The Bankwatch

Tracking the consumer evolution of financial services

US Banks payments jump from days of the Beatles all the way to 2005’ish for rest of the world

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For non Americans the significance that it took the President to sign an Executive Order is large. An Executive Order is required for either inconsequential items, but more often those which cannot otherwise be agreed upon by the legislative Congress who are generally governed by lobby groups, and therefore cannot make a decision.

US Banks have been stuck in the past and refusing to buy into Chip Cards. They have even been balking at PIN rather than signature. This is the country with Miles and Gallons of course. Most wanted to stick with Chip and Signature, as indicated in this recent Forbes article, which to the rest of us is nonsensical.

So the President fell on the side of common sense, and pushed through what the banks deep inside know they actually want. This really only brings them to Europe and Canada in 2005’ish, but its a good step. Not sure how they will feel about Apple Pay which hits tomorrow (Oct 20th) but thats for another day.

Obama signs chip and PIN executive order

US president Barack Obama has signed an executive order mandating the use of chip and PIN technology at executive departments and agencies for card payments.

The president called on the private sector to up its game, commending those that have taken action, including breach victims Target and Home Depot, who are now rolling out chip and PIN. Earlier today, a trade body set up to push the migration from magstripes, estimated that nearly half of US merchant terminals will accept EMV chip card payments by the end of next year.

As Mathew Shay of NRF indicated, the current credit card technology in US dates back to the days of the Beatles. It also drives the matter that kills me where Canadian Banks insist on having a mag stripe on a chip card. The only reason is because we are beside America and the Marketing folks can’t get there mind around not having american access when Canadians shop across the border.

Why is credit card data so easy to steal?

Because the technology designed to keep consumers’ confidential information secure was developed at the same time the Beatles arrived in America, says Matthew Shay, CEO of the National Retail Federation.

“We’re using essentially an 8-track tape from the 1960s,” Shay said in an interview on CNBC in January.

For once, I will say, go Obama!

Written by Colin Henderson

October 20, 2014 at 00:18

Posted in Uncategorized

Equity Bank’s Thin Sim technology represents a novel threat to most successful mobile app in Africa

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This brings in a whole new level of mobile access. Its a bit hard to imagine First world regulators permitting this kind of dual access, but then again it has not been tested and certainly represents a new angle on the fastest growth technology area.

Equity Bank to take on M-Pesa with Thin SIM technology

Safaricom earlier this week lost a legal battle to block the roll-out of Equity Bank’s Thin Sim technology, when the Communications Authority of Kenya (CA) and Central Bank of Kenya (CBK) dismissed the telco’s objections to the technology. Safaricom had claimed that the dual SIM had the potential steal data from the main SIM and pass it on to third parties.

Written by Colin Henderson

October 7, 2014 at 22:50

Posted in Uncategorized

Stripe are heading towards becoming leaders in payment processing

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In Aug 2013, I picked up on Stripe, and was impressed by their ‘start up’ approach to a space banks should have owned, but failed since day 1.

Stripe – simple online payments …

Today this piece at Bloomberg surprises with the extent that Stripe have become engaged in the payments eco-system that matters. This piece is worth the read just to see the big name players Stripe have engaged.

Stripe Lands Apple in Quest for $720 Billion in Payments

They are integrated with Apply Pay, Alibaba and have these backers:

Stripe has the backing of investors including Sequoia Capital and Andreessen Horowitz, as well as PayPal co-founders Peter Thiel, Elon Musk and Max Levchin. It has raised about $140 million in funding, with its $1.75 billion valuation pegged to a financing in January.

Written by Colin Henderson

September 21, 2014 at 23:00

Posted in Uncategorized

Banks ready for battle for supremacy in Apple Pay Passbook

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Early signals in US that Apple Pay with its simple NFC interface is ready to make a big impact. This could also be the kickstart NFC has been lacking.

US banks race to gain Apple Pay card advantage

But while all the major banks have allocated large budgets to the battle, they do not have a free hand in what they can do. Marketing staff from the banks are due to meet at Apple’s headquarters in Cupertino on Tuesday, according to people familiar with the matter, to receive strict guidelines on how they can advertise Apple Pay to customers.


The largest card issuers – led in the US by JPMorgan Chase, American Express, Bank of America, Wells Fargo and Citigroup – are already eyeing the benefits of having users nominate their cards as the default card on Apple devices. Some smaller competitors fear they may lose out.

Written by Colin Henderson

September 16, 2014 at 22:30

Posted in Uncategorized

Fun with Rogers and iPhone 6

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Just a wild guess, but this on day 3 of the iPhone 6 reservation system; could be co-incidence, but it may be time to buy more Apple stock :-)


Written by Colin Henderson

September 15, 2014 at 22:00

Posted in Uncategorized

Wells chief comments on mortgages sounds like a preview of another 2007

Wells Fargo hold a gun to the Governments head on poor quality mortgages. Somehow this article out of the blue took me straight back to 2007.

There still remains a fundamental gap in what Banks believe their role is, compared to what is expected from Government. The concept of government guaranteed mortgages helps many new homeowners but it is also a mis-used function that skews risk management. By definition it eliminates risk for banks. That seems perverse when compared to the concept of banking.

The wording of the Wells Chief struck me as something we ought to be concerned about. Do Wells have a portfolio of mortgages that they are concerned about again?

Wells chief warns on mortgage lending

“If you guys want to stick with this programme of ‘putting back’ any time, any way, whatever, that’s fine, we’re just not going to make those loans and there’s going to be a whole bunch of Americans that are underserved in the mortgage market,” Mr Stumpf told the Financial Times.

Written by Colin Henderson

August 27, 2014 at 00:17

Posted in Uncategorized

Stunning statistics on the value of the South China Sea

Zerohedge points out the value of the South China Sea, particularly the value in natural gas.

Written by Colin Henderson

August 2, 2014 at 20:32

Posted in Uncategorized


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