Snippings

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That is why I am announcing this evening that the Bank intends to extend direct access to RTGS beyond the current set of [48] firms, allowing a range of non-bank PSPs to compete on a level playing field with banks.

From Mark Carney: Enabling the FinTech transformation – revolution, restoration, or reformation?

By extending RTGS access, our objective is to increase competition and innovation in the market for payment services. To ensure that PSPs are not disadvantaged relative to banks offering equivalent payment services, the Bank intends to give appropriate remuneration for balances that PSPs will be required to hold overnight to support their payments activities.

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In practice, a consumer will choose from a list of Age-Check Service Providers unless age-checking is integrated into the payment process.

From Proving Age Online Is About to Get A Whole Lot Simpler

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In the speech that the Governor of the Bank of England eh, Mark Carney, didn’t give to the Mansion House in June he devoted some considerable time to the general topic of shared ledger technology, even going so far as to say that

In the extreme, a [shared ledger] for everyone could open the possibility of creating a central bank digital currency.

From Mark Carney: Enabling the FinTech transformation – revolution, restoration, or reformation?

I am not sure that I completely follow Mr Carney’s logic here and I don’t have the benefit of the expert advice that he must have received in connection with this statement but as far as I can tell, there are two entirely separate issues to examine here. The use of the distributed ledger for RTGS, which is the context in which it is mentioned earlier in Mr. Carney’s speech, is wholly unrelated to the provision of a central bank electronic currency and whether it might or might not be a good idea for the Bank of England to create such is nothing to do with the technology.

I suspect that the confusion may have arisen because of the tendency amongst management consultants (and others) to conflate the two entirely different kinds of electronic money: a crypto currency and a digital currency are very different things. If Mr Carney were genuinely suggesting that one of the scenarios under consideration by the Bank of England is that it abandons its responsibility for managing the creation of money and instead turns to a crypto currency, even if it is a crypto currency that is produced as a byproduct of a double permissionless shared ledger spawned by the Bank of England itself, then the value of that currency would not only be beyond political control it would be beyond the Bank’s control and one might imagine the Bank to be somewhat redundant in such circumstances.

The Bank of England is absolutely right to be exploring this new technology and I certainly think that it has something to offer. But that does not mean that the Bank of England is going to start using Bitcoin as a settlement system or that bitcoins will replace Sterling!

From RTGS NBG OMG SOS SLT PDQ SLAP | Consult Hyperion

On the other hand if Mr Carney were genuinely suggesting that one of the scenarios under consideration by the Bank of England is that it creates a digital currency, then I say more power to him. I cannot think of a single reason why such a digital currency would be a crypto currency or why it would be in any way related to the shared ledger used to process  the payments, but that doesn’t mean it wouldn’t be a cracking idea. A digital currency platform with right APIs in place (providing risk-free, genuinely instant and zero-cost transfers between accounts) would be an amazing platform for a Digital Britain.

Alex Todd rather kindly called this a “most lucid explanation of digital identity management”

I would highly recommend this presentation to anyone interested in understanding prospective blockchain based identity architectures

From David | LinkedIn

This is very kind, but as I said in the link, this is thinking out loud and far from a fully-developed solution. We’re working on parts of this for different clients and I can see that there is something there – a genuinely new way of solving some old problems – but it’s early days.

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Norway’s BankID is to begin a pilot programme to test in-app authentication and biometric logins for one-click access to financial services.

From Norway’s BankID tests in-app authentication

They’re using the Encap platform for this with TouchID and Android fingerprint support. I was a bit surprised when I read this story, because I thought that this system already existed in the Norway. And then I remembered that I read about this stuff a decade ago.

Telenor says it will now work with the BankID consortium to develop an e-signature authentication system for use with mobile handsets.

From Norwegian telco and banks to develop mobile authentication system

How has it taken a decade to implement the obviously sensible mobile solution? It makes complete sense for the mobile operators to provide this infrastructure and for the banks to use it, but they were never able to agree (I assume) on the business model.

Brian Rommele, who I always take very seriously about this kind of thing, says that it is clear that Apple Pay in the browser will be a very big deal indeed.

In my early testing I can confirm that the checkout abandonment rate for websites that use Apple Pay Safari will be reduced significantly.

From The Apple Pay Safari Vs. PayPal Battle For Web Transactions Is An Invalid Argument. — Medium

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She waved an ID card in front of the couple and then she was escorted to read the meter where she wrote down the reading on a piece of paper.

From Phoney electric meter inspector doing the rounds in Sherborne, report police | Blackmore Vale Magazine

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Look no further than Japan’s hardware stores for a worrying new sign that consumers are hoarding cash—the opposite of what the Bank of Japan had hoped when it recently introduced negative interest rates.

From Japanese Seeking a Place to Stash Cash Start Snapping Up Safes – WSJ

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I happened to working on a project looking at the impact of certain new technology-based finance plays on bank revenues a little while ago. For the (European) banks that we were looking at, net income for those functions broke down as 24 per cent from transfer functions, 43 per cent from payment functions, 19 percent from pooling functions and 14 percent for the rest. In other words, payments were about the biggest fraction of net income, and this income is under direct threat from alternatives (by which I mean instant payments and such like, not Bitcoin). 

According to McKinsey, global payment revenues (which average 40 per cent of bank income worldwide, slightly less than in Europe) are about $1.7 trillion and will reach $2 trillion in 2020.The biggest fraction of this income (around a fifth) comes from the balances on payment accounts (in other words, interest foregone). Hence you can see why banks are worried that if payments shift to non-banks who hold those balances under non-bank licences (with lower regulatory costs attendant) they stand to lose a big chunk of their income.

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PayPal have blacklisted addresses which include the name “Isis”

From B2fxxx: The tyranny of the algorithm yet again…

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