Community

While the need for flexibility and agility in banking applications is clear, drawing an analogy between Enterprise SOA and iTunes is oversimplifying the situation: In a playlist, each song can be placed anywhere in relation to another and doesn't have to be integrated with the other songs. Unfortunately, business workflows don't work that way - I shudder to think of the consequences for a bank if an an iTunes-inspired solutions architect decided to place the credit check and sanctions screening objects at the end of a fund transfer transaction and didn't think it necessary to integrate either of them with the payment release object. IMO, it is due to the complexities of interdependence and integration that, let alone SOA, even hub-and-spoke integration architecture has barely gained traction in banking landscapes, with hundreds of point-to-point interfaces still reigning supreme.

Biometrics in the mid-90s? We have been seeing biometric ID projects limping along (e.g. Aadhar, India) or failing altogether (UK?) several years later. Maybe the earlier proposal in South Africa failed to take off because biometrics ID was not robust enough at the time? (Some may say that it still is not robust enough even today, but that's another topic.)

Since Visa stands to lose interchange revenues as a result of this move, can't help feeling that it's going ahead with it only to stave off competition for the European launch of SQUARE, in which its has invested. 

On another note, as long as nonbank mobile payment vendors use existing banking rails, they'd always be dependent upon banks and card networks for their very existence. This is a far cry from naive expectations that they'd disintermediate banks.

While it might cost more to produce currency notes, it costs much less for merchants to accept cash as compared to debit cards or credit cards or any other form of ePayments.

Given that all cross-border payments routed via banks have to go through sanctions screening, it is evident that ePayments are not free of money laundering and other nefarious activities.

Lastly, going by this Finextra article and the accompanying comments, electronic money technologies are far from being robust enough to handle high transaction volumes. 

In short, governments are better off continuing to find ways to extend the lives of physical currency - with or without polymer.

Mutual funds pay brokerage to stockbrokers when they buy shares on your behalf. Traditional stockbrokers charge brokerage on an ad valorem basis. Hence, it should follow that the entry load charged by your mutual fund when you put money in should be a percentage of the asset value. If and when "flat fee" stockbrokers enter the mainstream and overtake traditional brokers, your wish for fixed entry load should be fulfilled.

With its candid - and, IMO, very true - comment about PayPal, SQUARE implies that it cares for its customers. I hope it lives up to this claim by refraining from putting arbitrary freezes on merchant accounts.

@BRC: Now that your bluff about PayPal being cheaper than credit / debit cards has been called by @NickC and others, are you still planning to go ahead with PayPal? If you do, hope you enjoy yourselves until you find your account frozen arbitrarily, you discover a new meaning of the term "bad customer service" and you can't find any regulator to whom you can complain.

Kudos to this move. Hopefully, it frees some bandwidth within the Payments Council to start focusing on how to make e-payments more frictionless for payers and payees instead of trying to ram them down the public's throats just because they're cheaper for banks. A true sign of Payments Council's value-add would be when consumers reduce the use of checks by themselves because they have safer and more convenient alternative payment methods. With Barclays PingIt and similar products, that day is not far away.

As long as the fiber coins are used to buy things from the same shop that issued them in the first place, there's perhaps nothing illegal about them. Therefore, the risk of any court issuing a "cease-and-desist" order are minimal. Besides, businesses like canteens have been issuing paper chits as substitutes for change for a long time in India. Furthermore, with commission on "change transactions" - 100 x 1 coins in return for 1 x 100 banknote - reportedly touching 18% (according to a parking lot attendant I happened to speak with recently), the change problem is only going to get more acute going forward. I doubt if Indian courts, who are struggling with a huge backlog of lawsuits, will be too bothered with such a typically-Indian solution to such a typically-Indian problem. Personally, I circumvent this problem by using credit cards as far as possible. Ever since I started doing this, I've been pleasantly surprised to note that, even for most categories of products of everyday purchase (e.g. fuel, groceries, cigarettes, etc.), there are several stores who do accept credit cards nowadays.

Maybe I'm missing something, but I'm unable to reconcile the first point in the second list with the first point in the first list. If 60% of B2B payers accept direct debits, how come 70% of payments are made by checks?

For many suppliers - me included! - collecting the payment in time is a major task in itself. Most incoming payments don't contain any remittance information, let alone in an industry-standard format. The second point in the second list shouldn't be a major surprise for many such suppliers.

Until e-payments permit detailed narration required for reconcilation - rather than just a cryptic message that can be accommodated in the limited lengths of their reference field - we can expect the usage of checks to continue to dominate B2B payments.