Community

@GaryW: Wow! When LinkedIn reached the 100M user mark, I was excited to receive an email from Reid Hoffman thanking me for being one among the platform's first 1M users whose early adoption fueled its rapid growth. But your accomplishment is in an entirely different league. Congrats!

Oh, I keep getting such offers but, since I don't intend to open the attachment, I delete such emails w/o opening them just after reading their subject. 

My experience resonates well with your views about how eStatements are not suitable for increased cross-selling. As I'd highlighted in my Finextra post titled, Save Costs But Lose Revenues With eBills And eStatements, because of better open-rates and a more natural advertising experience, "Most advertisers... are willing to pay a premium for advertising on printed documents compared to eBills or eStatements."

Why do we take a regulated industry like banking and keep quoting examples of disruption from transportation, consumer electronics and other unregulated industries? I suspect it's because there are hardly any examples of successful disruptors in telecom, utilities and other regulated industries. Compared to them, structured financial products like CDO, CDO2, CDS and MBS prove that banking is a lot more innovative. The very fact that these products sold so well establishes their customer-centeredness as well. 

As I've argued in my JIBC op-ed article titled "Impact of Regulation on Financial Services Providers", some nonbank financial products are too small to threaten banks (e.g. Dwolla, PROSPER) and the others will simply cease to exist in the absence of the banking rails on top of which they’re built (e.g. Facebook Credits which has, since then, ceased to exist despite the continued presence of the underlying banking rails). 

That said, it’s not as though regulation has totally paralyzed banks. There are several areas in which banks can enhance their services to become customer-centric. But they involve operational improvements rather than large-scale innovation.

If I understand this article correctly, only businesses - not banks - are lagging behind on SEPA implementation. This matches my experience with a Top 5 UK bank that went live with SCT on the first deadline in Jan. 2008 after barely 3-4 of months of work despite having a large and complex payments landscape. Maybe this migration is far more complex and time-consuming for businesses. In which case, they might try to justify their laggard status by raising basic questions around its business case.

I think this Microsoft Research paper gets it absolutely right when it says, "Despite countless attempts and near-universal desire to replace them, passwords are more widely used and firmly entrenched than ever... and not only will passwords be with us for some time, but in many instances they are the solution which best fits the scenario of use."

In this day and age where people bare their souls on Facebook / equivalent, I wonder if any shared secret is really known only to the biller and the customer. In the interest of avoiding repetition, let me refer to my comments here.

Tell an online shopper that a certain website is insecure and, sure, she'll not go near it. On the other hand, tell her that the website has implemented the latest in security technologies and will shunt her between five different websites and lose her payment once in 12 times (Cf. Skating Away With Online Payments on my company blog). Think she'll praise all the security measures and keep trying till her payment goes through? Unlikely. As I'd highlighted in The Death Of Cash Is At Least 190 Years Away, she's more likely to pay with cash. So, there's a clear trade-off between security and convenience and, as the most interested party to the transaction, the merchant should be free to decide how to strike the trade-off.

Most ecommerce websites in the USA lack security by ROW standards in that they don't use 2FA and some of them don't even ask for CVV #s. Have they lost business? No, sir, USA remains the largest ecommerce market in the world. 

Additional authentication inevitably increases friction in online payments and causes shopping cart abandonment, which results in loss of revenues. On the other hand, it is likely to reduce fraud loss. I hope the regulators leave it to e-tailers to evaluate which of these two factors proves to be of greater importance in their specific context and decide whether or not to implement tighter security.

With Passbook, Apple distanced itself from NFC. With this patent, it has further bet against mobile payments. In this day and age where bulk of terrorist funding, money laundering and other nefarious activities are happening over wire transfers, prepaid cards and other forms of electronic payments, it's naïve to continue to associate cash with crime. With retailers in 40 US states permitted to levy as much as 4% surcharge for credit card payments, cash could actually stage a comeback for transactions that went electronic long ago. I'd written recently that tales of the death of cash are greatly exaggerated. This patent only reinforces my belief.