It was just a week ago when I wrote an open question to banks; “Banks – Why can we not have same day money transfer?” Well today I came across new Dwolla offerring they name FiSync.  They characterise the new service as real time money transfer through their cloud service and are oferring it free to banks. Unfortunately, and sorry Ben, but I predict this will not succeed at least not as currently offerred.  The reason banks won’t accept as offerred is one word – float. The post notes the value of ACH transactions annually at 33.9 trillion.  If we … Continue reading Dwolla offer real time money transfer for banks | but is this this the right model?

America has introduced a JOBS act designed to remove many of the truth and informational requirements that funding requests must address under securities law.  The title here is the final phrase in Esthers piece and it is a deep one. This article is a highly insightful piece from Esther that captures the essence of the role and responsibility of government as it applies to the free marketplace.  The words “unintended consequences” leap off the page here.  It is far to easy to design a solution that apparently attacks the problem directly but in fact has effects that were not even … Continue reading Sometimes friction has a purpose

FSA managing director Martin Wheatley spoke at the Chartered Institute of Bankers May 4th, 2012 and it is something of a clarion call to the financial services industry everywhere.  He raises gaps in bank service levels based on complaints received at the FSA. But there is nothing new here and the example of sending money for receipt by next day exemplifies his speech. Rebuilding trust and confidence in banks and bankers | FSA Martin Wheatley Even where we have brought issues to the attention of industry, such as the requirement to ensure payments reach the payee’s account by the end … Continue reading Banks – Why can we not have same day money transfer?

Square is getting a lot of attention these days.  Banks are sitting by while Square eats their lunch, and this is quite typical.  This happened with eCommerce where banks let PayPal and others take that space.  At the pace mentioned in this Bloomberg piece, Square is looking at up to 8% of the market which seems high but here is the quote. Square Payment Pace Rises 25% in Niche Coveted by EBay | Bloomberg Square, founded in 2009, is processing transactions at an annualized rate of $5 billion, up from $4 billion a month ago, as more consumers embrace mobile … Continue reading Square beat the competition by crediting merchants next day

So much has been written about RIM and the previously ubiquitous Blackberry. I see RIM as a solid future potential provided they do one thing.  Refocus. They must focus on the installed base of government and business customers.  Those customers all have installed Blackberry servers inside their corporate / government networks.  Can you imagine having your server and software working inside the US Government computer infrastructure?  This is an enormous competitive advantage. I say if I am at Waterloo HQ of RIM, you must throw away all preconceptions about your handsets.  That battle is lost.  Open your eyes, integrate android, … Continue reading RIM must focus on their advantage which is installed base of corporate and government installations

One of the key learning’s and outcomes of the 2008 banking crisis was the need to tighten up control over bank leverage, which in turn promotes de-leveraging and reduces rapid increases in debt.  This is primarily centred in Basel 3 which curtails off-balance sheet lending, and requires debt to to be first risk adjusted and have capital held against that risk. As with anything financial there are always unintended consequences, and those that seek to bypass the new rules.  Enter JP Morgan. Banks test ‘CDOs’ for trade finance |ft.com JPMorgan is among several banks that have begun testing investor appetite … Continue reading JP Morgan tests derivative based products for Trade Finance

In the “just when you thought you had heard everything” department, it turns out the Courtyard Marriott free wifi comes at a cost.  They are taking every web page served and rewriting it, presumably in preparation for injecting their own ads. I hate ads as much as the next person but the idea that a page is being altered and what I am viewing is not the same as is served on the ‘normal’ internet is quite abhorrent! Hotel’s Free Wi-Fi Comes With Hidden Extras | NY Times blogs The lines of code include references to “rxg,” which stands for … Continue reading Courtyard Marriott wifi rewriting every web page before you see it

I got all excited when I read about the Royal Canadian Mint and their MintChip initiative.  Cash Replacement it proclaimed.  I felt even better when I noted two people I have the privilege of knowing (Dave Birch and David Crow) on the judging committee.  The Mint refers to this initiative as “the evolution of currency”.   What they actually mean is the evolution of change.  I was at first disappointed when I realised this was all about small payments.  It was no co-incidence the challenge was timed with the Canadian budget and the Mints elimination of the 1 cent coin.  The … Continue reading Royal Canadian Mint introduces MintChip to handle < $10 transactions in Canada

Bruce Summers of the Kansas City Fed (retired) produces a highly articulate and relevant account (pdf) of the US Payments system that equally matches the Canadian. I especially liked this paragraph that epitomises banks today. US payments system failing to meet the needs of the digital economy | finextra "The idea that money in transit is digital information which can be processed immediately has not been readily accepted by the banking industry," he says. "Most bank-sponsored payment schemes depend on clearing and settlement systems that are designed around batch processing and delayed settlement, and these clearing and settlement arrangements are … Continue reading Bruce Summers critique of the US payments system and why banks will stick with status quo unless forced