Snippings

Credit cards are commodities. I don’t care whether my favourite co-brand credit card (in my case, John Lewis) is a Mastercard or a Visa card and I don’t care whether it comes from Citi or HSBC. Any of these combinations achieves the same purpose: I can pay for things in shops and I get cashback vouchers.

The vouchers are important. Javelin says that in across their history of consumer research, “reward programs remain a top driver” when it comes to choosing a card. But what if that changes? Whole the current U.S. card model means that a substantial portion of payment revenues are paid out as cardholder rewards, but that is the result of the interaction of regulatory and business arrangements, it is not a law of nature.

What if the rewards model changes? Organisations with a strategic perpsective are, I imagine, already taking a long-term view and preparing for a time when interchange revenue may be reduced. 

 

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Visa and Mastercard set interchange rates but only get a small slice of the charges. It is credit card-issuing banks that collect the bulk of swipe fees. They often use the money to fund perks for cardholders, including cash back, points or airline miles.

From Mastercard/Visa: new bill will do little to challenge duopoly | Financial Times:

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There’s an interesting 2022 paper about this from Valdimir Mukharlyamov and Natasha Sarin at the UPenn Law School. The paper, “Price Regulation in Two-Sided Markets: Empirical Evidence from Debit Cards”,  concludes that regulation to limit that amount banks can charge for debit transactions (ie, the Durbin Amendment of the 2010 Dodd-Frank Act) led to higher checking account fees  for consumers (previously subsidized) and accelerated the adoption of credit cards with higher interchange fees (cutting down on potential savings for merchants). In summar, the regulation’s stated objective of enhancing consumers’ welfare through lower retail prices was not met. Having looked at this issue across different markets and over many years, I have to say that I am not surprised and remain convinced that regulators should focus on more competion (from instant payments, for example) than trying to fix prices.

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Activity on coding answer site Stack Overflow has dropped in the face of competition from these AI agents. The company disclosed in August that its traffic dropped 14% in April, the month after the launch of OpenAI’s GPT-4, which can be used to write code that developers otherwise would look up on sites like Stack Overflow. In October, the company announced it was laying off 28% of its workforce.

From: It’s the End of the Web as We Know It – WSJ.

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The implications of this shift could be big. Seeking information using a search engine could be almost completely replaced by this new generation of large language model-powered systems, says Ethan Mollick, an associate professor at the Wharton School of the University of Pennsylvania who has lately made a name for himself as an analyst of these AIs.

This could be good for consumers, but it could also completely upend the delicate balance of publishers, tech giants and advertisers on which the internet as we know it has long depended.

AI agents help cut through the clutter, but research is already suggesting they also eliminate any need for people to click through to the websites they rely on to produce their answers, says Mollick. Without traffic, the business model for many publishers—of providing useful, human-generated information on the web—could collapse.

From: It’s the End of the Web as We Know It – WSJ.

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This humorous panel kicked off with talk about the possibility of protecting ones private key for accessing encrypted data by converting it to a QR and and tattooing it on a very private body part.
The moderator, David Birch of Consult Hyperion, was presumably being hyperbolic (though he provided no proof), but his point was well taken: protecting one’s identity can result in some extreme precautions.

From: Consensus 2016 Panelists Debate Blockchain’s Business Impact – CoinDesk.

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According to Kim Bates, Chief Futurist at Faith Popcorn’s Brain Reserve, “The customer journey of the future will begin to emerge as Business to Robot to Consumer (B2R2C).” This will all begin within the comfort of our homes.

From: Marketing To Robots: Why CMOs Need To Start Thinking About Business To Robot To Consumer (B2R2C).

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Marketing in the future is an entire paradigm shift where it’s no longer the brand owning the relationship with the customer but rather the personal digital assistant, (and the platform it is run on), owning the relationship.”

From: Marketing To Robots: Why CMOs Need To Start Thinking About Business To Robot To Consumer (B2R2C).

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Capital One, the ninth-largest bank in the country and a major credit-card issuer, uses Visa and Mastercard for most of its cards. The bank plans to switch at least some of its cards to the Discover network, while continuing to use Visa and Mastercard on others

From: Capital One Is Buying Discover Financial for $35 Billion – WSJ.

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To enable generic functionality for EU citizens, the EDIW must contain three elements: personal identification data (PID), a qualified signature, and various electronic attestations of qualified and non-qualified attributes. These three elements enable EU citizens to use the EDIW as a way of identification or to confirm certain personal attributes for the purpose of access to public and private digital services across the EU.

From: Demystifying the payment scope related to the European Digital Identity Wallet | INNOPAY.

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In November 2023, the European Commission published a press release about the final agreement on the EDIW together with a Q&A. The press release states that “the Wallet will allow users to make payments” and that large-scale pilots “have started testing the EDIW in a range of everyday use-cases, including digital payments”. In the press release, no specific definition of the payments use case is given. In the Q&A, however, it is mentioned that users will be able to use the EDIW “to authorise online transactions, in particular where strong user authentication is required”. Additionally, “initiating a payment” is mentioned as one of the examples. This Q&A suggests that authorising payments would be in scope of the EDIW.

From: Demystifying the payment scope related to the European Digital Identity Wallet | INNOPAY.

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Greater reserve transparency can increase run risk when stablecoin holders believe the quality of reserves backing the stablecoin is low or when transaction costs of conversion to fiat are low. However, transparency can lower run risk when beliefs about the quality of reserves are strong or transaction costs are high. When reserve assets are highly volatile, as in the case of many crypto-backed stablecoins, par convertibility is resilient to small shocks but collapses under large negative shocks, even for high initial reserve values. Drawing on several case studies, we find empirical support for the testable implications of the model.

From: Public information and stablecoin runs.

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An Amazon spokesman said: ‘We have content guidelines governing which books may be listed for sale, including not allowing AI-generated content that creates a poor customer experience.’

From: Bogus AI books claim Kate Middleton took drugs and MI6 killed Princess Diana… after computer-generated books about King Charles’s cancer diagnosis were sold on Amazon | Daily Mail Online.

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