In Glenbrook's Payments Boot Camp® and in our payments consulting work, we use our Domains of Payments framework to subdivide the major use cases and payment contexts into a half dozen categories or domains. The Remote Domain contains cross-border e-commerce, a particularly challenging use case where the buyer and seller are separated by distance and, in the case of cards, credentials are presented without the cardholder present. This is card on file (COF), card not present (CNP) transactions live. Just add cross-border complexity.

If you sell via e-commerce in the EU, Middle East and to the global market, you’re crossing borders. That means regulatory compliance. It also means you want your customers to pay you in the manner to which they’ve become accustomed. Germans and Belgians like SOFORT and PayPal. The Dutch prefer the domestic iDEAL system. The UK is card-centric.

To reach customers in those countries and beyond, you need a payment services provider with reliable connectivity into those domestic systems, access to global card systems, and the ability to maximize authorization rates.

Credorax is a PSP founded in Israel with a strong technology focus that has also become a Malta-based bank in order to expand its EU presence as an acquiring bank.

In this Payments on Fire® episode, George and Credorax COO Moshe Selfin discuss the initial impact of the novel coronavirus on the travel segment and then move on to authorization optimization.

The podcast includes the Credorax creation story. While technical capabilities were the core of its start-up phase, it was the EU’s PSD2 regulation that created its market strategy and steered its business evolution. While many in the payments industry complain about regulation, it’s true that mandates move markets and, as Credorax saw, create opportunity.

Take a listen to how a this not-yet-quite-global company positions itself in an increasingly crowded market and its approach to delivering value.

Direct download: EP121_Credorax.mp3
Category:general -- posted at: 3:55pm EST

In this special episode of Payments on Fire®, Glenbrook partner Elizabeth McQuerry, partner in charge of Glenbrook’s Global payments consulting practice, leads a conversation on the development and adoption of realtime payments in developing markets.

Joining Elizabeth are Miller Abel, Deputy Director, Principal Technologist at Bill & Melinda Gates Foundation and Gene Neyer, Executive Advisor to Icon Solutions, board member at the US Faster Payments Council, who has supported Gates-funded projects in Pakistan and Tanzania.  

This discussion was originally scheduled to take place at the 2020 Payments Canada Summit.

If the development of faster payment, instant funds transfer systems is important to you, take a listen to this episode on the development of these instant push payment systems in developing markets. Many of the issues and concepts discussed apply to developed market concerns and you will gain important insight into the multiple paths governments and leading tech firms take in system and ecosystem development.

Anchoring the discussion is the set of principles for financial inclusion codified in The Level One Project Guide, a work product of the Bill & Melinda Gates Foundation.

An essential principle is the role of real-time payments as an economic development tool. Digital payments have to have the immediacy of cash to be transformative. No one can afford to wait for a payment to wander for a few days through an antiquated banking system when they have to buy fuel in 20 minutes.

Digital payments also have to solve for specific use cases which quickly leads to the need for an API layer to embed payments into purpose-built apps. The discussion addresses these principles and illustrates them with examples like the agriculture-focused version Uber for tractors.

To address the necessary transaction switching and connectivity infrastructure, the Gates Foundation has built the Mojaloop
platform, an open source initiative to ease development for  governments and commercial entities alike. Miller takes us through its genesis and applications.

Elizabeth, Gene, and Miller discuss the extraordinary and growing penetration of inexpensive smart and surprisingly capable feature phones in markets like Nigeria and Myanmar.

They also discuss the “stack” of rules, rails, account providers, and apps that enables innovation, a model that applies to both developed and developing markets.

This is a comprehensive discussion that touches on the roles of government and commercial stakeholders and how they differ across countries, payment economics, and the multiple paths to broad deployment of real-time payments. Take a listen.

Direct download: EP120_FasterPaymentsDevelopingMarkets.mp3
Category:general -- posted at: 3:09pm EST

The “supermarket” days of financial institutions providing all of our financial services and holding all of our accounts are long over. Brokerages, insurance companies, and the expanding array of fintechs compete to hold, manage, or organize our assets.

With so many custodians of our financial data, it can be difficult for an individual to generate a complete picture of her finances. That’s been a longstanding problem that was addressed over two decades ago by data aggregators like personal financial management app Mint.

Individuals found this single portal approach quite useful. All we had to do was provide the aggregator with the login credentials to each of our online accounts. The aggregator would then log into that account on our behalf, “read” our data off of the web page, and display all of that data in a single consistent fashion (this is “screen scraping”, the method of data gathering that started it all).

This single view capability has been a compelling proposition that dozens and dozens of firms have emulated in the years since.

Further, use cases have proliferated where a fintech, for example, simply needs access to one or two accounts in order to fulfill its goals. The mobile app model has just accelerated the expansion of apps needing access to user account data.

Yodlee and Plaid, now a Visa company acquired in a whopping big transaction, are examples of companies selling access to user account data either through screen scraping or, in a more modern approach, direct integration to individual financial institutions.

Direct integration to each bank or credit union’s data is, of course, inefficient because each banks exposes its own interface. The syntax and functions of each vary making everyone’s development and maintenance tasks more difficult..

Evolution of a Standard

Into this gap is the Financial Data Exchange organization. With over 100 members https://financialdataexchange.org/pages/members
from a wide range of companies - Chase, Plaid, FS-ISAC, Intuit, PNC, Fannie Mae, Truist, Cashflow Solutions - its goal is to standardize the domain of permissioned at a sharing through an API layer in operates in front of financial institution data.

FDX is a true standards organization. Its members pay dues, yes, but their more important contribution is time and effort. Working groups take on particular technical and usage aspects, develop them, and generate draft standards for the entire membership to ratify.

One of its working groups focuses, for example, on the user experience, on the use cases that benefit from data sharing and how to make that process transparent and secure for end users.

In this Payments on Fire® episode, George and FDX Managing Director Don Cardinal discuss the API, its many reasons for being, and the standards development process.

They also discuss Akoya, Fidelity’s former data sharing unit that is now owned and operated by The Clearing House and 11 member banks. Akoya serves as a central integration provider making it easier for a fintech app to connect its users to the banks subscribing to the Akoya service.

So take a listen. FDX is important to the fintech and financial services community. It’s important to end users. And it’s a great example of how comprehensive standards can be developed swiftly.

 

Direct download: EP119_FDX.mp3
Category:general -- posted at: 1:15pm EST

1