payments systems [...]

Payments 101, Part 5 – Prepaid Cards

February 4th, 2021|Banking as a Service, Payments 101, Prepaid Cards|

Welcome to another installment in my ongoing tour of the major payment methods, how they work, and the issues and controversies surrounding them.  Earlier articles in this series can be found here. In this article, I will be explaining prepaid cards, a variation of debit cards that deserve a full [...]

Stablecoins for Purchases? Not So Much

January 28th, 2021|Cryptocurrency|

I have said quite a lot in the past couple of months about how Bitcoin is not the best cryptocurrency for actual purchases, mainly because of its volatility.  Instead, I recommended using an asset-backed stablecoin, such as Circle’s USDCoin, to avoid market risk.  I have also criticized the most [...]

Cryptocurrency in China’s Economic Strategy

January 11th, 2021|Cryptocurrency, Governments, International, Payments|

Recently, China piloted a new state-owned cryptocurrency, the digital yuan.  In this article, I will show how this fits into China's larger economic strategy, and why it is a harbinger of problems for the West and the mainstream payment networks. On November 24, 2020, the New York Times published an [...]

Payments 101, Part 4 – Debit Cards

December 23rd, 2020|Debit cards, Legal issues, Payments, Payments 101|

This is part of an ongoing series.  For earlier installments, see The Five Actor Model, Credit Cards, Part One, and Credit Cards, Part Two. In this article, we will dive into debit cards: what they are, how they work, the two different models, and legal issues. Here is the version [...]

Bitcoin is Not a Viable Currency. Stablecoins Will Be.

December 14th, 2020|Cryptocurrency, Payments|

(Note: this article was updated on January 19, 2021 to account for new information, particularly the extension of the boom in Bitcoin valuation since the original publication on December 14, 2020. These changes reinforce the points made in the original) Bitcoin has been on a roll lately, hitting a record [...]

Payments 101, Part 3 – Credit Cards, Part Two

November 18th, 2020|Payments 101|

(This is part of a continuing series.  Read Part 1 and Part 2.)   Introduction When we left off last time, I said that there there was a major decision by the Reserve Bank of Australia in 2002 that had a dramatic effect on the future of the credit card [...]

As Americans Face Economic Strain, VCs are Investing $230 Million in Alternative Credit

October 29th, 2020|Financial, International, Payments|

Before we get back to the history and workings of credit cards, I thought it would be interesting to catch up on an emerging trend, that of "alternative credit." Background On September 24, 2020, Petal announced a $55M Series C led by Peter Thiel’s Valar Ventures.  Petal requires no credit [...]

Payments 101, Part 2 – Credit Cards

October 21st, 2020|Credit Cards, Payments, Payments 101|

Over the next several weeks, we’ll take a tour of the payment methods outlined in Part 1, and go into their history, which helps us understand their current position in the payments landscape. Credit cards have a particularly rich and dramatic history, as I suggested in the following tweet: Beginning [...]

Payments 101, Part 1 – The Five Actor Model

September 29th, 2020|Financial, International, Payments, Payments 101|

Payments has been a rapidly evolving space over the past 20 years, and many companies have sought to get into it, even as the incumbents seek to evolve and expand their offerings.  I have noticed, however, a lack of resources to get new employees up to speed on how different [...]

COVID-19 Update: Things Could Be Worse

April 14th, 2020|Payments|

It’s been a few weeks since my last blog post on the novel coronavirus (COVID-19) pandemic, so this seems a good time to revisit some of the statements I made then. At the time, I pointed out that equity analysts were still forecasting positive earnings per share for the major card networks, [...]

Wallets Within Wallets

July 24th, 2017|Payments|

On July 17, 2017, PayPal announced a new partnership with Samsung to enable PayPal as a payment method within the Samsung Pay mobile wallet. This parallels a similar announcement with Android Pay on April 18, 2017. PayPal followed this up with another announcement on July 20, 2017 that it would be incorporating Chase’s wallet Chase Pay as a funding [...]

Fragmentation in the World of P2P Payments

June 26th, 2017|Payments|

Last time I wrote about the unbundling and rebundling of payments; what I didn’t cover was the downside, which is greater fragmentation of payment services. In the old world, consumers had limited choices when it came to payment methods: Visa, Mastercard, American Express for credit cards (along with domestic brands like [...]

The Unbundling and Rebundling of Payments

June 13th, 2017|Payments|

One of the most interesting trends that I have been following for the past several years is what I call the “unbundling” of payments, which is the exposure of services through open application programming interfaces (APIs) that had previously been bundled into a single product. To think about the scope [...]

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