Snippings

Researchers posing as small business owners had more than two thousands conversations with leading LLMs about financial products and discoverd that the AI models recommended fintechs (eg, Mercury and Wise) far more than traditional banks. As Professor John Thompson from the Univeristy of Michigan pointed out about these results, the AIs focus on products and services. Brand value and word of mouth mean nothing to them. The researchers themselves said that it was hard to say exactly why the models recommended fintechs more frequently, product clarity and digital-first messaging are likely factors and ome of the difference between the way LLMs perceive fintechs and banks comes down to “legibility”.

From: Why AI models favor fintechs over traditional banks | American Banker.

xxx

xxx

Credit cards broadly are getting more expensive to offer, prompting high-end card issuers to raise fees, David Shipper, strategic advisor at Datos Insights, told American Banker. Amex, for instance, recently raised the annual fee on its exclusive Platinum Card to $895 from $695. Chase boosted the fee last year on its Sapphire Reserve to $795 from $550.

In addition to offsetting increased costs, the move may help banks “trim the fat” on the programs, Shipper said. Cardholders who only use the card to maximize rewards may not be that profitable to the bank, he added.

From: The high-end card changes that are challenging banks | American Banker.

xxx

In July 2026, China introduced regulations on “human-like” AI chatbots.
Until this regulation came in, the reach of AI companions in China was vast.
There are currently some 128 million monthly active users of AI companion apps outside of China and estimates put the number inside China at anywhere from 29 to 70 million. The new regulations cover apps that have been specifically designed as AI friends, boyfriends or girlfriends but they also apply to any large language model that imitates the way a human interacts (but not customr service bots and other AIs for education as long as they do not provide “care, companionship, support and other emotional services”). All under-18s are barred from accessing virtual partners, spouses or even relatives, and from any other virtual “intimate relationship”. A week before the law came into effect, two of China’s biggest tech companies, Alibaba and ByteDance, shut down the companion features on their AI assistants leaving many Chinese people devasted, leading to an outpouring of grief on social media.

The issue is global, not only Chinese. A Harvard Business School study of the six most popular AI companion apps linked the use of companion apps to poorer mental health which seems to me to be linked to a survey by researchers at Stanford University which unsurprisingly found that the fewer friends or close family members a person has, the more likely they are to use AI chatbots while the use of the chatbots is in turn linked to increased isolation and loneliness.
There are several theories as to why that might be.
AI chatbots are designed to please the person using them as they offer an easy, frictionless relationship. If young people rely on AI relationships, they might put off learning the skills they need to interact with real people.
“Humans can be hard work. Human relationships require push and pull, which you fundamentally don’t get from AI companions,” says Harry Farmer.

A survey of students in China in 2025, widely reported in Chinese state media, found that one in five children said they only wanted to speak with AI and not real people. Now, we all feel like that some days, but at a time when nearly four in five British 18- to 24-year-olds have used an AI companion, we really ought to think about where this is taking us!

(The Chinese regulations are linked by some observers to the country’s efforts to reverse a collapsing birth rate. One researcher quoted by the BBC said thart “Many of the younger women, in their early 20s or late teens, do not want to fall in love or have intimate relationships,… Physical touch is really disgusting for them”, which doesn’t sound good for the population dynamics over there.)

xxx

A certificate authority for the post-quantum Internet

We also intend to lead on where certificates are going, not just where they are. We plan to be one of the first CAs to issue production Merkle Tree Certificates (MTCs), with the first certificates issued in the first quarter of 2027.

MTCs are a new and far more compact way to deliver publicly trusted certificates, designed for a post-quantum world where traditional certificate chains grow large enough to strain TLS handshakes. We have been championing the standards-based proposal for MTCs at the IETF, and earlier this year, Chrome named MTCs as the preferred path for post-quantum authentication. Issuing them in production allows us to protect Cloudflare customers as well as the wider Internet against the post-quantum threat, with real volume behind a transition the whole web has to make. 

xxx

The post-quantum scaling problem

We’ve written extensively about the challenges of scaling post-quantum cryptography, but in short: to support server authentication at Internet scale, the WebPKI must authenticate roughly a billion TLS servers without preloading every server’s public key into every client. Traditionally, CAs addressed this problem by using certificate chains as a trust-distribution mechanism. But over time, additions like key revocation checks and certificate transparency have added more public keys and signatures — five signatures and two keys in a typical TLS handshake. PQ signatures are roughly 40 times larger than classical ones, creating larger overheads that would be expensive for clients, CAs, logs, and monitors to handle at scale.

Enter Merkle Tree Certificates (MTCs), a draft specification from the IETF PLANTS working group that describes an architecture for compact, efficient, post-quantum certificates. MTCs batch certificates into an append-only Merkle tree, allowing a CA to sign the root of that tree instead of many individual certificates. This allows browsers or other clients to verify a certificate using a compact inclusion proof — a sequence of cryptographic hashes — against a signed tree head rather than validating each certificate individually. A key idea behind MTCs is “don’t log what you issue, issue by logging.” By coupling issuance and logging, transparency becomes a requirement for operation, rather than an add-on.

From: Building a post-quantum certificate authority with Merkle Tree Certificates | Cloudflare Blog.

xxx

We do not expect that transition to be sudden. Much of the Internet will continue to rely on classic certificates and existing WebPKI for many more years. But across that window we expect MTCs to take a steadily growing share of issuance, and that is why we are building one service that does both. By carrying classic certificates and Merkle Tree Certificates under one CA, with one lifecycle and one set of guarantees, customers can adopt at the pace that suits them and help the web make the crossing without a hard cutover. Customers should not have to pick a side of a multi-decade migration, run two systems, or rebuild when the balance shifts.

From: Building a certificate authority for the whole Internet | Cloudflare Blog.

xxx

xxx

I wrote about this in detail in my book “Before Babylon, Beyond Bitcoin” (LPP: 2017), noting that it was interest rate deregulation combined with technology that allowed the credit card business to explode after its near death at the beginning of the 1970s. In the United States, the banks had expanded the infrastructure for a nationwide credit card payment system through the precursors to Visa (created in 1976) and MasterCard (created in 1979) but State usury laws prevented card issuers from reaping the benefits of a nationwide system.

Issuers did not always find it profitable to extend credit lending in states where usury ceilings were low. At that time, the United States limited bank lending to 10 per cent, but South Dakota took steps to deregulate, prompting the Supreme Court to rule in 1978 (in its famous ‘Marquette decision’) that interest rates could be exported across state borders via credit cards, whereupon Citi (and other banks) shifted their credit cards operations away from New York to take advantage.

After the low-profit late 1970s and the loss-making early 1980s, credit cards became profitable and the business exploded. Credit cards became a mass-market phenomenon, leading to increased competition, which in turn drove financial innovations and additional products and services

From: If The Cap Fits – by David G.W. Birch.

xxx

The bank-backed European Payments Initiative (EPI), which is behind the Wero wallet joined forces with the European Payments Alliance (EuroPA) to explore ways to make it easy for consumers to send and receive payments seamlessly across the continent. They have now created a joint entity, headquartered in Madrid, called the ‘European Network for Payments’, that will operate a common interoperability hub to connect their payment services, including instant account-to-account payments.. The EPI and the EuroPA members (Italy’s Bancomat, Spain’s Bizum, Portugal’s Sibs-MB WAY and the Nordic player Vipps MobilePay) serve some 130 million users across 13 European countries. These users will be able to continue using their current preferred app but with broader reach, while merchants will be able to accept payments from European consumers using European tech. The phased rollout is planned to start with cross-border peer-to-peer payments, with e-commerce and POS payments to follow.

xxx

Zach Abrams, who co-founded and has been leading Bridge in addition to being interim CEO of Open Standard, will transition to be Open Standard’s full time CEO. 
Open Standard, the nascent stablecoin consortium with more than 140 partners across banking, payments, fintech, and crypto, took steps to formalize its governance structure, founding partners, and leadership as the company prepares to issue OpenUSD later this year.

From: Open Standard’s stablecoin business begins to take shape | American Banker.

xxx

xxx

Fraudsters using AI to impersonate senior executives stole €95 million ($108 million) from Fideuram, the private banking arm of Italy’s biggest lender ​Intesa Sanpaolo (ISP.MI), opens new tab, two sources familiar with the matter said on Friday.
More than half the funds were later recovered, but some €36 million remains missing

From: AI messaging scam costs Italy’s top bank Intesa millions, sources say | Reuters.

xxx

xxx

Meta says Muse conversations and data will not be shared with its advertising systems. If that holds, the influence shows up in Muse’s recommendations and the transaction fee, not in ad targeting. That is a cleaner business than ads, and a harder one for merchants to audit.

From: Meta’s Muse: The Agent Becomes the Control Point | Noyes Payments Blog.

xxx

xxx

Put those together. When the agent picks the credential and Stripe supplies the risk decision, a bank account or stablecoin balance in Link is as good as a card to the merchant, and cheaper. The consumer never sees a button. The merchant sees a Stripe token with Stripe’s risk data. The network becomes optional.

From: Meta’s Muse: The Agent Becomes the Control Point | Noyes Payments Blog.

xxx