Snippings

Transactions in this future world will be frictionless and invisible, yet the pricing will be transparent. Our digital wallets will do our transacting for us, autonomously and with our permission. The busy consumer will be spared many tedious transactions, and the underserved consumer will see opportunities open up where none existed before.
Rather than carrying cash or even cards in a physical wallet, value will be stored in a digital wallet that will be our primary account. This “wallet” is actually a sophisticated piece of software that manages multiple payment accounts, loyalty programs, and perhaps manages our investments and our identities. The value held in our wallets can be traditional funds, crypto-currency, store credit, gaming tokens, and much more. All of this value will be accessible and fungible within the wallet as users perform transactions.
In 2030, small routine transactions will be autonomous, machine-to-machine. Purchases will not require interacting with a cashier or even a website or app shopping cart. The purchase will be logged, invisibly but transparently, and your wallet will pay the merchant. This will also be the case for non- discretionary payments, such as bills. If it needs to be paid, artificial intelligence (AI) will know and do it. When approval is needed, the user will be notified. When it comes to major purchases, offers and discounts will arrive automatically, but approval will still be manual. Nonessential purchases (the fun stuff) will also largely be manual, but the potential for automation within defined parameters will be high and ubiguitous. AI will review competitive offerings and make sure your choice is the optimal one for that time and place.
What form will this AI agent take, and “where” will your wallet reside?
It will not be in the personal device you carry in your bag or pocket everywhere you go. Or rather, it will not only be in your personal device- it will be in every device you possess, in a cloud or aura that surrounds you, or stored in many places, a capability offered by Web3.

 

Guibaud, S. and S. Sieber (2022). 2030: How Embedded Finance Takes Over the World. Embedded Finance: When payments become an experience. Hoboken, NJ, John Wiley & Sons: 197-222.

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Over 8 million debit cards have been sent to California residents loaded with up to $1,250. But someone forgot to put the Chip on those cards, and the cards have become a skimmers haven.

ABC7 news reports, “A growing number of Californians are reporting that scammers have drained their inflation relief debit cards, prompting one state lawmaker to raise alarms about what appears to be rampant “remote fraud”

From It’s a Fraud Blitz! No Chip On Tax Refund Debit Cards – Frank on Fraud.

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It’s that time of year again. I  mean that time of year when not one but two of my credit cards expired. It

 

The reason is that I get e-mails from a variety of suppliers that I’d completely forgotten about to tell me that my subscription to a website, media, magazine, blog or whatever had expired.

 

This is one of the reason why I think a standardised “request to pay” service would be a much better solution to the problem of recurring payments.

 

This is what should happen

Howard Adler, a former deputy assistant secretary of the Treasury for the Financial Stability Oversight Council, and Alex Pollock, a former Principal Deputy Director of the Treasury’s Office of Financial Research, advocate a more laissez-faire approach: Why regulate crypto at all? Allow investors to proceed at their own risk under the protections of general commercial law and existing anti-fraud and criminal laws. As they point out, since cryptocurrency originated as a libertarian revolt against the government monopoly on money, this approach is consistent with its founding ideas. I agree. But for this approach to work, it must be combined with transparency. with required full, audited financial statements and disclosures about risks and important matters such as assets and redemption policies. Such a combination is the most promising path forward for cryptocurrency regulation.

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Three-quarters of a million South Koreans already have a blockchain-based mDL on their phones, as of 30 November, after signing up in the first few months of the scheme originally piloted in January 2022. The Digital Safety division expects registrations to accelerate as awareness of the credential and its benefits grow.
Anyone passing their test for the first time now can choose to go digital only, or take the traditional route with the plastic card with an IC chip. The photocard license is the first step for them and all other Koreans in acquiring digital ID.

From South Korea’s digital identity blockchain prepares to add new credentials, go international | Biometric Update.

I love how a smart card is now seen as the “traditional” option! Got to say that makes me feel old as the hills. 

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The arrest of Avraham Eisenberg in Puerto Rico after being charged with commodities fraud and manipulation by prosecutors in New York is interesting for the precedent it could set on how DeFi markets operate. Back in October, Eisenberg managed to push the price of the platform’s token MNGO up by 4,400% in 10 minutes mainly by selling to himself, and used that increase to take out MNGO-collateralized loans, eventually draining $116 million – almost all the available liquidity – from the platform. Soon after, Eisenberg confessed on Twitter to the “highly profitable trading strategy”, stressing that what he did was not illegal in that the platform worked as designed. To demonstrate that he wished the platform no harm, he returned $67 million of his profits. That the US Attorney’s Office sees his trades as a crime puts the “code is law” mantra in the spotlight for DeFi platform designers and users alike.

From Wednesday, Dec 28, 2022 – by Noelle Acheson.

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It’s been an interesting year, to say the least, so now it’s coming to an end I can’t help but look back over an incredibly volatile period. Fintech is here to stay, but it has been a bumpy ride for some. Valuations are collapsing, frauds are rampant and there have been events. Serious events, ranging from war in Europe to COVID to weather. A lot of events, dear readers, events.

(When the British Prime Minister Harold Macmillan was asked might most influence the future of his government in 1957, he famously replied “events, dear boy, events.)

Whether looking back on the wreckage of the market is any value or not I couldn’t say, but this seems to be the sort of thing that people do at the end of the year. So here goes… here are my top 10 Forbes contributions of the year, ranked according to you, the readers…

First, Apple Moves Into Open Banking concerning Apple’s purchase of a UK open banking company and the potential to bypass a lot of the current payments infrastructure by going directly to bank accounts.

Follow The Yellow BRIC Road looking at the potential for international trade without dollars.

What The Zelle Is Going On? concerning the use of Zelle for retail payments – but not in America!

Super Apps or Smart Wallets explaining why I think in Western markets the smart wallet approach would be better. I still feel that smart wallets (shared strong authentication) are a better choice than super apps (shared identity) but hey Elon Musk is a billionaire and I’m not so you should probably listen to him.

From Apple Pay To Apple Paid talking about Apple’s decision to turn iPhones into point-of-sale terminals. Of course you could already accept contactless payments on Android phones but Apple’s market entrance legitimises the sector as it always does. Phone-on-phone action ahoy!

When The CBDC Revolution Comes, It Won’t Be On The Blockchain commenting on early work in the field and expressing my scepticism that blockchains will be used for population-scale central bank digital currency. I remain firmly of the conviction that device-to-device transfer of balances stored in tamper-resistant hardware will be the chosen architecture.

If The Crypto Crash Is Another Tulip Bubble That Is Really Good News which takes a historical perspective to suggest that the regulatory response to the crypto winter, if intelligent, could be of benefit to all of us (ie, not only crypto “investors”).

How Do You Measure Open Banking putting forward my view that open banking is already changing the world of financial services and that the lack of account switching is not, an never has been, a useful measure of impact.

ChatGPT Is A Window Into The Real Future Of Financial Services reinforcing my view that revolution in financial services comes when customers get AI, not when banks do.

And finally, coming in at no.10, was New Ledgers, New Business Models And New Opportunities In Micropayments. In the face of all evidence to date, I really do think that a workable micropayments infrastructure (maybe the destiny of the new Twitter?) will enable new kinds of business.

As for next year, I won’t be making any fintech predictions. Well, not beyond the obvious ones, anyway…

First of all, I and certain that many people in business continue to underestimate the impact of AI. We are seeing astonishing new tools being built on top of Chat GPT and such like. The bot revolution is coming faster than I had anticipated. 

Second, I’m confident that a digital assets phoenix will arise from the flames of crypto.

And finally, I’m fairly sure that the core strategies for most of the businesses that I work with will focus on embedded finance. I rather liked Simon Taylor’s view of this sector as delivering regulated financial products to point of need and I think that a great many customer-facing enterprises will exploit this.

Well, that’s that. I’m off to put my feet up and enjoy playing Dungeons & Dragons, watching Woking FC and eating too much for the weekend. See you on the other side.

By the way, if you like the cartoons that the brilliant Helen Holmes draws for my Forbes columns, please let me know. I will send a physical copy of one of those cartoons, signed by the author herself, to the first person to respond to this post here on LinkedIn!

Thanks to everyone for their kind words in response to my meagre scribblings and onwards to a great 2023!

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n alternative future for crypto is that it will be absorbed into the existing financial system so completely that in 20 years’ time people will have forgotten that it ever existed separately. After all,  we’ve only recently discovered that dinosaurs still exist in the form of birds, and that Neanderthals live on in the DNA of modern humans. Similarly, crypto could, by disappearing from view, fundamentally change the future of finance.

From From bank vaults to the crypt – The Mint Magazine.

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ECB holds open the possibility that offline peer-to-peer payments could be recorded independently of any such ledger, writing that “settlement in a local storage device would be a suitable solution.”

From ECB Outlines Banks’ Role in CBDC Project | PYMNTS.com.

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The auditor of FTX’s bankrupt US exchange business said it stood by its work for Sam Bankman-Fried and was proud of having provided services for a cryptocurrency industry that needed to improve trust and transparency, but it would ditch its digital assets practice by the end of next month.

From FTX’s US auditor Armanino defends work for failed crypto exchange | Financial Times.

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