Payments on Fire™

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.