Snippings

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A paper by Yvonne Chen of ShanghaiTech University and colleagues refers to “genai’s mediocrity trap”. With the assistance of the tech, people can produce something “good enough”. This helps weaker workers. But the paper finds it can harm the productivity of better ones, who decide to work less hard.

From: Investors expect AI use to soar. That’s not happening.

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A company director has pleaded guilty to supplying counterfeit plane parts, which led to the grounding of hundreds of flights across the world.
Jose Alejandro Zamora Yrala, 37, from Virginia Water, Surrey, admitted defrauding customers while operating UK-based AOG Technics between January 2019 and December 2023. Zamora Yrala admitted falsifying documentation that related to the origin, status or condition of aircraft parts.

From: Surrey man admits part in scam which grounded international flights – BBC News.

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The CapGemini World Payments Report 2026 makes for some interesting reading, as always. I found some of the comments around payments and merchants particularlt interesting. The report talks about the “service gaps” in key areas such as reliability and onboarding that explain why merchants are shifting to “PayTechs” for support. I talked to Kartik Ramakrishnan, CEO of the Financial Services SBU at Cap Gemini about this and he told me that with the right infrastructure and interfaces, with embedded workflows then banks can stay agile, scale and deliver seamless experiences across channels to meet the demands of merchants. And there is another X factor here that makes the acquring side of our industry so interesting right now.

 

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Banks have a clear opportunity to reclaim their position in merchant servicing by leveraging five strategic building blocks:

Refocus with clarity and move nimbly.

Choose the right business models to compete effectively.

Build digital capabilities that support and secure business strategy.

Capitalize on the marketplace edge in trust, data, and liquidity.

Scale through best-in-class delivery of verticalized, value-added services.

From: CapGemini World Payments Report 2026

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The global merchant acquiring industry has become structurally more attractive over the last decade, but what is particularly interesting to me is how AI is now changing it from a commodity business all about volumes and margins (as it was when I first got into retail payments) into a strategically important sector. Why? Well as Radi El Haj of RS2 (a global payments processor and technology provider that powers some of the world’s leading banks and payment facilitators) put it to me, “acquirers are sitting on mountains of data and AI might finally give them the ability to use it”. Indeed. In short, AI makes avquiring interesting again.

AI and machine learning have been deployed across a variety of functions on the acquiring side for some time in fraud prevention, chargeback reduction and so on but AI is transitioning from risk management to mission‑critical infrastructure rather than a side tool. AI-driven analytics turn transaction data into merchant insights that allow acquirers sell higher‑margin value-added services instead of competing only on basis points. AI is also used to support routing and orchestration to provide more sophisticated optimisation for merchants.

What is coming next, of course, is the era of agentic commerce and this means merchants will need acquiring infrastructure that can safely handle machine‑to‑machine transactions, tokenization and automated decisioning. As AI agents intermediate demand, some merchants will lose control of customer journeys and data, so they will rely more on acquirers and payment platforms for visibility, attribution, and optimization across fragmented channels.

 

Will acquiring be strategically interesting again?

AI makes acquiring strategically important, but only for players that evolve from processors to AI‑enabled platforms. The “boring” part (commodity transaction processing with thin margins) remains, but value is now concentrated in insights, orchestration and new agentic models being explored

Strategically, that means acquiring is once again a battleground for banks, big PSPs, and fintechs: they are buying AI capabilities, building orchestration layers, and repositioning as commerce or “operating system” platforms rather than utilities. For incumbents still focused on scale processing without AI or software depth, acquiring will stay low‑margin and non‑strategic; for those that lean into AI‑driven services and agentic commerce, it is becoming one of the most attractive parts of payments again.

Yoni Rechtman

Startups, at their core, are stories about the future.

From: Sam Lessin: They’re Not Dumb. You’re Just Not Paying Attention..

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“Every phone, tablet, or computer should start as a kid-safe device. Only verified adults should unlock access to things like dating apps, gambling, or adult content.”

From: Pornhub is urging tech giants to enact device-based age verification.

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One of the world’s premier security organizations has canceled the results of its annual leadership election after an official lost an encryption key needed to unlock results stored in a verifiable and privacy-preserving voting system.

The International Association of Cryptologic Research (IACR) said Friday that the votes were submitted and tallied using Helios, an open source voting system that uses peer-reviewed cryptography to cast and count votes in a verifiable, confidential, and privacy-preserving way. Helios encrypts each vote in a way that assures each ballot is secret. Other cryptography used by Helios allows each voter to confirm their ballot was counted fairly.

An “honest but unfortunate human mistake”

Per the association’s bylaws, three members of the election committee act as independent trustees. To prevent two of them from colluding to cook the results, each trustee holds a third of the cryptographic key material needed to decrypt results.

“Unfortunately, one of the three trustees has irretrievably lost their private key, an honest but unfortunate human mistake, and therefore cannot compute their decryption share,” the IACR said. “As a result, Helios is unable to complete the decryption process, and it is technically impossible for us to obtain or verify the final outcome of this election.”

From: Oops. Cryptographers cancel election results after losing decryption key. – Ars Technica.

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Klarna is launching a payment stablecoin, becoming the latest fintech to bet that the digital tokens will reshape cross-border payments.

The Swedish “buy now, pay later” lender said on Tuesday it had launched KlarnaUSD on a blockchain created by payment company Stripe and would use the digital token for international payments.

From: Klarna launches stablecoin to cut cost of cross-border payments.

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Amazon’s decision comes at a tumultuous time for e-commerce, as the emergence of AI chatbots offers consumers a new way to buy things and brands a fast-growing way to get their products in front of more shoppers. Many retailers, including Walmart and Target, have raced to strike partnerships with AI companies like OpenAI to get an early jump on shaping the new commerce features.

While Amazon has rolled out its own AI chatbot, Rufus, and other AI-powered shopping features, it has held off announcing splashy partnerships with outside AI labs or startups thus far.

Instead, it has cracked down on a host of sites, including even crawlers from OpenAI. In mid-November, Amazon added new restrictions to the code underpinning its site blocking ChatGPT-User, an OpenAI agent that takes action on behalf of users, and OAI-SearchBot, a web crawler that indexes sites for ChatGPT search features, according to a review of Amazon’s code by The Information. Last summer, the e-commerce giant added language blocking shopping agents from Google and bots from OpenAI, Perplexity and Anthropic

From: Amazon’s AI Crackdown Hits More AI Search Startups — The Information.

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The Bank of Canada will have oversight for the open banking payment initiation that will kickoff in 2027, for which $25.7 million has been allocated for oversight and security over the next five years. The government will also be releasing a consumer-driven banking framework to provide further guidance to payment service providers (PSPs).

Notably, Canada introduced rules for fiat-backed stablecoins allowing them to be used securely for digital payments and regulating PSPs that provide stablecoins.

The Real-Time Rail (RTR), Canada’s incoming instant payments system is set to launch in 2026, designed to enable 24/7 transactions.

The Retail Payments Activities Act has expanded member eligibility for Payments Canada to allow more companies to participate in Canadian core payment systems. Over 1,500 new PSPs are expected to join.

The budget also included a review of ATM, Interac (a Canadian interbank payments network), and cross-border remittance fees to enhance transparency, and proposed for investment account transaction fees to be eliminated. The process of switching primary transaction accounts for Canadian institutions will also be simplified for those looking to make a change.

From: Canada’s 2025 budget plan includes new stablecoin rules, Real-Time Rail launch.

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The way we solve these tradeoffs in TradFi is with centralized organizations protecting your data.
KYC isn’t just collecting data.
The CIP (Customer Identification Process) has been largley solved in existing crypto. Custodial and self-custodial wallets KYC their users whenever they on-ramp/off-ramp or make a transaction above $1,000. 
However, KYC also includes monitoring transactions, customer due diligence, and a whole swathe of processes that follow. Banks have the highest bar for getting this right and receive the biggest consequences if not.
The crypto industry solved this in a few ways
Centralized exchanges and wallets KYC their customers
They use services like Note Bene to ensure travel rule compliance if a transaction goes above $1,000
They use blockchain specific transaction monitoring tools like Elliptic or TRM Labs.
But banks also need to ensure commercial and consumer privacy on those networks when it comes to deposits.
There are many possible approaches here.
They can build their own L2s (like a VPN) where they can see the privacy / KYC tradeoffs, and then allow users to swap their deposit token and bridge to another network.
Their deposit token smart contracts can restrict which wallets get to use the token to known, KYC’d entities.
They can use Zero Knowledge Proofs or other privacy-preserving cryptography to not reveal sensitive PII or data.
Ultimately, this is a solvable problem. 
The market just hasn’t agreed precisely how to solve it yet.

From: Every Bank Should Tokenize Deposits.

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