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Restaurant SMBs that use instant account-to-account payments have healthier balance sheets.

From: Instant Payments Can Help Restaurant Balance Sheets.

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The Government and regulators committed to the introduction of commercial VRPs last April and we are waiting for the kick off of ‘Phase 1’ later this year.

Despite the value they will provide to businesses and consumers, a consultation issued by the PSR suggests that UK banks will have to provide commercial VRPs for free in Phase 1. This may sound like great news for Payment Initiation Service Providers (PISPs) like GoCardless. But in the long run, it will hinder progress.

Fueling future payments

For commercial VRPs to become a competitor to card payments, all stakeholders involved must be incentivized to invest and innovate. This means changing the perception of open banking from a compliance obligation to an exciting new business opportunity, increasing the quality and resilience of the APIs banks provide.

We need to select which banks will provide the most relevant APIs. Since the CMA9 group was established in 2016, neo-banks have become more involved in retail banking. Bank coverage must start high and get higher, rather than staying low.

If banks are incentivized to play their part, then the main innovators in the open banking space – PISPs and AISPs like GoCardless – can test the robustness and quality of the newly-built APIs. We need all players to commit to Phase 1 if we’re to build a stronger Phase 2 and eventually power the mass rollout of VRPs. But to encourage widespread adoption, merchants need to be financially incentivized, meaning fees should be lower than current card acceptance costs.

From: Why we’re ready to pay the price for open banking | TechRadar.

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We’ll see how far the banks will push that. It might not be a wise move to deny some likeable octogenarian his £1,000 back because he didn’t notify the bank soon enough.

From: (3) New “Authorised Push Payment Fraud” rules from October!.

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The cost of supporting likeable octogenarians will be so great under the new reimbursement and duty of care rules that no sane bank will accept them as customers. I think the law of unexpected consequences will feature large in the near-future of retail banking.

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Plaid launched Layer, a new platform that allows fintechs to build customizable KYC and onboarding flows and which onboards prior Plaid users instantly.

From: Plaid Layer, Bilt headaches, and Brex banking (TWIF 6/21).

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To some investors, the term “tokenisation” may conjure up images of colourful monkeys. But the same technology that created Bored Ape Yacht Club Non-Fungible Tokens — unique digital cartoon artworks, authenticated on a blockchain ledger — also promises to shake the tree of global finance. The finance industry may stand to be one of the biggest beneficiaries of this stage of the digital revolution.

From: Faster, cheaper, safer: how tokenisation can change investing.

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The tokenisation of real-world assets can and should proceed without using these problematic [permissionless public] blockchains. Their inefficiencies are well documented, and experimentation to resolve problems in scaling their use tends to focus on processing transactions off the blockchain (defeating the stated goal of decentralisation).

From: The dark side of tokenisation.

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The results were otherworldly. Claude is fully capable of acting as a Supreme Court Justice right now. When used as a law clerk, Claude is easily as insightful and accurate as human clerks, while towering over humans in efficiency.

From: (3) In AI we trust, part II – by Adam Unikowsky.

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Our current world is beset by accountability sinks—places where things are clearly going wrong, but it is nobody’s fault.

From: A Return of “Management Cybernetics” as a Way Forward Out of Economics-Based Neoliberalism?.

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The European Payments Initiative (EPI) was born in 2021, backed by 29 banks and two payment processors, driven by a political imperative for a sovereign European payment system.

originally with the name Pan-European Payment System Initiative, or PEPSI, changed after objections from the drinks seller).

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A2A payments could offset 15-25% of future card transaction volume growth, says the report, costing the industry billion in interchange fees and interest charges. The EPI’s Wero wallet is likely to accelerate adoption of A2A payments with a 37% reduction in card transactions predicted across Europe by 2027, according to Capgemini.

From: European card transactions to fall as A2A payments take off – report.

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The wero digital wallet will be rolled out in phases, initially to support account-to-account based instant P2P and consumer-to-business payments, followed by online and mobile shopping payments and then point-of-sale payments.

Member banks backing the scheme include ABN Amro, Belfius, BFCM, BNP Paribas, BPCE, Crédit Agricole, Deutsche Bank, DSGV, DZ Bank ING, KBC, La Banque Postale, Rabobank, Société Générale, with added support from Nexi and Worldline.

From: Computop calls on retailers to join EPI pilot trials.

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Gert Huizinga, writing in the Spring 2025 Journal of Payments Strategy & Systems 19(1), identifies Wero’s integration of instant payments with the online, offline and person-to-person capabilities, in combination with the possible mobile, QR and app form factors, as an interesting alternative for merchants to consider although he also notes the reality is that it will take several years for EPI and Wero to be a genuine pan-European alternative to international card schemes. Because selling goods and services will always be the top priority for merchants, merchants will always need to accept as many brands as they expect consumers to have in their wallets or phones.

 

 

Such is the attraction of cards9 and their economics, EPI’s plan was to build a card network for Europe, a digital wallet and P2P payments. However, in March 2022, facing funding difficulties, EPI dropped the card scheme to focus on the digital wallet. At the same time 20 banks, including all Spanish banks dropped out of EPI10. Today, the EPI has 16 members based in Belgium, France, Germany and the Netherlands.

In my view, dropping cards was a smart move, perhaps more serendipitous than planned – going head-to-head with Visa and Mastercard with a me-too card network would have had little chance of success11.

As a result, EPI is positioned to capitalise on the trend for digital wallets and account-to-account payments. In July this year, EPI launched its Wero digital wallet.

The Wero Wallet

Wero is, I believe, a portmanteau for “We” and “Euro”.

It is a digital wallet, launched first in Germany for person-to-person payments with a number of banks, with Deutsche Bank joining later this year.12 The rollout in France started in September and will continue until early 2025, supported by a marketing campaign and a very amusing series of  I need a Wero TV ads.

The French banks operate a cards-based wallet called Paylib which has 35 million registered users – these will be switched to Wero and Paylib will be discontinued in early 2025. The Belgium rollout will be complete by the end of the year, with Luxembourg due later.

EPI acquired iDEAL in the Netherlands in October last year13. While for now I believe iDEAL remains as it is, it will move to Wero from 2026. This will give Wero an instant boost, while at the same time giving the Dutch an upgrade to the highly successful iDEAL system.

From: We need a Wero! – by Jeremy Light – Agenda: Payments.

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Between 1981 and 1984, Coke doubled its advertising spend. Pepsi responded by doing the same. The net result was almost no change in the two companies’ relative market share, achieved at higher cost all round. In the age of digital marketing, AI risks bringing the cola wars to every corner of the economy.

From: Why AI may fail to unlock the productivity puzzle | Reuters.

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