The credit-card duopoly is crashing the faster-payments party
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Digital, NEO, Open Banking, Open Finance
Mastercard and Visa seek to get the most out of the digital-payments boom
The Economist | Oct 3, 2020
The credit-card duopoly is crashing the faster-payments party
THE GREATEST accolade a payment system can aspire to is to be forgotten about. “People don’t want to make payments,” says Diana Layfield, an executive on Google’s payments team. “They want to do what a payment facilitates.” The industry’s biggest battles therefore often happen in the shadows. The latest struggle, which sees card networks, tech firms and governments vie to control the virtual pipes along which digital money flows, is no exception. Recent manoeuvres by governments, card networks and even SWIFT, the main interbank messaging service for cross-border payments, show how the battle lines are shifting.
“People don’t want to make payments,” says Diana Layfield, an executive on Google’s payments team. “They want to do what a payment facilitates.”
An electronic-payment system used to resemble a postal service for money. Many countries have a low-cost, national payment network, mandated by the government, that transfers funds between banks. Like post, the money could take days to arrive; tracking it was tricky. So automated clearing-houses (ACH), as the national systems are known, were mostly used to disburse recurring payments, such as payrolls or benefits, which do not need immediate authorisation.
For one-off transactions, like shopping, people used private card networks, which allow for instant checks via technology embedded in terminals.
As the digital economy has boomed, however, many governments have upgraded the pipes so they can clear and settle online transactions in seconds. Today 55 countries, from Canada to Singapore, have “real-time” bank-to-bank payment systems.
Credit-card firms, though, sense a threat. So Mastercard and Visa, which together handle 90% of global card payments outside China, have found a clever response: to get in on the action. On September 29th Mastercard said it would collaborate with ACI Worldwide, which makes software for real-time payments systems, to provide such services globally.
See:
Accelerating winds of change in global payments
UK government open banking tender puts focus on payments
Google and Gates Foundation to help spread digital payments in developing countries
Visa’s digital dollar concept opens a door to central bank currencies
Mastercard to Acquire Finicity to Advance Open Banking Strategy
FFCON20 Video: The Future of Paytech
On September 17th Swift unveiled a strategy to “facilitate instant, seamless, secure payments” using cloud technology. That would be like leaping from the costly and cumbersome process of sending a parcel abroad to the convenience of email. SWIFT’s plans could fast gain traction; the co-operative has more than 11,000 members, most of which are banks.
But the card networks see an opening here too. Last year both Mastercard and Visa acquired firms that process bank-to-bank transfers by connecting directly into local clearing systems.
Plastic is becoming less of a mainstay: this week Mastercard called itself a “global multi-rail payments technology company”.
Paul Stoddart, who is in charge of new payment platforms at the firm, describes its forays as a way of offering customers choice.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
|---|---|---|
 |  |  |
BrightTALK Webinar: Scaling Digital Banking Channels for Growth – Securely
BrightTALK | Webinar | Sep 30, 2020
Live Webinar:
Build trust, grow revenue and mitigate risk with the rise in digital transactions
Date: Oct 6, 2020
Time: 1:00pm CDT (Chicago, United States) / 2pm EDT
Length: 75mins
Consumers expect seamless and safe transactions through digital channels, and will seek out organizations that will meet their needs. With the recent COVID-19 pandemic, the shift to digital channels has been leaving many organizations scrambling to keep up. Financial institutions must now adapt their services to scale in digital channels to better serve their customers, yet the struggle of how to provide a secure yet seamless experience still remains.
See: Digital IDs Help Open Banking Reach Its Fullest Potential
At least 1 in 5 U.S. consumers polled by TransUnion have already been targeted by phishing and other economic environment COVID-19-related digital scams, while a 14% increase in risky financial services transactions has been observed by TransUnion.
Fortunately you can optimize your digital channels, grow revenue and mitigate your risk while providing an engaging experience. Please join Peter DeMars, CFE UMB Bank, Adam Miller, Director - CX practice from Temenos, and Matt Johnson from TransUnion (formerly iovation) as they discuss:
● How to manage the rise in digital transactions, and turn it into an channel for growth
● How to proactively address increasing and changing fraud such as such as account takeover, phishing and first party fraud
● How you can streamline decisioning and risk management to secure trust with device intelligence, real-time identity data checks
● Discover actionable strategies for success in the post COVID-19 environment
Register for this free webinar --> Now
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Global Risk Institute Report: Discussing Open Banking Regulation for Canada
Global Risk Institute | Markos Zachariadis, University of Manchester | Sep 24, 2020
Executive Summary: Data-sharing frameworks in financial services: Discussing open banking regulation for Canada
Data-sharing frameworks in financial services are becoming increasingly prevalent with the potential to shape drastically the future of banking and finance. As data assets are of strategic importance to financial institutions and central to their ‘datafication’ and digital transformation processes, sharing and accessing new data can alter the dynamics of competition and lead to the emergence of new players as well as nascent markets.
Innovative technologies such as application programming interfaces (APIs) can help simplify data communication between systems and thus standardize the exchange of information between organizations allowing them to experiment with new, more open, business models. APIs also give the ability to effectively control openness and orchestrate ecosystems of third-parties that can add value to organizations’ supply chain and end users. Having said that, the deployment of open APIs in financial services raises numerous questions regarding the appropriate regulatory (or not) framework and infrastructure for opening up data in the banking sector.
See:
Open Banking – North American Style
Explore Fintechs in Canada
Sign-up for NCFA's Weekly & Insights Newsletter
The current paper examines the potential for an open banking framework in the Canadian market and makes an effort to identify the regulatory, economic, technological, sociological, and political debates in the industry concerning data openness. During the course of the study there was consensus from participants that discussing the “merits of open banking” or opportunities that it will bring is an outdated topic and instead the discussions should focus on the real issues and ‘pain-points’ around open banking implementation in Canada.
Following a good number of interviews with FinTechs, challenger and incumbent banks, regulators, legal experts, consultants, and financial services professionals (in various part of the business as well as IT) in the Canadian market, the paper outlines a number of themes and frictions that the industry as well as policy-makers in Canada should consider when implementing an open banking framework.
We believe that the findings can be generalized and be useful for practitioners and regulators around the world when exploring similar frameworks.
Continue to the full article --> here
Download the 38 page PDF report --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
SkipTheDishes co-founders look to shake up banking as Neo Financial hits the market
Betakit | | Sep 23, 2020
Neo Financial, the new Canadian FinTech startup focused on challenging the status quo in banking, has begun rolling out its services in Western Canada.
Neo Financial is a Prairies-based startup created by SkipTheDishes founders Andrew Chau and Jeff Adamson, alongside Kris Read. It is the newest challenger bank entrant into the Canadian financial market and is on a mission to re-imagine everyday banking.
After spending the first year and a half of its existence building out its tech and banking infrastructure, Neo has officially brought its financial services offering to market.
Over the last couple of weeks, Neo began offering its savings account, Mastercard, and merchant rewards program to a select number of individuals on its 30,000-plus waitlist. With a current focus on Western Canada, Neo hopes to have its products available across Canada later this year.
See:
Open banking would help the recovery
Refusal to embrace open banking puts Canada behind yet another curve
C.D. Howe Institute Report: Open Banking Holds Promise, Risks for Consumers
Rebank Podcast: How to Build a Profitable Digital Bank with Tinkoff
Chau, Neo’s CEO, recently spoke to BetaKit about the startup’s go-to-market strategy and its goal of shaking up the Canadian financial services market.
“What made us successful as SkipTheDishes was focusing on Canada, and really focusing on adding value back to the consumers, but also back to businesses too,” said Chau regarding the rewards program. “So, with Neo what we wanted to do was create a consumer experience that leveraged not only technology to help drive that, but also leveraged partners too.”
“When we think about other challengers in FinTech, it’s a good thing that we all are driving towards acclamation into the Candian ecosystem,” Chau stated. “One of key pieces [Neo] has is not just building a fancy app, [but] what we’re building is a foundation for a bank that can compete with the Big Five.”
“Through our strategic partnerships with financial institutions, we’re building a platform that challenges Canada’s traditional banking system,” he added. “Because of our unique partnerships and how we’ve built our technology from the ground up, we’re able to grow faster and innovate without the same limitations others face in the industry.”
While Neo is currently partnering with financial institutions, the CEO pointed to his startup’s openness to potentially obtaining its own banking license – a process that is difficult to navigate within Canada.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
C.D. Howe Institute Report: Open Banking Holds Promise, Risks for Consumers
C.D. Howe Institute | Sep 10, 2020
September 10, 2020 – The path towards safe and secure implementation of open banking should be guided by three consumer-focused pillars, says a new report from the C.D. Howe Institute.
Open Banking – North American Style
UK government open banking tender puts focus on payments
In “Open Banking in Canada – The Path to Implementation,” authors Thorsten V. Koeppl and Jeremy Kronick lay out a roadmap to guide Canada’s upcoming open banking consultations, and explore the potential benefits and risks to consumers.
Open banking gives customers of financial institutions control over when and how to share their financial data, putting households and businesses back in charge of deciding when a provider can access their data. “Open banking breaks the monopoly banks and non-bank financial institutions currently have on their customer data,” write the authors.
Koeppl and Kronick propose a gradual, step-by-step implementation approach, introducing open banking to financial services with the least regulatory hurdles first. They also suggest the open banking roadmap be guided by three core objectives: generating value for consumers, building secure infrastructure for data sharing, and improving the regulatory framework to protect consumers.
The authors argue that constrained market experimentation should underpin generating value for consumers. Third-party providers, such as “Fintechs,” should be allowed to start offering their services to consumers in a controlled environment where policymakers take into account potential risks.
“In the long run, for open banking to become an unequivocal success, Canada will require a fundamental and extensive overhaul of its regulatory framework,” conclude Koeppl and Kronick. “Open banking may very well be the catalyst to achieve such change. If not, Canada is unlikely to realize the same benefits from Fintech that other countries like the UK or Australia are likely to enjoy.”
FFCON20 Video: Transformation of Digital Banking to Open Finance
FFCON20 Video: Adam Felesky Fireside keynote with Kevin Carmichael - Can Fintechs Succeed and Open Banking?
Secondly, building secure infrastructure for data sharing would ensure consumers gain control over the data they generate. Technology needs to be standardized and improved so consumers can manage data access everywhere in a secure and easy way. As such, the authors call for clear legislation for data privacy, a digital ID system, and a clear liability framework regarding data sharing and usage.
Lastly, Canada’s regulatory framework needs to be brought into the age of Fintech through a new framework for handling consumer complaints from third-party providers and streamlined financial regulation across jurisdictions.
Continue to the full article --> here
Download PDF Report (24 pages) - Open Banking Implementation -> Now
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
How Fintech is Changing the Mortgage Industry
Guest Post | Sep 8, 2020
When it comes to changing the way we utilise financial services, fintech is beginning to significantly impact the mortgage industry. With new companies continuously redeveloping approaches to home buying, future homeowners are being provided with convenience, quality, and personalisation.
Using Tech to Address the Downsides of Buying a Home
As of right now, the housing sector continues to depend principally on the traditional mortgage market – for prospective homeowners, this is a complex and bloated process with significant room for growth.
Where in particular is there room for improvement? There are a number of answers, according to various fintech firms worldwide. Tic:Toc home loans is such an example, with the start-up aiming to offer 22-minute home loan applications through the use of digital technology that processes an application automatically, in real time.
For another point of difference, REALas is a digital platform that has highlighted the need for predictable and accurate property pricing. Their claim involves a proprietary algorithm that accurately speculates sale prices, with predictions averaging within 5.4% of the actual price.
See: Where are the Biggest Fintech Startup Hotspots Around the World?
With a different approach to the industry, Effi utilises AI in offering what they claim to be “the smartest mortgage broker platform ever built”. This focus on integrated efficiency, effectiveness and customisation aims to move the industry beyond traditional CRMs and lead management tools, automating and streamlining the mortgage broker job process.
A final example, Lucas, provides an innovative approach to addressing the problem consumers face when raising a deposit for a mortgage. Lucas has redefined the concept of the mortgage, facilitating home ownership through renting. The company purchases properties from real estate funds, before making them available to pre-vetted tenants who will initially contribute as little as five percent towards the property purchase price.
The Impact of Fintech Businesses Transforming Consumer Experiences
Given the extremely high value of property markets in any given country, online only fintech businesses are threatening a significant impact on banks and credit unions that have traditionally dominated the mortgage market.
Not only does fintech hold a remarkable percentage of refinanced loans (in the US, fintechs originate more refinanced loans than a combination of their 5 largest banks), but US market share of traditional lenders decreased by 22% from 2007 to 2014. Lower mortgage closing times, higher innovation and flexibility, and more targeted offerings are aspects and goals that traditional lenders will need to work towards in order to remain competitive, and many are doing so.
Big Bank Fintech Investment
It is clear that not only start-ups that are showing interest in fintech within the mortgage industry - when it comes to Canada, there is significant disruption within the financial services and mortgage sectors. Despite ranking a low 23 out of 27 countries in the market adoption of fintech, Canada is ahead of the US, France, and Japan. In particular, the Bank of Nova Scotia has developed ‘eHOME’, a tool that digitises the entire mortgage process in real time, allowing the elimination of contact with financial advisors and mortgage specialists.
Overseas, big banks such as Westpac in Australia are making significant investments. Both in the form of big commitments such as backing venture capital firm Reinventure, and in small features like their flexible mortgage calculator (click here to check it out), Westpac is making a point of demonstrating the feasibility of fintech services within the banking and mortgage industries.
US banks are also getting involved, with 24 equity deals to fintech’s in 2019. Some mortgage start-ups that have been backed by US banks include Built, Rabbet, and Trussle.
The Future of the Mortgage Industry
The commitment to innovation and fintech by a range of companies across the mortgage industry highlights the increasing role that technology is having in reshaping financial markets.
The various service offerings that are becoming available within the property market are continuing to shape business models, push new customer experiences, and scale companies more rapidly. Ultimately, the mortgage industry is in the process of exciting change – being a previously underdeveloped area within the financial sector, there is still much to look forward to when it comes to fintech and property.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
UK government open banking tender puts focus on payments
Global Government Forum | Ian Hall | Sep 3, 2020
The UK’s journey towards implementing open banking to deliver citizen services has taken a significant step forward with the opening of what is believed to be the country’s first government tender specifically for open banking.
In a move that will be greeted by open banking’s advocates as a breakthrough statement of intent, HM Revenue & Customs (HMRC) is running a £3m (US$3.92m) tender for ‘Payment Initiation and Account Information Services’.
HMRC has been working alongside the Open Banking Implementation Entity (OBIE) – a company set up by non-ministerial government department the Competition and Markets Authority (CMA), and funded by the UK’s nine largest banks and building societies – on devising the procurement exercise.
The technology behind open banking, application programming interfaces (APIs), enables bank account holders to share information with third parties.
See: Open Banking – North American Style
HMRC’s tender focuses on ‘Payment Initiation Services’ (PIS), which – its proponents believe – should mean a simpler and more secure payment process for citizens who wish to pay HMRC via bank transfer.
The aim is that citizens making payments will not need to manually input as many details as would have been required through traditional methods. For example, there would be no need to enter details such as a reference number, payment amount and card number when paying a bill. Instead, customers would need to check and authorise a ‘pre-populated’ payment. Any increased use of bank transfer over card payments should mean cost savings for government.
Aiming to reduce payment costs
“Currently, our bank transfer journey is non-automated which can result in a high volume of customer errors that are resource-intensive to rectify,” according to technical details that relate to the HMRC tender notice. “By providing an innovative, well-designed journey that can be populated with our numerous reference formats and HMRC bank accounts, with little effort from our customers, we believe we can encourage card-payers to move to this more cost-effective method and subsequently reduce our payment associated costs significantly.”
The technical note also demands that the appointed service provider needs to be able to cope with HMRC workflow peaks “throughout the year” and “increased volumes during the contract period”.
FFCON20 Video: Transformation of Digital Banking to Open Finance
The tender also includes ‘Account Information Services’ (AIS), which enable third parties to access customers’ transactional data to deliver tailored financial services. Use cases for AIS in HMRC are understood to be in the development stage but HMRC included AIS in the tender to avoid the cost of a further procurement.
The HMRC contract would start in February 2021 and run initially for two years.
Cross-government exploration
Open banking, which aims to boost competition and promote transparency and innovation in financial services, is being explored – albeit cautiously – by a growing number of governments worldwide. Though examples of it being used by governments remain limited, it is seen to have significant potential in public service delivery.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
