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Alternative lenders and their regulated banking counterparts need to grow their portfolios. Is it time for the two to come together as Special Purpose Banks? In 2013, the FDIC lifted its moratorium on issuing Industrial Loan Corporation (ILC or Special Purpose Bank) licenses. To date, their application bin is empty, but with investors looking for growth out of online alternative lenders and with traditional bank partner pools remaining shallow, the value of owning one of these special bank charters just might become more appealing.
The major card payment brands cannot be complacent if they want to remain the dominant payment brands. The mobile payment applications on smartphones today are the foundation for a multitude of future commerce offerings both in-store and virtually. They are utilizing existing payment card brands and infrastructure to establish a foothold but are positioned to become the payment mechanism for point-of-sale transactions, online shopping, and contextual commerce in the years to come.
The United States is finally modernizing its card payment systems and confronting fraud with rules regarding use of the global EMV chip card standard starting on October 1, 2015. Unfortunately, there’s a lot more to be done before we can say the U.S. payment system is up to speed with the rest of the world on chip card security. And given the focus on “chip” by itself, it will be a long time before overall fraud losses are reduced and consumer fears about data compromise addressed. Decisions and investments made today should take a longer term view of security and the payments landscape.
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