Durbin 1.0 Did Not Work Well for Debit, Do Not Expect Durbin Amendment 2.0 to Work for Credit

If you ask the Federal Reserve, particularly one a hundred miles away from the nation’s capital in Richmond, Virginia, the Durbin Amendment failed to reduce merchant card processing costs. While the timing played well for the U.S. Senator, who ran for re-election in 2008 and 2014, the price controls did not meet the mission of reducing merchant costs. In a 2015 study, the Richmond Fed found, “New survey results suggest that the regulation has had limited and unequal effects on merchants.”  The report, which you will find here, suggests the opposite.  Main Street merchants did not benefit. In an [...]

By Brian Riley|2022-08-02T14:44:41-04:00August 2nd, 2022|Tags: , , , |

Commercial & Enterprise Payments Quarterly Update

Hello members. This the second edition of the Commercial and Enterprise Payments Advisory Service quarterly newsletter for 2022. Here we provide a recap of member research releases from the first quarter, including a look at the trend towards platform banking, the continuing transformation of treasury management systems, insights on card spend management software based on a recent sponsored survey, and finally a dive into B2B payments fraud with the costs surrounding that continuing challenge for banks and corporates alike. We also added a blog on business travel prospects for those tracking developments in what we hope are the [...]

By Steve Murphy|2022-05-16T15:28:18-04:00May 12th, 2022|Tags: , , , , , |

Circumventing Russian Credit Card Sanctions: Three Options for Muscovites

It is hard to beat the breadth of the Mastercard and Visa networks. Both payment networks remain at the forefront of the payments industry, engineered decades ago for security and universal acceptance. Today, you can transact globally, though things get tricky in Cuba, Iran, North Korea, and Venezuela.Recently, credit cards became more accessible in Sudan, but that took the “overthrow of its long-time dictator” to get the country off the U.S. sanctions list. When a country appears on the U.S. Department of Treasury Office of Foreign Assets Control (OFAC) sanctions list, citizens need to find payment card alternatives. The [...]

By Brian Riley|2022-04-05T17:51:40-04:00April 5th, 2022|

RTP Is from Venus, Crypto Is from Mars

The article, “Do Advances In Real-Time Payments Make Crypto Less Interesting?” fails to recognize the key differences between the two payment platforms and poses the question, Are these “parallel but separate” rails? The obvious answer is “Yes, they are!”  While crypto and RTP provide similar functions, there are two critical differences which are not related to payment rails; these differences are about funding and worldview. Funding: Investors won’t get rich investing in RTP. In fact, achieving breakeven is likely to take many years. As a result, RTP will never receive the level of investment crypto gets today (VC’s invested $3B [...]

By Tim Sloane|2022-03-28T09:40:01-04:00March 28th, 2022|Tags: , , , , |

BNPL: Was It All a Dream? Wake Up and Smell the Coffee

It seemed like a good idea at the time, but if you look at valuations for Aussie Buy Now, Pay Later (BNPL) stocks, you will find that you can buy one share of each remaining company for about the price of coffee at Starbucks. While the coffee might get your blood flowing with 180 milligrams of caffeine, the stocks may be worth even less tomorrow. Back in 2019, we wrote about the emergence of Buy Now, Pay Later in Australia. It seemed like a good idea, but we questioned the model's sustainability, and the unlikeliness BNPL could displace more [...]

By Brian Riley|2022-03-28T09:43:12-04:00March 3rd, 2022|Tags: , , , |

The Race Is on to Digitize the U.S. Dollar

The global payment networks, the high-tech companies, and the U.S. Government are competing in the race to digitize the U.S. dollar. With the U.S. Government in dead last, I would suggest the lead goes to the global payment networks because they have considerable advantages: Broad worldwide acceptance Account structures that enable the accumulation of value (not just private/public keys which are literally the value of any crypto and require different approaches to management within an account) Tokenized (digital) access to account balances in close to real time Support for a range of use cases as yet not possible with crypto [...]

By Tim Sloane|2022-03-28T09:25:44-04:00February 23rd, 2022|Tags: , , , |

Optimism Continues for Business Travel

It has been some time since we provided updates on the business travel industry. Since our blog in June[i] of last year, we’ve had another COVID-19 variant of concern (Omicron) and countries around the world have again reinstituted public health measures such as indoor masking and crowd control. What we have not seen is national lockdowns and border closings, which signals governments’ shifting views on COVID-19 as a manageable risk. Recently, the World Health Organization reported that countries with high immunity rates, strong health care infrastructure, and positive epidemiological trends may relax their restrictions.[ii] A number of European countries, [...]

By Ben Danner|2022-03-28T09:44:47-04:00February 8th, 2022|Tags: , , |

Closed-Loop Prepaid Cards: What Sets Them Apart

  What are prepaid cards? In the history of payment methods, nestled between the credit card boom of the mid-20th century and the current wave of payments digitalization, there was a different trend that emerged in the 1990s: the prepaid card. First appearing in the ‘70s, closed-loop prepaid gift cards are issued by a business and represent a liability. Funds from these gift cards are kept by the business and can be spent to sustain its operations. Cardholders can only spend up to the amount of money loaded in advance onto the card, hence the term “prepaid.” More recently, businesses have [...]

By Adam Winograd|2022-03-28T09:45:55-04:00January 27th, 2022|Tags: , |

Autonomous Vehicles and the Future of Payments in a Connected Environment

  What are autonomous vehicles? Autonomous and semi-autonomous vehicles are quickly increasing their global presence, with small-scale deployments and pilot programs happening around the world. Autonomous vehicles (AVs), also known as self-driving or driverless vehicles, have become a focal point for innovation as consumers increasingly rely on contactless payment and delivery options. Semi-autonomous vehicles have some autonomous features but are not fully self-driving. Semi-autonomous vehicles are classified as Level 1, Level 2, or Level 3, depending on how involved the driver of the vehicle must be. This article provides a basic overview of autonomous vehicles and connected vehicle payments. While [...]

By Rachel Gore|2022-03-28T09:46:58-04:00January 21st, 2022|Tags: , , , |

Credit Card Disputes and Chargebacks Threaten Merchant Profitability

It is not news that COVID-19 led to a rise in e-commerce as consumers shifted to contactless payment options instead of shopping in-store. The same held true for restaurants, where once common card-present transactions shifted to card-not-present transactions paired with contactless pick up and curbside delivery. This payment environment shift caused by the pandemic led to a significant spike in chargebacks for merchants of all types. Fortunately, there are steps that merchants can take to protect their interests and reduce their exposure to chargebacks. What are chargebacks? According to Mercator Advisory Group, a chargeback "can be understood as a reversal [...]

By Rachel Gore|2022-03-28T09:47:59-04:00January 6th, 2022|Tags: , , |


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