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“Gone are the days when cards were a necessary part of online payments.

Take VRPs for example, which can enhance the shopping experience for merchants and consumers when it comes to recurring payments. In a YouGov survey, more than half of the respondents said they would sign up for more subscriptions if they had one easy way to cancel them.

From: Are We Approaching a World Without Cards? – PaymentsJournal.

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Commercial banking clients—small businesses, in particular—don’t simply want “faster payments.” They want better cash management, simplified payments processing, automating invoicing, less cumbersome accounting processes, etc.

From: Banks’ Revenue Opportunity From FedNow Instant Payments.

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The results from fintech partnerships have been less than stellar, however. Just one in three banks have seen a 5% or more increase in loan volume from partnerships, and half as many have realized at least a 5% gain in non-interest income.

From: 2024: The Beginning Of The End Of Bank-Fintech ‘Partnerships’.

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I think my original analysis on this for clients stands the test of time. The returns are on the distribution side, where it is hard for banks to compete, so for many of them it is better to focus on the low margin but high volume heavily regulated manufacturing side and make some new products (eg, multi-currency accounts). Open banking makes the partnership model irrelevant.

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The Accenture study estimates that, globally, commercial payments providers have a $371 billion revenue opportunity from providing value-added services (of which real-time payments is one type of service) over the next five years.

From: Banks’ Revenue Opportunity From FedNow Instant Payments.

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What do these clients want? The research shows that fraud prevention is their single biggest pain point, followed by the lack of value-added services like accounting system integration, biometric payments, and bill payments tools like automated invoicing.

Most commercial clients would actually prefer to access these services through a bank or incumbent provider – but many banks are not positioned to provide them. Close to six in 10 banking and payments executives say their organizations struggle with quickly offering new payments solutions due to their legacy tech stacks.

From: The Payments Blindspot That Could Cost Banks Billions.

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The retail giant said Thursday it plans to rewrite hundreds of job descriptions so that for many of its corporate job titles, applicants can have either a college degree or show they have needed skills through prior experience or other types of learning.

The move adds one of the largest U.S. employers to the growing ranks of companies and institutions moving away from mandating college degrees for jobs in certain fields, such as cybersecurity, data analytics or operations. Driven by a shortage of talent in high-demand areas, dwindling college enrollment amid increasing costs and corporate efforts to improve diversity numbers, “skills-based hiring” has become one of the hottest topics in corporate boardrooms.

From: Walmart Plans To Remove College Degree Requirements From Hundreds Of Corporate Job Descriptions.

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The U.K. Government’s “Future of Payments Review”, written by the respected business leader Joe Garner (hence media references to the “Garner review”) is interesting reading for anyone interested in the payments business. I thought that the most interesting statement in the report can be found on page 26, where Mr. Garner says that “we could not find any clear and agreed vision of the long-term future or desired ‘end-state’ of the payments landscape”. Now, on the one hand this is to be expected, because the U.K does not have any clear and agreed vision of the long-term future of anything at all and there is no reason for payments to be any different. On the other hand, though, there are an awful lots of regulators, industry bodies, initiatives and various other activities under way. Can they really be operating in the absence of any actual strategy?

Well, yes. The primary recommendation of the report is therefore, unsurprisingly, that the Government should develop a National Payments Vision and Strategy. You won’t be surprised to hear that I agree. The report says that a vision for payments is vital to underpin a globally competitive economy, and this is spot on. The report goes on to say that the vision should include high level guidance on relative priorities, so that both regulators and industry can become more aligned in their delivery. The report identifies seven areas where the currently non-existent vision and currently non-existent strategy should “resolve and guide” the industry. The areas set out in the report are:

1. The importance of resilience and safety relative to customer convenience. How the industry can reconcile political demands for complete consumer safety and no consumer responsibility with costs and complexities  is far from obvious, but I might be tempted to observe that safety is not absolute.
2. The degree to which there should be competition ‘for’ the market at the infrastructure level relative to competition ‘in’ the market for the consumer experience. It is not obvious that we need two instant payment networks or three different digital Pounds or four different QR code schemes so naturally I am more interested in shared infrastructure and plenty of competition.
3. The degree to which our national payments infrastructure should be open internationally, relative to domestic alternatives. Personally, since I am in favour of an open but level playing field, I think that payments infrastructure is critical national infrastructure, but the payment service that run on top of it are not (so long as they are competitive).
4. The roles of respective regulators and industry bodies, of which there are many in the U.K.
5. The allocation of responsibilities for tackling fraud and financial crime – including high level principles of liability which (absent any actual digital identity infrastructure) cannot be left as they are with banks responsible for compensation under the Contingent Reimbursement Model (CRM).
6. To resolve questions of interoperability between key initiatives. The key initiatives that the report is talking about here are Open Banking, New Payments Architecture (NPA) and maybe Central Bank Digital Currency. It seems obvious to me that an effective way to respond to the need for resilience set out earlier is to create both the instant payments infrastructure (ie, money that goes through banking networks) and the central bank digital currency infrastructure (ie, money that goes from device to device) that are not co-dependent.
7. Take a position regarding Digital ID for payments. Well, they saved the best until last. There’s no way forward in the payments sector without something getting done about digital identity. The question in my mind is whether it is better for the payment sector to lobby the Government to do something about digital identity or to give up and do something about digital identity themselves. Personally, I think it might be time to dust off some of this old discussions about some form of financial services passport.

I cannot help but note that the strategy does not have a measurable target. I can understand why: since no-one knows how much payments cost society as a whole, it is difficult to assess whether the sector is working or not. I might  have been tempted to recommend that the Government commission a study to measure the overall total social cost of payments (this is complicated, but it has been done in other others) and then set a five year target to reduce it by using a combination of competition and regulation to respond to the issues set out above.

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The report, titled “Breaking (Bad) Bots: Bot Abuse Analysis and Other Fraud Benchmarks,” analyzed billions of sessions across various industries and regions in the first half of 2023 and into Q3. It found that 73 percent of all web and app traffic was malicious, driven by bots and human fraud farms that launched attacks such as SMS toll fraud, web scraping, card testing, credential stuffing, and more.

From Report reveals 73% of web and app traffic is malicious.

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Welcome to AADHAAR Dashboard

From Aadhaar Dashboard.

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Welcome to AADHAAR Dashboard 

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Aadhaar is a good example of Indian governments well intended biometric plan and novel idea to reduce bureaucracy and fraud, is now threatening the individual privacy of all its users and limiting the constitutional rights of Indian citizens.

From (PDF) A Study On Aadhar Privacy And Personal Security Issues In India.

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