Payments On Fire

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 cr

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 compli

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 Peabod

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.