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Tools to connect corporate solutions to banking solutions / payment rails have been around for at least 15 years that I know of. Back in the day, we used to call them C2B (Corporate to Bank) in the ERP industry. These tools have supported programming of ACH and other rails including FPS and BACS in UK, NEFT in India, and FedWire in USA. Where Sila seems to be different is in making corporate payments near realtime via the ERC-20 token despite using the T+2 ACH payment rail. While it's innovative, Sila will join PayPal and Stripe in continuing to be unable to disrupt the world of finance because, like PayPal and Stripe, Sila will also continue to use banking rails, so how it survive by disrupting them, right? But that shouldn't stop Sila from chanting the disruption mantra since disruption may still be a major draw in securing VC funds at exuberant valuations, as I'd highlighted in Fintech Shouldn’t Stop Chanting The Disruption Mantra. 

Brilliant product. Kudos to Starling Bank. Although one whose compelling need is legalistic in nature.

Not sure how widely it's known that, according to payment card rules, debit card and credit card are not transferable. You can't authorize anyone to use your debit or credit card. The only way for Y to use X's card to shop in X's behalf is, if the bank has issued another, transferable, linked card to X, which X can legally handover to Y. This is what Starling Bank has done.

This is one of those payment card rules that's widely broken but rarely called out. Rarely, but not never, though. There was this recent case where a woman was unwell. She handed over her debit card to her husband to go to an ATM to withdraw cash. The currency notes got stuck, no money came out, but the account got debited. Woman seeks refund from bank. Bank plays back CCTV feed, says cardholder is woman, but man was using card, so there's illegal use of card, so bank is not liable for refund. The customer filed a lawsuit with consumer court but court found for the bank.   

P/E = Share Price / Earnings per Share. The Median P/E Ratio for USA is around 15 now. That means Share Price is 15X EPS. That means Share Price will be impacted 15X by Profit change. That's a normal thing. Share Prices are ALWAYS driven down or up, substantially beyond the change in profit.

Not sure what's the exact significance of the line "Expecting a decline in revenues, investors have already driven the share prices of payments companies into a steep decline, substantially beyond the actual profit impact expected." Are they saying, for example, that the impact in share price will be beyond that which is determined by P/E ratio?

America's FFIEC announced 2FA guidelines for online payments in 2005, reissued them in 2012. USA still does not have 2FA for online payments. Sky hasn't fallen with fraud. RBI mandated 2FA for online payments in India 10-12 years ago. Friction increased. Payments failed. Conversion nosedived. Fraud reduced but at the cost of transactions not happening in the first place. A couple of years ago, RBI-administered NPCI launched UPI, which makes one factor implicit by moving it to the payer's mobile phone. With some sharp implementations, many popular payment apps obfuscated the second factor as well for a vast range of usage scenarios. As a result, digital payments have become frictionless and adoption has skyrocketed.

By now, it should be clear to any regulator that 2FA is a conversion killer and blood pressure booster. If any of them is still pushing through with its mandate, I can't help believe it's only to save face. 

All agreed but, in one of the best examples of a customer-centric product design ethos adopted by the Indian banking industry, FDs can be broken in India at any time, unlike even Savings Accounts in many other countries. Just that premature withdrawal from FDs attracts a 1% point penal interest on the entire FD amount (even if only part of it is prematurely withdrawn).

So, people who need cash and have FDs, go ye forth and break your FDs. It has always been allowed in India. 

That said, I can think of two areas of relief that reliefs that the government can provide under the present Covid-19 circumstances: (1) Waive the aforementioned 1%% penal interest (2) If that's not possible, levy it only on the prematurely withdrawn amount. As things stand, if you have an INR 5L FD and need only INR 2L, you break the entire FD, redeposit INR 3L and incur the penal interest on the entire INR 5L. Under my proposal, the govt should slap the penal interest only on the prematurely withdrawn amount of INR 2L. 

Commercial Banks' fear is justified at first blush. As Tech Review recently pointed out, FedAccounts - the accounts that individual Americans will have directly with central bank Fed - is an IOU from Fed, a sovereign body compared to normal bank accounts, which are IOUs from non-soveriegn private sector banks. People are more likely to trust a sovereign IOU than a non-sovereign IOU, thus causing a transfer of money from private sector bank accounts to FedAccounts. 

However, on deeper analysis, Fed may simply not have the bandwidth to absorb all - or even 50% - of the deposits currently kept at private sector banks. Ergo, this may not be the existential threat to private sector banks and some fear.  

Even within private sector banks we see this issue in another form. Some banks in India offer 4% interest rate on savings accounts whereas others offer 6%. Both categories are sovereign guaranteed via the same amount of RBI-DICGC insurance limit. Still the former cohort of banks has a higher market share than the latter cohort.

At first, many products / services seem like commodities and pundits claim that only price matters, but, in actual practice, many more factors start mattering *after* consumers start experiencing them, and price is no longer the only driver of purchase. 

I too am not a fan of letting personal and country-specific comments be posted anyonymously. Years ago, I appealed that, in the interest of establishing a level playing field, Finextra should stipulate that anonymous comments (A) should not include references to any country at all (hard to implement?) OR (B) should include the commenter's country as well (easier to implement?).

If both options are hard to implement, here's a third option for Finextra's consideration: 

(C) Warn people posting anonymously that, ex post facto, if it's brought to Finextra's attention that the comment makes personal and / or country references, then Finextra reserves the right to "out" the name and country of the commenter.

I'm sure Option C would act as a suitable deterrent against anonymous personal and country comments. 

I'm no techie but, as far as I can see, Option C won't require any website code change and can be implemented by merely adding a short slug of text next to the "Anonymously" radio button in the comment box. 

Hi Finextra: Got a link to the Revolut research paper?

In Fintech Shouldn’t Stop Chanting The Disruption Mantra, I predicted:

"Disruption is hard in actual practice. Sooner or later, when the forecasted numbers prove to be a mirage, many of these fintechs will be squeezed for funds."

The fund squeeze has come, albeit via a Black Swan event.

Time will "stress test" my other prediction that the surviving fintechs will sell out to Banks.

I must hasten to add that "first time fraud reimbursement" is itself fraught with huge moral hazard and can be a big source of "first party fraud". When someone knows he can claim APP fraud and get his money back, there's nothing stopping the fraudster from sending money to an accomplice and getting it reimbursed by the bank.

Still, I recommend it, in the largest interest, but with an upper limit or only when fraud happens the first time the app is used.