Christopher Danvers

FEDWIRE ISO 20022 IS LIVE

Plaid and Other Aggregators just took a tremendous (well deserved) hit last week: PAY BY BANK IS DEAD IN US. US Banks just set fees for API access/ authentication. Any "business" model that does not have shared economics will have a short shelf life. Building value on someone else's hard work, creating a competing product to end run them, and keeping all the economics will not gain you any friends. Surprise.. banks are fighting back. My bank was Yodlee's first customer in 97 (Wachovia), banks can't own all the dross of compliance, customer support, tech, infrastructure, ... with no upside. At one point in time Yodlee represented 30% of our call center volume and about the same in HTTP requests (before we converted them to OFX). There are real costs to be covered. Customer online credentials were never designed to be given away to 3rd parties. Modernization and tokenization of credentials is another cost. While PaybyBank was already a stretch against Durbin debit rates of $0.21.. The new access fees (vary by bank) will kill this completely. The aggregators may complain, but the banks will have a solid case by demonstrating the real costs involved in supporting this service. The aggregtors will need to move up market to RTP and FedNow.. but this also means abandoning consumer eCommerce to focus on markets where speed matter (B2B, Payouts).. and competition has a big head start.

The empire strikes back Banks need to get paid But jacking up fees unilaterally is harmful to consumers and the overall market. It's irresponsible. Consumer permissioned data gave us cashflow underwriting. A major lifeline for low income populations. While banks chase higher income segments for profitability. It's rational but cynical.

Open Banking/API thought for the day: "There is no such thing as a free lunch". Another reason API fees will withstand scrutiny is that the bank pricing is below the pricing of other commercially available services for account verification and identity that Banks, Telecos, Billers and others use. The "Good enough" verification associated with leveraging online banking credentials to verify identity (and ACH account control) for free are over. Most rationale people would know that building a commercial service (ie priced) off the back of another business, AND building a competing product(s) would be short lived. Commercial alignment is necessary for any commercial interaction. While banking data is the property of the customer, banks making this data available and allowing a third party to directly access them (ie not self attestation) is an important distinction. Customers can still send third parties their banking data for free (ex a file of their transactions). But that is NOT what aggregators or third parties want. US Banks want this fight. They want the opportunity to show in court how this data is being used. Example of the day, aggregators know how much you make and who you work for (ie Payroll from your bank account). While I'm not aware of anyone selling individual level data, the meta data is sold to put you in segments (ie Affluent, suburban, high travel spend). Is that what consumers signed up for when they linked an account to PayPal or Mint? I don't think so.

These are so Plastic Man-core

Question: as integrated payment systems become ubiquitous, can merchants start exchanging more data with issuers over the Visa $V and Mastercard $MA networks? (e.g. SKUs) Or the message format does not support this?

Welcome to Mission Rock! New neighborhood, new market support center, new home for our employees, same commitment to driving innovation, security and ease in payments.

Payments geeks might appreciate this at the Dubai airport

Varo has taken to calling itself "the first nationally chartered consumer techbank in the U.S." in its press releases and I am embarrassed on its behalf.