Snippets

The US Treasury's report on "Nonbank Financials, Fintech, and Innovation" prepared in response to Mr. Trump's "Executive Order 13772 on Core Principles for Regulating the United States Financial System" is, I have to say, most comprehensive. Payments Treasury recommends that the states work to harmonize money transmitter requirements for licensing and supervisory examinations, and urges the Bureau to provide more flexibility regarding the issuance of remittance disclosures. Treasury encourages the Federal Reserve to move quickly in facilitating a faster retail payments system, such as through the development of a real-time settlement service that would allow for more efficient and widespread access to innovative payment capabilities. Such a system should take into account the ability of smaller financial institutions, such as community banks and credit unions, to access innovative technologies and payment services.

xxx "overdraft and returned-check fees (NSF) [were] $15 billion in 2015… nearly twice what the entire payday lending industry earned in interest and fees in 2015. It also approached the $18.4 billion earned by the entire US banking system on merchant interchange from all debit card and general-use prepaid cards in that year. And it was considerably greater than what banks earned on all other deposit account fees combined." From "The Ends of the Month: The Elephant in the Room – CFSI – Medium" . xxx

xxx “Our cash payments continued to decrease rapidly year on year, so we’ve known for a while that we wanted to go cashless, we just needed the guts to go and do it,” From How small businesses can prepare for the rise of the cashless economy . xxx

xxx Banks maintain that contactless is safe, and card cloning is not cost-effective for thieves. From ‘I went on holiday – so how was my card used for a £600 spree at home?’ | Money | The Guardian . Not cost effective in the sense that it is not possible. If thieves do find a way to extract the private keys from the tamper-resistant chip on a contactless card, they the entire payment card system will collapse overnight. Don’t panic about it: they haven’t, and they are extremely unlikely to.   In 2015 consumer group Which? used cheaply bought card readers, and freely available software, to remotely “steal” key details from a contactless card and use them to buy items online, one of which was a £3,000 TV. From ‘I went on holiday – so how was my card used for a £600 spree at home?’ | Money | The Guardian .   Ah. I see what you’ve done there. You’ve taken the card number and expiry dates, which are in any case printed on the front of the card (and even embossed to that you can

xxx When economists say that one of the functions of money is to act as a store of wealth and that one of money's desirable properties is constancy of value (as measured by constancy of average prices), we are entitled to ask: How do you know this? Why should prices be stable? From cwpe1842.pdf . xxx

xxx Banks maintain that contactless is safe, and card cloning is not cost-effective for thieves. From ‘I went on holiday – so how was my card used for a £600 spree at home?’ | Money | The Guardian . It’s not cost effective because it is impossible and has never happened.

I’ve been thinking about games again, mainly because my good friend and futurist Lynette Nusbacher has been play testing a Brexit negotiation game as part of the fascinating work she does helping governments and businesses with their scenario planning. I’m really looking forward to playing it as part of the Wessex Separatist faction. I love tabletop games. My favourites are, I imagine, the same as everyone else’s: Settlers of Catan (which many believe to the be the best board game of all time), Dominion , Carcassone , that sort of thing. My sons and they friends’ recent favourite was  Game of Thrones  (and we had a few late night sessions with all of them around the Westeros map) but we’re currently into Wasteland Express, which is a sort of Mad Max (or The Domestics) meets the commodity markets resource trading game, so when we’re not playing Dungeon & Dragons 5e, we’re playing that...   It’s a very good game with excellent mechanics. You’re basically like Furiosa driving

xxx Once the currency is launched and Scotland becomes an independent country, it will be responsible for managing its currency in the same way that every other country that has its own currency From How to Launch a Scottish Currency | CommonSpace . xxx

xxx Would removing the 1p and 2p coins from circulation cause inflation? Or deflation? Or neither? Our analysis, and the overwhelming weight of literature and experience, suggests it would have no significant impact on prices because price rounding would be applied at the total bill level, not on individual items and it would only affect cash transactions, which make up a low proportion of spending by value. From Opposing change? The price impact of removing the penny | Bank Underground . xxx

xxx In some European countries — Finland and the Netherlands are good examples — both retailers and consumers have spontaneously abandoned low-value coins. Transactions are automatically-rounded (by custom and practice, not by law) to the nearest five euro cents and the one- and two-cent coins are just thrown away. From What would you toss? | Consult Hyperion . xxx

xxx We should not be investing in producing coins with a better anti-counterfeiting coating, we should be letting coins fade into oblivion, starting with an immediate end to the production of 1p and 2p pieces. From Let the coins go | Consult Hyperion . xxx

xxx "This is because the FCA has categorised [e-money and payment institutions] as having a low potential for negative impact on consumers and markets. They, like most of the firms within the FCA’s remit, are supervised as a sector, or sub-sector (what the FCA terms a ‘portfolio’)," From "What the FCA really wants from e-money and payments institutions » PaymentEye" . xxx

Tellme Networks and other companies are developing voice-recognition technology that will allow people to navigate the Net from a phone by asking verbally for things like stock quotes or movie locations… If that happens, the new voice services could have a powerful effect on electronic commerce. Incidentally, this quote comes from an article in Business Week two decades ago [ Rosenbush, S. "The Talking Internet" in "Business Week" (1st May 2000)].

xxx Amsterdam and seven other popular cities are asking the United Nations for help in dealing with the problems of overcrowded city centers and overheating housing markets. The cities hope the UN will put pressure on national governments to intervene From Amsterdam asks UN's help on housing market problems | NL Times . xxx

xxx Without clear regulations, cryptocurrency innovation in the United States is being stifled. From How Regulation Could Help Cryptocurrencies Grow . xxx

xxx Our research has found that security instructions described in terms and conditions of banks are inconsistent, confusing and far exceed what customers do in practice and what they can achieve with realistic effort. Therefore failing to take appropriate care should not be defined in terms of non-compliance to such documents. Banks should present evidence that their authentication systems will lead customers to act in a way that would allow them to readily prevent fraudulent transactions. From Will new UK rules reduce the harm of push-payment fraud? – Bentham’s Gaze . xxx

xxx The social-media giant has asked large U.S. banks to share detailed financial information about their customers, including card transactions and checking-account balances, as part of an effort to offer new services to users. From Facebook to Banks: Give Us Your Data, We’ll Give You Our Users - WSJ . The story goes on to say that banks "face pressure to build relationships with big online platforms, which reach billions of users and drive a growing share of commerce”.

xxx Quietly, some shops and restaurants in Dallas are following suit. Managers and business owners say that most customers, plastic already in hand, don’t even notice the policy. The few that do attempt to pay with cash usually listen demurely to the reasons that cashless is the new king before pulling out their cards. From Why Some Dallas Shops and Restaurants Are Going Cashless - D Magazine . xxx

  xxx "Lawmakers should authorise the creation of a ‘fintech’ charter allowing new entrants to do some things that only banks can do now. We need to break the banks’ monopoly. The Office of Comptroller of Currency has been considering such a charter, but its legal basis is shaky, and lobbying has stalled the effort." From "Fintech in the US is stymied by old-fashioned regulators | Financial Times" .   xxx   xxx “An OCC fintech charter is a regulatory train wreck in the making,” declared the Conference of State Bank Supervisors. From Controversial New Bank Charter Sparks Fears of a 'Fintech Apocalypse' .   xxx

xxx n our paper, we exploit the differential impact of the SEC reform on the different segments of the MMF industry as a quasi-natural experiment to estimate the premium investors are willing to pay for money-likeness. In particular, we look at the difference between the net yield offered by prime MMFs and that offered by government MMFs (the net-yield spread) and test whether such difference increased around the implementation of the reform (that is, we employ a difference-in-differences approach). Holding everything else constant, if investors value the money-likeness of their MMF shares, we expect the net-yield spread between prime and government MMFs to widen, and to do so to a greater extent for institutional funds. This is indeed what happened! From The Premium for Money-Like Assets   Liberty Street Economics . xxx

xxx If regulated payment providers use this data wisely, bank-to-bank bank payments will get smarter, more secure and more reliable. For example, an AISP may ensure that a payment is only triggered when money is in a customer’s bank account, From Bank-to-bank payments will steal market share from cards in a Cashless Society » PaymentEye . xxx