Snippings

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Gilles Grapinet: I am convinced that our payment industry is on the right track and has a bright future. Our fundamental mission is to support the long-term transition initiated decades ago towards economies with much less cash-based payments and much more electronic payments.

We may not have the driving force of Silicon Valley or the volumes of China, but we can rely in Europe on one of the world’s most innovative regulatory systems and a very competitive market, which helped us cross many thresholds.

From A strategy for a new normal in European payments: An interview with Worldline CEO Gilles Grapinet:

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Observations

Issuers have yet to enable SCA in some markets, for browser, app or both – CYP, ESP, EST, LTU, LVA, PRT.
Challenge success rates are low to very low. This means merchants lose sales and customers cannot get the goods and services they want.
Customers abandon checkout at high rates when challenged. This suggests customers are confused, don’t like the authentication method, and/or encounter poor implementations of SCA.
Even a successful challenge takes a long time to complete, especially for app. This suggests that significant friction is added to the customer purchase experience.
Issuers rely heavily on Visa/Mastercard for authentication stand-in. This suggests that issuers are not ready with their own implementations of EMV 3DS.
Authorization approval rates worsen with authentication stand-in. This means that merchants are penalized for lack of issuer readiness.
Authorization approval rates improve when the challenge succeeds. A bright spot, this suggests the payments ecosystem can deliver on the promise of SCA.
SCA readiness is more than just EMV 3DS enablement, it is about performance as well. Based on current testing results, the ecosystem has some ways to go.

From Microsoft SCA Testing Results | LinkedIn:

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As one of the legions of fans of the brilliant BBC / British Museum radio series on “A History of the World in 100 Objects”, I was absolutely fascinated by the episode on 14th-century Chinese paper money: follow the link and have a look at the beautiful picture of the Chinese banknote from 1375.

The Chinese writing along the top of this note reads (from right to left): ‘Da Ming tong xing bao chao’ and translates as Great Ming Circulating Treasure Note’

[From 
Chinese Ming bank note › The British Museum
]
I love that name: Bank of England notes really should be inscribed “Circulating Lack of Treasure Note”. These notes had pictures of the “cash” (copper coins with holes in the middle, threaded on to a string) that they represented: ours should have a picture of… what? What do they represent?

From Smart banknote design competition – Consult Hyperion:

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China and Russia have roughly halved their use of the dollar in trade settlements over the past five years.

From China and Russia ditch dollar in move toward ‘financial alliance’ – Nikkei Asian Review:

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“One interesting finding from the study is that while Issuers have lost revenue of EUR2,950 million per year. Acquirers, instead, have gained revenue of EUR1,200 million coming from lower interchange fees. Not surprisingly this is the part of the value chain that Apple targets through their newly acquired POS capabilities.”

Much was made of the threat from the Mobeewave buyout to companies like Square and iZettle, which sell card readers to merchants for processing contactless payments. Hernæs points out that the real value of Square lies in its unique positioning in the midst of its customer’s income stream, and the revenue-generating opportunities provided by offering small business loans via Square Cash.

Square recently received assent from federal and state regulators to open a bank in Utah, which means that it will soon be able to originate commercial loans to merchants that process card transactions through its payments system.

From What does Apple’s acquisition of Mobeewave mean for banks?:

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The RBI is now encouraging banks and non-banks players to develop offline payment technology, on a pilot basis, for cards, wallets and mobile devices, stressing that they will need built-in safety measures.

RBI plans offline digital payments pilot, sets up innovation hub:

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Never-ending data breaches continue to expose usernames, passwords, payment information, health records, and other personal information on the dark web, enabling fraudsters to log into user accounts and commit account takeover (ATO) fraud. Banks have been facing a concerning rise in ATO attacks against customers, with losses due to such schemes rising 72% from 2018 to 2019.

Traditional authentication methods such as SMS-based 2FA and knowledge-based authentication can no longer be trusted to protect online accounts since passwords and security questions can be easily bypassed or guessed with readily available information.

The COVID-19 pandemic has amplified the need for digital transformation

From Five Identity Verification and Authentication Trends to Follow:

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Thus, the question of whether
a CBDC is typically held in and used via special-purpose wallets purpose-built to
the CBDC, or generic wallets designed to manage a broader class of digital assets,
presents important issues and questions to be considered carefully

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The business value of the payments industry increasingly now also relies on the use of data that can be extracted at the front end of the digital payment value chain. The fees extracted from a payment play a lesser role, also because they have been capped in the European Union because of competition abuses

From The evolving role of central bank money in payments – Central Banking:

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The report notes the need of a balance between privileges offered to commercial banks and obligations imposed on them to preserve the integrity of the currency – in the words of the report, “a symbiotic relationship exists by which, on the one side, commercial banks help to extend the use of the currency while not putting its stability at risk, and, on the other side, the central bank provides them with privileged access to its credit and, where appropriate, to some form of safety net”.

From The evolving role of central bank money in payments – Central Banking:

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