Retailers and Payments Apps Moving into Banking in India

PayPal Plans In-Store Presence Via Mobile

Banking

Retailers and Payments Apps Moving into Banking in India

December 4, 2019

You likely saw the announcement recently in the Wall Street Journal that Google would be getting into the business of...

As the CEO of Clarus Merchant Services and a member of the merchant service and processing industry for over 20 years, I’ve seen a lot of emerging technologies and payment solutions that were going to revolutionize how consumers buy and sell goods. I deliberately moved into the electronic payment industry after personally owning thousands of ATM machines. I saw an incredible opportunity for the future of cashless payments, which would solve the need for better transparency for merchants who were working in a convoluted system wrought with hidden fees. I knew this from personal experience as I was once a merchant myself with several restaurants. Today, the big question that I am consistently asked is, “How is Cryptocurrency going to disrupt the mainstream electronic payment industry?” The transfer of assets has always been based on trust. Like the early years of crypto, the early years of banking in the U.S. was like the Wild West, as there was little regulation over banks and how they conducted business. That lack of trust led to the Great Depression of 1929. Trust was restored to the money system after the government reorganized its federal oversight of banks and added FDIC insurance for deposits. Trust in private financial institutions also played an important role in the mass adoption of credit cards. The first credit card – the Diner’s Club Card – was created in 1950. But the adoption of this new method of payment didn’t take off until Bank of America and other financial institutions issued the cards that established the Visa and MasterCard systems. Today, cryptocurrency is at a similar crossroads. Less than a year ago, it remained in the fringes and even went through its “Crypto Winter.” But last fall, crypto’s image began to change as major organizations began to announce their own venture into issuing digital coins. It started with JP Morgan’s announcement that it would issue a coin. But it was Facebook that brought crypto into focus as the mainstream and digital media pushed the news of Libra. With the U.S Senate Banking Committee recently holding hearings, it’s clear that if Crypto is going to take mainstream transacting adoption it must have the regulatory oversight that credit cards do so all of us can feel safe in trusting those transactions. “Crypto is a new asset class and should be regulated as such,” Circle CEO Jeremy Allaire said. Regulation of cryptocurrencies is a challenging issue that is slowly being addressed on global and national levels in varying degrees. In some countries, such as Germany, bitcoin is recognized as a “unit of account” which citizens may trade freely. Other countries including Switzerland have taken a similar stance in recognizing cryptocurrencies as assets, but are also adopting laws to determine the status of the digital coins as securities and their taxability. The U.S. Government has yet to issue regulations specific to digital currencies and continues to proceed cautiously. “Although cryptocurrencies are innovative and may provide benefits related to automation and validation, they also pose challenges associated with speculative dynamics, investor and consumer protections, money-laundering risks, and governance,” the Board of Governors of the Federal Reserve System recently said. The Federal Reserve staff continues to “monitor and analyze developments across the spectrum of digital currencies to understand tradeoffs and to consider further these developments in the broader context of widespread payment innovations.” Specific relations to digital assets aside, all cryptocurrencies must comply with Federal regulations regarding money and banking, such as the Bank Secrecy Act, according to Treasury Secretary Steven Mnuchin. Cryptocurrencies must also meet anti-money laundering and counterfeiting standards, and must register with the Financial Crimes Enforcement Network. In addition, many states have adopted their own wide-ranging regulations, such as California, Texas and New York, where its controversial BitLicense regulates companies or persons residing in the state and using cryptocurrencies. Looking at crypto from the merchant side of the equation, the adoption of Federal Reserve Standards specific to cryptocurrencies will provide a framework that can open the door for digital coins to be readily accepted and processed at the point of sale. The Fed’s standards will set precedents and parameters on what form of cryptocurrency (such as a stablecoin, which is not meant to be speculative and is tied to traditional assets such as the U.S. dollar or gold) can be exchanged for goods and services.

Digital Banking

The Fed Doesn’t Appreciate Digital Currency

by Tim Sloane

December 3, 2019

This article in Modern Consensus indicates that Fed Chairman Powell dislikes the idea of a central bank digital currency (CBDC)...

Banking

Blurring the Lines between Tech and Banking

by Aaron McPherson

November 25, 2019

The narrative on fintechs has been consistent for many years—fintechs pose a direct threat to banks. PWC released a report in...

Faster Payments

ACI Worldwide to Deliver Universal Payments Technology Via Microsoft Azure

by PaymentsJournal

November 20, 2019

ACI Worldwide (NASDAQ: ACIW), a leading global provider of real-time electronic payment and banking solutions, today announced a global strategic collaboration with...

Digital Banking

Nium to Power Cross-Border Payments for Brazil’s Leading Currency Broker Frente

by PaymentsJournal

November 20, 2019

NIUM, the recently-rebranded (formerly, InstaReM) digital cross-border payments platform for consumers, enterprises and financial institutions, will now power cross-border payments...

Digital Banking

After Winning $200 Million in Court, Where Will USAA Go Next?

by Sarah Grotta

November 18, 2019

You may have seen the headlines last week that USAA won a court battle that requires Wells Fargo to pay...

Mobile Payments

Boost Payment Solutions Collaborates with J.P. Morgan to Offer Fully Integrated Automated Payments

by PaymentsJournal

November 13, 2019

Boost Payment Solutions, Inc., the leader in optimizing the use and acceptance of commercial cards, announced today a strategic collaboration...

Digital Banking

Credorax Announced as Winner of Mastercard Europe’s “Market Shaker Award”

by PaymentsJournal

November 11, 2019

Credorax, the smart payments provider and licensed bank for cross-border processing for eCommerce and omni-channel payments, was awarded the “Market...

Mobile Banking

Uber Is in a Unique Position, as a Challenger Bank

by Sue Brown

October 29, 2019

Today's post covers a CNBC article detailing Uber's recent announcement regarding payments: Ride-hailing giant Uber is making a deeper push into financial...