In this episode, we are exploring one of the “buzziest” buzz words in payments today - orchestration. If you have been in the payments space for a long time, your reaction to hearing about orchestration might be “What’s all the fuss about? We’ve been evolving these capabilities for decades.” If you are new to the industry, you may think this is some kind of high-performance jet fuel that is painfully needed to improve a rather opaque transaction processing environment. Joining Yvette Bohanan are two Glenbrook colleagues, Simon Skinner and Samantha Gordon, who have been digging into orchestration solutions. They will be helping us define orchestration, offer a perspective on who should consider orchestration, and for those of you who do, a framework for thinking about orchestration.  

Launching a payment product requires big moonshot thinking alongside a lot of agonizing over the details. Understanding the market, the customer journey, and the technology - from every angle requires patience, persistence, and a beginner’s mindset to learn from every success and failure. Thinking about launching a new form of currency, however, is on another level altogether. There’s an entire population of a country to consider - what does each segment of the population require to be able to use the currency? Then, there is the currency’s role in supporting the economy. How will a new currency be protected from counterfeiting, and what controls will be required to prevent its misuse? How will it work with legacy payment systems and commercial banks? And how will it adhere to laws in place today and be prepared for tomorrow? Last but certainly not least, which technologies will enable all of these things and more? These were just some of the thoughts bubbling through my mind when I sat down with Jim Cunha, former EVP at the Federal Reserve Bank of Boston, to discuss the capstone project of his career - Project Hamilton - and the questions he and his team sought to answer as they embarked on their CBDC experiment. I hope you enjoy hearing Jim’s insights on digitizing the world’s reserve currency - I sure did.  

It is a rare occurrence when we get to have ALL the Glenbrook partners in one episode of Payments on Fire!  Glenbrook is kicking off the new year with a (lengthy) conversation on what payments industry trends and developments we think are the most interesting, compelling, and controversial at the moment, and what to watch as we move into 2024.  

Debbie Bartoo, the editor of Glenbrook’s daily Payments News, guest hosts this Fanning the Flames episode of Payments on Fire alongside colleagues Justin Pituch and Will Eisler. Listen in as they discuss some of the top payments headlines of the year - fast payments, rising interest rates, BNPL, mobile wallets, identity, CBDCs, and (just a bit of) regulation. If you want to stay on top of the rapidly evolving payments world with all the headlines delivered each day to your inbox, subscribe to Payments News today.

What if every time you went to pay for something at a store, the clerk behind the counter had a different terminal for each card network - one for Visa, another for American Express, and a few others for local domestic networks? That was what much of the world was like decades ago - and it still is a bit like that in some countries today. But in 1999, collaboration entered the picture when Europay, Visa, and Mastercard came together to create a common specification for Chip and PIN so that any chip-enabled card could be read from any chip reader anywhere in the world if both complied with a common EMV specification. That significantly impacted Chip and PIN adoption - for merchants and consumers. Today, EMVCo supports seven EMV technologies. As a consumer, when you insert your card into a reader, “tap to pay,” or pay using Secure Remote Commerce, or as a merchant, accept payment through a mobile device or a QR code, support a tokenized card credential, or 3D Secure technology, you are benefiting from the work of EMVCo. In this episode, we talk with Oliver Manahan to understand how EMVCo fulfills its mission, catch up on its 2023 initiatives, and try to peek over the horizon to see what might be in store next for EMVCo.

Debit routing - once again, all the rage. On July 1, 2023, the US Federal Reserve’s clarification on Reg II went into effect. The clarification confirms that Reg II - which required unaffiliated debit network routing as part of the Durbin Amendment - also applies to CNP environments.  What were we thinking in 2015 when debit routing at POS, contactless payments, and chip and PIN were “of the moment”? What lessons can we glean from a conversation then that apply now? We’ve pulled Episode 16 from our vault to find out. We hope you enjoy this far-reaching discussion that moves from some EMV fundamentals to the implications of having a long tale of adoption, how consumer behavior and payment capabilities have to evolve in concert, and the reaction of fraudsters when things change in large, complex environments like the card system.  And stay tuned for our next episode where we welcome EMVCo to the show to see what they are up to these days and take a peak over the horizon. 

Glenbrook's Bryan Derman, Chris Uriarte, and Drew Edmond are back from a few days of learning, networking, and speaking (including a live broadcast from the Money Pot) at this year's Money 20/20 conference in Las Vegas. Chris and Drew talk with Yvette Bohanan about the noteworthy payments trends they observed at the show and what related themes our team is paying attention to.

Creating a great purchase experience may start with a frictionless checkout process, but it doesn’t end there. In fact, it takes a lot of effort to create a well-functioning payment platform and a cross-functional operations environment to keep a business running smoothly and customers happy. Like most things in life, it’s easier to talk about doing this than to do it. So it helps to learn from someone else’s experience about what has worked or hasn’t worked for them. In this episode, we go big - talking with two Google leaders, Luda Sokolov and Aarti Bharathan, who have been on a relentless mission to make the work of the Google teams supporting payments for billions of people worldwide more efficient, stable, and scalable.

“So, have fees gone up?”  Yvette Bohanan starts with the tough question in this Fanning the Flames episode.  In our August Payments Post, Chris Uriarte and Justin Pituch observed an underlying theme of broad downward pressure on the cost of merchant processing as well as fee backlash directed towards card networks.  Tune in to hear our thoughts on these fees and the impact on stakeholders across the industry.   

We get the opportunity to work with many different types of merchants in our Merchant Practice at Glenbrook: Global omnichannel retailers, marketplaces, commerce platforms, utilities, you name it. One of the major categories that we work with is subscription merchants, and they come with their own unique needs and perspectives.  Subscription merchants and merchants that have recurring payments as part of their business model rely on the ability to charge their customers on an ongoing basis. In this Fanning the Flames episode, Drew Edmond joins Yvette Bohanan to dive deep into an issue that has grown in importance with the continued growth of the subscription economy: involuntary churn.  Listen in to hear Drew shed light on this tricky and important topic for subscription merchants.  

Last week, we hosted the first Payments on Fire Live Stream event on the future of fast payments in the U.S. This episode highlights the panel conversation with Bernadette Ksepka, Federal Reserve Financial Services, Elena Whisler, The Clearing House, and Bryan Derman, Glenbrook Partners. 

Policy abuse, a form of first-party fraud, occurs when a customer - whether legitimate or a professional posing as a legitimate customer - manipulates a business’s policies for financial gain.  In this episode, Yvette Bohanan and Chris Uriarte sit down with Eyal Elazar, Head of Product Marketing at Riskified, to discuss policy abuse trends and the implications of consumers and professional criminals increasingly engaging in these schemes.  

Government leaders, policymakers, and a host of incumbent and new providers are focusing on cross-border payments. Innovating to increase transparency, lower cost, and make funds available in near real-time is showing up on agendas and roadmaps across the globe. Money and resources are being thrown at this problem from every possible angle. Yet friction points persist. Money does not get to beneficiaries with equal speed. Costs remain high and hidden. Compliance screening and due diligence create delays. Ryan Zagone, Head of Americas for Wise for Banks, and Glenbrook’s Joanna Wisniecka join Yvette on this episode of Payments on Fire to raise a fundamental question: Is technology the whole answer? And if it isn’t, what is?  

Globally, cross-border payments represent $156 trillion annually - roughly 25% of global GDP - and are projected to reach nearly $250 trillion by 2027. From a payments industry perspective, these transactions account for approximately $40 billion of $2.1 trillion in fee-generated revenues, excluding foreign exchange (2022 McKinsey Global Payments Report). These attention-grabbing numbers have been in the line of sight of regulators, innovators, and incumbents with increasing urgency. Improvements in domestic systems have matured in many countries, leading to conversations on how new fast payments systems can go cross-border. And, indeed, they are in several regions. Central Bank Digital Currencies are piloting cross-border payments, too.  In this episode, we’re looking at the rapidly evolving space of cross-border payments with Glenbrook colleagues who have been traveling the globe working extensively with regulators, corporations, and governments on cross-border initiatives.  

The payment provider space is a complex and crowded field in the payments universe, particularly when it comes to supporting merchants. Independent Sales Organizations, Payment Facilitators, and Commerce Enablers all work to simplify payment acceptance for merchants, yet they each craft specific go-to-market strategies and differentiated value propositions. The diversity of these stakeholders underscores the diversity of merchants' payment acceptance requirements. In this episode, we had the opportunity to talk with Jared Isaacman, Founder and CEO of the Integrated Payments Provider, Shift4. Over the past 24 years, Shift4 has evolved by addressing the unique requirements of merchant categories and sub-categories in the increasingly complex Point of Sale (POS) environment. Jared’s insights on how he bootstrapped the company to an IPO, successfully integrated multiple acquisitions, and often takes a problem-solving approach that highlights a different ethos than his peers makes this conversation soar.  

Each month, Justin Pituch recaps the news that got Glenbrook talking in his Payments Post. In a "double feature" for June and July, Justin covered two major themes: 1) organizations responding to greenfield opportunity in fast payments and 2) organizations recalibrating their post-COVID fintech bets. In this Fanning the Flames episode, Justin and Yvette Bohanan discuss these developments, as well as Justin's recent Payments Views posts on the pain of B2B and how ISO 20022 could help solve B2B data challenges. 

We find ourselves pondering many questions since the FedNow® launch, the third fast payments network introduced in the US. To gain perspective on the questions that have been asked and answered, and those that remain, we’re giving a second listen to Episode 10 - when George Peabody sat down with Carol Coye Benson to discuss The Clearing House’s announced plans for a multi-year effort that resulted in their fast payments network, RTP®. 

Issuer tokens, network tokens, EMV tokens - whatever you call them - continue to be a hot topic for merchants, payment service providers, issuing banks, processors, and the networks themselves. This “sleight of hand” substitution of a payment account number with an indistinguishable alternative carries with it a robust set of capabilities that have promised to reduce the value of breached payment account information, lower the cost of card replacement, and enable unique account numbers for the expanding universe of payment-enabled devices. In this episode, Chris Uriarte and Russ Jones discuss how tokens are implemented in the “card present” and “card not present” environments and how EMV tokens are becoming normalized in interchange tables, scheme fees, and provider services. As tokens move squarely into mainstream card processing, this conversation highlights important distinctions in network and provider implementations, fees, and regulations that should be on everyone’s radar.

Payments on Fire Episode 21, originally aired: June 15, 2015 Network tokenization - the promised land of payments. Like most promised lands, the journey there is epic and, well, hard. One question we hear from our clients, workshop participants, and the folks in our Merchant Round Table is: Are we there yet? We dug into our vault to understand the journey - where we started and how far we’ve come. We found Episode 21, when George Peabody and Russ Jones discussed network tokenization (aka issuer tokenization, aka EMV tokenization). This conversation is an excellent episode to get the history, essential workings, and context for an important, if not long in the tooth, technology reshaping how payment credentials are propagated and managed in our digital era. Yvette will be catching up with Russ and Chris Uriarte to discuss recent developments in network tokenization on an upcoming podcast - and try to decide when we’ll arrive at our destination.

While payment facilitation has opened up a new segment of service providers within the payments industry, embedded finance is opening up the world of payments to every company. The allure of embedded finance is rooted in the deepening of the customer relationship through offering meaningful financial products. This deeper relationship comes in the form of increased customer loyalty - or “stickiness” - and new revenue streams accretive to the company’s core business. This is all well and good, but payments and financial products are regulated, complex, and often require support at the critical moment of the transaction or afterward. How is customer support evolving to meet the needs of companies and customers in the world of embedded finance? How should providers be thinking about customer support?  In this episode, Yvette sits down with Ashley Isenberg, VP of Revenue and Strategic Partnerships at Finix and Glenbrook’s Drew Edmond to explore the ongoing evolution of customer support in the payments industry.  

With all its associated technologies (neural networks, symbolic reasoning, search algorithms, probabilistic reasoning, expert systems, and more), AI has been evolving in universities, the government, and corporations for decades. But only those with a keen interest in this technology have been paying close attention to its progress. Meanwhile, a chatbot helped you when you contacted support. Or you used Alexa or Siri to answer a question, play some music, turn on your lights, buy something online, pay your bills, or tell a joke. In our lives, we have caught glimpses of AI’s potential but no clear line of sight as to how powerful the underpinning technologies have become or how quickly they are evolving. With the unveiling of ChatGPT and similar tools, we are now face to face with the AI era. In his book, Impromptu: Amplifying Our Humanity Through AI, Reid Hoffman says, "Much of what we do as modern people—at work and beyond—is to process information and generate action. GPT-4 will massively speed your ability to do these things, and with greater breadth and scope. Within a few years, this copilot will fall somewhere between useful and essential to most professionals and many other sorts of workers. Without GPT-4, they’ll be slower, less comprehensive, and working at a great disadvantage. The Payments Industry is interesting because it is constantly changing, and technology has always been a significant change agent. For decades, networks, processors, PSPs, merchants, and financial institutions have invested in technology to increase adoption, create new services, manage risk, and accelerate initiation, clearing, and settlement.  In this episode, Yvette Bohanan is joined by Frank Young, a 35-year veteran of the fintech space, and Glenbrook’s Russ Jones to think about how AI might transform the payments industry and how organizations should mobilize for this transformation. It’s time to start talking about this topic seriously - with each other - and not just asking ChatGPT.   

Payments on Fire Episode 1, originally aired: September 7, 2014 Innovation in the payments industry is a funny thing. Sometimes payments lead. Sometimes technology leads. Increasingly around the world, regulators lead. In preparing for an upcoming podcast on AI, Yvette thought about Glenbrook’s first Payments on Fire podcast episode - in 2014 - on Bitcoin. So we’re pulling it from the vault to share.   If you have ever wanted to be a fly on the wall while industry thought leaders contemplated the implications of something new, here’s your chance. This is eavesdropping at its best - and a great reminder that innovation and disruption are not just about technical feasibility.  

In Part 2, Yvette Bohanan continues the conversation from Episode 206 with the commercial practice team at Glenbrook. We cover some new topic areas, including banks, risk and fraudsters, and the investment community in this macroeconomic environment. Listen in to see what we're watching, where we might see some blind spots, or where the next set of curveballs will be coming as we get into the back half of 2023. 

Russ Jones chats with Yvette Bohanan about Glenbrook's new Payments Boot Camp Intensive workshop. Listen in to hear more details including agenda highlights, workshop format, and who should attend. Register for any session before July 10 to automatically receive a 10% discount!

Each month, Justin Pituch recaps the news that got Glenbrook talking in his Payments Post. In May, he observed a burst of news highlighting new technology reshaping how American consumers make purchases and verify their identity. At the same time, other articles underscored how American consumers are struggling to fulfill financial obligations against the backdrop of continued economic uncertainty. In this Fanning the Flames episode, Justin and Yvette Bohanan consider these forces and potential implications for the future of payments.

Some people know Glenbrook for our Payments Boot Camp workshops, some know us for our book - Payment Systems in the US - while others know us for this podcast. Interestingly, while we do all of those things, we are, in fact, a consulting firm. A consulting firm that believes educating industry professionals is a great way to make the industry stronger. Our consulting practice gives us a front-row seat to stakeholders across the value chain. Whether they are in start-ups or central banks, we hear what’s on their minds every day and have the opportunity to help them tackle challenges, identify growth opportunities, and instigate change. In this episode, Yvette Bohanan sits down with Bryan Derman, Chris Uriarte, and Drew Edmond to take stock of payment industry trends as we reach the halfway point of 2023, to hear their perspectives on what’s hot, what’s not, and what are they watching as we venture into the second half of the year.  

In payments, as it is in life, a simple question is often wrapped in complexity. The complexity of the payments acceptance landscape, with an increasing number of stakeholders and technology providers, changing regulations and rules, and Issuers implementing new authentication and authorization mechanisms - any one or a combination of these could lead to major and minor impacts to the operational and financial performance of a business. And while this has been the case for several decades, we find ourselves in a macroeconomic environment that requires us to find operational efficiencies, which places the payments team under increasing pressure to maximize the number of successful payments, lower the cost of accepting payments, and support customer acquisition to drive incremental revenue. Long story short, these “simple questions” are being asked more often and at higher organizational levels. Why are simple questions hard to answer? Yvette Bohanan talks with Klas Bäck, Founder and CEO of Pagos Solutions, and Glenbrook’s Drew Edmond.  

In the US, fast payments discussions have centered around person-to-person, business-to-business, bill payment, and digital wallet funding in/out scenarios. In 2022, RTP® processed $72B, the majority of this volume communing from PayPal and Venmo funding activity. Zelle has reached a highly respectable $629B in person-to-person payments, traversing into “person-to-sole proprietor” territory. ACH, the workhorse of bulk payments is, as we say “hotter than ever” with Same Day ACH seeing an 86% year-over-year increase growing from $943B to $1.758B annual volume. But what about consumer-to-business purchases? Is there an opportunity for the US to see momentum in open banking and fast payments move into the commerce domain as they are in India, Brazil, and other countries? What will it take - and are we ready - to “pay by bank”? Yvette Bohanan welcomes Eric Shoykhet, CEO & Co-Founder of Link Financial Technologies, to this episode to share his thoughts on the topic.

A 2022 report from the CFPB titled Buy Now, Pay Later: Market trends and consumer impacts noted that from 2019 to 2021, the dollar volume of BNPL originations through five lenders surveyed grew by 1,092 percent, from $2 billion to $24.2 billion. BNPL adoption continues, not just in the US but globally, making it one of the most watched payment methods in the world.  BNPL’s rapid ascent has raised questions about its use: Who is choosing to use BNPL? Is it helpful or harmful to consumers’ credit and overall financial well-being? Does it improve financial inclusion? Is it displacing other forms of payment at checkout? A quick online search leads to mixed data points and inconsistent findings, often based on modest sample sizes and extrapolations. To answer these questions, we sat down with Kristin Carlson, Global Products and Analytics Data Scientist, and Zach Tondre, Director of Credit Risk Market Planning at LexisNexis Risk Solutions, who conducted a longitudinal study to obtain insight into these and other questions.  

In this episode, we explore the intersection of three significant payment trends: helping small businesses modernize their payment acceptance options, embedded finance, and the consumer lending phenomenon known as  Buy Now, Pay Later. We look at the potential market - asking ourselves if there is demand from small businesses and consumers. Then we unpack the opportunity using our BNPL “flywheel” to examine the critical success factors for any BNPL solution. Yvette Bohanan and Debbie Bartoo are joined by Bobby Tzekin, Founder and CEO of Wisetack (and Glenbrook Payments Boot Camp alumnus) to examine how technology, consumer and small business demand, and banking are opening up a very large market in the BNPL space - one that has a lot of potential and a lot of nuance.

In this episode, we are taking a closer look at the relationship underpinning much fintech innovation in payments – the fintech, bank, and BaaS trilogy. These 3-way partnerships have spurred innovation, increased access to financial services, and created offerings that appeal to a broad range of businesses and consumers. But in the context of these 3-way partnerships, new and existing risks abound, and relationships between counterparties are not well-established – making this a perfect haven for bad actors. Join us as we explore the current state of payments risk management across these alliances, and discuss the opportunities to make this new landscape safe, strong, and sustainable.  

There are a lot of headlines in the payments world. Payments News is Glenbrook’s curated news feed of the headlines that matter most every day, but we’ll readily acknowledge that it can be a lot to digest. That’s why we’ve introduced Payments Post, a month-end roundup of the news items that got us talking as a team along with some commentary about why we think they’re particularly important to the direction of the industry. Glenbrook’s Justin Pituch joins Yvette Bohanan in this Fanning the Flames episode to discuss the implications of the top April headlines, which were all related to account-to-account (A2A) payments. 

Cloud-based platforms, machine learning that increasingly improves or eliminates routine tasks, the phenomenon of “everything” as a service - platforms that stand on their own and tech stacks that embed complex capabilities into other software with minimal coding - these are just some of the technologies reshaping what is commonly referred to as “back office” financial operations. At the same time, these technologies are reshaping the customer journey - particularly when it comes to payments. New payment experiences facilitated by digital wallets, digital currencies, fast payment systems, and sophisticated transaction monitoring tools are increasing sales, lowering costs, enabling global expansion, unlocking new revenue streams, and speeding up settlement cycles. However, as we know, a critical component for maximizing any technology investment is the leadership of an organization. In this case, the relationship between the payments leader and the Chief Financial Officer is front and center. In this episode, Yvette Bohanan is joined by Vivek Sharma, Head of Revenue and Financial Management at Stripe, to consider the importance of this relationship and how, by joining forces, these leaders can help the C-Suite achieve the organization’s broader strategic objectives.  

Wrapping up our three part series exploring Brazil’s Pix, Carlos Brandt, Head of Management and Operations for Pix at the Central Bank of Brazil, sits down with Yvette Bohanan and Elizabeth McQuerry to discuss some of the keys to Pix success and what the future looks like as Pix continues to transform Brazil’s payments landscape.

In the second installment of our series on Pix, Carlos Netto, CEO and Co-Founder of Matera and Sarah Hoisington, Vice-President of Strategy and Marketing discuss what makes Pix “tick", and the challenges and opportunities presented to the banks responsible to implement this new payment system.

There are a lot of headlines in the payments world. PaymentsNews is Glenbrook’s curated news feed of the headlines that matter most every day, but we’ll readily acknowledge that it can be a lot to digest. That’s why we’ve introduced PaymentsPost, a month-end roundup of the news items that got us talking as a team along with some commentary about why we think they’re particularly important to the direction of the industry.  Glenbrook’s Justin Pituch joins Yvette Bohanan in this Fanning the Flames episode to discuss the implications of the top March headlines, including stumbling blocks for fintechs and their sponsor banks, a bank-led battle for the checkout page, and a clearer view of the path forward for U.S. fast payments.   

Call them what you will - Instant Payment Systems, Fast Payment Systems, Real Time Payments - or by their brands UPI, RTP® and more - these payment systems are experiencing success around the world. As the US stands weeks away from launching FedNow, we decided to take a closer look at the success of one of the hottest newcomers to the instant payments scene - Brazil’s Pix. As it turns out, there is much to be learned from success. Launched in November 2020, in just 2 years Pix had processed R$13 Trillion. Remarkable as that statistic is, it is more impressive when you realize that within 7 months of its launch, Pix was processing more volume than credit documents (DOC), electronic transfers (TED), and bank slips combined. By February of 2022, Pix had overtaken debit and credit card transaction volumes. By December of 2022 Pix broke a record - processing more than 100 million transactions in 24 hours. If that is not enough, it looks to be accomplishing what many countries hope for with a new fast payment system - Pix has moved the needle on the financially underserved, shifting from 50% of the population being unbanked to 75% of the population using Pix. In this first episode of a 3-part series, Yvette Bohanan sits down with Cici Northup, Joanna Wisniecka, and Elizabeth McQuerry to discuss the “state of play” for fast payment systems and the key questions to ask about what the future holds for all of us as the world enters a phase of transformative modernization.  

In this latest episode of Fanning the Flames, Yvette Bohanan catches up with Joanna Wisniecka and Cici Northup after their recent attendance at the 2023 Payments Summit and the Fintech: Innovation, Inclusion, and Risks Conference. Listen in to hear why “FOMO is not the answer” when implementing fast payments (or anything, really), and their other key takeaways on the digital currencies and fraud topics.  Joanna is currently on the road again at the Women in Payments USA Symposium, moderating a panel on fast cross-border payments. If you are there, be sure to connect with her!   

What do Fintechs have to do with the cereal aisle? Tune in to this episode of Payments on Fire: Fanning the Flames to hear the answer to that question and more, as Glenbrook’s Chris Uriarte and Drew Edmond prepare for MRC Vegas 23. 

Nacha's Phixius is one of the better kept secrets in the U.S. payments landscape. Maybe that needs to change. Take a listen to Yvette Bohanan and George Peabody as they speak with George Throckmorton, Senior Director at Nacha and the head of Nacha’s Phixius data network initiative.

We’ve reached our final destination on Glenbrook’s 2022 tour of local payment methods around the world. Joanna Wisniecka joins Yvette Bohanan on this episode of Fanning the Flames to chat about her recent trip to Jordan. Joanna walks us through her experience opening and making payments with a Zain Cash account, and also provides insights into JoPACC (Jordan Payments & Clearing Company) initiatives throughout the country. 

With many of us still experiencing cold and rainy winter weather, let’s look to warmer climates as Glenbrook’s Chris Uriarte walks us through his payments journey in French Polynesia.  If you’ve attended a Payments Boot Camp, you’ve heard us say that payment systems are domestic by nature. The experience Chris has in the islands of French Polynesia really brings that point home. Listen in to hear his observations and key takeaways on local payment methods.   

The next destination on our journey around the world is Singapore! Glenbrook’s Chris Uriarte and Bethany May come on the show to share their stories using local and regional payment methods. Listen in to hear their experiences using GrabPay, QR codes, and even digital currency to pay a friend back for dinner.  While at the Singapore FinTech Festival, Bethany also had the opportunity to participate in a Central Bank Digital Currency pilot put on by the Monetary Authority of Singapore. She provides her insights on the “purpose bound money” trial and overall observations on the research and experimentation being done on CBDCs in Singapore. 

Next up in Glenbrook’s travelogue series, Nikhat Choudhury joins Yvette Bohanan to share her experience making payments on a recent trip to Turkey.  In this double feature episode, Elizabeth McQuerry and Bethany May also provide observations on the local payments scene in Ethiopia, including their use of the e-money wallet Telebirr. 

In 2022, travel started to get back to “normal” and the Glenbrook team had many opportunities to get out and about. No trip would be complete without running a few payments experiments. Over the next 5 Fanning the Flames episodes, we’ll take you with us on our journeys to hear first hand experiences and observations with local payment networks across the globe.  To kick the series off, Elizabeth McQuerry joins Yvette Bohanan to discuss a recent trip to Brazil. 

We’ve talked a lot recently about how important it is to stay up to speed on regulations. In this episode of Payments on Fire®, George Peabody and Chris Uriarte are joined by Michael Borgia, Partner at Davis Wright Tremaine, to discuss data security and privacy and the steps regulators are taking in this space.

Glenbrook has been providing payments education for over 15 years. In that time, over 35,000 payments professionals have attended Glenbrook workshops, including the popular Payments Boot Camp. The Payments Boot Camp provides a thorough overview of the global payments industry - an industry that is constantly changing. As you can imagine, the material for our workshops changes with it.  Glenbrook’s Russ Jones joins Yvette Bohanan to discuss the refreshed Payments Boot Camp agenda as well as the newly designed Advanced Payments workshop. Listen in for a behind-the-scenes look at how Glenbrook’s education content is curated and why certain topics may not be included at all.  If you are interested in attending a Glenbrook workshop, click here for upcoming opportunities to learn and network with your peers. 

We talk about ACH a lot at Glenbrook (even coining the phrase “ACH is Hot”) and there’s a reason for that. More than 29 billion ACH Network payments were made in 2021, valued at close to $73 trillion. While ACH technology has been around for decades, modernization has made this system virtually unrecognizable from what existed in the 1970’s, and it continues to evolve.  In this episode of Payments on Fire®, George Peabody and Yvette Bohanan are joined by Michael Herd, Senior Vice President of ACH Network Administration at Nacha. In the conversation, Mike walks us through the state of ACH, insights on volume and growth, and new Nacha operating rules. https://pof.glenbrook.com/

Glenbrook’s Bryan Derman, Chris Uriarte, Cici Northup, and Joanna Wisniecka are back from Money20/20 and return to Payments on Fire to debrief with Yvette Bohanan in this Fanning the Flames episode. If you listened to Episode 180, you know what hot topics the team was anticipating at the conference. Was it everything they expected? Tune in to hear the highlights and observations.  https://pof.glenbrook.com/

Becoming a fintech is no easy task. There’s the foundational idea, there’s the team, the market opportunity, macroeconomic conditions, and the necessary skills of running a business. Never easy and today it’s even tougher for new fintechs given rising interest rates, consumer hesitation, and the uncertain global economy.  There’s also the make-or-break concern of regulatory compliance.  In this Payments on Fire® episode, Cameron Peake, partner at VC firm Restive Ventures (recently renamed from Financial Venture Studio) joins Glenbrook’s Yvette Bohanan and George Peabody in a discussion on the regulatory and contractual issues fintechs face.  Cameron’s firm takes a hands-on approach in helping their fintech investments navigate those complexities. And in these conditions, a guiding hand has to be a welcome value-add for a fintech looking for a VC partner. Smart money is always better than the clueless variety. https://pof.glenbrook.com/

Join Wordline's Michael Steinbach and Glenbrook’s Elizabeth McQuerry and George Peabody to hear the story of SEPA’s creation, the Single Euro Payments Area. You’ll also learn about Worldline, Europe’s largest processor. It's an amazing story. If you are concerned with how networks work, or thinking of building network-based processes, there are lessons here - and cautions.  https://pof.glenbrook.com/

Yvette Bohanan hosts Glenbrook’s Bryan Derman, Chris Uriarte, Cici Northup, and Joanna Wisniecka to discuss their attendance at the upcoming Money20/20 conference. Listen in to hear what noteworthy payments trends the team is paying attention to and what related themes they expect to surface at Money20/20. We’ll catch up with them after the conference to see what takeaways were most surprising or interesting.  If you are attending Money20/20, we’d love to connect! Please reach out to Bryan, Chris, Cici, or Joanna on Our Team page or connect directly on LinkedIn.  https://pof.glenbrook.com/

Most of us see payments innovation as the force that moves markets. That’s true when it comes to user experience and the tech that moves money. But it is government regulation and business contract rules that guide and control what financial services players can, and can’t, do with their shiny new tools. Or crusty old ones. Regulation in the US is a complex, multi-layered reality for incumbents and fintechs alike. In this Payments on Fire® episode, Jennifer Aguilar, Sr. Associate at law firm Alston & Bird, provides a crisp review of payment system rules, federal and state regulations, Regs E and Z, and more. https://pof.glenbrook.com/

Glenbrook’s Russ Jones returns with George Peabody and Yvette Bohanan on this episode of Payments on Fire® to discuss tokenization - a substitution of a high value primary account number with a digit that, in many cases, looks just like the original PAN, but isn't. Tune in as they break down how tokenization works and the security it provides, amidst numerous cooking metaphors.  https://pof.glenbrook.com/

Merchants rejoice? Credit card interchange regulation is on the table with the Credit Card Competition Act of 2022. But the new rule proposed by Senators Dick Durbin and Roger Marshall is pretty unusual, and the researchers at Glenbrook have been hard at work trying to figure out what it means for the industry. How is it different from existing debit interchange regulation and credit interchange regulation in other jurisdictions? And how will players across the value chain react if the rule takes effect? Will anything really change? Glenbrook’s Justin Pituch joins Yvette Bohanan to discuss potential implications. https://pof.glenbrook.com/

Glenbrook’s Drew Edmond joins Yvette Bohanan on the show to recap his experience at the PaymentsEd Forum in Washington DC earlier this month. In addition to attending the conference, Drew also spoke on a panel about “How collaboration at scale can improve outcomes” with Jordan Kaplan from Groupon and Jonathan Lee from Netflix, moderated by Tyler Heun from checkout.com.  Tune in to hear more about Drew’s panel discussion as well as the major topics of conversation around the conference “water cooler”.  https://pof.glenbrook.com/

If you’ve attended a Glenbrook Payments Boot Camp®, chances are good that you remember reviewing push and pull payments during the key concepts. The determination for whether a transaction is push or pull comes down to who is sharing their payment address. If the receiver is sharing, it is a push payment. If the sender is sharing, it is a pull payment. But what if the sender and receiver are not personally involved in initiating the transaction?  Russ Jones joins George Peabody and Yvette Bohanan on this episode of Payments on Fire® to talk about delegated push payments, where another party has permission to initiate a push transaction on the sender’s behalf. Listen in as they discuss the nuances around delegated push payments and the use cases for these transactions.  https://pof.glenbrook.com/

Glenbrook’s Neel Saunshi and Yvette Bohanan return to explain the Proof of Work consensus algorithm. Listen in as they discuss what it is, how it works, and the environmental impact from the associated energy consumption. https://pof.glenbrook.com/

In this Fanning the Flames episode, Neel Saunshi joins Yvette Bohanan to discuss a very hot topic in the industry - NFTs. Tune in as they break down smart contracts, what’s happening behind the scenes, and examples and applications for how this technology is being used to disrupt various industries.  https://pof.glenbrook.com/

Glenbrook’s own Elizabeth McQuerry and Joanna Wisniecka just returned from spending a couple of weeks in Kenya leading training on inclusive payments systems.  While in the country, they got to play end-users of digital payments and experimented with M-PESA’s mobile money e-wallet. You may have been following their payments adventure on Glenbrook’s LinkedIn page.  Listen in to hear more about their experiences, some quick insights into other learnings from Kenya, and what fast payments developments they are seeing on the continent.  https://pof.glenbrook.com/ 

Chuck Huang, Founder and CEO of Citcon, joins George Pebody and Yvette Bohanan on this episode of Payments on Fire® to chat about digital wallets across the globe. Listen in to hear their thoughts on where the industry is headed as the consumer payment choice continues to diversify.

In this episode of Payments on Fire®, George and Yvette Bohanan welcome Ahon Sarkar, GM of Helix by Q2. Listen in as they discuss embedded finance, multi-tenancy, participating in the FedNow pilot, and bringing online, physical and financial worlds together into a consistent experience that is meaningful to customers.

George and Yvette welcome back Robin Gandhi in this episode of Payments on Fire®. Formerly of TripActions (Episode 146), Robin is now the chief product officer of Nium, a firm specializing in bringing cross-border payments capabilities to banks, fintechs, and large and medium enterprises.    Glenbrook has been taking a deep dive into Global Payments lately - check out recent recorded webinars. This conversation with Robin highlights the complexities and considerations involved in moving money across borders and the importance of in-country access to domestic payment systems.    Thanks for visiting your “podcast home”, Robin!

Just off the plane from Nashville, Glenbrook’s Elizabeth McQuerry and Cici Northup sat down with Yvette Bohanan to chat about attending NACHA’s Smarter Faster Payments Conference, where Elizabeth also participated in a session with the US Faster Payments Council. Tune in to hear their takeaways and why this year was “not your grandma’s NACHA conference”.

In this episode of Payments on Fire®, Yvette Bohanan is joined by Patrick Chen, co-founder of SpecTrust, to discuss payments risk, fraud, and the age-old question of good versus evil. Listen in to hear how organizations can combat fraud while still providing the best customer journey.

In this episode of Payments on Fire®, George Peabody and Yvette Bohanan are talking payment trends and best practices with Fiserv’s Casey Klyszeiko, Head of Carat and eCommerce at Fiserv.  Tune in to hear Casey, a Payments Boot Camp alum himself, discuss the consumer payments journey and the questions merchants should be asking in order to deliver the right payments experience for their customers.

In this timely episode of Payments on Fire®, Yvette Bohanan has gathered teammates at Glenbrook (Elizabeth McQuerry, Erin McCune, Cici Northup, and Joanna Wisniecka) to discuss the payment infrastructure supporting the foreign policy actions being taken as a result of the situation in Ukraine. In the past week, the UK, EU, and Switzerland announce sanctions against Russia, – with Switzerland setting aside a long-standing tradition of neutrality in participating in these actions and the US announcing sanctions against Russia’s central bank in a move that prohibits Americans from doing any business with the bank as well as freezes its assets within the United States. These measures are also targeting the National Wealth Fund of the Russian Federation and the Ministry of Finance of the Russian Federation. As markets opened February 28, the Russian Ruble had fallen 29% against the dollar to an all-time low, after the U.S., European Union and Canada agreed to disconnect some Russian banks from the SWIFT interbank messaging system. We’re going to explore SWIFT and other payment infrastructure used to implement foreign policy on a routine basis, and why these recent announcements, in some respects, are taking this to a new level.

In this episode of Payments on Fire®, George Peabody will have back on the show two people that our listeners know well. Yvette Bohanan from Glenbrook Partners’ Education Team will co-host this episode, the second episode from 2022.Keeping the listeners updated about the digital currency systems, Yvette and Bethany May (new Senior associates) are promoting a webinar series about Central Bank Digital Currencies in February and another one in March about cross-border payments systems. Not by coincidence, today’s guest is an expert on this topic.George will also welcome back Ran Goldi, CEO of First Digital Asset Group to talk about the huge expansion of the stable coins business, how cryptocurrencies can benefit cross-border payments with small fees and almost instantly transfer. That would interoperability between the systems involved. Let’s hear Ran’s insight about it.

2022 just started and we got so much to see and learn this year. But, we are not alone in this learning journey. Machine Learning and Artificial Intelligence are here to stay, so we also should learn why and how it works for the payments industry.    Starting this season of Payments on Fire®, we will have Ismini Psychoula discussing fundamental technology, AI and ML, and its role in financial services. Ismini is a Research Scientist at OneSpan. OneSpan is a global organization that is focused on digital banking security and e-signatures, delivering trust and business productivity solutions for more than 10,000 customers in 100 countries. In the financial industry, more than half of the top 100 global banks rely on OneSpan solutions to protect their online, mobile and ATM channels.    Ismini Psychoula got a PhD in Computer Science with a thesis about Privacy-Preserving Machine Learning for Smart Healthcare. At OneSpan she’s Researching and designing privacy preserving and explainable machine learning models for financial systems.   In this episode, you’ll hear about Ethical AI, AI feeding and monitoring, Machine Learning bias and how it all affects the financial system. We’ll take a deep dive in the research to prevent fraud and increase transaction security.   Come to the Payments on Fire® website for: Expanded show notes Podcast transcript The complete Payments on Fire® episode catalog

The new year is coming with lots of innovations for the payment industry. Some of them will impact some companies and/or all the industry, changing how things work on the marketplace. George welcomes back Russ Jones to Payment on Fire and they will uncover the lens of the game-changing innovations, including talking about the upcoming events and changes that really matter to the arc of the payment industry. Glen is a Payments Consultant, Analyst, Co-Author of "Payments Systems in the U.S.” and partner at Glenbrook Partners. In this episode, Russ will discuss the Webinar presented by him and Yvette Bohanan between December 15th and 16th about innovation and payments, with topics like types of payment systems and technologies, how the different use cases lay out what's unique about each, variations and differences around the world and how the payments industry is structured. You’ll also hear about core system modernization, systems running 24/7/365, strong customer payment authentications and several other topics. Let’s hear George Peabody and Russ Jones talk about what to expect for the payments industry in 2022. Come to the Payments on Fire® website for: Expanded show notes Podcast transcript The complete Payments on Fire® episode catalog The Glenbrook Education schedule

Payment scams and the fraudsters who perpetrate them are everywhere. And as we speed up payments, the ability to send money from one account to another in near real-time, there’s a lot to like for users. And for fraudsters. Scammers love it when they convince us to send them money from our own accounts. This is called authorized push payment fraud and it is a growing problem. To shed light on APP fraud, its impact, and some approaches to detecting fraudster coercion and the misdirected payments it causes, join Glenbrook’s George Peabody and PJ Rohall, Fraud Subject Matter Expert at Featurespace, a fraud management software company. PJ is also the co-founder of About Fraud.Com, a community site for the fraud management industry. In this episode George and PJ discuss the growth of APP fraud, the range of scam types, and a few techniques to detect and deter it. You’ll hear him describe examples of the impact APP fraud has caused on individuals, many least able to weather this kind of financial damage. Psychological damage is real. Then come to the Payments on Fire® website for: Expanded show notes Links to UK Finance reports and Take Five for Fraud resources Podcast transcript The complete Payments on Fire® episode catalog The Glenbrook Education schedule

Financial health and inclusion in the US remain as major concerns  and challenges for the nation, the millions who struggle with access to affordable financial services, and payments experts focused in this arena. Join Glenbrook's Erin McCune and Justin Pituch as they speak with a recent panel of expert practitioners in the financial health space: Kimberley Gartner, Arjan Schutte, and Ryan Falvey.  Kimberley is Chief Growth Officer at Canary, a company that helps businesses establish emergency relief funds for their employees. Arjan and Ryan both work in the venture capital space; Arjan leads Core Innovation Capital and Ryan heads up Financial Venture Studio. Come to the Payments on Fire® website for: Expanded show notes Podcast transcript The complete Payments on Fire® episode catalog The Glenbrook Education schedule

This podcast with Mimi Joy explores consumer financial wellbeing in the US and initiatives to improve access to quality financial services for low and moderate income Americans. Mimi shares her perspective as Head of Partnerships at the Financial Health Network, a leading authority in the space. Topics discussed include: The current state of the financial health landscape Research on the effect of the pandemic on low and moderate income consumers and their financial wellbeing New approaches to serving the needs of vulnerable consumers Key financial health lessons for payments professionals Come to the Payments on Fire® website for: Expanded show notes Podcast transcript The complete Payments on Fire® episode catalog The Glenbrook Education schedule

Multiplayer fintech takes payments services to levels of depth and breadth not seen before. The breadth of payments platform services enables other fintechs to bring comprehensive capabilities to their customers. Listen to this conversation with Modern Treasury’s CEO Dimitri Dadiomov, its Chief Growth Officer Rachel Pike, and Glenbrook’s Erin McCune. You’ll hear: The creation story of Modern Treasury and the market conditions that proved demand The central role of enterprise payments operations How payments as a service is evolving as a business How its customers deploy its range of capabilities Why ACH is taking off in the fintech space Come to the Payments on Fire® website for: Expanded show notes Video Podcast transcript The complete Payments on Fire® episode catalog The Glenbrook Education schedule

In this wide ranging Payments on Fire® episode featuring gateway provider NMI, you’ll hear how payment industry roles continue to evolve as tech and consumer preferences change. Topics covered include: The evolution of touchless payments from QR to Tap on Phone NFC transactions What a gateway does How a white label provider sells and who uses its services What an ISV needs to think about when considering the role of payments facilitator COVID-19’s impact on merchant and consumer payments Take a listen to this conversation with Kyle Pexton, president and CFO of NMI and Nick Starai, NMI’s Chief Strategy Officer as they talk with Glenbrook’s George Peabody about the arrival of the NextGen ISO and how NMI is helping them, their bank customers, ISVs, and VARs get SMBs into payments acceptance. Come to the Payments on Fire® website for: Expanded show notes Podcast transcript The complete Payments on Fire® episode catalog The Glenbrook Education schedule

Fast payments will move the US payments market. But to get there, we need fintech to expose those capabilities. Zelle, the RTP Network, Same Day ACH, push to card, and eventually FedNow all need providers that connect up to those rails. For an enterprise or its software developers, a single integration to all sure would be easier. In this Payments on Fire® episode featuring Dwolla, you’ll hear: A practitioner’s view of how ACH and RTP differ and are being used? Why B2B digital payments are growing and what you need to know what’s enabling that growth Learn what a provider must do to bring multiple payment systems to its enterprise customers. It isn’t simple Take a listen to this conversation with Dwolla’s Brady Harris and Adam Steenhard as they talk about realtime access to fast payments (and more) with Glenbrook’s Elizabeth McQuerry and George Peabody. Come to the Payments on Fire® website for: Expanded show notes Video Podcast transcript The complete Payments on Fire® episode catalog The Glenbrook Education schedule

Curious about how fast payments systems like Zelle, the RTP Network, and FedNow work? Many fast payments use cases aren’t about speed. Find out why. Fast payment systems are national “must haves” around the world. Take a listen to this conversation with Glenbrook’s Elizabeth McQuerry and ACI Worldwide’s Craig Ramsey. Come to the Payments on Fire® website for: Expanded show notes Video snapshot Podcast transcript The complete Payments on Fire® episode catalog The Glenbrook Education schedule

Glenbrook’s fintech payment series continues with this look at Veem in a deep convo with Marwan Forzley, CEO. Curious about how fintechs solve client problems? Fintechs aren’t just about payments; they blend commerce enablement into their offerings The payment solution that solves the data problems - as well as moves the money - provides the most benefit to the customer Did you know that fintechs don’t do anything new? They just do it better. Take a listen to George and Veem’s CEO Marwan Forzley as they talk about how Veem built its international payment network for small and medium business (SMB) customers. Listen to Marwan describe the commerce services and integrations Veem has done to drive traffic over the network. Come to the website for: Expanded show notes Podcast transcript The complete catalog of Payments on Fire® episodes The Glenbrook Education schedule  

Curious about how fintechs solve client problems? Fintechs aren’t just about payments; they blend commerce enablement into their offerings The payment solution that solves the data problems - as well as moves the money - provides the most benefit to the customer Did you know that fintechs don’t do anything new? They just do it better. Take a listen to George and RoadSync’s CEO Robin Gregg as they take a deeper look into how fintech’s solve specific problems for specific industry segments. RoadSync provides payments and commerce services to the logistics and trucking industries. Come to the website for: Expanded show notes Video clip Podcast transcript The Payments on Fire® episode catalog The Glenbrook Education schedule

How do you secure bank to bank transfers between counter parties when the payment system itself lacks strong authentication? Can you balance the cost, speed, and security of transactions across multiple payment networks? In this episode of the Payments on Fire® fintech series, join Glenbrook’s Nicole Pinto and George Peabody as they speak with Eli Polanco, CEO and Founder of Nivelo. Her company offers risk scoring for ACH transactions to improve payment success rates and reduce fraudulent transactions. Listen as she speaks to her entrepreneurial experience and insight into the evolution of bank-to-bank payments. Show notes include: A look at the ACH and its advantages Useful links to other sources Podcast transcript Video snapshot The Payments on Fire® episode catalog The Glenbrook Education schedule  

There's a huge shift on the horizon. Want to learn about the state of cryptocurrencies in payments today? What about the entrepreneur’s journey in leading edge fintech and payments technology? Take a listen as Glenbrook partners George Peabody and Yvette Bohanan talk crypto, Diem, CDBCs, and the evolution of digital money with Ran Goldi, CEO of First Digital Assets Group. Goldi’s entrepreneurial story and experience with VC are well worth hearing as are his predictions for digital money’s future. Show notes include: A deep dive into cryptocurrency evolution Links to other sources Podcast transcript Video snapshot of Goldi's elevator pitch The Payments on Fire® episode catalog The Glenbrook Education schedule

Prepaid cards are the “apps” of the card world. Join George and Fiserv’s Head of Prepaid Dom Morea as they introduce prepaid’s twin modalities - open loop and closed loop - and then dive into how the gift card industry has morphed into a far broader set of uses cases. And plan to return for the next episode as they discuss open loop’s evolution. Card payments have four modalities: Charge Cards. There are charge cards that are a form of very short term credit, you pay off in full the monthly statement Credit Cards add the option of revolving all or a portion of the debt obligation and, if you do, you pay interest on those charges Both of these are products that we buy as consumers or businesses. And we’re paying with money we don’t have at the moment of the transaction. They are “pay after” products. Debit Cards. Debit Cards, on the other hand, are a feature of a specific checking account. It draws on funds that are available right now. It’s a “pay now” method. As soon as the issuer authorizes the transaction, a hold for that amount is placed on funds in your account. Prepaid Card. The final modality operates in “pay before” mode. That’s the prepaid model where funds have been placed in an account to be spent at a later date. Like debit, prepaid draws on funds that are already in place. In most cases, the prepaid funds owned by an accountholder are pooled in a single bank account. Prepaid is used in two different manners Open loop prepaid cards are network branded (think Visa and Mastercard). They can be used anywhere the network’s cards are accepted. The second approach is closed loop. This is the domain of the gift card where a merchant has pre-sold an obligation to provide goods or services up to the value in the prepaid account. Prepaid Use Cases Abound Prepaid is big business. Go into any chain drugstore and you’ll see a rack with both open and closed loop prepaid cards for sale. For years, the physical footprint of that “prepaid mall” has been the most profitable square footage in the store. The prepaid world has some very interesting dynamics. Unlike credit card products that may be issued to millions of cardholders and used for all kinds of purchases, a prepaid program may only serve a few thousand and may be locked down for special purposes. The Apps of Cards That’s why we think of prepaid as the “apps” of the card world. Prepaid lends itself to some very specific use cases and program types. In this first of two interviews with Dom Morea, Fiserv’s Head of Prepaid, we cover closed loop prepaid and some of the new and growing use cases Fiserv has supported, often driven by COVID-19. Here’s Dom discussing B2B use cases for closed loop prepaid programs: Read the Transcript  Expert payments industry commentary The latest Payments News Subscribe  COVID-19 Payments Industry Impact eBook

In our payments education workshops, we make the point that today’s fintechs rarely do something entirely new. At the macro level, our activities and the transactions they produce haven’t changed. We buy food and clothing. We pay rent. But where and how we do these things has been transformed by technology. A Great Time to Be a Fintech Fintechs are the newer, nimbler businesses that are most often changing how we do things. We buy tickets online, get takeout using our mobile phones, and file insurance claims via an app. Fintech entrepreneurs are busting old processes with much improved user experiences and “value for money” propositions. It’s a great time to be a fintech. The building blocks are in place. Powerful cloud-based capabilities are common. APIs connect these tools. Rich data and machine learning generate specific, actionable insights. iOS and Android give smartphones super powers. Business models like payment facilitation help some fintechs. You can even become a bank. Multiplayer Fintech Builds a Winning Service Individual fintechs are partnering with others to develop and deliver compelling new services. This is multiplayer fintech. Think of it as the fintech supply chain. The direct provider of services to the customer uses the specific payments capabilities of other fintechs to expand and strengthen what it delivers to its customers. This approach lets the provider get to market faster with better capabilities than its competitors. That builds a competitive moat for a period of time. And expands the company’s revenues through a broader range of services. Not Always Easy in B2B The ability of these fintechs to displace incumbent vendors and processes (“How we’ve always done it”) can be hindered by the target company’s size and reliance on legacy systems. Their complexity presents a barrier. Dismantling it can take a lot of time and change management process support. For mid-sized firms, however, the choice to shift to cloud-based service delivery is fast becoming a no-brainer. The work from home imperative has only accelerated the decision. Prospering Despite COVID We all know that the Travel and Hospitality industries have taken a COVID-inflicted beating. But not every company serving those needs has suffered. TripActions, focused on corporate travel, just raised $155M at a $5B valuation to help enterprises analyze travel and expense data. Join TripActions’ Robin Gandhi and George as they talk about how TripActions has prospered in the last year with its travel expense management service that makes both the COF and the employee smile. TripActions has employed those building blocks and partnerships with firms like Visa, Stripe, and Modern Treasury. Using the multiplayer fintech approach, TripActions now has a service that has rewritten how an enterprise manages its travel and expense management processes. For the employee, the hated expense report submission process can be virtually eliminated. TripActions’ services could not have been built even five years ago. Without today’s technical building blocks and those partner-provide capabilities, TripActions could not have built its services and hit the market as it has. It’s a good time to be a fintech. Here’s Robin talking about multiplayer fintech:  Read the Transcript at the Payments on Fire® website Expert payments industry commentary at Payments Views The latest Payments News. Subscribe here Read our COVID-19 Payments Industry eBook  

GPay is Google’s app for payments, financial services, rewards, and, is expanding its capabilities, its partnerships, and its ambitions. Join Glenbrook’s George Peabody and Yvette Bohanan as they talk GPay with Steve Klebe, Google's head of GPay business development and Google's Processor and Partnerships work. Fairly recently, Google’s payments services were a disjointed collection of point solutions. Today’s GPay is far more than a rebranding job. Listen between the lines to what Steve has to say. The implications are many. Way More Than a Wallet A lot has happened since Steve joined us in July 2019. GPay has added incentives and loyalty more deeply as well as added expense management with automatic receipt discovery when sent to your Gmail account or via the camera. The incentives can turn into real money. In the U.S. Google has teed up its Plex bank account offerings in partnership with Citi and Stanford FCU (other FIs to come) for launch in 2021. You can already add bank accounts to GPay through Google’s partnership with Plaid. GPay is becoming a very competent user interface to the banking services offered by the FIs themselves. Google provides the UX and the data that matters. The bank does what it does. Does this disintermediate the banks or give them a new channel through which they can offer their services? We will decide but personal experience suggests the GPay interface has a lot going for it. Google has added these new capability and consolidated others under the single GPay roof. Its ambitions now go beyond simply being a repository for payment credentials and loyalty cards with a sprinkling of P2P payments on top. Exercising Open Banking One of the major payments and fintech trends for 2021 is open banking, the ability of third parties to access accountholder data. PSD2 has driven this in Europe and India’s Unified Payment Interface (UPI), both pushed by mandate, enables a vigorous open banking ecosystem in that country. Google Pay, formerly Tez, has been a huge success in India. Of course, market pressure is the driver in the U.S. Google is now exploring the potential for GPay to assume the role of "super app" along the lines of WeChat Pay or Alipay. Yes, that’s a big leap but there are hints of its ambitions. For example: Google has built over 100 HTML games optimized for low bandwidth networks and low memory smartphones, all targeted toward supporting its NBU (Next Billion Users) effort. GPay will be one of the presentation surfaces for these GameSnack. Fairly recently, Google’s payments services were a disjointed collection of point solutions. Today’s GPay is far more than a rebranding job. Listen between the lines to what Steve has to say. The implications are many.   Read the transcript Find more podcasts at Payments on Fire® Read expert payments industry commentary at Payments Views Read the latest at Payments News. Subscribe here Read our COVID-19 Payments Industry eBook

A Global Phenom Realtime Retail Payments (RTRP) systems are a global phenomenon. These systems exist or will soon in over 50 countries around the world. Some have been in operation for decades. The UK’s Faster Payments system, operated by Mastercard’s Vocalink unit, has been in operation for over ten years. Still others are still in the design stage. These account-to-account systems (A2A) have gained in regulator popularity because: They are fast. The receiver has near instant availability They are push payment systems. Transactions don’t take place unless the sender has enough money to fund the transaction. In other words, authorization takes place before the transaction User authentication is up to the financial institution These systems operate year round, 24x7 They are inexpensive. Transaction pricing is fixed, regardless of the value of the payment itself They have rich data carrying capability Some include a new message type called Request for Payment, essentially a digital invoice message that prompts the payer to send money and smooths account reconciliation. Still New to the US Most Americans still have no idea there’s a new national payment system in operation. Or that a similar one will begin operation in a few years. Wallets like Venmo and the Cash App abound. But an entirely new set of payment rails? That happens once in a generation. Some of those Americans, on the other hand, may have experienced what a system like this can do. Zelle is a fast push payment system that moves money between banks accounts. But Zelle is more of a directory-enabled messaging layer. The money movement between banks relies on older payment rails like ACH and wires. New Age messaging and user experience; old fashioned settlement. Key RTP Characteristics Payments geeks, like Payments on Fire® listeners, know that the Real Time Payments Network takes a different approach. Operated by bank processor, The Clearing House, the RTP Network leaves management of the user experience and the use case up to the bank, the processor, or the provider serving a particular industry. The RTP Network provides: The messaging between the sender and the receiver and each of their banks Nearly instant availability of the funds into the receiver’s account (by network rule) 24/7/365 operation (ACH and wires take a break after working hours) Instant settlement between the sending and receiving financial institutions In short: the RTP Network provides the plumbing and pipes. What it looks like and how it’s used is up to another stakeholder. Members of the network are financial institutions who either expose the RTP rails themselves or sponsor third party access so that those entities can make use of them. Nothing groundbreaking there. An RTRP with RTGS One of the impressive features of the RTP Network is that interbank settlement, the movement of funds between the sender and receiver banks, happens in realtime. The two banks settle their positions instantly. Settlement happens in realtime for every transaction. That’s what a realtime gross settlement (RTGS) does. Contrast that with a system like Zelle that provides instant messaging among the stakeholders but typically leaves the final movement of monies between banks to an overnight batch process via ACH. And this is net, not gross, settlement. The amount includes all of the day’s transactions. The RTP network achieves its RTGS capabilities using the following technique: RTP requires each member financial institution to pre-fund monies sufficient to handle its transactions. The money to operate the system has to be in place ahead of time. This eliminates settlement risk between the banks Each FI’s monies are pooled in a single pooled account, owned in common by the RTP Network’s member financial institutions. This pooled account is held at the the Federal Reserve The Clearing House maintains a ledger that tracks every transaction, that debits and credits FI pairs in realtime for each transaction Each Member FI is responsible for making sure it has enough funds to cover each of the transactions initiated by its accountholders. Each FI uses another open loop payment system, FedWire, to move monies into and out of its share of the pooled account as needed. A Maturing System That’s a lot of background to help US contrast this system against the other four mostly digital systems in the U.S. (If you’re not clear on that, join us for the best in payments education at a Glenbrook Payments Boot Camp®) The RTP Network is in its fifth year of operation. In this Payments on Fire® episode, Steve Ledford updates us on: The growth in member financial institutions The growth in transaction volume The expanding set of use cases Who is using the RTP Network How COVID-19 accelerated usage in new use cases So, take a listen. Here’s Steve talking about those new COVID-driven use cases. For a snapshot of how the faster payments phenomenon is growing in the U.S. here is the 2020 Faster Payments Barometer. Read the episode transcript Find more podcasts, visit Glenbrook's Payments on Fire® site Read expert payments industry commentary at Payments Views. Read the latest at Payments News. Subscribe here. Read our COVID-19 Payments Industry eBook

Continuing our payments in fintech series, we talk about one of the major changes in the payments industry over the last few years: the installment lending phenomenon. Companies like AfterPay, Klarna, and Affirm (that just IPO'd and saw its stock double in one day) are leaders in this buy now, pay later (BNPL) space and appeal to Millennial and Gen Z users as well as the merchants selling to them. These firms offer a range of installment payment options: three, six, and 12 month payback periods are typical. The interest rate gets lower the shorter the payback period and, for the shortest period, that cost is eliminated. The merchant pays for it as promotional financing. These installment loan options generally increase the size of the sale and, because the BNPL provider may take on the risk and guarantee the sale, they remove a measure of risk from the merchant. In other words, for multiple merchant categories, they increase sales. BNPL providers accept multiple methods of payment: credit and debit cards and, of course, they may encourage the use of ACH as a low cost funding source. For younger demographics, a majority of them without credit cards and credit histories, these services enable them to transact. Sezzle is a player in this arena with a unique, very short term product that charges no interest to the consumer because the purchase is paid back in six weeks. The costs are born by its merchant customers. Sezzle has particular appeal to sub-prime or young consumers who may not even have a credit score. Take a listen as Sezzle’s Chris Bixby, VP of Growth, and Glenbrook’s George Peabody dissect the Sezzle proposition and discuss the changing face of Retail in the post-COVID era. Watch Chris describe why his customers choose the Sezzle payment option:

Faster Payments: Fundamental Tech for Payments Innovation Payments innovation comes in waves. And the wave that’s breaking on the U.S. - having swept over 50 countries around the world - is faster payments. Also referred to as Real-time Retail Payments (RTRP) these systems are fundamentally different from what’s come before: They are push payment systems They are new, systemically important domestic systems Risk and economic models are dramatically different than what’s come before They run 24/7 365 days a year. Go ahead, push money to and between accounts during your Sunday midnight snack Novel messaging and data formats open up new use cases and deep integration opportunities Most important, these are “clean sheet of paper” payment systems built for the Digital Age. Glenbrook has been working with these systems for over a decade. Our global experience gives us unique insight into how these systems are used and their real and potential impact on multiple stakeholders. Why This Course is For You If you are responsible for payment products and services in any way and you're looking to differentiate your services, join Glenbrook’s Russ Jones and Yvette Bohanan on this deep dive examination of how faster payments is fundamentally altering payments industry dynamics. Here are other reasons for you to join the workshop: Smart, expert workshop leaders to guide the group through the materials, make it interactive, and love QQ&A A crisp look at what these systems do, don’t do, and how overlay offerings in the UK, India, Australia, and Mexico extend their utility A deep dive into how The Clearing House’s Real Time Payment Network Request for Payment message operates and how the RTP Network settles (it’s a very new approach) Workshop attendees from across the industry bring unique questions and perspectives The workshop description has many more reasons. Check it out. Take a quick listen to learn more about the workshop from one of its leaders, Russ Jones. George and Russ take a quick, fun tour through why this course is different. Go here for the workshop detail, schedule, and registration.

The Fintech Phenomenon is rarely about doing something entirely new. It’s about doing things in a new way that better fits the needs of the target market. The fintech model also enables the provider to reach underserved market segments. Lending is, of course, the core offering of banks. But between their legacy processes, underwriting requirements, compliance demands, and more, they simply aren’t nimble enough to serve new segments in our evolving economy. And the banking crisis of 2008 left them even more risk averse. That’s left small business lending wide open to fintechs. Case in point: the online seller, that small business that makes a product or buys wholesale and sells direct to customers through their own website and, for most, through marketplaces like Amazon and Shopify. Cash Flow is Everything Here’s where success can kill a business. If their online store and what they’re selling catches on, they’ve got a tiger by the tail. They’ve already invested their own money to get the store off the ground. But they have to keep buying inventory in order to fulfill orders. Where’s the capital to pay for that inventory to come from in order to do that? As the founder of multiple small businesses, I can tell you that cash flow management is a daily concern. It’s no different for these Amazon sellers because Amazon pays out every two weeks and it may take a month or more for the funds from some transactions to hit the seller’s bank account. With cash flow “everything” for the SMB, funding business growth is a major challenge. To keep up, you have to reinvest to feed the beast. You take all your earnings and put them into new inventory. That’s where our guest for this episode comes in. Keith Smith is co-founder and CEO of Payability, a firm that has loaned over $2.5B since 2015 to Amazon and Shopify sellers. Data Enables the Model Payability, sitting between the seller and the marketplace, sees massive data sets that help it and its algorithms determine risk. Given the volume of data, the myriad sources of these signals, it’s impossible for humans to do the underwriting. Machine learning can examine far more signals than a human can ever handle. So, as Keith puts it, Payability’s staff “trains the robots” to help the company accurately price financing for those who would otherwise be locked out this kind of business. The Money Supply Chain In the business of selling money, you have to have access to it. You have to be part of the money supply chain. Drastic changes in the finance ecosystem have taken place since 2008. With traditional banks stepping back from small business lending, fintechs have entered the money supply chain, as the new distributor of funds, enabled by their ML-based underwriting and risk models. The fintech underwriting sophistication has been a boon to traditional sources of financing, both banks and institutional investors. They still sell money; they just do it through the new fintech channel. The COVID Accelerator As a funder of online businesses that have benefited from the COVID-driven shift to e-commerce, Payability has prospered in 2020. As Keith put it “we’ve seen four or five years of growth out of a single year.” In Glenbrook’s payments consulting work, our discussions with merchants, billers, sellers, and their technology parters have included this common refrain. COVID has hurt many but others, able to respond to the challenges and opportunities of the digital shift, have prospered. Find more podcasts and commentary at Glenbrook's Payments on Fire® site, check out our blog Payments Views, and subscribe to the best payments industry news feed, Payments News. Read our COVID-19 Payments Industry eBook.

In a crisp explanation of account takeover and authentication risks, George and Robert Capps, Vice President, Market Innovation, at NuData Security. They discuss the findings of a recent NuData report and its experience with the sophistication of online fraudsters. NuData’s techniques are all about foiling cybercriminals as they bang at the front door of financial institutions, merchants, streaming services, and more. Payments on Fire® listeners know that we’ve been taking a steady look at fraud issues over the past few years. Fraudsters have been pouncing on every opportunity, taking advantage of pandemic relief payments as well as the shift from card present to card not present, remote commerce transactions. If this topic didn’t matter, we wouldn’t be talking about it. Measuring and detecting what the fraudsters are up to and their impact is critical. To better understand what’s going on, we speak with Robert Capps, Vice President, Market Innovation, at NuData Security, a company that specializes in behavioral biometrics. NuData published in Q3/2020 its e report on cybersecurity trends. And the findings are really interesting. What They Found The current scourge is account takeover. ATO is a concern for financial institutions, for retailers, streaming media companies, and more. Attack method sophistication goes well beyond reuse of stolen user IDs and brute force password guessing. It is an arms race of increasingly complex and sophisticated attack and detection techniques. NuData and others have expertise in behavioral analytics, tools that detect, among other things, bots that are build to emulate human interactions at the account login page. The use of CAPTCHA is one technique to deter these attacks. But the fraudsters have responded, going so far as to establish call center-scale operations with staff endlessly filling in CAPTCHA forms to add the human touch and smarts in what are otherwise highly automated ATO attacks. This is human farming to get around CAPTCHA and other rudimentary defenses. Financial institutions and retailers aren’t the only targets. In this age of stay at home orders, streaming services have become targets of opportunity. Parasitic use of streaming service accounts has risen as the fraudsters sell streaming service account credentials. The Defender’s Balancing Act There are dedicated professionals working on both sides. But the defenders have the harder job. Besides having to protect every door and window, they also have to keep it simple for good users to transact. Adding friction to a transaction flow increases the shopping cart abandonment rate. That’s bad for the ecommerce merchant and insults the customer. It’s a tough balancing act. Part of that balance is handled by “step up” authentication based on the level of risk. A bank might let a session proceed to a balance inquiry without asking for further customer input. But if a new payee is added to the account, the bank might insist on sending a one time code to the customer via email or SMS. Getting to Good ASAP Providers of authentication services see activity from a lot of devices. Building profiles based on these devices and the many variables surrounding each transaction, they use the profiles to efficiently track the behavior of each in order to separate the known good profile from the questionable. A technique to “get to good” faster is to pool that profiling information in anonymized form from across all of the clients who agree to participate. COVID Impact Robert discusses the shifts in fraud given the pandemic. As a percentage of transactions, fraud increased substantially in the travel segment. And for those retailers operating in the physical world the shift to e-commerce was sometimes overwhelming. That’s a story we’ve heard a lot at Glenbrook. Check out our COVID Series book. Podcast transcript      

Take a listen as George and Deluxe’s President and CEO Barry McCarthy discuss how the company continues to adapt to and prosper in the digital age. Barry talks about the journey the company has taken, in recent times shifting from a conglomerate model grown via acquisition to today’s streamlined and focused small business focused organization. The Journey from Paper to Digital Services In Glenbrook’s Payments Boot Camps® we make the point that fintechs rarely invent new functions out of whole cloth. What they do excel at is reimagining and reengineering the processes that incumbent players have been locked into for years. It’s the incumbent’s inability to adapt that puts them at a competitive disadvantage. As Charles Darwin put it: “The species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself.” We make this point in our training. Incumbent firms, no matter what the industry, survive and succeed over decades only if they have the ability to adapt to change in their environment. You only have to glance at the moves Visa and Mastercard have made over the last five years - the acquisitions of Plaid and Vocalink (among many) come to mind - and it’s obvious adaptation is at the core of their respective strategies. In this episode, we speak with a company that has over 100 years of adaptation behind it. Starting with the invention of the checkbook a century ago Deluxe Corporation has expanded and adapted its offerings to the digital needs of its customers. Take a listen as George and Deluxe’s President and CEO Barry McCarthy discuss how the company continues to adapt to and prosper in the digital age. Barry talks about the journey the company has taken, in recent times shifting from a conglomerate model growing by acquisition to today’s more streamlined and focused organization.  

Open banking. It’s a term we started to hear about at the end of 2016 and since 2019 interest has remained high. That’s according to Google Trends. Along with those searches, the related hot topics were PSD2 and APIs. Regulation and technology is opening up access to bank accounts for payers, billers, and service providers. But the state of that openness varies by region and country with important consequences for billers, merchants, and their payment providers. In this wide ranging discussion, George and Duncan Barrigan, Chief Product Officer at GoCardless, cover a range of topics, all through the lens of the company’s primary value proposition, the use of direct debit from bank accounts to enable recurring and one-off payments across 30 different countries. As you'll appreciate, stitching together a network capable of using the domestic low cost rails (think ACH and BACS) in 30 different countries to provide both domestic and cross-border recurring payments is no easy task. Topics discussed include: The definition of open banking What the impact of open baking has been Where open banking is taking off, and where it isn’t Recurring payments defined and use cases APIs and integration How a biller or merchant can move customers from one payment method to another Cross-border direct debit And, of course, the GoCardless value proposition, something its financial backers believe in given its recent $95 million raise.  

Financial inclusion for the poor is a global challenge. In this episode, we dive into the story of Mojaloop, a platform that enables interoperability and transaction routing between mobile money system operators, banks, and other providers. It’s a fascinating, and evolving, story. Take a listen. = = = = = =  Individual Benefits, Nation Building Impact Financial inclusion for the poor is a global challenge. Over two billion adults lack access to financial services. While that number is declining - and in no small part because of the work done by this episode’s guests - that level of digital disenfranchisement and cash dependence suppresses well being at multiple levels: Individuals must spend significant time to pay bills when they must travel to the biller or its agent, never mind travel to acquire cash. Carrying cash, of course, comes with its own set of risks Families suffer as time away from work and home reduces family income Entrepreneurs and small businesses face the same time penalty, high transaction costs, and uncertain credit access Entire countries experience diminished GDP because of productivity losses and transactional friction. Cash-based transactions also fuel the shadow economy, making audits and taxation very difficult While Kenya's M-Pesa is the most well known exemplar, there are hundreds of systems around the world offering digital payments, bill pay, savings accounts, microlending, and other services to their accountholders.  Not Without Concerns Financial inclusion efforts are not without downsides as some credit extension services, riding the e-money rails laid down by the provider, charge usurious rates. Gambling services are similarly problematic. With success, e-money systems become systemically important to a country and, therefore, pose a level of systemic risk should the operator go offline for technical or security reasons. And as with every digital activity that touches money, there is the problem of fraud. But these are not insurmountable challenges. Some are candidates for regulation-based cures. Others can be addressed by providers themselves. The Network Effect Matters Another challenge to the growth and health of mobile money systems is interoperability among those systems. In many countries, multiple e-money systems compete for accountholders but do not interoperate. A user on one system cannot send money to a user on another. That condition adds friction, reducing the e-money value proposition for all stakeholders. The challenge becomes even more acute, and costs rise, when the sender and receiver are in different countries. Ecosystem Enablement A thriving digital ecosystem and economy requires the right conditions: Regulation that encourages innovation while also protecting the end user Low cost enabling infrastructure, and User-focused services that meet real needs The Bill & Melinda Gates Foundation has taken on financial inclusion for the poor in multiple ways, through support of: Development of guiding principles for the delivery of financial inclusion through the Level One Project Creation of guidance for regulators to speed accountholder onboarding while limiting fraud and risks concerns Support for the development of open loop software designed to speed system interoperability. Called Mojaloop, this open source effort’s goals include the development of a reference platform In this episode, we dive into the Mojaloop story with two leaders of the work: Paula Hunter, Executive Director, of the Mojaloop Foundation Kosta Peric, deputy director, Financial Services for the Poor at the Bill & Melinda Gates Foundation It’s a fascinating, and evolving, story. Take a listen. And, if financial inclusion for the poor in developing markets is important to you, get involved with Mojaloop. It's quite a team.  

Welcome to Payments on Fire® and to our third, now annual, discussion with Steve Ledford, SVP Products and Strategy at The Clearing House, and the leader of his company’s Real Time Payment Network initiative. As in prior conversations, Steve and George discuss the growth of the RTP Network both in terms of transactions and dollar volume as well as an important metric, the growth in the number of financial institutions and FI processors who are already or in process of connecting to the network. The evolving set of use cases supported by a new payment system is often surprising. Few expected Zelle’s leading use case to be rent payments. While the RTP Network is in its infancy, Steve shares a number of use cases already in flight. Changes to the network’s rules also position it for expanded use. For example, the network’s recent increase in transaction size limit to $100,000 positions it far better for B2B transactions. Like all bank services, strong user authentication is critical and firmly out of scope for the new network. Banks will have to improve their authentication processes because account takeover is a real risk. As Steve says in this discussion, banks can also reduce the risk of accountholders sending money to bad actors simply by well-timed messaging. Financial institutions can adopt best practices that have evolved in the UK and other markets with similar systems in place. For example, the bank should ask the accountholder if they personally know the recipient of the funds and if they have been pressured to make the payment within a certain timeframe. Both questions are meant to caution the accountholder before pressing Send. Steve also addresses the announcement of FedNow and its ripple effects on the RTP Network. New national payment rails are a once in a generation event. New rails, better data representation techniques, and mobile devices make for an innovator’s playground. Take a listen.

The U.S. has just come off a record setting holiday shopping season with e-commerce sales rising over 18%. While the numbers aren’t in yet, there’s no doubt the fraudsters also had a record year. There are so many ways to defraud consumers, merchants, and financial institutions. At Glenbrook, we are optimistic about our longer term ability to deter, prevent, and detect fraud. Our kit is getting better. The combination of tech and rule making will payoff: strong authentication enabled by standards-based smartphone-enabled biometrics; regulations requiring strong authentication as put forward in the EU through its SCA rules; and our expanding ability to detect new attacks using tools that operate within the transaction flow. It is this last area that is the topic of this Payments on Fire® episode. Fraud detection tools operated by or on behalf of merchants that examine transactions are today’s major line of defense against payment, loyalty, and coupon fraud. In this conversation with Colin Sims, COO of fraud prevention company Forter, the development, deployment, and maintenance of a modern fraud management platform is the topic. Colin and George discuss how fraud management and prevention technologies continue to evolve, Forter’s own approach, the role and impact of PSD2 and SCA regulations in the EU, and how fraud continues to adapt. While machine learning is a central technology, Colin makes clear that human effort and insight is what makes the difference.

Deployment of “clean sheet of paper” payment systems is a once in a generation event. In over 50 countries, new account-to-account push payment systems are either in full scale operation, implementation, or fully committed planning stages. The U.S., for example, has the RTP Network in operation and, in a few years, the FedNow system will be online. This is hard, serious work. Technology decisions need to be paired with equally rigorous rules making. One of the major concerns for these systems is what to do when a transaction is sent in error or initiated by a fraudster. In contrast to card systems, dispute resolution capability is not a standard feature. These choices should reflect clear agreement and follow through by the system’s key participants. In this Payments on Fire® podcast, Glenbrook’s Elizabeth McQuerry talks with builders of dispute resolution, complex messaging, and connectivity capabilities developed around Australia’s New Payments Platform (NPP). Joining Elizabeth are Jack Baldwin, Chairman of BHMI, a U.S.-based developer of bank-grade settlement and reconciliation systems, and Nathan Churchward, Head of Product, Emerging Services at Australia’s Cuscal Limited. Cuscal is a developer of payments capabilities that include card issuing and acquiring, mobile payments, fraud prevention, switching and settlement. There’s a lot to be gained by learning from someone else’s experience. Nathan and Jack address the dispute resolution process, ISO 20022 messaging, and the significant effort needed to build out systemically important payment infrastructure. Take a listen and you’ll gain a deep appreciation of the interplay of rules, regulations, technology, and effort. Glenbrook Partners is working with the U.S. Faster Payments Council to help shape rules in the U.S. and address significant concerns around system interoperability, directory services, and dispute management. Take a look at the Faster Payments Barometer based on our industry survey. And visit the U.S Faster Payments Council site for more. 

If you thought bitcoin was dead as a payments system, take a listen to George and Jimmy Nguyen, founding president of the Bitcoin Association, as they discuss Bitcoin SV, a new version of bitcoin that is a significant upgrade to the performance and capabilities of the original bitcoin protocol put into the world a decade ago.   From a payments perspective, bitcoin has failed. While successful as an albeit volatile store of value, its failings include: It is slow, only able to handle 2 or 3 transactions per second with a peak rate of 7. Visa handles 50K at peak holiday times with aplomb. While transactions are irrevocable, they are not immediately written to the blockchain. Core design specifies that that happens every 10 minutes but when the network is under load it has taken hours. Processing cost is too high, measured in dimes and dollars, and also volatile As the processors, known as miners, are rewarded with fewer bitcoins for their work, they’ll have to rely on processing revenues, transaction fees, to stay viable. Costs are already too high There’s the high power usage of the network that’s needed to maintain consensus, essentially trust in the network. If you thought bitcoin was dead as a payments system, take a listen to George and Jimmy Nguyen, founding president of the Bitcoin Association, as they discuss Bitcoin SV, a new version of bitcoin that is a significant upgrade to the performance and capabilities of the original bitcoin protocol put into the world a decade ago. Jimmy brings a refreshing view on cryptocurrencies and payments. Jimmy provides a great review of how bitcoin works and why both its performance and its economics are broken. He explains the advantages of the Bitcoin SV fork and why it was necessary. Suffice it to say, bitcoin’s evolution is subject to the often fractious politics of that community where competing interests inhibit long term thinking. Bitcoin SV has intriguing potential. Micropayments, sub $1 transactions, have never found a home in electronic payments. BSV could apply there. BSV is also designed to use enormous blocks in order to keep processing costs low and provide the ability to store massive amounts of data about the payment.   

Join Jeff Brown, president of VPay, a firm specializing in insurance claims payments, and George Peabody of Glenbrook Partners in this deep dive discussion of how the work of claims processing is done and how he approaches B2B payments, compliance, and the value-added services needed by the company’s customers. The B2B Domain We’re all familiar with the card present POS domain, card not present Remote domain, P2P payments, and the Bill Pay domain. A phone tap here, a card swipe there, a bill payment to the utility company. On a day to day basis, our personal experience with payments is these areas. The B2B and B2C payment domains are very different. There is a wide range of industries with very specific payment needs. (Listen to episode 92  to hear how customized payments can become. Roadsync’s Robin Gregg talks about the special paper check type built just to serve independent long haul truckers.) Insurance is Huge One of the biggest industries is insurance. Premium payments in the U.S. alone are over $1.2 trillion. Payouts by stakeholders, such as healthcare systems and property & casualty insurers, and made to individuals claimants and service providers amount to trillions more. Insurance is definitely big enough to be a very attractive vertical to a payments service provider. Knowing Your Customer's Business If you are a PSP serving a particular vertical market in the B2B space, you have to know at least as much about the vertical you serve as you do about payments operations and services. For example, if you’re making healthcare payments, you have to comply with the strict data privacy requirements specified by HIPAA regulations. You may have to support specific data formats. And you should help your business customers deliver useful features to their own customers. If you want a great explanation of how payments fits into a vertical market, you can’t do better than listening to this episode of Payments on Fire®.

Digital disruption and financial inclusion are focus areas throughout the developing world and the topics are white hot in Colombia. Listen in as Hernando Rubio, CEO of Moviired, speaks with Elizabeth McQuerry and George Peabody about Movii and payment / financial inclusion ecosystem in Colombia. Financial Inclusion in Colombia Although one of the first countries in Latin America to make a big policy push for financial inclusion, those efforts focused a “banking correspondents” or agents in local stores carrying out basic financial services on behalf of banks. While these correspondents greatly improved access to financial services, they have not fully produced the desired results. According to the World Bank, fewer than half of all adults have a bank account and only a handful (less than 5%) have a transaction account from a telco led service. Very few Colombians use those accounts to pay bills or buy something on the internet. Cash is still preferred. Enter the SEDPEs In 2015 regulators in Colombia created a new category of licensed financial institutions called a   special company for electronic deposits and payments, or SEDPE by the Spanish language initials. While a bank can also pursue this type license to focus financial inclusion efforts, the main conceptualization of SEDPEs are fintechs that gain authorization to take deposits and make payments – the two most basic (and still lacking) aspects of financial inclusion. SEDPEs are not allowed to make loans but can partner with others to make small credits available. Movii Rubio’s Movii was the first SEDPE to be authorized by regulators. Movii is a classic digital service that offers a wallet for storing funds, access to a reloadable debit card from Mastercard for buying in stores and on the internet, bill payment, mobile top ups and transfers to other Movii users. Movii also recently connected to the new national real-time payment service (Transferencias Ya) in order to be able to reach all account holders in Colombia. Movii builds off the company’s experience managing Moviired, an extensive network of physical agents in stores and bank correspondents throughout Colombia, that people use for those basic payments. Hear how a company disrupts itself as it lays the foundation for the next generation of financial services.

The merchant acquiring industry continues its large scale shift from a payments-led to an operations-led purchasing decision for the merchants it serves. Historically based on independent sales organizations (ISOs) and non-bank acquirers, the party that increasingly provides payment acceptance is the independent software vendor (ISV). This makes sense for a number of reasons: Software is Vertical. Today, the first IT choice more merchants make is the software they use to run their business. This makes sense. Tools that improve overall business operations have a greater impact on success than the comparatively minor differences among payment providers. Auto parts stores need inventory management. Salons need scheduling. Ice cream and coffee shops need quick order entry. Daycare providers need security controls. Payments are Horizontal. Every merchant, regardless of its segment, needs to take payments. While many segments have particular requirements for payments, payment acceptance alone is a commoditized service. The ISV is the First Point of Contact. Given its primary role, the ISV has moved into an excellent position to sell and profit from payment acceptance. Taking a Back Seat in Selling, Payments is Infrastructure. The payments industry has multiple ways of enabling ISVs to sell payments. The ISV may use a gateway to reach multiple acquirers with the gateway itself selling value-added capabilities in areas like fraud management. The ISV may use the payfac model for fast onboarding of new merchants. The ISV may, itself, become an ISO. Multiple forms of business relationship all provide some measure of revenue sharing with the ISV. Differentiation in Payments Via New Paths Differentiation based on value-added services drive revenue in payments. For that reason, we have seen non-bank acquirers and ISOs focus on particular vertical market segments to drive and secure long term revenues. A decade and more ago, Heartland Payment Systems (acquired by Global Payments) doubled down on the restaurant vertical by developing special services for restaurant operators as well as acquiring restaurant-focused ISVs. That lesson has been learned by many since. Over the last few years, differentiation has also stemmed from how well the payments provider serves the ISV and its developers. Integration of payment services both into the ISVs code and within the provider’s own code base is important. A single API that exposes all of a provider’s services is preferable to integration work requiring knowledge of an API tied to each function. Micro-services based capability is also welcome. Payment Facilitation as Enabler While not, in and of itself, a new approach, the payment facilitation model is a major enabler of payment service delivery via ISVs. The payfac model is based on network rules that allows an intermediary to act as the merchant of record in order to provide payment system access to smaller merchants. PayPal did this first for ecommerce merchants. Stripe is another card not present example. Square used the payfac model to offer sellers in the physical world access to card acceptance. ISVs who become payfacs assume responsibility for the activity of their small merchant customers. So, choosing to become a payfac has its complexities and risks. A number of providers, including Finix, bring expertise in the payments facilitation model to help ISVs make that decision. In this Payments on Fire®, take a listen to Glenbrook’s Nicole Pinto, Drew Edmond, and Finix CEO and founder Richie Serna as they discuss the payfac phenomenon and the larger shift to the ISV as payments provider. This is a cool conversation about a sea change event in the merchant services industry. 

Take a listen as George and Nick Starai, Chief Strategy Officer of NMI discuss the role of the independent payments gateway and its evolution as a technology and business enabler for today’s providers of payment acceptance: ISOs, ISVs, and merchants.   A key technology and business partner for merchants and the first-line providers of payment services (think ISVs and ISOs) is the payment gateway. At their simplest, gateways provide a single interface to their users that, once built, lets the party using it switch between acquirers with relative ease in order to get better performance, service levels, and/or pricing. For independent software vendors (ISVs) selling line of business software this flexibility allows their customers to choose their acquirer of choice from the range of acquirers supported by the gateway. Many such relationships are in place long before the ISV relationship is established. ISVs can’t insist that their potential customers change acquiring banks in order to use their software. That’s one use case for a gateway. Another is the Independent Sales Organizations (ISOs) that also realizes the necessity of using gateway technology in order to reach their increasingly demanding merchant customers. Placing stand-beside payment terminals next to a cash register is no longer nearly enough. Integration of payments into the overall business process of even a smaller merchant is now table stakes. Gateways can help make integration of more advanced capabilities happen. Independence Means Acquirer Neutrality Many formerly independent gateways have been acquired by processors. What processor wouldn’t want to move all the transactions managed by the gateway onto its own systems? It’s all about volume, after all. But for independent software vendors, independent sales organizations selling to ISVs and merchants, and for many merchants themselves, an important virtue of the gateway function is its processor and acquirer independence. Value-added Services Gateway operators generally charge flat fees for each transaction handled so they have every incentive to expand the volume of transactions they manage as well as to provide value-added services that increase revenue on each transaction handled. To increase volume, gateways make it as easy as possible for a customer to integrate to the gateway. They make their APIs simple and robust so it’s easy to add new services. The gateway provider builds software developer kits (SDK) to support in-app payments and makes sure their code runs on every important operating system. Gateways often specialize on a particular payment domain such as large ecommerce merchants or in-store systems. Others offer a broader set of services. NMI, the subject of this Payments on Fire® podcast, supports both EMV terminals and the card not present environment. Payment Facilitation The payment facilitation business model has broadened card payment acceptance to the wide base of small merchants who would otherwise not qualify for a traditional merchant account. The greatest impact of this payfac model is how it streamlines the onboarding process. Instead of the days-long underwriting process traditionally needed, sellers working through a payment facilitator (PayPal, Square, and Stripe all employ that model) can start to take payments within minutes of creating an account. Because of that swift onboarding, the payment facilitation model reduces sales friction for ISVs. Their customers can install the ISVs line of business software and start taking payments at the same time. For the ISV, there’s also the opportunity to earn revenue from their customer’s payment transaction flow. We’ve seen multiple merchant companies selling software services earn substantial revenue from the payments side of their business. NMI provides essential infrastructure services for the payfac business model including onboarding, sub-merchant account creation, KYC, and other reporting services. The NMI Story Nick relates NMI’s growth and service expansion. It’s a cool story that speaks to the industry’s evolution as well as the company’s own growth. By the end of the podcast, you’ll understand how enabling technology and new business models have shifted, yet again, the payments ecosystem. The gateway and payment facilitation services offered by NMI help move ISVs and tech-forward ISOs into a first position over traditional providers of merchant services.  

Take a listen to Ian Drysdale of Zelis Payments and George as they discuss how complex the payments process is in the healthcare industry.    Near the peak of payments complexity and specificity is the healthcare industry. If you’ve ever looked at an explanation of benefits letter from a healthcare insurer, you’ve had a glimpse into the complexity of these payments. Multiple parties are paid a lot of money, before you may be required to ante up a co-payment yourself. Regulation, compliance, the huge range of services delivered, and the scale of the healthcare ecosystem—from giant healthcare insurers to the local dentist—make healthcare payments a challenging, and attractive, market to serve. It is an enormous business-to-business market. Americans spent $3.5T, over $10K per person, in 2017. We spend something like 1 in 6 of our dollars on healthcare. Simply getting the payment to the right party is complicated. Consider the imaging clinic that operates within a big regional hospital. It has its own back accounts, its own P&L, its own accounts receivable. Getting payments routed into the right account isn’t easy. Checks still dominate in this industry because the development and maintenance of databases to track bank accounts is a major headache for a payer like an insurance company. Dropping a check in the mail, along with invoice information, at least communicates what’s necessary despite slow speed and high cost. That’s where Zelis Payments and Ian Drysdale, its president and guest on this Payments on Fire® podcast, come in. Zelis Payments specializes in shifting healthcare payments from check rails to ACH rails. Using the service, providers get paid within a two or three days instead of two weeks. That speed has a huge impact on cash flow, a business metric of particular importance to smaller providers. Zelis Payments also enables an EDI message format that communicates what’s being paid for in a manner consumable by the accounts receivable software in almost every healthcare provider’s office. Matching up the ACH deposit to what it covers is automated. While neither ACH or EDI are considered modern technologies, pairing them tightly produces real efficiencies. Another area of complexity Ian discusses is healthcare fraud. Unfortunately, no small number of providers enter fraudulent claims into the system. They add up to huge numbers. Zelis Payments adds value specific to the healthcare industry around the general functionality of EDI and ACH rails. If you’re a dentist getting paid 10 days faster than before, that added value is a very good thing.  

Need an early warning system for what payment system hackers are about to do? Then knowing what’s happening on the dark net is imperative. In this episode of Payments on Fire®, George speaks with Aamna Zia, VP of Finance and Growth at Flare Systems, and David Hetu, its Chief Science Officer. Based in Montreal, Flare Systems operates a dark net monitoring system that brings intelligence to the InfoSec and fraud management teams at banks. The dark net is a mysterious place for most of us. It exists on something called Tor, an internet overlay that is designed for anonymity. Using a purpose-built browser, users can access websites, chat rooms, and the like, similar services to those we use on the open internet. The anonymity feature makes performance slow but it also works. And that’s why it is the hub that marketers of stolen card numbers, user IDs and passwords, personally identifiable information, and hacking tools use to buy and sell. It’s this activity and the discussions around it that Flare Systems monitors and reports on. Among the findings of Flare’s analytics is the fact that the vast majority of card data sellers probably have to live with their parents to get by. There’s not a lot of money in that particularly tired approach. Obviously, there’s plenty of money to be made in payment fraud, though. Account takeover (ATO) fraud is growing quickly as recent losses on the UK’s Faster Payments system demonstrate. Synthetic identity fraud is fueled by the kind of data sold on the dark web. Take a listen as Aamna Zia and David Hetu as they describe how Flare Systems works and what the hackers are up too. Then, if you’re on a bank’s infosec or security team, try to get some sleep.

Listen to George and Jacques Soussana, General Secretary, of nexo Standards, an organization based in Europe with global goals to establish interoperability of hardware, software, and data across the point of sale and e-commerce domains. Interoperability in a Complex Ecosystem The payments industry is in a period of especially swift change. New methods of payment, new payment systems, new ways to initiate a purchase. Innovation can be wonderful, improving convenience, speed, and reliability. But there is a downsides to all of this creativity: Interoperability. Connecting disparate systems is technically challenging and faces business questions such as “what's the ROI on connecting to yet another system?” Today interoperability may be difficult or impossible by design. Payment methods stood up by individual companies often remain closed or must rely on other payment systems to actually move transactions. In what is an increasingly integrated world with payments as an embedded experience, interoperability challenges show up both at the physical point of sale and online. Acquirers often use proprietary adaptations of standard protocols to “enhance” their capabilities and, to a degree, erect competitive barriers. The software used to connect point of sale terminals processed by one vendor must be changed when those same POS devices are connected to another provider. Further complicating the merchant challenge is the merchant-facing software that connects to those terminals. That software connects to each brand of payment terminal in a proprietary fashion. While gateway providers simplify the payment interface for these independent software vendors (ISVs), each gateway provider has its own approach. For merchants, then, there’s no such thing as “plug and play” software to connect to terminals or to connect those terminals to payment networks. This complexity was bad enough when card rails were the only payment method of consequence. Today, however, domestic and regional payment methods are changing, adding account-to-account push payment systems like the U.S Real Time Payment Network from The Clearing House or the European SEPA Instant Credit system. In other words, there are new payment rails, the systems that actually move money, that matter. So, this complexity problem must overcome and that is the goal of nexo Standards, the organization Jacques represents and the topic of today's Payments on Fire® discussion. Getting stakeholders to work on the common goal of interoperability is no easy task. Most often, participants come from competitive companies. Most of these organizations are large because, first, they have to be large to afford the investment in participation, and, second, they have to be large to realize the financial benefits of actual implementation. This is known as the “Herding Cats Problem” and they aren’t kitty cats. nexo Standards, and its prior incarnations, has been working on point of sale standards for over a decade. The nexo FAST standard that addresses the physical point of sale, EMV, and how to connect within the SEPA framework is nearly 1,000 pages long. And there are multiple nexo specifications including the Retailer protocol that describes the interfaces between a card payment application and a retail point of sale system Other nexo standards address security, terminal management, the acquirer connection, and implementation. So, a complex technical and business environment with nexo Standards bringing a comprehensive set of specifications to address it. nexo Standards Annual Conference (attendance is free, in London)

A  Better Way, Please Last week I tried to connect my accounts at two different banks. Between account type mismatches (my bad), long account numbers, ACH micro-deposits, and balky websites, well, I’ll confess I put a check in the mail as a “quicker” way of overcoming the electronic barriers. Snail mail. Really? That situation, and many more where speed matters, is exactly why the world is turning to faster payment systems that allow the accountholder to push money from an account she controls to a recipient in near real-time. To eliminate entry, and sharing, of bank routing and recipient account numbers, today’s faster payments systems are often enhanced by a directory that maps the recipient’s name to a mobile number or email address. The director connects those to the underlying bank account. This is great stuff, especially for the United States where so many push payment methods exist based on closed loop or incumbent payment rails. The U.S. now has providers like Venmo using balance transfers and card rails (Visa Direct, Mastercard Send) to make realtime P2P transfers workable. NACHA has sped up the automated clearinghouse (ACH) system to run batches a few times a day to accomplish its Same Day ACH service. We have Zelle, the P2P service stood up by Early Warning Services,  that combines a directory with immediate funds transfer availability for the recipient and interbank settlement running over, yet again, an incumbent payment system, in this case the ACH. Every one of these approaches has merit and traction. New Rails, New Rules That said, the new realtime systems are growing here too. Built with modern software and messaging protocols, they promise to change how both end-user settlement and inter-bank settlement is accomplished. The first on the scene was the Real Time Payment (RTP) network from The Clearing House (TCH). Launched in 2017, the largest financial institutions and bank processors are integrating their core systems—the software that manages accountholder balances and transaction activity—to the RTP Network. And this summer, the Federal Reserve announced it will build and operate its own faster payments system called FedNow. Like TCH, the Fed has operated multiple payment systems and been the preferred operator for the nation’s smaller financial institutions. New Complexities Competitive pressures, market guidance, and regulation are what move the U.S. economy. The Federal Reserve provided plenty of guidance to encourage development and deployment of faster payment systems. THC’s RTP Network was among the first to respond. These new rails are a result of a multi-year effort by the Federal Reserve to shepherd the highly competitive U.S. payments industry toward the development of these faster payment systems. The RTP Network and FedNow are proof of its success and that of the Faster Payments Task Force, the group convened by the Fed to define the characteristics of the new approaches.  But there’s still a lot of work to do. Questions of governance, implementation, and more abound. Interoperability concerns are especially high. These are, after all, competitive systems. The New Organizing Principle - The US Faster Payments Council To keep the evolution of the U.S. faster payments moving forward, the US Faster Payments Council was formed. Many Task Force members have joined as members of the Council. The Council serves as an industry-led organization that supports collaboration across multiple areas including security, end user education, and interoperability. In other words, the Council will be herding some very big cats. The U.S. Faster Payments Barometer To support its education and collaboration efforts, the US Faster Payments Council is conducting a survey of industry views on faster payments advancements. A multi-year survey, to monitor the momentum and evolution of Faster Payments here in the U.S. market. The survey is designed to identify key criteria for market adoption, broadly gauge momentum for various use case applications, and seek to address challenges to be solved in order to have a well-established Faster Payments ecosystem. Take the Survey Talking Faster Payments In this Payments on Fire® episode, Faster Payments Council Executive Director Kim Ford discusses the Council’s work, the U.S. Faster Payments Barometer survey, and where we are today with Glenbrook’s Beth Horowitz Steel and Elizabeth McQuerry. Take a listen and take the survey. You’ll contribute to the Council’s education, planning, and prioritization work.

For a nanosecond, about seven years ago, I thought the payments industry was entering a steady state where change, while sure to be accelerated by technology, was going to settle down to the familiar sedate pace the payments industry had taken for decades. Hah! Payment industry evolution has leapt forward since then based on, yes, technology, but also new rules, regulations, business models, and changes in attitude toward how money moves, security, and privacy. One major trend I didn’t anticipate then was the global phenomenon of faster payments, now in active implementation or operation in some 40 countries around the world. Another, of course, is cryptocurrencies but I’ll leave that one alone for now. The emergence of faster payments is a function of new technology with new transaction switching infrastructure and (mostly) a common messaging standard in the form of ISO 20022. But it’s also a function of rules and market response. Even in the United States, a nation whose payment strategy is largely set by competitive forces, the central bank has had significant influence in launching new settlement capability. (And now, the Fed is planning to build its own version). Europe and India are standouts when it comes to government guidance and strategy setting for banking and payment systems. The European Union’s active role in evolving payments policy is recently expressed in the second Payment Services Directive (PSD2). PSD2 has chosen to address one of the most vexing digital security challenges: strong customer authentication or SCA. Article 4(30) of the directive defines SCA as: “an authentication based on the use of two or more elements categorised as knowledge (something only the user knows), possession (something only the user possesses) and inherence (something the user is) that are independent, in that the breach of one does not compromise the reliability of the others, and is designed in such a way as to protect the confidentiality of the authentication data” For anyone familiar with authentication requirements, this is hardly a novel approach. That said, as far as the payments ecosystem goes, however, this is a sea change. This is also a necessary change. Faster payment systems, where the sender pushes the payment to the recipient, make the sender’s bank responsible for authenticating its accountholders. The accountholder has to prove to her bank that she has the right to access her own account and to initiate a payment. Unfortunately, phishing and malware are attacks that make account takeover easier than ever. There’s been an uptick in authorized push payment fraud in the UK due to ATO. Therefore, enforcement of multi-factor authentication is seen as a necessary response. Point of sale transactions already meet the SCA requirement. The card is something you have; The PIN is something you know. That’s enough to meet the SCA requirement. Oh, right, in the US, we don’t put PINs on credit cards. They do in Europe. We’re going to need biometrics in the US (something you are). PDS2’s SCA mandate requires that multi-factor authentication be used whenever a user logs into her bank account or makes an e-commerce payment. Whenever payment risk is a possibility, SCA has to be used (there are plenty of exemptions but that doesn’t change the point). Every stakeholder—every bank, every e-commerce site—must comply by doing something they have not done before. That means a lot of work. In this Payments on Fire® episode (Episode 100!), I speak with Russ Jones, Glenbrook’s partner in charge of our Education work and a preeminently insightful payments consultant. Russ takes us through SCA, its relationship to other standards, and the impact of its now somewhat delayed implementation. Russ concludes the conversation with the rather chilling observation that history is about to repeat itself. The US will experience in the digital arena what the US experienced at the physical point of sale. When EMV chip cards were mandated in Europe, card fraud at the POS and the ATM migrated to the US. Reliant on the static data of the mag stripe, the US became a global magnet for magstripe card fraud. Once SCA becomes broadly implemented in the EU, in 2021 and beyond, online fraudsters will redouble their already considerable attacks on US financial institutions, tech providers, and merchants. While security tools are more common than ever—FIDO capable smartphones are one example—the US lacks a single entity to mandate and enforce multi-factor authentication in payments. Scared yet?

One of the privileges of using a card to make a payment is the ability to dispute that charge should something go wrong. Maybe you ordered one garden rake but got charged for two. Perhaps you ordered a sweater and, as my colleague Allen Weinberg puts it, “got shipped a box of rocks.” Or you discover a charge that you didn’t make on your card account and believe it’s fraudulent. In all those cases, the dispute process involves a chargeback. The cardholder disputes the charge, the issuer credits the customer for the amount of that charge if it’s an obvious mistake or fraud, and, depending upon the chain of liability rules and the type of transaction, one party—the issuer, the acquirer, or the merchant—will have to bear the cost of the chargeback. For merchants, just getting a chargeback message is a cost in the form of a fee paid to its acquirer. How does $5 and (way) up sound? Chargebacks, as a payments cost, are no financial joke. The card system also views the chargeback rate—the percentage of transactions that result in a chargeback—as a leading indicator of poor merchant behavior. Once a merchant’s chargeback rate approaches one percent of its transactions, the merchant’s acquirer or PSP is going to put it on notice. If the merchant doesn’t lower that rate pronto the merchant could lose the ability to accept card payments. The chargeback process is also a cost to issuers who are generally the party first called by the unhappy customer (issuers will often ask the customer if she or he has called the merchant, too). In other words, chargebacks are a result of something going wrong and they can be a costly hassle for everyone because, for many stakeholders, chargeback handling is still dealt with manually. In this Episode 99 of Payments on Fire® we talk with Rick Lynch, VP of Business Development from Verifi, about the impact of chargebacks on merchants and issuers. He updates us on rule changes by Visa and Mastercard. And he addresses the process and techniques needed to handle these post-authorization events. While only mentioned in passing during the episode, Verifi is being acquired by Visa, in another example of expansion by card network operators into adjacent payment ecosystem roles.

The global spread of digital payments gets a huge boost from giants like Google. Google’s Google Pay is far more than just a wallet, and the subject of this Payments on Fire® episode with Steve Klebe. Steve heads Google’s Processor and Partnerships business and has terrific experience in our industry, working with payment gateway CyberSource, payment security firm RSA, and carrier billing firm BilltoMobile. He’s also served multiple times on the board of the Electronic Transaction Association. In other words, a true payments geek. Here’s what we talked about: The evolution of Google Pay from its 2011 launch as Google Wallet and the various incarnations since then Google’s business model for GPay and the degree to which the data generated by GPay transactions influence (or not) the advertisements we see on sites using Google’s advertising services Transit payments, Google’s role in the W3C’s Payment Request API, and how Google pulls it into its own tools The Google Pay value proposition and how it combines the value of hundreds of millions of cards on file, their organic growth through Chrome’s auto-fill, Google’s own sales, and making those credentials available to third parties via Google Pay The new Google Pay APIs that focus more on convenience than payments: event ticketing, airline boarding passes, and more Google Pay India, renamed from Tez, and its role in the UPI framework that enables secure bank-to-bank transactions. We conclude with thoughts on the Open Banking phenomenon and Google’s intentions in that area.    

Here on Payments on Fire® we've spoken a lot with risk and fraud management firms that generally offer some combination of services and technologies that promises to lower customer exposure to payments fraud, data theft, and operational risk. There’s another dimension to cyber security that’s based on expertise - before and after a data breach. That's the subject of this episode. First, a company needs to understand its overall exposure. What do we have and what can we afford to lose? That takes a technical assessment of the firm’s internal and external defenses. It also takes an understanding of what the company has to lose, from reputation-based good will to loss of R&D investment through the theft of intellectual property. Such concerns are now top of mind for corporate directors tasked with shepherding their companies in the complex cyber domain. Yes, there’s a role for insurance. Post breach, there is the work of uncovering what happened, the maintenance of evidence so that proper forensic procedures can be taken, and the painful resolution process that may include fines (PCI) and litigation. All of this is well understood territory for Chris Uriarte, Chief Information Officer at Aon Cyber Solutions who joins George in this episode. Topics discussed include: The kind of activities and efforts needed to address today’s cyber risk How IoT threats are no longer confined to cheap surveillance cameras The sophistication of the cyber criminal industry The interlocking roles of threat analysis, risks assessment, and insurance The rise of ransomware and the particular exposure larger organizations face from this threat

The task of risk management in the payments business keeps getting bigger. Where once the concern was confined to payments alone - starting with counterfeit checks and currency - payment electronification has created a universe of potential risks. Risk now includes fraudulent cards, system and network hacks, data breaches, and account takeover with all the havoc that can produce. And we’re seeing how these impact the reputation and value of businesses even when the hack has nothing to do with payments. (By the way, bogus checks and counterfeit twenties are *still* a problem.) We’ve touched on this topic in multiple ways on Payments on Fire®. We’ve spoken with Ethoca about its data sharing capabilities. We’ve spoken with Feedzai about its AI and machine learning technology. We’ve spoken with White Pages Pro and its data correlation capabilities. And we’ve spoken to companies deeply involved in the problem of online identity. Each of those has a particular approach, a particular technology, or a combination of approaches, to apply to the problem of e-commerce or CNP fraud. In this podcast, we talk to Tricia Phillips, SVP of Product and Strategy, at the fraud and risk management firm Kount. Protecting some 6,500 e-commerce merchants, banks, and payment platforms, Kount takes a deeply layered approach to the risk and fraud management. This deep dive discussion takes us into not only Kount’s approach but into what fraudsters are doing today and the damage they can do, even to non-payments companies like Yelp. It’s a scary scene. Tricia takes us through it with insight and experience. If Risk in Payments is a topic of interest, check out our upcoming Insight Workshop by the same name. Led by Russ Jones and Yvette Bohanan, you won’t find a more knowledgeable team to guide you through what is, as I hope we’ve demonstrated, one very complex topic.

One of the biggest payments challenges for merchants is how to handle payment data - whether it’s at the POS or in the remote domain where e-commerce and mobile payments take place. A lot of this concern is driven directly by PCI DSS compliance and broadly by the reputational risk data breach represents. One of the major techniques merchants employ, in order to remove the need to store payment data, is tokenization - the replacement of the high value card data with a low value representation managed by another party. Merchants just store the token for lookup purposes while the third party maintains the database that links these low value tokens to the true primary account number or PAN. At Glenbrook, we refer to these as merchant tokens because they are specific to and paid for by the merchant. We’ve also heard them referred to as acquirer tokens because the tokenization function is often performed by the merchant’s acquirer, processor, gateway, or payment service provider. Makes sense, right? Put the radioactive payment card data into another party’s hands. But for large and mid-size merchants, the provision of tokenization services to an acquirer has a few downsides: The token database maintained by the provider is specific to the merchant. If the merchant wants to shift to another provider, tokenization portability can be an issue and a costly one. In our merchant work, we are seeing the largest ones looking at a multi-acquirer topology for cost, redundancy, and channel flexibility purposes. But each acquirer will use its own tokenization scheme, adding complexity and limiting functionality. Omnichannel merchants may employ one provider for POS transactions and another for ecommerce. That doesn’t work when you want to provide a consistent experience to your returning customer. You want a token that works across channels, i.e. an omnichannel token. In this Payments on Fire® episode we talk with Alex Pezold, CEO of Token, an acquirer neutral, independent tokenization provider. We talk a lot about protecting payment and bank account data. But we also address the growing need for protecting other data assets and how tokenization can help accomplish that.

Digital identity is one of the most solution resistant challenges to online commerce and, indeed, our online lives. It is basic to online trust, an elusive condition undermined by data breaches, abuse of our data by service provider, and fraudsters. That’s not say we aren’t trying. Providers of all stripes are applying their value add to the problem. Smartphone makers have a role. Fraud management providers see themselves as having a role because they see so many users visiting their merchant customers’ websites or using their apps. Networks do, too, as evidenced by Mastercard’s recent interest in identity services. Then there are specialists in identity who play a role between the end user and the party granting access to a service, i.e. a bank. Today’s podcast is with SecureKey, a Canadian firm that has built a system to generate online trust while not sharing too much data between the parties. Blockchain technology has increasingly gotten the attention of those in the identity space because the idea of having an immutable database as a single source of truth for identity credentials just seems so obvious. Well, it’s not exactly as simple as putting your drivers license on a blockchain. SecureKey has partnered with IBM to use blockchain technology in support of its function as a provider of identity services. SecureKey’s Verified.Me service gives the user the ability to quickly identity themselves and to share only the personally identifiable information they consent to share. Customers include Canadian banks CIBC, Desjardins, RBC, Scotiabank and TD. BMO and National Bank of Canada will be available later this year. Take a listen to this conversation with Andre Boysen, SecureKey's Chief Identity Officer, and Glenbrook’s George Peabody and imagine the power of coupling a service like this to strong authentication services that use biometrics.

Ever wonder about EMVCo's role in the development and implementation of its technical specifications? Take a listen to Bastien Latge, EMVCo's director of technology and Glenbrook's George Peabody as they discuss EMVCo's EMV®* QR Code Specification for QR code-based transaction initiation in the card system. While developed card markets are shifting to contactless cards and NFC-using mobile phone wallets to kick off payments, the QR code offers a flexible, very low cost alternative. There's a lot to learn here. Most of us are familiar with QR codes to retrieve product information from websites or print media, or perhaps when authenticating a mobile device to a web page. In payments, many of the caffeine-reliant among us use the Starbucks app with its 2D barcode to initiate the transaction. It makes it so easy to know when we have enough gold stars to ask the barista for a drink on the house. Some merchant apps use a QR code for the consumer to present when initiating a payment transaction that calls on card on file payment credentials. Walmart Pay for example. In China - and really throughout Asia - providers like Alipay and WeChat Pay have been hugely successful with QR code-using payment apps. In Japan, the proliferation of closed loop QR code-based payment tools, each encoding data differently, has created a cacophony of incompatible approaches. A new industry collaboration effort is attempting to lower the technical noise level by using a common technology provider.  The card industry, named because of those 85.60 mm × 53.98 mm (​3 3/8 × ​2 1/8 inches) pieces of plastic we carry around, is, of course, far more than the cards it uses to initiate a transaction. Their rules and global networks are unparalleled in reach and sophistication. But at the edge of those networks, the card format is becoming less important (think mobile wallets) and useless in those markets lacking a terminal infrastructure. To make sure card network transactions can take hold in card-less regions, the card brands put their technical specification organization to work. In 2017, EMVCo released its EMV QR Code Specification, designed to encode and represent the card message structure in QR code format. A major hallmark of the EMV Chip Specification in cards is the generation of dynamic data, of a cryptogram unique to that transaction, that prevents replay attacks. The EMV QR Code Specification supports such dynamic data as well as the issuer tokenization framework also codified by EMVCo. Even the payment account reference number (PAR) is accommodated here. To accelerate use of QR code EMVCo recently built self-assessment tools for both merchant- and consumer-presented that validate the QR format. Certification to individual networks and acquirers is not supported by the EMVCo tools. * EMV® is a registered trademark in the U.S. and other countries and an unregistered trademark elsewhere. The EMV trademark is owned by EMVCo, LLC.  

Payments on Fire® usually focuses on a single topic, typically a fintech company and the business or personal challenges it addresses. In this episode, we take another direction by bringing together three fintech leaders to talk about their company offerings, how they connect up to payments, and some of the obstacles they’ve faced. George talks with the leadership of three companies working in very different areas: remittances, small business logistics payments, and healthcare. Mike Gaburo, CEO of Brightwell Payments, a company delivering a mobile payments app to global workers for their payroll distribution, enabling card-based purchasing as well as remittance services Robin Gregg, CEO of RoadSync, a business software provider that enables electronic payments to SMBs in the logistics sector; and Alan Nalle Chief Strategy Officer of Patientco, a payments platform with intuitive, mobile-friendly tools for Health Systems to enable patients to pay their healthcare bills. This conversation illustrates the breadth of payments and the focus required to solve the specific payments needs of each industry segment. Robin, Mike, and Alan will join Glenbrook partner Beth Horowitz Steel on her panel called Innovative Solutions - Solving Difficult Payment Needs at the Fintech South conference, held April 22 and 23 in Atlanta.

Five years on from Apple Pay’s release, contactless payment cards are just getting off the ground here in the US but in much of the rest of the card world, contactless payments of both kinds are common practice. In London, half of the card transactions are contactless. The same is true in Canada. While it’s true that the vast majority of these are card-based, not via mobile wallets like Apple Pay and Google Pay, even the mobile wallets are gaining momentum. To expand contactless usage, Mobeewave has developed software tools for financial institutions to integrate into their merchant app that turn the merchant’s smartphone into a contactless acceptance device. No added hardware: software only. We’re talking with Maxime de Nanclas, Mobeewave‘s co-CEO and co-founder. A firm based in Montreal, Mobeewave has worked to turn smartphones into general purpose contactless payment terminals. This is cool tech and, as Maxime tells it, a great journey for the company. Take a listen as he describes what their software does, how they built it, and their experience navigating the complexities of device certification.

The UK and the EU take a very different approach to payments industry evolution than here in the States; the former directed by government mandate, the latter by marketplace dynamics and the lighter touch of regulators. But both are responding, at different speeds, to the need of fintechs and enterprises for access to bank-based data and services. The Payment Services Directive 2, PSD2, written in 2015 and in effect since January of 2018, addresses a range of concerns including a ban on surcharging on card payments and limiting consumer fraud liability exposure from 150 to 50 euros. But its major impact is its enablement of Open Banking through the granting of access to payment rails and payment data managed, up until PSD2, only by banks. Banks are required to open up programmatic access, via APIs, to that data. In this Payments on Fire® episode, we dive into the UK and EU experience with the PSD2 a year after it going into effect. We take a look at its impact on Open Banking, the opening up of payment rails to these fintechs and other non-bank players. To do that, Myles Stephenson, CEO of B2B payments firm Modulr, discusses his firm’s experience as an Electronic Money Institution, an organization chartered by the UK’s Financial Conduct Authority (FCA) under PSD2 rules. Under its provisions, Modulr gains, or will gain, the ability to initiate payments on behalf of its customers as well as access customer data. While incumbent financial institutions are hardly thrilled at the prospect of opening up their systems to fintech competitors and the cost of doing so, the operational improvements for customers and increase in competitive activity are expected to generate many benefits.

Cross-border B2B payments are frustrating, time consuming, and expensive, especially for small and medium businesses. To dig into why and what's being done to overcome those concerns, join George and Marwan Forzley, CEO of Veem, for an explanation. SMB B2B payments, particularly cross border payments, have always been time consuming to accomplish and expensive to do. They are time consuming because sending an international “wire” payment was historically slow with uncertain delivery timing and with uncertain, and high, costs to both the sender and the receiver. For the sender, the process of initiating a cross-border payment has always taken no little time compared, for example, to writing a check. Cost is a second concern because cross-border payment economics are not always transparent. At least a few times a year, when Glenbrook gets paid by one of our international clients, the funds we receive are less than what we invoiced. While our client sends us the correct amount at the prevailing exchange rate, intermediaries along the way may take “bene deduct fees” - beneficiary deductions - from the funds in transit in order to compensate themselves for their services. I prefer the more accurate term of “lifting fees." This uncertainty of timing and cost affects millions of small businesses participating in the global supply chain. Companies like Veem, Western Union, TransferWise, PayPal and many others compete on speed, predictability, low cost, and global reach. Super helpful integration into business accounting and AR/AP functions is a big plus. Veem’s story is compelling as it began using the bitcoin blockchain to send money between its operations in multiple countries. Since then, the company has added other partners and its own in-country account balances to fund transactions. Veem’s SMB customers can send money to 90 countries and receive funds in 25. The company has served over 100,000 SMB customers. If blockchain, cross-border, B2B, small business and fintech are terms that interest you, take a listen to George and Marwan as they catch up on the company, SMB pain points, and the impact of Chinese tariffs on Veem customers. If you're in Atlanta in April, check out the Fintech South Conference. Glenbrook partners Elizabeth McQuerry and Beth Horowitz Steel will be there. Get in touch!  

The digital marketplace model brings together buyers and sellers and, frequently, handles the money and payouts to the sellers. As my guest today has determined, digital infrastructure, e-commerce usage, competition, and workforce characteristics influence a country’s ability to establish a flourishing marketplace component to the economy. This marketplace economic model is a useful one enabling, among other use cases, the gig economy. Adopted in countries like China, the US, Canada, the UK, Australia, and other established markets, this episode’s guest, Tomas Likar, Head of Business Development and Strategy at Hyperwallet, has done a lot of thinking about its role in these and other countries. This podcast was prompted by Hyperwallet’s February 2019 release of its Marketplace Expansion Index report, the MEI, that evaluated the marketplace readiness of some 36 countries. A surprise is the early stage of marketplace adoption in a number of otherwise highly developed countries. The application of the marketplace model to human labor is, of course, not without controversy and concern. Steady employment with guaranteed benefits is no longer an attribute of employment in many countries, replaced by the uncertainties of the gig economy. That’s the downside concern. On the other hand, these marketplace services provide access to otherwise unavailable work and that is good news for individual and, by extension, domestic economic well being. Take a listen to this conversation with George and Tomas Likar of Hyperwallet for an overview of marketplace adoption and the variables affecting its uptake.

The business of merchant services continues to undergo two forms of transformation. First, the merchant services businesses, either as acquiring banks or via non-bank acquirers, has undergone massive consolidation over the last five years and more. Fiserv’s takeover of First Data, announced on January 16, is just the latest example. The second sea change is the expansion of products and services these entities deliver. What was a fairly innovation-averse industry has become, under the competitive pressure of companies like PayPal and Square, far more committed to delivering value that helps customers run their business, not just accept card payments. At the POS, Square changed the merchant services game by delivering a great deal more business value to the small merchant than the traditional ISO or agent focused on placing stand-beside terminals next to dumb cash registers. For the price of payment processing, Square has given those merchants inventory, time and attendance, sales and marketing focused reporting, and more. As a result, the giants in this game have been forced to respond. In 2013, First Data acquired Clover to reach small retailers and restaurant customers. Others, like Global Payments’ Heartland unit, have invested heavily in serving the mid-tier and larger restaurant industry. To deliver similarly broad services, TSYS recently come out with three new merchant offerings targeted at micro merchants, single shop operations, and larger merchants. The new line is called Vital, at vitalpos.com and its solutions are called Vital Mobile, Vital Plus, and Vital Select. Along with the new Vital hardware, we can expect the offering, taking advantage of cloud delivery, to expand its software and services line-up in the future - a trick that the old POS terminal model never could pull off. Take a listen to this episode’s discussion with Gavin Rosenberg, vice president of product marketing, at TSYS. It’s a revealing conversation about the decision making and product strategy of a major provider of merchant services.

This Stuff is Hard As the remote payments domain (think in-app and browser-based payment transactions) continues to grow at around 15% a year, that growing number means the size and scale of fraud losses are going to increase. And they have - in both absolute terms and as a percentage of overall transaction volume. That also means rising chargeback rates for many merchants. Rising fraud in the online world is also a result of better security technology in the physical world. While EMV chip cards have dropped counterfeit losses way down, the fraudsters still have their own bills to pay. They’ve just shifted more aggressively to the card not present channel. A Delicate Balance All e-tailers face a delicate balance in managing fraud. If they err too far on the side of fraud minimization by tightening approval standards too far, they leave good sales on the table and insult customers with unnecessary declines (the “insult rate”). Of course, those customers promptly go to another site to make their purchase. The e-tailer’s sales and marketing team, then, tells the fraud manager that she’s killing sales. If the approval standards are too loose, on the other hand, the e-tailer risks the twin threats of higher fraud and chargeback costs and, if the chargeback rate exceeds 1%, placement on a watch list if that rate stays over 1%. Not a good list to be on because the the merchant could lose card acceptance privileges if the problem is not addressed. The Smaller E-Tailer is Challenged While Amazon continues to gobble up half of the growth in US commerce volume, it still means that there is room for smaller online merchants to prosper. It also means they face growing fraud losses. Unlike their larger competitors who can afford internal fraud management teams and technology, small and mid-tier e-tailers have limited time, budget, and skills to meet those needs. Fraud management is a non-trivial problem even for the largest enterprises. They deploy a layered set of technologies, ranging from table stakes tools like address verification system (AVS) to device and behavioral fingerprinting and on to rules engines, AI, and machine learning controls. That level of sophistication is beyond what the mid-tier e-tailer can handle. Some enterprise customers don’t want to deal with that complex task either. The Outsourced Option That’s where the wholly outsourced proposition comes in. The third party fraud management service provider assembles the necessary technology, makes the right integrations with shopping carts and other software providers, puts an analyst team in place to decide on questionable transactions, and offers its services for a fee. ClearSale (www.clear.sale) is a provider in this space. Take a listen Rafael Lourenco, its EVP, and George as they discuss fraud management in this segment, how the ClearSale service is deployed, and some merchant best practices. Rafael breaks down this topic very clearly. Definitely worth your time.

Ecommerce fraud rates are rising and that means more cardholders are seeing unauthorized charges on their accounts. The cardholder remedy is to call either the merchant or the issuer to flag the problem. If the cardholder turns to the issuer to resolve the problem, the remedy is often an expensive chargeback for the merchant and a generally lousy experience for everyone. Ecommerce Merchant Pain Ecommerce merchants have invested heavily in fraud detection tools because in the remote payment domain liability rules make them responsible for fraud losses. Ecommerce merchants employ sophisticated fraud management processes and tools to detect fraud in realtime to stop authorization (best in class fraud rates are 25 bps - 35 bps). On top of that, they must eat the direct costs associated with stolen goods and services. These include a chargeback processing fee from the acquirer as well as the merchant’s internal costs to manage the chargeback process. If the merchant fights the chargeback, the merchant has to gather the supporting evidence (the receipt or copy of the order) and submit it to the acquirer. Disputes and chargebacks re initiated by cardholders for a range of reasons including fraud, authorization, various processing errors, and consumer-specific disputes. Examples of consumer dispute codes include products or services not as described, counterfeit, misrepresentation, and failure to process a credit. https://www.worldpay.com/global/support/support-articles/what-are-chargeback-reason-codes-visa-and-mastercard Issuer Pain For issuers, disputes and chargebacks are painful, too. In the POS domain, issuers hold the liability for fraud losses. If a counterfeit card is used and the issuer authorizes the payment, the issuer owns that liability. Issuers also bear the customer servicing and communications costs as chargebacks initiate with the cardholder’s call to the issuer. Consumers Game the System Zero liability rules have taught U.S. cardholders that they don’t have to worry about fraud and that they have broad powers to dispute a transaction. Knowing that, too many cardholders are taking advantage of these rules. Digital merchants, in particular, are suffering from friendly fraud (not exactly an accurate term) that occurs when a cardholder, for example, disputes the charges made by another family member. For some digital merchant, over half of their chargebacks are friendly fraud, purchases for which the cardholder is truly responsible but able to renounce (“It wasn’t me!”) because of the rules. Such high chargeback rates carry other risks for these merchants. Once a merchant’s chargeback rate exceeds 1% of its transactions, that merchant is put on a watch list, a remediation plan, and faces the possibility of losing card acceptance privileges. High chargeback rates also increase authorization declines for the merchant, losing even more good transactions. Card Network Remediation On the face of it, there’s an asymmetry when it comes to liability. Merchants shoulder a large burden. With that in mind, both Visa and Mastercard updated their chargeback rules in 2018. In a chargeback mitigating move, Mastercard recently announced an end to the automatic renewal of free trial subscriptions. Timely Data Sharing In other words, chargebacks are a pain. Steps to reduce chargeback cost and frequency are a Good Thing. One approach is to speed up data sharing. For example, once an issuer determines that a transaction is fraudulent, a timely message to the merchant could halt a product shipment. While the rules would still make an ecommerce merchant liable for the chargeback costs, the merchant wouldn’t lose the cost of order handling, shipping, and the item itself. Similarly, if merchants can share their cardholder fraud experience back to the issuer then that financial institution can adjust its fraud detection models and algorithms. Such data sharing is the proposition of Ethoca, a firm that federates bank fraud signals from hundreds of major global issuers and connects to thousands of merchants in the developed world in order to share alerts and chargeback messages. In this conversation with Keith Briscoe, CMO at Ethoca, we talk about the chargeback problem, hear some truly astounding chargeback stories (hackers aren’t the only fraudsters), and discuss Ethoca’s role in this space.

Fraud prevention today is about how quickly we can separate good customers from questionable ones and, for those doubtful transactions, use the right set of tools and data sources to optimize speed, costs, and fraud losses. When it comes to fraud prevention, it turns out that data is key. No revelation there, but how we manipulate it, gather it, and assure its provenance is undergoing major change. What would be a revelation to fraud managers of a decade ago is the unbelievable amount of data and the wide variety of sources that we have today. It’s a flood. The only means we have to make sense of this data deluge is through algorithmic examination. Rules engines and neural networks are staple approaches. In recent years, application of artificial intelligence and the newer incarnation of machine learning (“let the computer figure it out based on all the data it sees”) has become a hot, and effective, area for fraud prevention. Only machines can find correlations among all that data in order to identify potential fraud. A number of firms focused on the fraud prevention problem employ techniques that gather data and then analyze it in order to provide their customers like e-commerce merchants or financial institutions with a risk score. Companies specializing in device fingerprinting, for example, gather the relevant data (think IP address, mobile IMSI number, device type, OS version, browser software version, etc.) to create a profile or “fingerprint” of that device in order to generate a history of its behavior. Threat Metrix, owned by LexisNexis Risk Solutions, is an example. Behavioral biometric companies may take that data and layer on how the owner actually uses their device, often by looking for keystroke patterns, screen tap rhythms, the angle that the phone is held, and more, in order to build a more nuanced profile that includes how the owner interacts with the device. That richer data then feeds into analysis and risk scoring. Mastercard’s NuData Security acquisition uses this approach. Subsequent bidirectional data sharing can provide these firms with insight into the results of their decisioning. As these firms gain customers, they see more and more devices and develop clearer visibility into the outcome of their work. As a result, it becomes a natural step to pool or federate the data they see from all of their customers. There’s an expectation that a card account, for example, will be seen at multiple merchant clients of the fraud solution provider. These repeat interactions will improve fraud detection for all when the cardholder is a bad actor or speed the transaction of a trusted one. Data consortia where multiple financial institutions and merchants pool their fraud and chargeback data also exist. Ethoca is a prime example. The deeper the data pool the better, provided, of course, there’s the ability to analyze it all. Massive analytical capability is the foundation for artificial intelligence and machine learning. In the fraud prevention space, Feedzai is a firm that applies its analytics power to data sourced from multiple provider and techniques. Feedzai, like others providers who have attained a critical mass of customers, has also invested in federation of their data to improve, for everyone, its fraud prevention results. In an earlier episode, we spoke with Feedzai CEO Nuno Sebastiao to get us grounded in how AI and ML apply to fraud prevention. In this discussion with Saurabh Bajaj, Feedzai’s Head of Product and Nick Stanchenko, product manager for Feedzai’s Risk Ledger, its data federation program, we go further. Saurabh catches us up on Feedzai's growth and then take a look at how Feedzai works and at the data sources it uses. Nick addresses federation, its value, and the light integration required.  

Payment Innovation Moves to the Core When we conduct our Glenbrook Payments Boot Camp, our first graphic illustrates the three essential steps in every transaction - initiation, funding, and completion. When looked at through the lens of of the past decade most innovation has been in initiation. Consider: Apple Pay, Google Pay, Venmo, QR codes. The list is long of ways to kick off a transaction. Funding is all about where the money comes from. Usually a bank account, often a wallet holding money. Some innovation there but not a great deal. There are only so many ways to store funds. Completion, the last step, is the most important to many participants as it’s when the transaction completes with the final movement of money. Five years ago, in those boot camps, I said that completion, also called settlement, is the innovation-resistant phase of a transaction. Today, everything has changed. In the U.S., we have new services such as Zelle and Venmo that appear to the end parties to deliver instant settlement. They may use card rails or bank rails like ACH to complete the transaction.  Two Forms of Settlement In this discussion with Glenbrook’s Carol Coye Benson, we look at two forms of settlement: end party settlement - for example, an employer paying an employee - and then Carol focuses on the nuanced world of interbank settlement. If you’ve heard the terms net settlement, gross settlement, or RTGS and wondered what they mean, take a listen.  Faster Payments and Settlement We also talk about the phenomenon of faster payments and the settlement techniques these systems employ. 40 countries around the world are in one stage or another of deploying faster payment systems that push money from bank account to bank account. It's already in the US via the Real Time Payments Network from The Clearing House and, perhaps, a competing service from the Federal Reserve. (To get an update on the Real Time Payment Network, listen to Episode 81 of Payments on Fire). These faster payment systems vary in their capabilities. Speed and data carrying capacity are just two variables. But we have seen that when a new payment system enters a market innovative offerings can flourish, provided access to that system is encouraged by rule, regulation, or both. However, that level of openness is not guaranteed. As Glenbrook have seen in our work around the world, some systems are essentially closed by market power or operating rules. These constraints limit the network effect's benefits of ubiquity, convenience and, often, cost. This is an ongoing challenge. In this age of fintech, banks are under pressure to innovate. As owners or participants in new systems, some may choose to limit access to their fancy new rails in an attempt to forestall competitive market entrants. Others will be “encouraged” by regulators to open up. Of course, end party choices will play a big role, provided there’s a choice available. The New Game Settlement has traditionally been led by major commercial banks or the central bank of each country. That model still holds. In some markets, including the U.S., we expect a push and pull for control between those two entities. Christine Lagarde, Managing Director of the International Monetary Fund, suggests such tensions may justify  the issuance by a nation's central bank of a fiat digital currency as a counterweight to the alternative control over payments by a concentrated set of banks and processors. Settlement innovation has created a competitive environment that did not exist before. It will be the interplay of rules, regulations, technical capabilities, end party value proposition, and market power that will determine the evolution of each country's settlement platform. In some, regulators will shape the outcome. In others, system access for fintechs and the "open banking" model will be a determinant. For all, cost effective access for end parties is critical. So much for thoughts of a static payments ecosystem. If you think of yourself as a payments geek or just want to get under the hood of how money really moves, Carol is a terrific guide.

Restaurant payments is a complex area especially for those companies serving the mid-sized and large restaurant operator. They have different needs that extend well beyond payment acceptance but even that is a highly variable concern. Ever notice that we pay differently depending upon the type of restaurant we’re in? It’s always been walk up and pay the central server at McDonalds. Applebees uses Presto table top devices to speed table turns, upset desserts (“that lava cake sure looks good”) and take payments. At most sit-down establishments, especially those in the fine dining segment, we still hand over our cards and the server walks away to authorize the transaction (later that night, the manual tip adjustment process determine the final clearing amount.) For certain segments, order ahead is a priority. Order ahead dominates how pizza shop operate. Initially, that capability took market share from mom and pop pizza shops because only the largest operators in the “Big Pizza” segment could afford the necessary IT expertise. Now, mom and pop have multiple order ahead services to choose from. But consider the complexities of integrating the order into the kitchen or at the barista’s station. Business process automation is a differentiator. This podcast with Tim McKenna, VP of Sales, at Heartland Payment Systems, is both a deep dive into restaurant operator concerns and a revealing look into how a major payments provider has shifted its business model to serve mid-tier and larger restaurant operators. Like Square, Heartland has realized the revenue benefits of expanded commerce services above and beyond the traditional payments revenue stream. By cross selling multiple services, Heartland expects to see 60% of its revenues coming from payments coupled with value-added services that automate the business of their customers. If you’re interested in how the payments industry is evolving to market demands or how larger restaurant operators think about payments, Tim’s observations are well worth your time. Take a listen.

For those of you who didn't make it to Money20/20 and want to hear the latest on The Clearing House's Real Time Payments Network (RTP), take a listen to this update conversation with Steve Ledford, SVP at The Clearing House for the RTP Network.    A year ago, The Clearing House got out of the gate with its Real Time Payments Network, a wholly new payments system based on the push payment model.    A lot has changed - more banks have integrated into the system and many more are in process. By the end of June 2019, over 3,000 FIs are expected to connect to RTP, most via their bank processor. B2B payments are taking place over RTP between known parties.   RTP Characteristics   Not All Things   TCH is not attempting to provide everything necessary for a ubiquitous push payment system. It relies on its FI participants and their processors to expose RTP capabilities to their customers. RTP hopesto have bank-friendly fintech partners use its rails through the traditional model that gives the new provider access to bank rails via a sponsor bank.    Thus far, TCH has also steered clear of a native directory service, a necessary feature for broad use in P2P and C2B payments. Given the partial ownership overlap with Zelle's Early Warning Services parent banks and The Clearing House, no one will be shocked if Zelle becomes RTP's lead P2P directory provider. For that matter, few will be surprised when Zelle shifts to RTP for settlement. Of course, at least one business-facing directories will be needed for bill payments to take off.   It's Taking a Lot of Work   Connecting up a financial institution to the RTP Network requires deep integration into the FI’s core system, the software responsible for managing debits and credits. Connecting bank ledgers to any payment system is non-trivial, a fact that impacts how fast banks implement new payment rails like RTP.   Tell Me All About the Payment   A feature of the RTP network that holds enormous promise is its native use of the ISO 20022 messaging format. The standard's flexible and structured qualities--not an oxymoron--provide a major leap in data carrying capability. By representing the payment meta data, for example, ISO 20022 can support invoice information, letters of credit, and other business documents. Accounts receivable and accounts payable systems from multiple vendors will be able to communicate directly, reducing manual data input and data entry errors.   The RTP Push   In the U.S., we are accustomed to pull payment systems. We think nothing of giving our bank account information when we hand over a check or our card data when we hand our card to a merchant. We’re telling the payees where to go get their money so it can be pulled into their account.   RTP and Zelle are both push payment systems. Such systems are characterized by near instant funds availability to the recipient, messaging to send and receiver, and irrevocable payments. That last is very different from the chargeback protections U.S. cardholders, in particular, enjoy. While Reg E applies to the sender's transaction account, accountholder protections will also be prescribed by the FI.   To emulate some push payment attributes, RTP and most other immediate funds transfer systems offer a Request for Payment message type that essentially sends an instant invoice to the payer. The customer may press a Pay Now button that uses the Request for Payment Message on her screen. She then uses bank account credentials to authorize the payment. There may even be a redirect to the bank site. It's a flexible solution applicable to multiple use cases and payment initiation methods like embedded links and QR codes.   Instant Clearing and Settlement   The RTP switch runs software built by Mastercard's Vocalink unit, builder of the now 10 year old Faster Payments system in the UK. The RTP code base, however, is a new version, with native ISO 20022 messaging and an instant clearing and settlement system. That system uses a single, pre-funded account at the Federal Reserve common to all participating financial institutions. A separate ledger operated by TCH is the single source of truth, keeping track of the transfer of ownership of those pre-funded monies. Separate accounts, for each FI at the settlement bank, aren't necessary. So, instant clearing, no batch-based settlement. Lower risk, simpler management.    Competition?   If you've attended a Glenbrook Payments Boot Camp in the last couple of years, you know RTP and Zelle have some overlapping capabilities. Zelle, however, is targeted at P2P and C2B uses cases. RTP is a set of payment rails open to whatever use cases come along. In the short term, think B2B and payroll but there's no inherent limit to where it can go. Just don't expect it to take over POS payments any time soon. The UK's Faster Payments rails have operated for a decade and have barely touched merchant POS payments.   Another fact boot camp attendees know is that there are two ACH operators in the US: The Clearing House and the Fed. The Fed is now floating the idea of operating an RTP analog of its own. Smaller Fish may be glad to see the Fed operate an alternate system. We'll touch on that more later but the Fed will have a lot of selling to do because, at the very least, adding a new set of rails requires a lot of integration effort by financial institutions and their processors.   And I thought the U.S. payments landscape was settling down. Hah!   

The payment industry’s responses to ongoing payment security are many. We have procedural approaches and technical ones. For example, we are requiring merchants to attest to their compliance with PCI security standards that themselves include procedural requirements. Technical solutions are also called out by PCI and are, of course, being applied across the ecosystem. Encryption of payment data in flight is one approach. In the physical POS world, semi-integrated POS terminals connect directly to the acquirer’s front end instead of passing card transaction data back through the merchant’s workstation and enterprise system. An important technique, and the topic of this discussion, is tokenization. Tokenization is an ancient security technique. In the broadest sense, a token is just a dummy representation of something of higher value. In cards, that means the replacement of a PAN with a number or even an alphanumeric value that represents the underlying PAN. The mapping between the two is stored in a vault with the owner restricting access to that vault. If a hacker gets ahold of a token value, it’s useless. It’s a value that, to the payments ecosystem, is gibberish. Tokenization is used in pull payment systems where payment credentials are given to the payee by the payer so that the payee has the information necessary to go get the money. Think card numbers or the routing and account numbers on a check. In card payments, there are two forms of tokenization: merchant and issuer tokenization. Merchant tokenization has been around for more than a decade. A response to PCI, merchants generally outsource that token vault to a third party so they no longer store PANs themselves. When the merchant needs to do a lookup or initiate another payment, the merchant sends the token to the upstream service provider who then looks up the PAN and sends it off for authorization by the acquirer. That’s been around for awhile. The newer innovation is what we call issuer tokens - token values that are at the heart of Apple Pay, Google Pay, Samsung Pay and more. These token values are real card numbers, issued by your bank, but unlike a PAN that can be used to initiate a payment everywhere, issuer tokens are expected to come, for example, from specific devices or merchants. Every card in your Apple Pay wallet is represented by an issuer token and whenever that token is presented for authorization, data about where it’s coming from is sent along too. If the token is sent from another device, for example the one the hacker has, authorization will fail. This approach is totally compatible with the current card payment system. No changes are needed at the merchant or the acquirer and minimal ones at the issuer. Glenbrook will be conducting an Insight Webinar on December 13 called Tokenization Fundamentals. Russ Jones will conduct that webinar. In this Payments on Fire podcast, George talks with Russ about issuer tokenization, its role in the Pays (Apple Pay, Google Pay, Samsung Pay), in e-commerce, and the need for new entities in the payments ecosystem to support tokenization. This gets complicated. There's now the need for token gateways. Take a listen to the podcast and then sign-up for the webinar. Use the code POF80 to take 10% off the registration price.

In the US, there’s the automatic assumption that payment cards and perhaps PayPal are the way to pay online. But if you’re an ecommerce merchant trying to sell in the Netherlands, you’d better support the domestic system known as iDeal. Connectivity into domestic payment systems is an important and complex issue. There are over 150 such systems across dozens of countries around the world. While not all are important to a given merchant, most are important to the acquirers and payment service providers serving ecommerce merchants. Join George and Steve Villegas, VP Partner Management and Head of US Office, of London-based PPRO Group, a company that provides white label connectivity to these domestic systems by serving acquirers and PSPs alike.

Knowing who you’re dealing with online is critical if you’re taking transaction risk. Digital identity is tough. To address that challenge - and it is a challenge - relying parties, those who take on risk, employ two broad categories of technology: active tools that require user interaction and passive network-based approaches. When the user is required to explicitly provide identifying information, we use the interactive approach. The merchant or lender or website owner asks for user IDs, passwords, perhaps data generated by multi-factor authentication techniques such as biometrics, or one time passwords generated by an app or a hardware key. If you’re an ecommerce merchant or an entity trying to sell something online - lenders included - you don’t want to ask the customer to do more than absolutely necessary to complete a good sale. Transactional friction is deadly to revenues and a main cause of shopping cart abandonment. So, you use passive approaches that examine whatever data the customer’s device can provide. Device fingerprinting, behavioral analytics, rules engines, machine learning, and the past behavior of card numbers are among the portfolio of decisioning tools that do not interfere with the user experience. Data is the foundation of the passive approach. In this podcast, George speaks with Ajay Andrews, Senior Director, Product, at Whitepages Pro, a data provider and analytics firm about identity verification and how the linkage of key data items influences decisioning. It turns out that particular pairs are strong indicators of potential fraud.  We discuss where the data linkage approach fits in the overall portfolio, what drives merchants to adopt, and how the tool is integrated into automated decisioning and case management.

Alexa. Siri. Cortana. We’re talking to or at our machines. I walk into my office and say “Hey Google, what’s the weather?” or “Hey Google, when’s my first appointment?” When I’m driving in a strange town, it’s “hey Google, navigate to the [fill in the blank] hotel.” This kind of hands-free access to information is hugely helpful and hugely popular. But there’s a long way to go toward a general purpose voice interface for every task we want to accomplish. That said, we’re getting there. In this conversation with Central 1’s Alex Chan, we discuss the process of voice-enabling access to the high volume queries that credit union members make, i.e. balance inquiries, balance transfers, etc. We cover what it takes to build an Alexa skill, the code that links Alexa’s natural language processing to the underlying application that executes the action. Voice design, the process of imagining and codifying how the user interaction proceeds, is at the heart of a successful voice-enablement project. Alex takes us through that process. It sounds like fun. While payments are a tiny fraction of today’s voice-based interactions, they’re coming along, too. Better design and broader participation is needed. As a recent (failed) demo proved, Siri can’t send me money if I’m not an Apple Pay Cash user. Take a listen and get in touch if you've questions or comments. We'd love to hear from you!  

During the Glenbrook Payment Book Camp we make clear that national payments systems are domestic by definition. Each country has its own set of systems to effect payments. We point out that national payment systems differ in many of their details. Regulation, operating rules, governance, ownership, technology, and more are highly variable. At the same time, we also point out that major components are generally similar. An overnight, batch-based system for low-cost, low-value retail payments and an instant, irrevocable wire system for high-value transfers are typical of most countries. Across the planet, countries are planning, designing, trialing or enjoying fully deployed immediate funds transfer systems, new ones that instantly transfer lower value payments. The UK's Faster Payments system and The Clearing House's Real Time Payments (RTP) are two examples of this system type. Beside increased speed of payment, a second push for changes to national payment systems is the need for a richer representation of the data surrounding the payment transfer itself. Remittance data, for example, communicates what the payment is for, which invoices a payment may be covering, and what trade terms were taken by the payor. ISO 20022 is the internationally recognized method for representing this information and support for it has become a new priority not just for system operators but for financial institutions and enterprise customers. Generally, major upgrades, never mind deployment of an entirely new system, are performed in a step-wise manner because of the critical nature of these systems, the cost, and the difficulty of herding system stakeholders through the many stages needed to achieve broad support and usage. Undeterred by those realities, Canada is taking on a comprehensive upgrade to multiple systems over the next few years, including its overnight settlement and wire systems while simultaneously planning for its own immediate funds transfer system, codenamed Real Time Rails. Significantly, each system upgrade will include support for ISO 20022. Payments Canada is the non-profit organization mandated by the federal government to manage, operate, and upgrade these systems. In this Payments on Fire episode Glenbrook's George Peabody speaks with Justin Ferrabee, Payment Canada's COO about his organization's work, how its systems differ from those in the U.S., and what's ahead. It's a great conversation between payments geeks.    

In this second discussion with First Data execs, George and Scott MacKay, Vice President, Strategic Solutions talk digital commerce in the automative space, both at the fuel pump and in the Connected Car. The importance of full stack security, whether it's sole sourced or the result of an integration effort, to successful deployment of mobile commerce is a theme here. Enabling the mobile experience at the fuel pump is complex. Petro sellers have a lot of legacy gear and the cost of upgrading that equipment is very high, a fact that has, at least, inhibited the pace of the EMV upgrade. The richness of the mobile device's data such as device fingerprinting and back end intelligence makes it conceivable that a fuel retailer could skip EMV altogether. Maybe. Scott also shares a look at payments and the Connected Car through the company's discussions with automobile manufacturers.

In this, the first of a two-part podcast series with First Data executives, Ajay Guru, VP of Merchant Fraud Solutions at First Data and George discuss the impact of fraud on the merchant, what the merchant has to do to manage it, and the classes of tools and techniques available to mitigate fraud. Ajay addresses machine learning technology's remarkable ability to identify anomalies and makes candid remarks on the necessity of human analysis to determine whether these anomalies are indeed fraud. Other topics discussed include behavioral analysis (how we enter our user ID and password into the browser) as well as the sophistication of today's manual and automated attacks. There is still a lot of CNP fraud taking place over the phone. There's good detail on the technology and what fraudsters are up to. Take a listen.

Online trust requires a context-based understanding of who we transact with. Attributes about us are needed to build that trust but in many transaction contexts we share more than we need to. To pick a simple example, the law says you must be 21 to buy alcoholic beverages but our current method of proof is to show our driver's license, an unnecessary oversharing of personal information. Why show that creepy barkeep where you live when you only need to prove you were born before 1997? In this wide-ranging Payments on Fire podcast, George and Lockstep Technology CEO Steve Wilson discuss how we share the attributes that, in aggregate, define to the online world who we are. Steve makes the case that security and identity professionals continue to encourage the oversharing of personal data. Now that we have sophisticated network-based fraud management tools - device fingerprinting, behavioral analytics, machine learning and AI - that generate a crisp profile of our devices and our behavior, the attributes that a user must provide could be limited to just what's required and no more. An "attribute wallet" under the user's control - yes, another role for the smartphone - might prove to be a valuable authentication enabler. This episode concludes with Steve's report on comments made by some of the deans of modern cryptography on the threat that quantum computing represents. It sounds like good news.

This episode of Payments on Fire covers two topics - payments in Atlanta and the essential challenge of online authentication and identity. May in Atlanta - Fintech South and Glenbrook Payments Boot Camp Everyone in the payments industry knows that Atlanta is a hotbed of activity. Coming shortly to Atlanta are two fintech-focused events that will add to the goings-on. The Fintech South conference takes place on May 7 and 8. With great speakers - and great sponsors like Glenbrook and the Technology Association of Georgia - the conference describes itself as “FinTech South 2018 is a global exchange of insights, innovations and trends fueling tomorrow's financial tech industry. “Attracting international companies and speakers across multiple industries, FinTech South is an opportunity to engage with 400 FinTech companies employing more than 130K employees globally, generating $72B in revenues, and processing over 118B transactions annually.” Speakers include: Kathryn Petralia, President and Co-founder of Kabbage Barry McCarthy, EVP of Network and Security Solutions at First Data Nuno Sebastiao, founder and CEO of Feedzai, who is also a past guest on Payments on Fire. Right after the conference ends, Glenbrook will host our Payments Boot Camp on May 9 and 10. Both events draw will attendees from all over North America. So if you want to expand your network, hear the latest at the conference and/or get smart about how payments work, come to Atlanta. Authentication, Biometrics, and Banking Authentication online remains one of the most challenging aspects of life online. Given the complete availability of personal data, account takeover has never been easier for the hackers. Knowledge-based authentication (KBA) asks softball questions like “what was your father’s middle name?” Easy stuff to find online. User IDs and passwords are even easier to find. We have a problem. Strengthening the connection between an accountholder’s true identity - perhaps proven by a drivers license or passport - and the credentials that the user presents online is necessary and the topic of this Payments on Fire episode. George speaks with Andrew Gowasack, CEO and co-founder, of TrustStamp, an identity verification company using AI and facial biometrics to create a strong, unique digital credential. For a few use cases, TrustStamp also employs a blockchain-based database. Andrew knows all about the Technology Association of Atlanta, too. So, take a listen and geek out in this conversation about authentication, biometrics, and how to answer the online conundrums of “who are you?” and “do I trust you?”                    

The rise of Chinese mobile payment systems is the top global mobile payments story of the last few years. Alipay and WeChat Pay serve hundreds of millions of users with payments, loyalty programs, merchant coupons, and more. QR codes are used to initiate many of these interactions especially within the point of sale (POS) domain. When there isn’t a legacy payment infrastructure in place, software is easier, and cheaper, to deploy than the hardware-reliant approaches used for card-based transactions. To serve its millions of accountholders traveling around the world, Alipay is building out its acceptance footprint. In this episode of Payments on Fire, George speaks with payments industry veteran Souheil Badran about his role as president of Alipay Americas and the company’s plans for reaching US merchants in tourist hotspots and beyond.

Mid-market financial institutions have enormously strong relationships with their banking customers. But their size makes home grown IT difficult because it is simply too hard, and too costly, to meet all the B2B finance needs of their enterprise customers. The answer, of course, is deeper integration to third party software systems like SAP, Oracle, JDA and the growing set of fintech providers brining point solutions to these institutions. But that’s no simple task. These FIs often run on legacy systems, generally provided by a large bank processor. Integrating software built before the cloud and APIs and these modern point applications is not easy. Into that gap is a new company called FI Span. Led by founder and CEO Lisa Shields, the company value proposition is to act as an API orchestration platform for banks. In other words, FI Span proposes to be the glue that connects legacy code or a processor’s banking platform to the growing base of fintech point solutions in the market. The goal of becoming a one-stop shop for new tools for these B2B-focused banks will take time and focus. Connecting up nextgen software and data to older systems demands clever approaches and a lot of spade work. Maintenance of a growing set of evolving API interfaces is non-trivial, too. A fintech startup serving fintech startups, incumbent bank processors, and mid-tier banks has a lot of work to do. Lisa is no stranger to the start-up world; she also founded Hyperwallet. Take a listen to this conversation about the technical challenges, the business model, and the goals Lisa has for her customers and for her company.

“Digital cash” has been a dream of the internet age for, well, almost the entire internet age. That goal requires instant payment settlement. It’s more than just sending a message that a payment has happened; it means the money has actually moved. In this wide ranging conversation with Laurence Cooke, founder and CEO of nanopay, he discusses the platform his firm has built to move value between parties in both real-time and, when necessary, offline modes. More distributed than blockchain systems, nanopay is designed for multiple uses cases including B2B payments using ISO 20022 representation of the payment data. If you’re at all curious about payment security, blockchains, distributed ledgers, or the instant payment systems now being deployed, take a listen to this conversation between Laurence and Glenbrook’s George Peabody. It’s quite a story and we touch a lot of bases.

Episode 69 is all about how the PCI Security Standards Council is responding to changes in security technology and how it is expanding its role and technology coverage across important new geographies. If payment security is on your screen, join Glenbrook’s George Peabody, partner and host of Payments on Fire, and Troy Leach, CTO for the PCI Security Standards Council as they discuss standards under development like PIN Entry on COTS, other new tools to mitigate data breach risk, and the Council’s work in Latin America, Asia, and India. A little background... We don’t need any more evidence for how difficult data security is. In payments alone the number of system components is so high that hardening them all has been functionally impossible. But we’re are making progress. There’s EMV. Data devaluation through encryption and two forms of tokenization - security tokens and payment tokens - reduces the amount of hack-worthy information available. Guiding, steering, nudging, and corralling the payment card ecosystem toward stronger security is the PCI Security Standards Council. The PCI SSC has developed a 12 step standards program for the secure treatment of payment card data that goes well beyond data devaluation. Various enterprises looking to protect their own data assets, not just card data, use PCI DSS to guide their security program. The Council’s activity is expanding along with the threats we face. As technologies emerge that benefit security, the Council considers how to employ and deploy them. For example, the Council has a certification program for the token service provider function that handles payment token vaulting and other life cycle management tasks. Another example is its soon to be released PIN Entry on COTS standard. Commercial Off the Shelf (COTS) devices include the smartphone that’s by your elbow or in your hand right now. The standard makes clear that, with the right card acceptance hardware, PIN entry via a software-driven screen, rather than a physical encrypting PIN pad, is secure.   As you'll hear on the podcast, this is an exciting time in payments security development. Broad deployment of many important tools will take many years. That's the real news. As they come online, however, there's already reason for optimism. We just have to use what we have and get others to do the same.

Digital identity is a crisp sounding term that belies a complex layer of concepts. There is identity proofing. Identify verification. Identity assurance. Each addresses one element of the many questioned raised by digital identity. How does a bank really know the digital presence at its banking portal is associated with the accountholder? How can you, as an individual, release only the amount of data necessary to satisfy the parties to the transaction? We share more than we need to. I still get carded at a bar to prove I’m over 21 (what a waste of time!). When I show my license, the barkeep also sees my address, license number, and more. Definitely a case of oversharing. If parties such as utilities, government, and financial institutions vouch for that digital presence, should any of them be responsible for proving that digital presence is right and true? Simplifying complex problems for multiple stakeholders should be a formula for success. SecureKey is a long time player in the identity ecosystem, having built a federated identity platform linking Canadian citizens to government resources using bank-issued credentials. SecureKey has evolved its system to make use of a mobile app as well as a blockchain-based database that securely points to data stored by banks, utilities, and government entities, all in a zero liability arrangement. This conversation between Glenbrook’s George Peabody and SecureKey’s chief identity officer Andre Boysen dives into identity concepts, how SecureKey’s Verified Me system works, and its use of blockchain. For more on digital identity concepts, look at NIST’s excellent set of Digital Identity Guidelines.  

Voice is the natural user interface and the robots are coming to take it on. Enabled by high volume consumer devices like Amazon Echo, Google Home, Apple’s Siri and powered by artificial intelligence engines like Amazon’s Alexa, Google Assistant, and Apple’s Siri, we are headed toward making voice-enabled commerce and payments a common experience. Russ Jones is Glenbrook’s “tech whisperer,” an expert observer of tech evolution and how it applies to payments. Join Russ and George as they discuss the development of the voice ecosystem, Amazon’s leadership, the intersection of voice and IoT, and where voice-enabled payments may flourish.

Payment innovation runs at multiple speeds. Changes in how a payment is initiated happen almost every day. Payments infrastructure change is a lot slower. But it’s happening. Nudged forward by the Federal Reserve’s Faster Payment Task Force, we are seeing the launch of the first entirely new payment system in decades. Called Real Time Payments (RTP) the new system switched its first real-time payment on November 13, 2017. Built entirely around the rich payment messaging standard ISO 20022, we have a system that can carry both payment instructions and meta-data about the payment. Data rich, essentially instant, bank-fased account to account push transactions could be a game changer. Join George and Steve Ledford, Senior Vice President, Product and Strategy, at The Clearing House (TCH) as they discuss the spread of real-time payment systems around the world and take a deep dive into RTP’s operation, rules, and use cases.

Once upon a time, text messaging systems didn't interoperate. But when they did, usage skyrocketed. Many of the world's mobile money payment systems still operate within that old "walled garden" model, limiting the ability of citizens in areas like Southern Africa to send money home to family, pay utility bills, and, most important, enjoy the benefits of an national economy that is payments enabled. The Bill & Melinda Gates Foundation sees today's limited interconnection of payment systems as a high barrier to the poor's participation in that payment enabled economy. Fortunately, those barriers are beginning to come down. In this Payments on Fire podcast, Kosta Peric, Deputy Director of Financial Services for the Poor at Bill & Melinda Gates Foundation joins George in discussing Mojaloop, the foundation's open source software initiative that provides interconnection capability between disparate payment systems. Informed by the foundation's Level One Project, the goal is to encourage a lower cost deployment of this critical payments infrastructure as well as the active collaboration among the operators of mobile money services, financial institutions, each country's central bank, and national regulators. Listen for a view into how payments systems can improve the health and well being of millions of people as well as the nation's they inhabit. This is very cool and important work.  

The intersection of new tech, faster payments capabilities, and forward looking regulation is enabling significant innovation in B2B, and consumer, payment services in the UK and EU. Join Glenbrook’s George Peabody and Myles Stephenson, CEO of business payments platform provider Modulr, as they discuss how modern tech and updated rules have created opportunities for fintech service providers. The challenges to incumbent banks are only getting bigger.

Payments standards typically operate deep within a payment system, invisible to most of us. But before long a new standard for web browsers will touch us all. Known as the Payment Request API, it is one of the newer projects of the Word Wide Web Consortium (W3C). Supported by browser builders Mozilla, Apple, Google, Microsoft, and more, this new API should simplify web payments for consumers and merchants alike. Join the W3C project leader Ian Jacobs and Glenbrook’s George Peabody as they discuss the effort’s goals, transaction flow, and status. It’s coming very soon.

If you’re planning on attending Money/2020 in October, the Glenbrook team will be there in force. This short, not entirely serious, podcast previews the sessions we are leading there on two of the hottest topics around: B2B payments and the faster or real-time payments systems coming to the U.S.

We all know that the evolution of payments systems in the U.S. is accelerating. That’s why Glenbrook has just published the third edition of our book, Payments Systems in the U.S. - Third Edition: A Guide for the Payments Professional, the definitive guide to the how and, in particular, the why of our multiple payments systems. The third edition addresses that evolution through updated examples and, unique to this edition, a focus on payments innovation in all three payments phases: initiation, funding, and settlement. Join Payments on Fire host George Peabody and Glenbrook’s Russ Jones as they talk about the new edition, what it covers, and the book’s relationship to Glenbrook’s Payments Boot Camp. Payments Systems in the U.S. – Third Edition is available on Amazon.com in paperback and Kindle format. 

Interchange is fundamental to open look card system economics and a mystery to many, especially to merchants who must pay it but don’t perceive any benefit from it. It’s a non-optional component of what the merchant pays to accept cards. It’s one element of the merchant discount fee. Despite the stubborn fact of it, there are ways for some merchants to make sure they pay as low a rate as possible. Join Angelo Grecco of CardConnect (now a part of First Data) and Glenbrook’s George Peabody for a conversation about interchange optimization, an approach that certain B2B merchants can employ to lower their acceptance costs. In this episode of Payments on Fire we decode the payments industry terms: Merchant discount fee Interchange Bundled pricing Interchange plus pricing Level II/III data If you’re new to payments or just need a refresher on interchange, take a listen!

B2B payments are huge. Taken together, these supply chain payments exceed the gross domestic product. But supply chain payments remain an imperfect art. While consumers pay for one purchase at a time, a B2B payment may cover multiple invoices, each with different commercial terms. Given the amount of data about the payment that’s necessary to crisply communicate between a buyer’s accounts payable department and a seller’s receivables group, it’s no wonder paper checks are still in broad use. While B2B payments have been resistant to “electronification,” the cloud, the mobile user interface, a new data standard (ISO 20022), and APIs into banks and payment schemes are enabling a renewed effort to streamline B2B payment transactions. B2B payments are hot. Join Erin McCune, partner in charge of Glenbrook’s B2B practice, as she discusses: How B2B payments are different from consumer payments Why B2B is “hot” once again What market forces are pushing B2B forward Why Faster Payments in the U.S. and around the world could have a major impact on supply chain payments

The Faster Payments Task Force has brought together a broad constituency with the payments industry thoroughly represented. And thanks to participation by organizations like Consumers Union, the people who bring us Consumer Reports, the voice of the consumer has been well represented in determining important evaluation criteria. Christina Tetreault, staff attorney at Consumers Union, joins Glenbrook’s George Peabody for this podcast discussion on faster payments, the consumer benefits these new approaches could offer, and what to hope for from their deployment in the U.S.

Merchant adoption of EMV capability isn’t a done deal in the U.S. Glenbrook’s own estimates show that we’re only halfway there. Few people have as much insight into merchant payment acceptance and the technology that enables it as Larry Godfrey of Global Payments’ Heartland Payments business. Take a listen to George and Larry’s discussion as they cover: The EMV terminal transition The chargebacks that many merchants have encountered (looking at you, LA) Contactless payments Security and encryption Payment acceptance  

Consumer billing payments get complicated in the healthcare space. Co-payments are bigger than ever as are the medical bills. Consumers need prompting to pay and even incentives to get those big bill onto a payment plan. With higher co-payments, smaller insurance payments, and so many patients having to deal with large medical bills, providers need services to take on the revenue management task.   Join Glenbrook’s George Peabody and David Yohe of the billing specialist BillingTree as they discuss the rising importance of consumer payments in healthcare and the challenges of changing property management payments. You’ll hear how an ISO addresses payment industry change. Listen closely and you’ll hear that the ISO’s job isn’t easy.

The Internet of Things may be a hot topic but its security isn’t hot at all. Up until recently, IoT device manufacturers and buyers haven’t cared much about security, a disinterest that’s led to over one hundred thousand surveillance cameras being hijacked by Mirai botnet malware. While cameras aren’t making or accepting payments (yet) it’s easy to imagine automobiles paying for tolls and fuel directly. If it’s not my Roku box, maybe it’s Alexa or Google Home that makes payments on my behalf over the IoT. The payments industry is working to get out in front of this potential trouble.    EMVCo tokenization, now expressed in services like Apple Pay and Android Pay, is a leading tool in the payments security kit. 3D Secure. 2.0 services, when used in combination with other security layers, should have a role in IoT payments security, too. Join Tim Sherwin, Co-Founder and CEO of Visa’s CardinalCommerce unit and Glenbrook’s George Peabody in this deep dive into 3DS 2.0, where it works, who pays for it, and its expected role in the IoT.

The Internet of Things (IoT) will bring us a tsunami of network-enabled devices, for consumer use as well as yet to be imagined industrial and commercial applications. Many of these devices will be payment enabled, many using card payment rails. Securing those billions of IoT devices is going to require techniques deployed by the mobile industry, the card industry, and other sectors. Cryptographic hardware will be part of the solution. The answers, of course, will include multiple methods and modes, all chosen based on risk and cost. Join Gemalto’s Jack Jania and Glenbrook’s George Peabody for a discussion on the broad world of IoT device security and how payments intersects with this new and enormous category of devices. 

Bringing electronic payment capability to small merchants is a major hurdle for multiple developing economies. In this Payments on Fire podcast with Glenbrook co-founder Allen Weinberg and George Peabody, we discuss merchant enablement in markets reliant on 2G wireless and feature phones. We take a deeper look at India’s payment evolution in particular. Allen’s observations come from his recent work in India and the insights into payment system success factors he’s developed. Take a listen!

Bringing payments and financial services to those of us with a tenuous connection to the banking system is the goal of the Center for Financial Services Innovation. FinLab, a joint effort by the CFSI and JPMorgan Chase, is a five year effort, now in its third year, that’s using a competition for funding and business support to broaden American financial services options. When nearly half of Americans don’t have $400 ready money, better financial management tools can help. Join FinLab’s Managing Director, Ryan Falvey and Glenbrook’s George Peabody as they discuss the FinLab mission, its process, successes, and what Ryan hopes to see next.

Payments transactions generate plenty of useful data for merchants. But wrangling that data into informative shape gets challenging, especially when multiple acquirers, gateways, processors, or other service providers are used. Each one has a different approach to reporting and some are (much) better than others. Developing a consolidated view and, as important, reconciling financials from different sources is a time consuming task for staff who need timely data on multiple concerns.    Addressing this data hairball is payments analytics company Pazien. Take a listen to  Pazien CEO and co-founder Jason Pavona and George as they discuss what the company does as well as reliability strategies for website operators.  

The term identity gets used a lot whenever internet payments and security are discussed. Knowing who we transact with is still the knotty problem. Strong authentication is required. Identity verification is required, too. A means of sharing the fruits of that work among the parties involved, especially those taking on risk, could save everyone a lot of cost and effort. That’s the notion behind federated identity and other means of securely sharing identity attributes without undermining privacy. That tall order is the subject of this podcast with Andre Boysen, Chief Identity Officer of SecureKey. Join George and Andre as they talk about trust on the internet, SecureKey’s approach, and the company’s use of blockchain technology via a partnership with IBM.

Want to know what it takes to to stay smart in payments? Take a listen to Russ Jones, the Partner in Charge of Glenbrook’s Payments Boot Camp program. Russ gives a look behind the scenes, talks over the boot camp’s evolution, and how it stays forward looking in what’s become a fast changing industry. Over 13,000 payments professionals have experienced the Payments Boot Camp Russ talks about in this Payments on Fire podcast. 

Sometimes a change in direction is the way forward. Network aspirant Dwolla has recently pivoted its work toward the product and development teams inside financial institutions. Instead of being a system operator, Dwolla now offers a broad set of APIs designed for those FIs to take advantage of the ACH’s overnight and Same Day ACH services. Dwolla’s shift also comes as the company and the US anticipates the impact of new immediate funds transfer systems Zelle, The Clearing House, and likely others. Take a listen to this conversation with Jordan Lampe, Dwolla’s Director of Communications and Policy Affairs, and Glenbrook's George Peabody as they discuss the Federal Reserve Faster Payments Payments Task Force Steering Committee, use cases for Same Day ACH, and more.

Turning money movement into a core capability of the internet is the guiding principle of Circle Internet Financial. Not an easy task. While technical issues abound, regulatory and business hurdles pose larger challenges. Join Payments on Fire host George Peabody and Circle’s co-founders Jeremy Allaire and Sean Neville for this discussion on Circle’s geographic expansion, its recent shift in bitcoin support, and its development of Spark, a blockchain-based open source smart contract platform optimized to share and store payments meta-data including exchange rates, KYC details, identity, etc.

One of last year's most anticipated advances in fraud management was the final release of EMVCo’s 3D Secure 2.0 protocol specification. Designed to take a risk-based approach to authorization and lower the checkout friction of its predecessor, 3DS2 will be a new tool in the growing anti-fraud arsenal. One of its supporters and a service provider that’s been closely tied to 3D Secure is CardinalCommerce. Cardinal, now a new addition to Visa’s arsenal with its recent acquisition, has been working with the risk-based approach for quite awhile. Take a listen to Visa’s Mark Nelson and Mike Keresman and Tim Sherwin of CardinalCommerce in this discussion about 3DS2, card network mandates, Cardinal’s acquisition by Visa, and when the market will see 3DS2 solutions.

In e-commerce and mobile commerce the problem of false declines is significant, especially during the holidays. Issuers decline transactions that online merchants approve. And vice versa. In other words, the necessary process of sorting out fraud from good transactions catches good transactions with the bad. This poor decision making means merchants lose the sale and the issuer its transaction fees. In this Payments on Fire podcast, Glenbrook's George Peabody discusses the false decline issue with Ethoca’s CMO Keith Briscoe as well as the company’s program to encourage more merchants and issuers to take advantage of its shared data service. 

Multiple organizations have emerged to address different aspects of security, privacy, and identity. In this Payments on Fire Podcast, Glenbrook’s George Peabody speaks with Craig Spiezle, Executive Director of the Online Trust Alliance, an organization bringing together privacy and security best practices for a range of industries, including payments. Take a listen to this conversation about the security challenges ahead, especially around the Internet of Things.

Faster payments, B2B payments, international remittances, cross-currency, and cross-border payments. These are hot topics and major challenges the payments industry must address. Central to all is the ability to represent, in an interoperable fashion, the information that surrounds the payment itself. What’s this payment for? Who is it for? Where’s it going? These are information gaps that bedevil B2B payments and all of the above. Extensible standards in general and ISO 20022 in particular are the answer. The International Payments Framework Association (IPFA) is dedicated to expanding the utility of ISO 20022 through rule building around the usage of this data representation method. Standardized business messages are huge and that’s what the standard and the IPFA are all about. In this podcast, the IPFA’s CEO, Glenbrook’s own Elizabeth McQuerry, addresses ISO 20022 itself, the IPFA’s role, and updates to accommodate international faster payments. Cross-border money may finally fly.   

As the breadth of transaction data expands, even the definition of payment data is getting stretched. Payment data, when combined with other sources, is becoming a valuable tool for both commerce and security. If we know your first name, we can figure out if you’re male or female 92%+ of the time. If your email address is at AOL, you’re probably over 50. What you might buy can be inferred from the websites you visit. And that’s just the start of data’s role in payments. Take a dip into the payment data pool in this podcast with Glenbrook’s Russ Jones. Russ discusses artificial intelligence, privacy, and the spread of Bluetooth beacons. For a deeper dive into the topic, join Russ at the Payments Data Insight Workshop on October 13 in Palo Alto because data’s influence in payments continues to expand.  

Bitcoin’s reliability and transaction-level security has inspired today’s explosion of blockchain pilots, companies, and consortia. But the bitcoin rails already have solid commercial applications. Circle Internet Finance has focused on person to person payments. Align Commerce has focused on international B2B payments for smaller businesses. With growth, both have blended bitcoin rails with more traditional methods to accomplish fast, cost effective transfers. Join Marwan Forzley, CEO of Align Commerce, and Glenbrook’s George Peabody for a conversation about how Align moves money and the state of bitcoin and blockchain development. There may be no such thing as an international wire but this approach gets pretty close.  

Stretching the retail financial institution’s (FI) mission beyond checking account and debit card management is on that industry’s agenda. It’s what fires the imagination of fintech entrepreneurs too because retail financial services is an industry in need of creative, expansive approaches to accountholder services. Not every idea catches fire but fortunately there are those willing to light a match. This Payments on Fire podcast looks at Sensibill, a digital receipting and data repository service for FIs. Join Glenbrook's George Peabody and Sensibill’s CEO and co-founder Corey Gross in this discussion of how an FI can help its accountholders turn digital receipts into data far more useful than what’s on a statement or that piece of paper stuffed into a purse or wallet.    

Machine learning and the broader category of artificial intelligence are rightly attracting attention and discussion. These are powerful technologies. But, like many new technology conversations, there’s the suggestion that they can address all use cases.   Maybe focusing on a single use case is the better approach right now. Join Glenbrook’s George Peabody and Nuno Sebastiao, Chairman and CEO of fraud management firm Feedzai, in this refreshing discussion about the role of machine learning in fraud management, some of its limitations, and how services like these fit into an enterprise’s fraud and risk management operations.

Digital identity is the black hole of the internet. Our online lives simply aren’t protected by a system without strong authentication. Killing the password is Mission One for security professionals because they’re so readily stolen through phishing attacks and malware. Users, warned to make passwords complex and unique, have no hope of remembering them. And a password is simply one factor of secure authentication. Biometrics and data, when used in combination, can relieve password fatigue and, for the relying party, increase security substantially, bringing some light to that dark place on the internet. We talk with MasterCard’s biometrics and authentication leader, Bob Reany, about where biometrics work and the intersection of device-based tools with what the cloud provides through Big Data, particularly device profiling and behavioral analytics. Your fingerprint’s not just for unlocking the phone anymore.

Chargebacks are one of the card system’s great consumer benefits. If fraud happens, the merchant doesn’t deliver on what was promised, or you’re charged six times for something you bought just once, the chargeback mechanism returns your money or restores your credit. What’s not to like? Well, if you’re a merchant, a lot. While there are plenty of legitimate chargebacks, there are also consumers who take advantage of the system through “friendly fraud,” the “I didn’t do it” chargeback category abused by all too many. Chargebacks are expensive for merchants. There’s a chargeback handling fee from the acquirer. There’s the cost of disputing the chargeback. There’s the cost if, at the network’s discretion, the merchant loses the chargeback. And then there’s the small matter of the cost of the goods or services. Take a listen to this audio primer on chargebacks with Glenbrook’s George Peabody and Chargeback’s CEO Dave Wilkes. Hear how they work, what the trends are, and how Chargeback assists merchants in the chargeback dispute process.

This episode of Glenbrook’s Payments on Fire podcast comes from the Shoptalk conference, mid-May 2016. Focused on the entire customer engagement cycle, the attendees are all about influencing consumer behavior, the processes of moving customers through that cycle, about making some portion of enterprise IT work more smoothly, or, yes, even about payments. Take a listen to my conversations with start-ups Tuku (in-store digital content delivery), Belly (in-store loyalty), Bold Financial Technologies (payout management for Treasury) and established fintech provider ACI Worldwide.

Payments industry professionals naturally have a hard focus on the industry’s own dynamics. So, it’s not uncommon to lose sight of who the customer is and who pays the freight. In retailing, yes, the consumer pays, but payments is a direct cost to the merchant. With all of the changes underway in the U.S. payments landscape, merchants now view payments as a complex, strategic element of their business, both as a way to drive new sales as well as a cost component to be tightly managed. To learn what’s top of mind for a large scale retailer, take a listen to Dean Sheaffer, SVP of Financial Services at Boscov’s Inc., the U.S.'s largest family-owned department store. In this Payments on Fire podcast, Dean addresses payments as a sales tool (Dean and his team have upped usage of the Boscov private label card to 40% of tender!), payments and data security, and the potential of Faster Money.

Extension of credit to people in developing markets has been a long time challenge. Banks, of course, look to repayment history to make such determinations but in much of the world, banking relationships and repayment track records are few. But history has demonstrated that extension of credit in developing markets can be effective and profitable. Just look at the Grameen Bank’s high micro-loan repayment rates. To address this repayment data dearth, Lenddo.com developed a lending data set in multiple developing countries, having gone into the lending business just to generate the data it needed to tune its machine learning capability. Lenddo then built its algorithms that examine some 1,000 characteristics in the data drawn from social, mobile, and other sources. This Payments on Fire podcast with Lenddo.com’s founder Jeff Stewart takes a look at lending in developing countries, social and mobile data sources, and examines the algorithmic "black box" that is at the heart of the company’s approach to making credit decisions in "thin file" markets.

The world of moving money is changing. And faster is the theme. Domestic real time payment systems are showing up across the planet. Today's discussion is full of bitcoin, open and permissioned blockchain approaches to speed asset exchange. But the competitive balance between proprietary and open systems is in flux. The view that moving money is or should be an internet-wide capability is a guiding principle for Jeremy Allaire, founder and CEO of Circle. Take a listen to Jeremy on how Circle is connecting US dollars to British pound sterling, his plans for the euro, and how multiple technologies - blockchain and machine learning among them - enable money movement for Circle's customers.  

The Smart Card Alliance has been educating payments, government, and security professionals since 2008 on the fundamentals of smart card technology and how smart cards are put work across a range of use cases. In this Payments on Fire podcast, Randy Vanderhoof, Executive Director of the SCA and the EMV Migration Forum, talks about the organization’s training programs, their evolution and the establishment of the new National Center for Advanced Payments and Identity Security, an expansion supported by a grant from Heartland Payment Syhttps://www.heartlandpaymentsystems.com/stems. Talking with Randy is always refreshing. He lays out the important elements of payment security and speaks directly about how they interrelate. Hardware-based security is always at the core of his mission but he’s well up on the expanded use of data and mobile devices in authentication and payments security.  

Blockchain. Is it the most revolutionary technology in value exchange ever or just the latest fintech buzzword enjoying its peak on the hype cycle? Or both? These young techniques are undergoing swift evolution, going from bitcoin and money transfer into new use cases such as identity management. There’s still truth in the cartoon’s joke that, online, no one knows you’re a dog. The challenge goes beyond discerning hacker activity from the permitted. It’s also about the release of just the data necessary to satisfy the needs of both parties in a transaction - and no more. How much better that would be than sharing a full suite of personally identifiable information when simply asking the question “are you over 21?” Take a listen to my discussion with Matthew Commons, CEO, of Cambridge Blockchain on how his company’s blockchain-based approach can be used to address one of the internet’s remaining fundamental concerns. You’ll also learn about the state of play in this new stage of permissioned blockchains.  

Anyone even vaguely conscious during Sunday afternoon football games has seen adverts for Visa Checkout, that shopping cart checkout assistant the card network is encouraging everyone—cardholders, issuers, and merchants—to adopt. Visa is not alone. MasterCard’s MasterPass and American Express Checkout are similar product offerings all meant to add convenience and security to the merchant’s checkout flow. These checkout assistants—you could even stretch the definition a bit and think of them as wallets—use the payment tokenization specification from EMVCo. But as products from competitive networks, each has unique attributes, never mind its own APIs specification. Glenbrook’s Russ Jones takes us for a pretty deep dive into how these tools work. And the benefits they provide to merchants especially in mobile commerce. Russ has been under the hood and this is a report on what he’s found.  

Interchange galvanizes the attention of regulators around the world like iron filings to a magnet. Everyone in card payments watches their moves closely because of its economic impact on merchants, card networks, acquirers and, in theory, consumer pricing. European regulators are among the most recent to weigh in. Based on the EU’s Multilateral Interchange Fee legislation, effective December 9, interchange on many card products is now capped at 0.3% for credit and 0.2% for debit. The ripples are just beginning to spread. Join PSE Consulting’s Luke Purser and Glenbrook’s George Peabody as they discuss this shift in the European payments landscape. The conversation closes with Luke’s insightful comments on what it’s going to take to get the UK’s credit push system—Faster Payments—to the physical point of sale. On a personal note, I am very grateful for your support of Payments on Fire over this year and look forward to bringing you more good conversations Send me you story ideas! In the meantime, in this complicated and challenging world, celebration and rest restore each and all of us. Warm wishes from me and Glenbrook Partners for a safe, happy, restful Christmas, Chanukah, Milad un Nabi, Kwanzaa, or whatever practice you favor and follow at this time of the year’s turning. — George Peabody

Sending money in real-time is a capability that is growing around the world. “All bank” systems in the UK and Mexico are thriving. Mobile money services like M-Pesa are changing economies and individual lives in developing countries. But in the US, “things are complicated.” We have a crowded landscape in the US without, as in many global markets, a clear mandate from a regulator. In this Payments on Fire podcast, Glenbrook’s Carol Coye Benson and Dwolla’s Jordan Lampe join George Peabody for a discussion on the evolution of Faster Payments in the US, directories, bill pay, and the challenges of interoperability. And best wishes for a relaxing and happy Thanksgiving! 

Since the first promise to pay was made, knowing who you’re dealing with has been a requirement. Authenticating the identity of a trading partner - a customer, an accountholder, a business or even a computer - is a burden that falls on the one extending trust because the giver takes on the transaction risk. In online and mobile transactions, the job of authentication has fallen on the password’s sagging shoulders in combination with other credentials such as a payment card or drivers license. The smartphone has brought, to this world of stolen passwords, social security numbers, and other bits of personal information, the fingerprint and other biometric techniques. Authentication and convenience are no longer at odds. While Apple’s TouchID is at the heart of Apple Pay, the Android side is made up of a broad assembly of technology providers and users called the Fast Identity Online Alliance or FIDO Alliance. Take a listen to this discussion between FIDO board member Philip Andreae and Glenbrook’s George Peabody on how FIDO works and the growing role of biometrics in authentication.

With the EMV liability shift only days away, consumers and merchants are facing any number of changes in the point of sale experience. Unlike some other countries where the EMV change-over took place on a single day, the US EMV transition is going to be a long one, too. Not every issue is ironed out either. Join Glenbrook’s George Peabody and Philip Andreae, VP, Field Marketing North America at Oberthur Technologies in a discussion about EMV and debit, EMV transaction speed, and prospects for contactless, dual interface cards in the US. 

3D Secure, the protocol that connects ecommerce merchants to the cardholder’s issuer, has had a rough go. But after ten years, smarter application of the tool and, in particular, risk-based usage makes it more attractive to both issuers and merchants. In this conversation with Mike Roche, VP of Consumer Authentication at Cardinal Commerce, we take a deep dive into 3D Secure, its implementation and continuing evolution, expectations of increased card not present fraud due to EMV’s US arrival, and its positive effect on merchant sales and issuer spend.

The Internet’s designers quickly realized that no one’s very good at remembering IP address numbers. Unless you type the same number over and over again (and I did when I ran an ISP) a human readable version is a lot easier. That’s what the domain name system or DNS is all about, connecting human readable names to specific IP addresses.  You can imagine then that Bitcoin, with its long alphanumeric addresses, suffers from similar challenges. That insight is what this podcast is about and the reason Justin Newton and Dawn Newton formed Netki. Try it out by sending bitcoin to me at wallet.geopeabody.bit (kidding) or, better, take a listen as the Netki leaders discuss their directory service for virtual currency wallet addresses.   

Every payment pro in the US is also a shopper and we all know that the largest retailers are poised to support EMV. Nearly all have EMV capable hardware. A few have turned it on. Most are waiting for the October liability shift so the temporary pain and awkwardness of clerk and consumer confusion is spread across everyone.    But what about the small and medium business (SMB) market? Mike English, VP of Product Development, at Heartland Payment Systems has a front line view on the EMV transition of its SMB customers. Take a listen as Mike discusses EMV, the future of contactless and the NFC evolution. Mike also discusses how Heartland is thinking about omnichannel payments and commerce, proving that the definition of “payment processor” is morphing far beyond its traditional remit.   

Host card emulation (HCE) was invented back in 2012. It was supposed to do for NFC on Android what Apple Pay has done for NFC in the iOS ecosystem. But it’s taken longer, a lot longer, for a robust Android-based NFC capability to get deployed. In this conversation with HCE inventor Doug Yeager, CEO of SimplyTapp, we review how HCE works, what it requires, and take a look at why it’s taken so long to gain momentum. The good news is that momentum is increasing with a growing set of HCE technology providers pushing it forward and, it appears, a pipeline of HCE-based apps on the way.   

The domain of point of sale (POS) has three legs to its security stool: EMV, point to point encryption, and card number tokenization. Card not present (CNP) merchants and issuers have the more challenging task of assembling fraud mitigation tools on their own. The networks have had, until EMVCo’s move into payment card tokenization, not much more than 3D Secure to offer. Merchants and card issuers have a lot of transaction and fraud data and when that data gets shared, improvements are possible. That’s what Ethoca is about. Its growing network of merchants and issuers share their fraud data to improve fraud detection and lower chargeback rates. Take a listen to this discussion with Keith Briscoe, Ethoca’s CMO, on what’s possible through collaboration. 

Tokenization is, and will continue to be, a hot topic in payments. After all, it's what powers Apple Pay. Last week I chaired the Mobile Payment Innovation Summit where tokenization was a recurring theme. I asked Glenbrook partner Russ Jones to return for an update, to help us dig deeper into what’s happened over the six months and to consider where tokenization is going. He’s bullish on the capabilities of this technology and likes what he’s seen so far. Take a listen to what Russ has to say.  

We all know EMV is coming to the U.S and that it will take years to build a complete EMV security perimeter. But the work starts with issuers sending out chip cards to their customers. Take a listen to this conversation with Chase’s Dina DeMerell, Director, Card Services Chip Security, to hear how Chase is deploying EMV credit, debit, prepaid and co-branded card products. She wasn’t kidding about their accelerated push of credit cards to frequent transactors. I received my new EMV United co-branded card the day after we spoke - and it wasn't special treatment.  

Decisions about point of sale transactions are largely made using card data alone but in e-commerce the merchant has to use a rich mix of data sources to manage fraud. The merchant is, after all, liable for both the transaction as well as the goods or services lost due to fraud. E-commerce merchants use publicly sourced data from firms like Whitepages to perform both automated and manual reviews. This discussion with Tom Donlea, Director, e-Comm/Retail Practice at Whitepages, looks at how the data is provided to the merchant, the challenge of data sourcing in international markets, the care and control of PII, and what the US EMV roll-out could mean for CNP fraud.

This week's CNP Expo in Orlando brought together some 1,000 fraud technology vendors, processors, merchants, commerce-focused entrepreneurs and others to discuss the arrival of EMV in the US, global payments, and more. We took the opportunity to speak with two enterprise focused firms, Nu Data Security and CardConnect. We also spoke with the founder of mobile shopping service SelfPay. Nothing like good conversations! 

Paying invoices and moving funds aross borders for small and medium business (SMB) is expensive and full of uncertainties. How much does the recipient actually get once the transaction is finished? (Hint: it's not always what was sent.)  How long does it take a San Francisco firm to pay an invoice to a contractor in Berlin or Hyderabad? (Hint: it's hard to know exactly when it gets there). Since there's no such thing as an international wire, entrepreneurs in the virtual currency space have been looking at how these new math-based "rails" can move money faster at lower cost across borders. In this Payments on Fire episode, Marwan Forzley, CEO of Align Commerce, talks with Glenbrook's George Peabody about how his firm moves value for its SMB customers from the sender's currency to the receiver's over bitcoin rails.

EMV and its moving parts presents a far more complex payments method for merchants, ISVs, payment processors, and financial institutions than the good old magstripe. It continues to have ramifications throughout the payments ecosystem.  As Executive Director of the Smart Card Alliance and director of the EMV Migration Forum, Randy Vanderhoof has shepherded a sometimes fractious payments industry as well as encouraged a a skeptical merchant community toward EMV adoption. Now that the US EMV deployment is a certainty, Randy and Glenbrook’s George Peabody discuss what got us here, where the challenges are, and how EMV will evolve in the US. 

It’s always intriguing to watch how a good idea evolves into new areas. Such evolution often happens when designers find new applications for their ideas. Brian Merritt and Ryan Hildebrand were part of the early team at Simple that was subsequently sold to BBVA. In mid-February, they announced the formation of Seed, a Y Combinator firm, designed to bring small business banking into the mobile and SaaS-based worlds. Listen to this conversation between Glenbrook’s George Peabody and Seed CEO Brian Merritt. While very early in the company’s development, Brian’s description of the company’s “API first” approach banking makes clear what’s possible when legacy technology and processes are in the rearview mirror.

Tablet-based ePOS cash registers are growing in popularity and capability. A boon to smaller retailers who have been laggards in store automation. But without technical support staff on hand, solving issues when they arrive, never mind securing systems, is an expensive proposition. Join Glenbrook’s George Peabody and payments industry veteran Chip Kahn, founder of Boomtown, a marketplace for merchant tech support pros, for a discussion on tablet POS trends, what SMB retailers needs, and the payments programmability.

Aaron Press of Lexis Nexis Risk Solutions joins Glenbrook's George Peabody for a discussion on mobile fraud trends based on the firm's True Cost of Fraud mCommerce report. While the mobile channel presents fraud and risk professionals with a wide variety of tools to mitigate losses, the report concludes that the mobile channel represents a disproportionately large loss vector. In this Payments on Fire podcast, we talk about why and what needs to happen to fix the problem.

Glenbrook's Elizabeth McQuerry and George Peabody talk with CBW Bank's Suresh Ramamurthi on payment innovation, risk management, and international remittances. Suresh is also founder of Yantra Financial Technologies. He and his wife were featured in this NY Times Dealbook article last month.

Glenbrook's George Peabody discusses Bitcoin and blockchain evolution with Sean Safahi, co-founder and CEO of Bold Financial Technologies, a provider of math-based currency services to the banking industry. Applications that make use of the bitcoin blockchain and consensus-based approaches are proliferating. We discuss these including the newly launched Stellar, a non-profit infrastructure provider for currency exchange and asset transfer. 

In this interview with Glenbrook's founding partner Carol Coye Benson, we discuss the prospects for a faster payments system in the US. Responding to the October 22 announcement by The Clearing House, Carol expresses her caution and hope for ways to accelerate replacement of today's system for credit push payments.   

Realtime, consumer-facing authorization of card payment transactions has been available for some time but few of us have it offered to us by our issuers. Today, there's a number of technology providers selling truly realtime notifications and two-way approval requests based on the live authorization stream. Glenbrook's Russ Jones takes us through what's on offer while George gets grumpy over what he's got today. As more consumers become thorougly alarmed over data and privacy breaches, this could be the time for issuers and independents to offer the "worried" consumer more control and a strong role in fraud management. Companies mentioned in this episode include: TSYS Spend Controls for consuemrs and corporate card administrators MasterCard InControl Vantiv MobiMoney Red Giant Mobile          

Join George Peabody in a conversation with Stockpile's Dan Schatt on virtual banking, innovation, and the future of PayPal.  Dan is former GM of Financial Innovations at PayPal and the author of Virtual Banking: A Guide to Innovation and Partnering, a new book that includes a chapter on Bitcoin and math-based currencies by Glenbrook's George Peabody.  We also discuss Stockpile's innovative approach to equities ownership, a business model that will be fascinating to watch develop.

Apple Pay's announcement has brought attention to biometrics and their role in payments security and to the broader, if amorphous, concept of online identity. Steve Wilson of Constellation Research and I discuss local and cloud-based biometrics, identity attributes, and the vexing challenges of privacy. 

Using a powerful examination of the challenge of online and mobile checkout, Glenbrook's Russ Jones takes us for a deep dive into Visa Checkout, comparing it to PayPal and other methods of making the ecommerce experience slippery. At Checkout's announcement in mid-July, Visa promised to support the initiative with significant advertising. One ad has been viewed by 9 million times on YouTube and anyone with a passing interest in Sunday football has seen spots educating viewers on Checkout's speed and availability.    

Come back for Bryan Derman's wrap-up on FinovateFall 2014. From banking technology vendors to SMB lending and some very interesting security and biometric apps.  Take a listen to his report here and via iTunes.  Just search for Payments on Fire.

Finovate has become the leading opportunity for new companies and long term players in financial technology to strut their stuff.  But not all of us can attend the conference and not all of us have the long term view that Glenbrook's Bryan Derman brings to the show.  Take a listen to his take on Day 1 of the event.  And come back tomorrow for his take on Day 2. 

Want to know more about SEPA and the new SEPA for cards initiative?  Thinking about opportunities in the EU?  Need to understand how payments work in Europe and how they vary country to country? Well, to get started, take a listen to this podcast conversation between Elizabeth McQuerry, Glenbrook's international payments maven, and Manfred Schuck of Schuck Consulting from Frankfurt.  Then, if you need more understanding, join them October 9 in Mountain View, CA for their Payments in Europe Insight workshop. Visit www.glenbrook.com for more.

In this Payments on Fire podcast, Russ Jones and I discuss last week's Apple Pay announcement and how it fits with and compares to other checkout approaches.   We begin looking at Apple Pay and Visa Checkout from the perspective of the checkout process because that's what they are, ways to optimize checkout. We talk about how both will evolve over time. We then dive into what we know about Apple Pay and discuss and what's most exciting about Apple Pay (it's not NFC). In our next Payments on Fire podcast, Russ takes a deeper dive into Visa Checkout.  So, come back for that next week. This week's Glenbrook links of note: Carol Coye Benson's personal appreciation of Apple and Apple Pay Glenbrook's business assessment of Apple Pay Take our Bitcoin 2014 survey. Please! Glenbrook's Insight Workshop on Payments in Europe

Welcome to Glenbrook's first Payments on Fire podcast. This conversation between Glenbrook's founding partner Scott Loftesness, Terence Spies, CTO of Voltage Security, and Glenbrook's George Peabody is about virtual currencies.  It's a discussion about Bitcoin, other math-based currencies and approaches like Ethereum, Nxt, and more.   We're calling Glenbrook's podcast series Payments on Fire because, well, payments are hot and the payments industry finds itself in some hot water. Between investor, entrepreneur and hacker interests, payments is the place to be. My Glenbrook partner Elizabeth McQuerry will join me as co-host on this series soon. Looking ahead, Payments on Fire will cover all things payments. You'll hear interviews with payments participants about their offerings, conversations with members of the Glenbrook team and guests on recent events and news as well as discussions on the larger themes of faster payments in the US, payments security, and more. So, please plan on coming back to hear more.  It's not just about Bitcoin.  But before we leave that topic, we are running our second annual bitcoin and payments survey right now.  So, please, check it out and let us know what you think. You'll find the link at our blog site, paymentsviews.com and here.