Though we never knew you at all – because you only did a soft launch
You had all of the drama of Kadarshians but none of the glamor
And those around you fought and little got shipped Continue reading
Last Friday, I attended a closed door session on FinTech at the White House – alongside a few others in the Financial services ecosystem – Founders, Investors, Academics, a handful of Financial institutions and Regulators. Titled “The White House FinTech Summit” – the intent was to promote a discussion, sans media, on what could be done better to progress innovation in financial services, as well as communicate the administration’s own perspective on topics such as Financial inclusion, Regulatory arbitrage, Cyber Security and Big Data. Continue reading
I was invited recently to moderate a panel on Biometrics at the Atlanta Fed with MasterCard, Morpho, Daon, Pindrop Security and NIST, kicking off a One day summit to discuss the current technology environment in US around authentication. There will be a follow-on conference summary made available to the public by the Fed Retail Payments Risk Forum – so this serves as opinion – shaped by my own research and writing on the topic, as well as ongoing debates with organizations who are looking to broaden their use of biometrics. Continue reading
This week, Chase Partnership ends up a Hail Mary pass for MCX, and the 94 Million preloaded cards constitute the single most benefit. Elsewhere, Apple Pay looks to Amex as it rolls out to Canada and Australia – a partner who has sufficient margin in interchange to stomach a toll fee, but smaller market share in comparison. Finally, the platform moves from Mastercard to extend MDES and Express to the Internet of Things is interesting less because of payments, and more when you view it against the backdrop of name-centric identities giving away to algorithmically derived ones. This post is part of my November Newsletter. You should email me at cherian(dot)abraham(-at-)experian(.dot.)com to be added Continue reading
Last week I joined Sherri Haymond of MasterCard and Bharathi Ramavarjula of Facebook on a panel moderated by Paul Moreton, for a CapitalOne summit on Payments. When asked what was more important for the future of commerce – Sherri spoke of how security and trust is key, and I talked about how messaging has intersected with payments, (and in Wechat’s case) now intersecting with lending – with Bharathi eloquently summing it up as – “Facebook sees Commerce as a conversation”. Continue reading
In Payments, Tokenization has surfaced two key points of debate for financial institutions. The first has to do with bank partnerships with technology providers like Apple, Google, Samsung et al – and how these partnerships need to be equalized around the topic of cost and control. Though the fear of disintermediation isn’t new, concerns about costs, data sharing and customer privacy has received a disproportionate share of this internal debate. Following is a brief perspective on how this is further shaped within banks and the downstream impact to those who intend to wrap them. Continue reading
As banking moves from branch to app – from a wholly owned and curated experience inside a branch – TO – an app that vies for space in a “democratized” and crowded home screen, banks must realize that they no longer own the entire canvas. Instead they merely follow the design principles set by the most-used apps on our phones. I no longer compare my bank app with that of another bank, I compare it against the services I use often – Facebook, Twitter, Gmail, Apple Pay, Uber etc. And if who you compete with on this platform has been redrawn to include brands who have nothing to do with managing money – then you have to try as hard not to be boxed in as a bank.
Having both the talent required to design these new experiences, and the capital to acquire them will only serve to further differentiate banks that have this focus as a priority vs those who will in the end get wrapped.
For Apple Pay, tokenization is the process by which card information is protected and subsequently shielded from the merchant and other parties in the transaction flow – till it reaches an entity equipped to reverse the translation and submit the authorization for bank approval. With AP – this role is entirely owned by the card schemes, even though the specification put forth by EMVCo places no such stipulations and allows third party “Token Service Providers” to exist. Apple is said to have welcomed “non-card scheme TSP’s” to operate within Apple Pay for a couple of reasons – the ability to support non-payment tokens as well as a hedge against putting all its eggs in one basket. For network TSPs like V and MA – tokenization represents a real advantage that dis-incentivizes disruption, while opening their rails to far more potential than just payments. Continue reading
Two quick notes before I trade a chilly 36 for a blistering 96, and spend the next few weeks in India. First up is on Samsung’s acquisition of Loop Pay. Second is a followup on Apple Pay Fraud that has now graduated from an itch to a raging infection. Continue reading
“Building a better mousetrap merely results in smarter mice” – Charles Darwin
Credit card issuers in general have a good handle on fraud. They manage it under 10bps (i.e. losses of $0.10 or less per $100 of transactions) on transactions made with a dumb plastic card lacking any additional context. So Issuers wishing for Apple Pay fraud to fall between 2-3bps was not totally out of character, considering the protections in place by Apple and Networks to keep fraud away – including Issuer support during provisioning, NFC, Tokenization, a tamper proof Secure Element and TouchID. But fraud seems to have followed a different trajectory here. About a month post-launch, it seems like fraud has come to Apple Pay. (in one case – as high as 600bps for an issuer that I cannot name). Though what follows was written in the context of Apple Pay, much of it translates to any other competitor – irrespective of origin, scale, intent, or patron saint. Continue reading
There has been a lot of focus on the Card Present rate rebate Apple has been able to extract from the Issuers, and continue to extract from banks lining up behind networks who are signing them up for Apple Pay. Networks are finally finding use for the “Issuer Provisioning Service” they hastily put together during the lost decade (the “Isis years”). Term sheets are blunt and non-negotiable, they don’t provide a lot of clarity other than demanding absolute acquiescence. There are traditional bankers sitting in wood paneled rooms wondering – “How on earth did we get here?” “Well Ed, you finally lost control of the form factor and now all you have is borrowed time, to play in someone else’s playground!”.
But beyond the CP win, apparently Apple almost got their way with CNP transactions as well – in finally affording parity to Card Present and Card Not Present transactions through Apple Pay. And if issuers hadn’t finally rejected it – I believe there would have been ripple effects beyond Apple Pay and even mobile payments – with far reaching repercussions for traditional players. Banks and Networks don’t fully understand what it is that they just dodged. Continue reading
Much has been written of late, about Coin and its peers. Coin, Loop and others are worthy emerging players who have focused on innovating on the edges of the current payments framework – and consider convenience a more lucrative goal vs disrupting it altogether. Despite bank’s aversion to having their brands wrapped by a 3rd party – Coin and its peers have much consumer support. I have little to say about the product as-is – I think it’s a sexy widget, but for me – I am too cheap to pay for a plastic replacement when I carry around one already. However I believe they are intentionally evasive when it comes to their respective roles in an EMV landscape. Much of that follows focuses on Coin, but really – applies to Loop and others as well. Continue reading
This is the Part II of my Apple in Payments take – and it’s early because of the leak last week around Apple’s MFi program. In the first half of my take, I had touched upon Apple’s program for 3rd party hardware attachment market as being significant and likely to be a key aspect of its payments approach. So below, I will cover more on the approach, how Bluetooth will be the standard of choice – not NFC, and how Apple plans to secure Bluetooth enough to be able to handle payments. Continue reading
Two recent comments led to this post. One is by David Marcus of Paypal who long held fast to his belief that NFC based payments had high barriers to entry – cost, complexity while offering very little upside. Paypal’s position on NFC (Not For Commerce) had always been a bit zealous – understandable as in a world of Secure Elements – Paypal (and many others) could not meaningfully participate. But Marcus’s recent post is an attempt to view NFC/HCE as one of the three trends that could transform the retail payment experience – is a pragmatic view to a complex and heterogeneous retail environment. Marcus speaks on how Paypal has come to adopt a cautiously optimistic view of NFC/HCE, now that there are no gatekeepers extracting a toll and because HCE (thanks to SimplyTapp) finally offers a level playing field in the Android ecosystem. Continue reading
This post is in response to the recent Bankinter story of NFC payments at the point-of-sale without requiring SE – and the lack of any real detail around how it plans to achieve that goal. I am not privy to Bankinter’s plan to dis-intermediate the SE, but as I know a wee bit about how NFC works, I thought a post would help in clearing up any ambiguity as to how Card emulation and Host Card emulation differs, upsides, challenges – the whole lot. Continue reading
From my February newsletter, so you could see what it’s normally about: my posts, thoughts about other posts I have read, my take on interesting industry bits, and other perspectives. If anyone wants to be included in the distribution – email me at cherian(.)abraham(at)experian(.)com.
What it is -> A quick read and meant to be useful.
What it is not -> Not meant to make you buy stuff, not meant to use your email for other things.
Tim Cook has a cogent explanation of why building a backdoor (in this case, a firmware that degrades the device security to allow endless pin entry attempts by the law enforcement to gain access to the device, without triggering a data wipe) will not be in the public interest. Any attempt to build a backdoor will be an irreversible step towards weakened system security not just for the iOS ecosystem – but for banking and financial systems that has come to rely on TouchID and other security subsystems inherent in iOS devices. Unintentionally or not, we are at risk of poisoning the well. Link Continue reading
This is a portion of my biweekly newsletter that I started earlier in 2015 to a small group of people that I communicate with often – a mix of Founders, Bank and Retail Execs, VCs, and others who find their work intersect with mobile and commerce. The last one to go out is pasted below, so you could see what it’s normally about: my posts, thoughts about other posts I have read, my take on interesting industry bits, and other perspectives. If anyone wants to be included in the distribution – email me at cherian(.)abraham(at)experian(.)com.
What it is -> A quick read and meant to be useful.
What it is not -> Not meant to make you buy stuff, not meant to use your email for other things. Continue reading