100 episodes

Podcasts from Glenbrook Partners on the latest developments in payments and fintech. Featuring interviews with opinion leaders, Glenbrook's own take on emerging technologies and industry trends, other news and views on this dynamic industry.

Payments on Fire Glenbrook Partners, LLC

    • Business

Podcasts from Glenbrook Partners on the latest developments in payments and fintech. Featuring interviews with opinion leaders, Glenbrook's own take on emerging technologies and industry trends, other news and views on this dynamic industry.

    Episode 111 - Managing Ecommerce Fraud - Colin Sims, Forter

    Episode 111 - Managing Ecommerce Fraud - Colin Sims, Forter

    The U.S. has just come off a record setting holiday shopping season with e-commerce sales rising over 18%. While the numbers aren’t in yet, there’s no doubt the fraudsters also had a record year. There are so many ways to defraud consumers, merchants, and financial institutions.
    At Glenbrook, we are optimistic about our longer term ability to deter, prevent, and detect fraud. Our kit is getting better. The combination of tech and rule making will payoff: strong authentication enabled by standards-based smartphone-enabled biometrics; regulations requiring strong authentication as put forward in the EU through its SCA rules; and our expanding ability to detect new attacks using tools that operate within the transaction flow.
    It is this last area that is the topic of this Payments on Fire® episode. Fraud detection tools operated by or on behalf of merchants that examine transactions are today’s major line of defense against payment, loyalty, and coupon fraud. In this conversation with Colin Sims, COO of fraud prevention company Forter, the development, deployment, and maintenance of a modern fraud management platform is the topic.
    Colin and George discuss how fraud management and prevention technologies continue to evolve, Forter’s own approach, the role and impact of PSD2 and SCA regulations in the EU, and how fraud continues to adapt. While machine learning is a central technology, Colin makes clear that human effort and insight is what makes the difference.

    • 40 min
    Episode 110 - Building Out and On a National Faster Payments System

    Episode 110 - Building Out and On a National Faster Payments System

    Deployment of “clean sheet of paper” payment systems is a once in a generation event. In over 50 countries, new account-to-account push payment systems are either in full scale operation, implementation, or fully committed planning stages. The U.S., for example, has the RTP Network in operation and, in a few years, the FedNow system will be online.
    This is hard, serious work. Technology decisions need to be paired with equally rigorous rules making. One of the major concerns for these systems is what to do when a transaction is sent in error or initiated by a fraudster. In contrast to card systems, dispute resolution capability is not a standard feature. These choices should reflect clear agreement and follow through by the system’s key participants.
    In this Payments on Fire® podcast, Glenbrook’s Elizabeth McQuerry talks with builders of dispute resolution, complex messaging, and connectivity capabilities developed around Australia’s New Payments Platform (NPP).
    Joining Elizabeth are Jack Baldwin, Chairman of BHMI, a U.S.-based developer of bank-grade settlement and reconciliation systems, and Nathan Churchward, Head of Product, Emerging Services at Australia’s Cuscal Limited. Cuscal is a developer of payments capabilities that include card issuing and acquiring, mobile payments, fraud prevention, switching and settlement.
    There’s a lot to be gained by learning from someone else’s experience. Nathan and Jack address the dispute resolution process, ISO 20022 messaging, and the significant effort needed to build out systemically important payment infrastructure. Take a listen and you’ll gain a deep appreciation of the interplay of rules, regulations, technology, and effort.
    Glenbrook Partners is working with the U.S. Faster Payments Council to help shape rules in the U.S. and address significant concerns around system interoperability, directory services, and dispute management. Take a look at the Faster Payments Barometer based on our industry survey. And visit the U.S Faster Payments Council site for more. 

    • 35 min
    Episode 109 - Bitcoin SV, a Payments and Data-focused Path in Bitcoin Evolutio - Jimmy Nguyen, Bitcoin Association

    Episode 109 - Bitcoin SV, a Payments and Data-focused Path in Bitcoin Evolutio - Jimmy Nguyen, Bitcoin Association

    If you thought bitcoin was dead as a payments system, take a listen to George and Jimmy Nguyen, founding president of the Bitcoin Association, as they discuss Bitcoin SV, a new version of bitcoin that is a significant upgrade to the performance and capabilities of the original bitcoin protocol put into the world a decade ago.
     
    From a payments perspective, bitcoin has failed. While successful as an albeit volatile store of value, its failings include:
    It is slow, only able to handle 2 or 3 transactions per second with a peak rate of 7. Visa handles 50K at peak holiday times with aplomb. While transactions are irrevocable, they are not immediately written to the blockchain. Core design specifies that that happens every 10 minutes but when the network is under load it has taken hours. Processing cost is too high, measured in dimes and dollars, and also volatile As the processors, known as miners, are rewarded with fewer bitcoins for their work, they’ll have to rely on processing revenues, transaction fees, to stay viable. Costs are already too high There’s the high power usage of the network that’s needed to maintain consensus, essentially trust in the network. If you thought bitcoin was dead as a payments system, take a listen to George and Jimmy Nguyen, founding president of the Bitcoin Association, as they discuss Bitcoin SV, a new version of bitcoin that is a significant upgrade to the performance and capabilities of the original bitcoin protocol put into the world a decade ago.
    Jimmy brings a refreshing view on cryptocurrencies and payments. Jimmy provides a great review of how bitcoin works and why both its performance and its economics are broken. He explains the advantages of the Bitcoin SV fork and why it was necessary. Suffice it to say, bitcoin’s evolution is subject to the often fractious politics of that community where competing interests inhibit long term thinking.
    Bitcoin SV has intriguing potential. Micropayments, sub $1 transactions, have never found a home in electronic payments. BSV could apply there.
    BSV is also designed to use enormous blocks in order to keep processing costs low and provide the ability to store massive amounts of data about the payment. 
     

    • 37 min
    Episode 108 - B2B Payments for the Massive Insurance Segment - Jeff Brown, VPay

    Episode 108 - B2B Payments for the Massive Insurance Segment - Jeff Brown, VPay

    Join Jeff Brown, president of VPay, a firm specializing in insurance claims payments, and George Peabody of Glenbrook Partners in this deep dive discussion of how the work of claims processing is done and how he approaches B2B payments, compliance, and the value-added services needed by the company’s customers.
    The B2B Domain
    We’re all familiar with the card present POS domain, card not present Remote domain, P2P payments, and the Bill Pay domain. A phone tap here, a card swipe there, a bill payment to the utility company. On a day to day basis, our personal experience with payments is these areas.
    The B2B and B2C payment domains are very different. There is a wide range of industries with very specific payment needs. (Listen to episode 92  to hear how customized payments can become. Roadsync’s Robin Gregg talks about the special paper check type built just to serve independent long haul truckers.)
    Insurance is Huge
    One of the biggest industries is insurance. Premium payments in the U.S. alone are over $1.2 trillion. Payouts by stakeholders, such as healthcare systems and property & casualty insurers, and made to individuals claimants and service providers amount to trillions more.
    Insurance is definitely big enough to be a very attractive vertical to a payments service provider.
    Knowing Your Customer's Business
    If you are a PSP serving a particular vertical market in the B2B space, you have to know at least as much about the vertical you serve as you do about payments operations and services. For example, if you’re making healthcare payments, you have to comply with the strict data privacy requirements specified by HIPAA regulations. You may have to support specific data formats. And you should help your business customers deliver useful features to their own customers.
    If you want a great explanation of how payments fits into a vertical market, you can’t do better than listening to this episode of Payments on Fire®.

    • 43 min
    Episode 107 - The Financial Inclusion Impact of the Digital Wallet in Columbia - Hernando Rubio, CEO, Movii

    Episode 107 - The Financial Inclusion Impact of the Digital Wallet in Columbia - Hernando Rubio, CEO, Movii

    Digital disruption and financial inclusion are focus areas throughout the developing world and the topics are white hot in Colombia. Listen in as Hernando Rubio, CEO of Moviired, speaks with Elizabeth McQuerry and George Peabody about Movii and payment / financial inclusion ecosystem in Colombia.
    Financial Inclusion in Colombia
    Although one of the first countries in Latin America to make a big policy push for financial inclusion, those efforts focused a “banking correspondents” or agents in local stores carrying out basic financial services on behalf of banks. While these correspondents greatly improved access to financial services, they have not fully produced the desired results. According to the World Bank, fewer than half of all adults have a bank account and only a handful (less than 5%) have a transaction account from a telco led service. Very few Colombians use those accounts to pay bills or buy something on the internet. Cash is still preferred.
    Enter the SEDPEs
    In 2015 regulators in Colombia created a new category of licensed financial institutions called a   special company for electronic deposits and payments, or SEDPE by the Spanish language initials. While a bank can also pursue this type license to focus financial inclusion efforts, the main conceptualization of SEDPEs are fintechs that gain authorization to take deposits and make payments – the two most basic (and still lacking) aspects of financial inclusion. SEDPEs are not allowed to make loans but can partner with others to make small credits available.
    Movii
    Rubio’s Movii was the first SEDPE to be authorized by regulators. Movii is a classic digital service that offers a wallet for storing funds, access to a reloadable debit card from Mastercard for buying in stores and on the internet, bill payment, mobile top ups and transfers to other Movii users. Movii also recently connected to the new national real-time payment service (Transferencias Ya) in order to be able to reach all account holders in Colombia. Movii builds off the company’s experience managing Moviired, an extensive network of physical agents in stores and bank correspondents throughout Colombia, that people use for those basic payments. Hear how a company disrupts itself as it lays the foundation for the next generation of financial services.

    • 37 min
    Episode 106 - Payments Infrastructure for the ISV - Richie Serna, Finix

    Episode 106 - Payments Infrastructure for the ISV - Richie Serna, Finix

    The merchant acquiring industry continues its large scale shift from a payments-led to an operations-led purchasing decision for the merchants it serves. Historically based on independent sales organizations (ISOs) and non-bank acquirers, the party that increasingly provides payment acceptance is the independent software vendor (ISV).
    This makes sense for a number of reasons:
    Software is Vertical. Today, the first IT choice more merchants make is the software they use to run their business. This makes sense. Tools that improve overall business operations have a greater impact on success than the comparatively minor differences among payment providers. Auto parts stores need inventory management. Salons need scheduling. Ice cream and coffee shops need quick order entry. Daycare providers need security controls. Payments are Horizontal. Every merchant, regardless of its segment, needs to take payments. While many segments have particular requirements for payments, payment acceptance alone is a commoditized service. The ISV is the First Point of Contact. Given its primary role, the ISV has moved into an excellent position to sell and profit from payment acceptance. Taking a Back Seat in Selling, Payments is Infrastructure. The payments industry has multiple ways of enabling ISVs to sell payments. The ISV may use a gateway to reach multiple acquirers with the gateway itself selling value-added capabilities in areas like fraud management. The ISV may use the payfac model for fast onboarding of new merchants. The ISV may, itself, become an ISO. Multiple forms of business relationship all provide some measure of revenue sharing with the ISV. Differentiation in Payments Via New Paths
    Differentiation based on value-added services drive revenue in payments. For that reason, we have seen non-bank acquirers and ISOs focus on particular vertical market segments to drive and secure long term revenues. A decade and more ago, Heartland Payment Systems (acquired by Global Payments) doubled down on the restaurant vertical by developing special services for restaurant operators as well as acquiring restaurant-focused ISVs. That lesson has been learned by many since.
    Over the last few years, differentiation has also stemmed from how well the payments provider serves the ISV and its developers. Integration of payment services both into the ISVs code and within the provider’s own code base is important. A single API that exposes all of a provider’s services is preferable to integration work requiring knowledge of an API tied to each function. Micro-services based capability is also welcome.
    Payment Facilitation as Enabler
    While not, in and of itself, a new approach, the payment facilitation model is a major enabler of payment service delivery via ISVs. The payfac model is based on network rules that allows an intermediary to act as the merchant of record in order to provide payment system access to smaller merchants. PayPal did this first for ecommerce merchants. Stripe is another card not present example. Square used the payfac model to offer sellers in the physical world access to card acceptance.
    ISVs who become payfacs assume responsibility for the activity of their small merchant customers. So, choosing to become a payfac has its complexities and risks. A number of providers, including Finix, bring expertise in the payments facilitation model to help ISVs make that decision.
    In this Payments on Fire®, take a listen to Glenbrook’s Nicole Pinto, Drew Edmond, and Finix CEO and founder Richie Serna as they discuss the payfac phenomenon and the larger shift to the ISV as payments provider. This is a cool conversation about a sea change event in the merchant services industry. 

    • 28 min

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