Episode 158 – The High Pain of Push Payment Scams – PJ Rohall, Featurespace

By George Peabody on October 21 2021

We all know that there are risks in payments. When the controls we put in place to manage risk fail, fraud is the result. Fraud, or fraud prevention, is now an industry using many of the same tools to defeat our controls that we use to defend our payments systems.

A reality is that fraudsters aren’t discouraged when we erect a strong new defense around one weakness. They just move on to the next, more easily exploited vulnerability. We put EMV chips on cards, and fraudsters moved to card-not-present transaction fraud. We have card data breaches so we tokenize payment credentials to make stolen data less valuable. So, fraudsters work to gain control of our accounts through account takeover fraud (ATO).

ATO fraud has become made easier through data breaches, social networks, and all of the other ways our data is shared online. Fraudsters can capture our user IDs and passwords and even to intercept multi-factor authentication messages. (Note to self: SMS text as an authentication factor isn’t strong enough).

ATO is a problem but it can be defeated by biometrics, behavioral analytics, and other techniques like truly strong passwords. Use them.

The Latest Scourge: Authorized Push Payment Fraud and the Scams That Drive It

A fraud vector now favored by a good part of the Fraudster Industrial Complex is authorized push payment fraud, or APP fraud.

Enabled by social engineering, a fraudster uses what they know about an individual to convince the victim to send the fraudster money, often by masquerading as a representative of a trusted entity like a bank, a telco, or a government agency. Other times the scammer poses as a distant relative or potential love interest. Preying on vulnerable, often older, individuals, these frauds can be elaborate, taking years of grooming if the payoff in victim monies is big enough.

For the victim, the impact can be devastating and the pain enduring. Our work in developing markets has taught us that these frauds can take food off of the family table or derail plans for the family business. In developed markets, we hear of victims losing their life savings.

These are not rare cases. UK Finance has just reported that, for the first time, APP fraud exceeded card fraud during 1H 2021. Total losses due to APP scams rose to £355.3 million in H1 2021 , up 71 percent over the same period in 2020. The number of cases rose 60 percent to 106,164. Note that banks there are trying to restore lost funds to victims but the percentage of losses recovered has been, at best, 45 percent.

This is better than nothing–but imagine the pain. (The report also contains an excellent description of the many types of scams employed by fraudsters.)

That is breathtaking. And a warning of what’s to come in the far larger US market.

To help raise awareness and protect individuals and businesses, UK Finance has produced an excellent informative site, along with resources, called Take Five to Stop Fraud. It’s worth a long visit.

No Simple Solutions to Payment Fraud

Payment is tough to prevent because it is hard to detect. The victims properly authenticate themselves to their bank. From an authentication perspective at the bank, everything looks fine. It’s just that the accountholder sends the money to the fraudster or to a money mule hired by the fraudster for provision of an intermediate, less suspicious, bank account to receive the funds.
The good news as this Payments on Fire® episode discusses, there are payment technologies and actions that can make a difference. As of now, however, we are vulnerable to these frauds.

For more on fraud types and how to sort them out, visit the Federal Reserve’s FraudClassifier℠ Model.

This is Going to Get Worse

Fraudsters are good at APP scams because they are rewarding. They are difficult to detect although there are techniques available. And it’s low risk because getting caught and then successfully prosecuted is rare. Therefore, we can expect a lot more APP fraud as instant push payments grow in popularity.

What we don’t know, in the US, is the extent of APP fraud in today’s environment. While individual firms—whether closed loop systems like Venmo or open loop ones like Zelle—no doubt track APP fraud internally, there is no legal or industry requirement to report those numbers. In admirable fashion, UK Finance has required fraud reporting for years in the knowledge that situational awareness leads to risk reduction.

We Need the Numbers to Improve

The great business management thinker of the last century, Peter Drucker, is often quoted to say: “If you can’t measure it, you can’t improve it.” Applied to US fraud reporting statistics, a more accurate rendition would be: “If you won’t measure it, you won’t improve it.”

There has to be a way for the industry to develop and share solid metrics that inform everyone without embarrassing or exposing individual entities to undue litigation, never mind ridicule.

Painful Human Impact

While comprehensive fraud reporting in the US is unavailable, there are certainly plenty of stories to illustrate the pain involved and how many, out of shame or embarrassment, choose to hide what happened rather than report it to authorities. Ouch.

Scammers Love Push Payments

To shed light on APP fraud, its impact, and some approaches to detecting fraudster coercion and the misdirected payments it causes, join Glenbrook’s George Peabody and PJ Rohall, Fraud Subject Matter Expert at Featurespace, a fraud management software company. PJ is also the co-founder of About Fraud.Com, a community site for the fraud management industry.

In this episode George and PJ discuss the growth of APP fraud and techniques to detect and deter it. You’ll hear him describe examples of the impact APP fraud has caused on individuals, many least able to weather this kind of financial damage. Psychological damage is real.

PJ outlines how scammers prey on people’s vulnerabilities – our fears, desires, greed, and worries. Scam types include romance scams, business email compromise (phishing), investment scams, purchase scams, and more.

What Can We Do?

Fighting back against payments scammers is an ecosystem-wide task. As PJ makes clear, every stakeholder has a role. Yes, regulators, financial institutions, the social media giants and the rest of Big Tech, mobile network operators, payment networks all have a role to play in educating us so we can raise higher barriers to the fraudsters.

But it’s not just up to those big entities. As individuals, we can contribute to the solution, to the work of prevention.

If you’re reading this, you’re broadly in the payments industry. You know how serious this is and will become over time. Here’s some actions you can take:

Read through the UK Finance’s Take Five to Stop Fraud site. Its toolkits are a great resource that can help guide your discussion with friends and family. Nothing could be more British than its Take Five Over Tea with Loved Ones PDF.
Tell your family, especially your elders and the innocent. Children need guidance and guardrails online. Here’s another reason for them.
Tell your friends what you know. Ask them what their experience has been. Tell them what to do.
Take a few minutes when you’re with your wider community, in the real world and online. Tell them how scammers operate. Let them know how sophisticated and patient the fraudster can be.
Tell everyone that if they ever feel pressured to send money, that’s a sure sign of a scam.
Offer to help. That can help buy time and calm emotions.

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Episode 157 – Experts Deep Dive on Financial Health and Inclusion

By George Peabody on October 7 2021

As part of Glenbrook’s ongoing efforts to highlight new approaches to financial inclusion in the US, Erin McCune and Justin Pituch recently spoke with a panel of expert practitioners in the financial health space: Kimberley Gartner, Arjan Schutte, and Ryan Falvey.

Topics discussed include:

History of the financial health space
Current trends in financial health and financial inclusion
Key innovations helping financially vulnerable consumers
Advice for financial health practitioners in the payments world

Meet the Panelists

Previously, we’ve written about how financial wellbeing is measured in the US, and what fintech companies are doing to improve outcomes for low income consumers. In this podcast, we bring together a trio of experts to share their perspectives on the state of the financial health space. All three worked at the Financial Health Network early in their careers, and have since moved on to exciting new ventures. Kimberley is Chief Growth Officer at Canary, a company that helps businesses establish emergency relief funds for their employees. Arjan and Ryan both work in the venture capital space; Arjan leads Core Innovation Capital and Ryan heads up Financial Venture Studio.

What’s Changed?

All three panelists have been active in the world of financial health since the early 2000s, and naturally we wanted to know what’s changed since those early days. Ryan and Arjan both worked at ShoreBank, a Chicago-based community development bank. The bank spun out the Center for Financial Services Innovation, which would eventually become the Financial Health Network. In an era before smartphones, API calls, and open banking, there was a greater focus on education and community investment. But education can only do so much when harmful behaviors are incentivized by financial services providers. And community development banks, with their deep ties to specific neighborhoods, are inherently unable to scale. ShoreBank folded in 2010.

Where Are We Going?

Since then, new approaches have transformed financial health. Arjan noted that the scope of financial health has expanded to include more Americans who may not appear financially vulnerable on the surface, but are actually living paycheck to paycheck with no emergency funds. Ryan pointed out that fintech firms are disrupting traditional financial services paradigms by placing greater emphasis on the value of information than on capital. In a way, this is creating a more democratic environment in financial services by changing incentives for providers in a way that deemphasizes attracting wealthy consumers. Additionally, Kimberley pointed out that corporations are increasingly recognizing the needs of their employees and stepping up to help them through hard times.

Other trends on our radar may only be fleeting: for example, despite some interest from lawmakers in DC and California, our panelists aren’t particularly keen on postal banking. In an age of increasing digitization, turning post offices into bank branches doesn’t make a whole lot of sense. Your phone is the new bank branch, and the vast majority of Americans have smartphones in 2021.

What Do Payments Professionals Need to Know?

This is all interesting history and context, but we wanted to make sure our panelists left us with tangible next steps for our payments professional listeners. Kimberley highlights the value of innovation in faster payments; financial health improves when consumers have access to funds right when they need them. She also notes that payments professionals should understand the everyday financial lives of American consumers and recommends reading Jonathan Morduch and Rachel Schneider’s The Financial Diaries. Ryan advocates for keeping an open mind and disrupting entrenched practices. And Arjan wants us to create financial products that aren’t just frictionless, but aligned with our better selves.

We’re hopeful that folks in the financial health space are pushing the industry in the right direction, and we’re excited to see what Kimberley, Arjan, Ryan, and others like them bring to the market next.

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Episode 156 – How to Make Financial Health a Reality – Mimi Joy, Financial Health Network

By Erin McCune on August 16 2021

This podcast with Mimi Joy explores consumer financial wellbeing in the US and initiatives to improve access to quality affordable financial services for low and moderate income Americans. Mimi shares her perspective as Head of Partnerships at the Financial Health Network, a leading authority in the space.

Topics discussed include:

The current state of the financial health landscape
Research on the effect of the pandemic on low and moderate income consumers and their financial wellbeing
New approaches to serving the needs of vulnerable consumers
Key financial health lessons for payments professionals

What is financial health?

As the economic recovery continues, financial health is attracting increased attention from stakeholders across the financial industry. The Financial Health Network, previously CFSI, works with stakeholders including banks, technology providers, and others to improve financial health by enhancing consumer resilience and increasing opportunity. The first component of this goal, resilience, refers to a household’s ability to withstand a financial shock. The second, opportunity, refers to a household’s ability to save for the future, for housing, education, or retirement.

The Financial Health Network measures the financial health of American families through periodic research including its ongoing Pulse Survey and the annual Finhealth Spend Report. Both track the financial lives of Americans, examining the effects of government stimulus, predatory lending, and new financial technology on how consumers, and especially vulnerable consumers, transact, save, and plan for the future. This research shows that low and moderate income households bear disproportionate costs for everyday financial services.

What are the levers of change?

It doesn’t have to be that way, and providers are realizing the opportunity to serve the broad swath of American consumers who lack access to quality affordable financial services and associated products. The changes don’t have to be monumental; banks eliminating overdraft fees or allowing grace periods before the imposition of an overdraft fee are good examples of seemingly mundane changes that can be hugely beneficial to consumers living paycheck-to-paycheck.

Outside of the traditional banking sector, fintechs are helping low and moderate income consumers make payments, borrow, and save through innovative new products.

What do payments professionals need to know?

As fintech players continue to expand their focus on historically underserved consumers and banks retool their offerings to better meet the needs of the segment, there’s plenty of opportunity for payments professionals to get involved in the changes going on in the industry.

Real time payments, for example, offer an opportunity to speed up access to cash for people who need their next paycheck as soon as possible. And advances in cross-border payments are making it easier for workers in the US to send money to family abroad. Providers can also use data to help consumers make informed decisions about spending and saving, and help people without a credit history borrow based on transaction patterns.

With all these developments, it’s an exciting time to be a payments professional thinking about financial health.

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Episode 155 – Enabling Payments Operations and the Multiplayer Fintech Ecosystem – Dimitri Dadiomov and Rachel Pike, Modern Treasury

By George Peabody on August 13 2021

We continue our series on fintechs and how they improve payments and data handling flows.

One of the major trends that has emerged in the last five years is the “as-a-service” phenomenon. Payments as a service companies – true payment platforms for those offering payment capability as well as those needing to make and accept payments – are broadly available. Stripe is just one example. We are now seeing “banking as a service” providers proliferate.

We spoke with Robin Gandhi of TripActions in Episode 146. TripActions is a fintech focused on the travel needs and expense management of its enterprise customers. And what’s become clear from that conversation and many others is the extent to which fintechs serving specific vertical markets are able to focus so crisply because they can partner with these “as a service” providers who have done the hard, back office work of integration to banks, payments systems, and enterprise software.

We’re calling this trend “multiplayer fintech”. It enables firms like TripActions to take very comprehensive capabilities to market that no single provider could ever hope to do. And to, in a matter of months, deploy more efficient payment transaction flows through process redesign, modern user experience approaches, and with multiple revenue opportunities for the provider.

In this episode, we speak to one of the leading enablers and participants in multiplayer fintech, a company that has done the hard work of software enablement of payment operations, those challenging back office services. We are joined by Modern Treasury’s CEO Dimitri Dadiomov, its Chief Growth Officer Rachel Pike, and Erin McCune, Glenbrook’s B2B practice leader.

A True Fintech

One of the pleasures of producing Payments on Fire® is hearing the creation stories of fintechs like Modern Treasury. And, as with other firms, the business of Modern Treasury grew out of the tool set that Dmitri and his colleagues had to build in order to delivery the services of a mortgage industry firm they’d started. Integrating multiple financial institutions into their payments flow proved challenging given the number of banks and their typical reliance on legacy infrastructure. Speaking with other fintechs addressing other markets affirmed the breadth of those difficulties. Modern Treasury’s raison d’être was established.

In enterprise payments, payments operations is especially challenging. Nothing is as simple as tapping a card or writing a check. Challenges include payment initiation from inside the right application, approval management and controls, reconciliation, and reporting.

In classic fintech fashion, Modern Treasury has taken a design approach that starts with the user experience and process efficiency. No more automation of previously paper-based processes. This is about new replacement processes.

APIs Everywhere

Following the fintech playbook, Modern Treasury’s offer is based on an extensive set of APIs that support multiple payment methods including ACH, wires, check, the Real Time Payment (RTP) network, global payout capabilities, connection to the Canadian EFT system, and digital currency exchange specialist Silvergate Exchange Network, another fintech.

External account verification is supported via microdeposits and through a partnership with the fintech Plaid.

Synchronization of payment activity into accounting is made possible by connections into QuickBooks and NetSuite.

The multiplayer fintech theme is clear here, both in the build-out of Modern Treasury’s own operations as well as in its role as a payments operations platform for other providers.

So, listen to this episode. And, if you know how a particular industry works, dream of what you could assemble from building blocks like these.

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Episode 154 – Fighting Disruption in Merchant Services with Payments Tech – Kyle Pexton and Nick Starai, NMI

By George Peabody on July 8 2021

If you want to understand the incumbent merchant services business, the industry that puts payments capabilities into the hands of merchants, take a listen to this Payments on Fire® episode. It focuses on the realities facing the major stakeholders in that portion of the payments industry through a discussion with NMI, a payments technology provider.

Topics discussed include:

The evolution of touchless payments from QR to Tap on Phone NFC transactions
What a gateway does
How a white label provider sells and who uses its services
What an ISV needs to think about when considering the role of payments facilitator
COVID-19’s impact on merchant and consumer payments

Getting payments acceptance capability into the SMB merchant’s hands is complicated. The merchant services industry, as it’s called, is complex. It has multiple sales channels serving dozens of merchant categories.

Multiple Channels to the SMB Merchant

If you are a merchant or an independent software vendor (ISV) or a value-added reseller (VAR), you have no end of ways to payment enable your business. For merchants, their interest is in payment acceptance at the right cost, with reliability, transparency, and flexibility as major concerns. ISVs and VARs who sell commerce systems, look to offer payments to their customers as an embedded value-added service and also as a way to generate revenue over and above software subscriptions or margins on hardware.

Financial institutions have been a traditional channel for merchant acquiring and revenue, often using independent sales organizations (ISOs) to be the sales channel and often a provider of payments technology to the merchant customer.

Many of the providers of payment services and platforms insert themselves into the transaction flow directly, taking a piece of the payment revenue. Pure-play technology enablement as a service is less usual and for the merchants and ISVs and others who want more control over the payments revenue component of their business, the tech-first proposition is very attractive.

The Value-added Gateway

This white label enablement of payment tech providers is where NMI plays. Its customers, its affiliates as the company calls them, are the ISOs, ISVs, and financial institutions selling payment acceptance to SMB merchants. NMI provides, behind the scenes, the tech stack for those sales channels.

Its strategy has worked. Handling over 1.5 B transactions a year with over $100B in value, NMI has a major role in SMB payment enablement. A quarter million merchants are on the NMI platform.

Fintech Disruption in Merchant Services

The ISO channel in particular has been disrupted by the likes of Square, Stripe, and many others. But these fintechs are not attractive as providers to ISVs or FIs because they take the payments revenue, leaving little or no payments margin for NMI’s customers to make money.

NMI provides a bridge to help its ISOs move to what NMI’s Nick Starai refers to as the NextGen ISO, a software-led company selling more than payment terminals and merchant accounts. NMI tech enables the NextGen ISO and supports its partnership with business focused ISVs selling tools that help the customer run their business.

As with other Payments on Fire® guests over the last year, NMI reports that the pandemic has accelerated adoption of touchless tech and its overall transaction volume.

One adaptation NMI has made to the touchless requirement is support for QR codes. Using NMI’s code, a merchant unwilling to upgrade its POS terminal for contactless acceptance can display a QR code to the customer who scans it with her smartphone. The QR code decodes as a URL that directs the smartphone browser to the merchant’s online payment page where the normal checkout process takes place. If the customer has Apple Pay or Google Pay provisioned NMI’s software detects it and displays the operating system’s checkout and payment flow. A scan and a couple of taps for the customer shifts the transaction to card not present rails.

The line between brick and mortar and online continues to blur because customers have come expect a seamless, touchless payment experience regardless of channel.

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Episode 153 – How to Make B2B Payments in a Few Lines of Code – Brady Harris and Adam Steenhard, Dwolla – Payments on Fire® Fintech Series

By George Peabody on July 2 2021

The fintech phenomenon and the ability of software developers and their enterprise customers to embed payments capability into business processes relies on multiple forms of access.

First, there is the establishment of the business and contractural relationship necessary for access to a payment system. The rules of payments schemes, i.e. payment networks, say that you have to be a financial institution to be a direct participant. Non-bank third parties must be sponsored into the network by a member bank. That requirement is in the network rules.
Second, technical access is necessary. We’re all familiar with APIs, those application programmer interfaces, that companies like Stripe, PayPal, and others have built to simplify access to card network rails (primarily) and open up access to millions of new payment acceptors.

But there are other important payment systems. In the US, the automated clearing house (ACH) is systemically important because it is ubiquitous and carries far more value than cards, cash, and check. Because of that, the pandemic, and the secular trend to digital, ACH is hot as is connectivity to bank accounts through firms like Plaid and GoCardless (podcast link).

The US also has the fast payments network the Real Time Payments Network (RTP) from bank processor The Clearing House. While connected to far fewer financial institutions, its 24/7 availability and instant push payment capabilities are opening up new use cases in payroll and B2B payments (podcast link).

Programmatic access to non-card rails is the focus of this Payments on Fire® episode. Dwolla is a specialist in the programmatic access to the ACH and now TCH’s Real Time Payments (RTP) Network.

Founded in 2008, Dwolla has gone through some pivots. At one time it built a real-time payment switch with the ambition to connect all banks to it. Dwolla’s helped with the Fed’s Faster Payments Task Force and the Gates Foundation’s Mojaloop switch for e-money systems in developing markets.

Dwolla has always been a bit ahead of the market but now the market is catching up as interest in the use of non-card payment methods grows and the API-based proposition has become a foundational business modality.

In this episode, Brady Harris, Dwolla’s CEO, and Adam Steenhard, Senior Director of Corporate Strategy, join Glenbrook’s George Peabody and Elizabeth McQuerry to discuss the growth of digital B2B payments and enterprise interest in fast payments.

Brady and Adam speak to their experience with important capabilities built in RTP including the request for payment message type and the ISO 20022 payment data representation standard. They also discuss how partnering with other fintech providers gives them the ability to offer a broad capabilities set that would otherwise take years or be impossible to build.

This “multiplayer fintech” model relies on the assembly of capabilities offered by platform providers and offerings designed to address what a specific market requires. Dwolla uses the multiplayer fintech model to expand its offering into a comprehensive set of capabilities – a rich payments-as-a-service platform. TripActions has taken payments- and banking-as-a-service platforms and applied them to travel and expense management (podcast link). More on multiplayer fintech ahead!

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Episode 152 – The Fast Payments Imperative – Elizabeth McQuerry, Glenbrook and Craig Ramsey, ACI Worldwide

By George Peabody on June 21 2021

Fast payments are “must haves” in most economies. Their key attributes make them superior to other bank-led, open-loop systems. The speed of money has caught up with the speed of our communications. As Glenbrook’s Elizabeth McQuerry puts it, “this is a convergence of ideas around the world, a commonality, around this single approach in payments.”

Note: “Fast payments” is the term of art that the world’s standardized on. These new systems have gone by multiple names: real-time payments, faster payments, immediate funds transfers, and more. Very recently, the World Bank and the Bank for International Settlement (BIS) settled on “fast payments” as the moniker for these systems.

In this Payments on Fire® episode, Elizabeth and ACI Worldwide’s Craig Ramsey discuss the evolution of fast payments, its global spread, and the wide variability of use cases seen around the world.

ACI Worldwide is a $1.3B provider of payments technology to financial institutions, billers, merchants, and other ecosystem participants. Operating 24/7 in some 14 countries and 18 systems, ACI is a major participant in the global fast payment phenomenon. Among ACI’s roles are connectivity of core banking systems (the ledgers) to domestic fast payment systems. ACI also brings fraud management and back office services.

Elizabeth and Craig discuss the impact of rules on use cases, the slow rollout of services that take advantage of ISO 20022 messaging, and the nuances of deployment from country-to-country.

Craig notes that fast payments do not replace existing systems. They provide banks, and their customers, with a broader range of payments choices. Banks can make decisions about which rail to use for a given transaction.

An essential success factor is ubiquity. National mandates are enormously influential. The explosive success of Brazil’s new PIX system is an example. But even in a market-driven economy like the US, the benefits of fast payment systems are very apparent,

Push Payments and Risk

From a payments network and financial institution point of view, push payments are less risky than pull payments. The principal reasons include:

They are “known good funds” transactions that are only entered into the network if the funds are in the sending account.
Unless there is an account takeover, they can only be initiated by the accountholder.
The rules of fast payment systems make these irrevocable transactions. There are no chargebacks.

That said, those accountholders themselves can be victimized by fraudsters through social engineering.

Authorized Push Payment (APP) fraud occurs when the rightful accountholder has been convinced to send funds to the criminal. This fraud is troubling because the payment is initiated properly. The accountholder has logged into their financial institution and provided the correct credentials. They’ve simply sent the funds to a fraudster. This form of fraud is a concern for wire systems—high value, low volume system ($4.5M per transaction) and, as the UK has reported, it is a serious concern for the fast payment systems that are built for high volume, lower value transactions. In the UK, no systemic solution has been found.

Fast Payments Now, CDBC Later?

The build-out of a new open loop payment system and technique is a once in a generation event. We’re five years into the US’s fast payments evolution. The next five will see Zelle, the RTP Network, and FedNow in operation and serving a whole range of use cases, many unanticipated by their designers. How these rails evolve and how they connect to the fast payment systems in other countries are unknowns. Rule changes are as inevitable as those new use cases.

Because tech accelerates change in payments too we may see yet another method of payment emerge in the US, a “digital dollar” issued by the Federal Reserve. Fast payments is a stepping stone to CDBC which requires realtime, 24/7 processing.
Aimed at very different use cases, these central bank digital currencies (CDBCs) are a newer phenomenon we will discuss in upcoming podcasts and blog posts.

Questions for Stakeholders

How should fintechs use fast payment rails, how should they gain access to them, and who should they parter with?
What makes more sense? Should you work with a financial institution or a gateway provider? Should you become a financial institution?
What is the best way to prevent APP fraud? How should the industry make accountholders whole after they have been defrauded? Or are the victims of APP fraud on their own since they authorized the transaction?
How does the card industry respond to a new payment system that operates with very different economics where fee revenue is only based on the number of transactions and not their size?
We are here to work with you to make your fast payments initiatives successful. Reach out to talk.

Payments on Fire® Episode 152 – Fast Payments with Elizabeth McQuerry and ACI’s Craig Ramsey.mp4 from Glenbrook Partners on Vimeo.

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Episode 151 – The Fintech Network Built for SMB Payments – Marwan Forzley, Veem

By George Peabody on June 10 2021

We continue our fintech series on how fintechs deliver payments services that were formerly brought to market by banks or were just unavailable.

Key hallmarks of these fintechs, and innovators in general, are:

Market entry at a point the incumbents aren’t serving well
Rapid expansion of service offerings to more deeply embed their services into the customer’s operation
Rapid geographic expansion based on customer demand

To illustrate those points, and more, George welcomes back to Payments on Fire® Marwan Forzley, CEO and co-founder of Veem, a company that exemplifies that rapid evolution.

Veem is now an international payments network serving SMBs with domestic and international payment services.

Its creation story is fascinating. Initially, Veem used crypto rails to move money between the countries it operated in. Now, it is a multi-rail firm with its own operations in major markets and a wide array of partners to serve payment corridors with less volume.

To drive volume over its network, Veem has taken a number of steps. A few examples include:

1. Provide domestic payments without charge.
2. Embed Veem payments capability into accounting systems like Xero, QuickBooks, NetSuites, and more.
3. Turn accountants and bookkeepers using those systems into a sales channel
4. Let those accountants tee up payments for their SMB customers and provide a customer facing dashboard that supports multi-party approval (CEO and CFO, CFO and controller) for payment initiation

These non-payment capabilities smooth the adoption of the Veem service into the customer’s business processes and expands its value.

Surprising uses of the service included cross-border labor payments and even intra-company transfers to balance books across multiple geographies, a service that once required the use of correspondent banking services.

Marwan and George also discussed the epidemic’s impact on the company. As a firm with a customer base heavily involved with e-commerce, the shift to that channel was beneficial.

Their conversation concludes with a discussion of stablecoins, CDBCs, and NFTs.

Take a listen!

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Episode 150 – How a Fintech Speeds the Logistics Industry – Robin Gregg, RoadSync

By George Peabody on May 11 2021

In Episode 150, we continue our focus on fintech and its role in improving the payments process for specific verticals.

We recently spoke with Robin Gandhi at TripActions about the hard focus it has on enterprise expense management for the Travel and Hospitality industries. It’s also a great example of multiplayer fintech. (Take a listen).

In this episode, we find out how a fintech helps a very different industry, a segment we have come to rely on more and more as the pandemic has extended supply lines to our doorsteps and stretched the transportation and warehousing businesses.

Take a listen to George and RoadSync’s CEO Robin Gregg as they take a deeper look into how fintech’s solve specific problems for specific industry segments. RoadSync provides payments and commerce services to the logistics and trucking industries.

RoadSync’s market targets include warehouses, trucking firms, and the maintenance and towing operations that keep it all on track.

Logistics is an industry that still relies heavily on checks. When a driver picks up a load at the warehouse, they often pay by check. Knowing the check is good before the driver hits the accelerator is necessary. RoadSync helps with these “dock door” payments through check authorization as well as enabling the warehouse to accept credit cards.

Like so many of today’s fintechs, RoadSync has built out data handling capability around its payments services. Matching up payments to invoices is critical on both sides of the transaction.

For example, the warehouse can create a complete invoice through RoadSync and then simply text the link to the driver for review and payment.

Roadside repair plays a key role in logistics. We’ve all seen an 18 wheeler with its hood up or a blow tire. Those repairs are not inexpensive. Towing and repair services need to:

Get authorization from the freight carrier before doing the work. Work over authorization is a key step.
Get the invoice to the customer when the work is done. The repair tech can create the invoice on the spot.
And get paid, best case by the driver as soon as the last bolt is tightened. RoadSync gives the repair tech the ability to accept a card or a fleet check

To help drivers find those RoadSync-able truck and trailer repair services, the company has established its BigRig411 directory.

In Glenbrook’s payments education workshops, we will call the introduction of a new payment system like today’s Fast Payment rails an “ecosystem build.” Success requires the deep participation of as many parties as possible.

Here, RoadSync is applying that imperative in the areas it can impact. It is automating both sides of a transaction. It makes it easy to find ecosystem participants. And it is API-enabling its services so its payment services and data handling can be more deeply embedded into fleet, warehousing, and repair operations software.

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Episode 149 – Bringing Data to Secure A2A Transactions – Eli Polanco, Nivelo

By George Peabody on April 28 2021

The U.S. is moving faster than ever into seamless, account-to-account payments. That means enterprises and their payments providers are able to initiate a payment from one bank account and direct it to another. Think payroll. Think supply chain.

The system attracting the most interest today is the ACH, a network built on batch processing and lacking authorization. Despite those shortcomings it has some enormous advantages:

It is ubiquitous. The network effect matters for payments even more than it does for social networks
It is cheap. Compared to wires and cards, it is inexpensive for transactions that aren’t time critical. And the ACH has sped up with Same Day ACH transactions now available

That lack of authorization and banking’s reliance on authentication methods of varying effectiveness makes these transactions a fraud target. COVID has only increased the fraudsters’ appetite for attacking this channel.

Fraud prevention in this context requires the use of data and intelligence to, among multiple steps, identify out-of-pattern behavior between counter parties.

Join Glenbrook’s Nicole Pinto and George Peabody as they speak with Eli Polanco, CEO and Founder of Nivelo, a company that offers risk scoring for ACH transactions to improve payment success rates and reduce fraudulent transactions.

Listen as she speaks to her entrepreneurial experience and shares her insights into the evolution of bank-to-bank payments.

Click for the transcript

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