Payments Watch

Perhaps one of the biggest developments to come out of Check 21 is Remote Deposit Capture (”RDC”), which, as I have previously noted, turns Check 21 and image exchange into a revenue opportunity, not just a story on improving operating efficiency in cheque processing. One idea I had recently was of a RDC wholesaler, a company that could provide a soup to nuts (e.g. front office scanners to clearing and settlement) solution that banks and other third parties could simply brand and sell to their clients.
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In September, Interac, Mastercard and Visa Canada are planning a trial of chip cards (I understand using the EMV standard) in the Kitchener-Waterloo area just outside of Toronto according to ComputerWorld. Merchants in the region will be set up with EMV enabled POS devices that will accept chip based credit and debit cards.
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Orbograph, a developer of recognition solutions for the U.S. cheque processing industry and provider of solutions for business process outsourcing has announced some management changes. Orbograph’s technologies including image recognition, fraud detection, business process outsourcing and image quality assurance are used at many financial institutions across North America, processing millions of items each day.
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No one is going to use your new payments platform until a significant number of businesses or people accept the new method, yet no one is going to invest in the infrastructure to accept and handle the new payment method until lots of customers are using the new method. This chicken & egg problem needs to be addressed in any strategy, and the answer is often having a backward compatibility option that dissolves the problem.
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It just occurred to me yesterday that I have never once had any communication from the CEO or president of the bank at which I do most of my banking. I’m not talking about a personal, two way communication here (I certainly don’t really expect, nor necessarily want to have a phone or email conversation with someone I don’t really know), but not once has the chief of strategy and business at my bank sent me even a form letter to let me know how things are going and what’s up.
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Currently residents of Second Life, a virtual world created by Linden Labs buy from and sell to one another directly using the Linden (a virtual currency which is exchangeable for US dollars and other currencies on market-based currency exchanges). How about offering other payment channels in Second Life like credit cards?
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Dave Birch at the excellent Digital Money Forum discusses how at a time in the not so distant past Americans reverted to Barter. In fact with no real money around in the Great Depression, people started to print their own money, called “scrip”.
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Bruce Schneier comments on an article about how rising gas prices and the caps on card transactions authorized at the pump can cause pumps to shut off mid-fill.
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How many customers does PayPal have, and how often do they use the service? How does this compare to a big bank? An article on PayPal’s Nebraska operations centre provides some interesting insight into the use of PayPal:
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The adoption of smart card technology in North America is beset by a “chicken and egg” conundrum. To accept smart cards would require merchants to retool their card reading equipment even though the swiping of the magnetic stripe currently serves them well. Here is one way to get merchants to adopt smart card technology:
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