IPA Payments Pod

In this episode we take a peek into people’s diaries with Claire Greene from the Federal Reserve bank of Atlanta, and Joanna Stavins of the Federal Reserve bank of Boston. In their report, The 2019 Diary of consumer Payment Choice, they use data logged by consumers as part of a payments diary to understand the trends in consumer payments behavior. The initial diaries were tracked in October 2019, but given everything that has happened since then, they also discuss the results of two snapshot surveys done earlier this year. Debit cards still remain the most popular way to pay, and despite the growth in electronic payments, cash is still holding its own. You can find their report and supplemental data here. Interested in becoming an IPA member and helping to shape the future of payments? Reach out today and talk to us about the benefits of joining. Go to www.ipa.org  to learn more.

The IPA recently held its first Fintech Elevator. The online event gave participants a chance to make industry connections and win a membership in the Innovation Payments Association. In this episode, we talk with one of our winners, Frizzmo, an app and card account that combines spending tools and financial literacy modules to teach kids about money management. In addition, it offers schools a way to raise money through an automated donation tool built into the spending tools. We talk about why Frizzmo was created, how it works, and what it’s like to launch a company during a pandemic. Interested in joining Frizzmo as an IPA member and helping to shape the future of payments? Reach out today and talk to us about the benefits of joining. Go to www.ipa.org  to learn more.

The IPA recently held its first Fintech Elevator. The online event gave participants a chance to make industry connections and win a membership in the Innovation Payments Association. In this episode, we talk with the founder of one of our winners, Invest Sou Sou, about how being more social with our household finances can lead to greater success. Before becoming an entrepreneur, Fonta Gilliam was a diplomat who have worked in a number of countries around the world. She saw a different approach to managing money than what is common in the United States. She believes that getting people to share more about their finances will help them achieve their goals. To this end, she founded Invest Sou Sou, which offers financial institutions a platform that their customers can use to create social networks to help them reach goals. The use cases can range from individuals saving to buy a house to groups savings towards a common goal. You can learn more by visiting their site at: https://investsousou.com/. If you want to create a Sou Sou wallet of your own, visit: https://investsousou.com/elementor-55/how-sou-sou-works/. Interested in joining Invest Sou Sou as an IPA member and helping to shape the future of payments? Reach out today and talk to us about the benefits of joining. Go to www.ipa.org  to learn more.

While the topic of financial services regulation is not being discussed much in this election, nevertheless, the outcome of the vote will determine the shape and tone of the regulatory landscape. In this episode, we talk with Dee Buchanan and Gordon Taylor, principals at Ogilvy Government Relations, about the various ways the 2020 election could go and what each outcome might mean for the regulatory environment. This episode was recorded before the news broke about the President’s COVID19 diagnosis, so we did not discuss its effects on the campaign. However, the analysis in this conversation remains the same. In addition to this podcast, the IPA will continue to monitor the election and host an election update webinar for its members on October 14, and a discussion about potential regulatory threats to fintechs on October 21. Go to www.ipa.org  to learn more.

Few areas of payments are more complicated than health care benefits delivered to individuals. While health plans want to give consumers more control over how they spend their dollars, the tax code restricts how those dollars can be used. For years, health plans that wanted to provide consumers with money for over-the-counter medicines and incent behaviors like healthy eating or getting a flu shot, had to resort to an assortment of payment tools. Checks and gift cards might be distributed before or after the fact. Consumers might need to use a prepaid or debit card, but then report what they bought and prove it fit within a plan’s guidelines. Whatever the methods used, the process was cumbersome and not always effective. InComm Health Care has developed a system that can streamline these payments. The company’s system combines point of sale services and a multipurpose card to make the payment process as easy as any card payment. The system can filter eligible items down to the SKU level, and automatically pull from different pools of funds available to the cardholder for everything from medicines to healthy food. This system earned Incomm the IPA’s Payments Innovation award. In this episode, we talk with InComm about its capabilities and where things go from here. InComm is a member of the IPA. Go to www.ipa.org  to learn more about the benefits of membership.

One of the newest names in the Fintech space comes with a ton of experience. North Lane Technologies revealed its new name in October as part of an announcement about its joining with daVinci Payments under Syncapay, another Fintech company. In this episode of the IPA Payments Pod, we spoke with Seth Brennan, the CEO of North Lane. He describes how North Lane evolved from its start-up days as Ecount, through being part of a large bank with Citi, then a multinational with Wirecard. We also talk about where the company goes from here as part of a larger organizations created out of multiple Fintechs. Brennan says that Nprth Lane and DaVinci are on their way to becoming a juggernaut in incentive payments.   North Lane and Syncapay are members of the IPA.  If you want to join them and other payments leaders in helping to create an environment that fosters innovation, then go to www.ipa.org  to learn more about the benefits of membership.

No one would dispute that we are in a data-driven economy, but many of the metaphors used to describe it miss the mark in describing its true value.   In this episode, Salomè Viljoen, a research fellow with the New York University School of Law and the Cornell tech Digital Life Initiative discusses the nature of data and what that means for individuals, businesses, and governments.   While data is often thought of as an ethereal collection of bits and bytes or as a resource like “the new oil,” it is more complicated than that. Data are relationships between people, companies, and governments. Information is collected, aggregated, and analyzed and that becomes data when it is used to facilitate some kind of relationship between people.   Viljoen talks about why companies need to rethink data and how they use it in terms of the relationships they have with their customers and business partners. She also discusses the difference in value between individual and aggregated data.  Finally, she covers what kind of regulation might be necessary and how it could develop.   The questions of data and privacy regulation likely will be on the federal and state agendas in 2021. If you want to be part of the policy discussion, then go to www.ipa.org  to learn more about the benefits of membership in the association.  

As unlikely as it might seem, 2020 ended on a high note for the payments industry. The Federal Deposit Insurance Corp.’s updated rules on brokered deposits will lower the costs of insuring consumers’ deposits for Fintechs and the banks that work with them. This change is the culmination of five years of work on the part of the Innovative Payments Association and its members.   Despite this bright spot, the regulatory environment in 2021 may be a lot darker for the industry. There will no doubt be a change in the Consumer Financial Protection Bureau’s leadership, which will change that agency’s approach to regulation. Also, a letter from the chairwoman of the House Financial Services Committee to the incoming Biden Administration shows that Congress also plans to keep a close eye on financial services.   Despite all of that, the brokered deposits rule change shows that engagement by the industry can ensure that any new laws or rules do not stifle the industry’s good work to help consumers, businesses, and governments manage their money more effectively. We talk about how companies should lay the groundwork for the new environment they will face in 2021.      If you are not already a part of the Association and want to be part of the policy discussion shaping the future of the payments industry, then go to www.ipa.org  to learn more about the benefits of membership in the association.  

At the end of 2020, PayPal won an initial victory in its lawsuit against the Consumer Financial Protection Bureau. In this episode, Brian Tate, the Innovative Payments Association’s CEO, talks about what the decision means for the payments industry. He covers the practical implications for payments companies and the potential regulatory and legislative fallout. The ball is now in the CFPB court to make a decision whether to appeal, so this likely is only the beginning of a long saga between the industry and regulators. Policy discussions informed by the arguments may play out on a different timetable or in tandem. Either way, the decision sets the stage for a number of conversations around the future of payments regulation.

The big banks are asking the Federal Reserve to re-examine what companies should be subject to interchange caps on debit transactions imposed by the Durbin Amendment to the Dodd Frank Wall Street Reform and Consumer Protection Act. In a letter and meeting with the Fed, the Clearing House, a trade association and payments company owned by the biggest U.S. banks asked the Fed to examine whether certain business arrangements used by Fintechs mean that they should be subjects to the same interchange caps as banks with more than $10 billion in assets. If the Fed were to apply the Clearing House’s recommendations, it could affect the business model for Fintechs and for many prepaid programs that are designed to help low-income Americans. 

PayActiv Works to Get Money to Workers When They Need It The payroll process needs to catch up to the rest of the payments world by becoming real time, according to Safwan Shah, the founder and CEO of Payactiv. The company wants to help workers get money as they need it by providing access to wages they have earned sooner than a traditional two-week or monthly pay cycle would allow. The company does this by working with employers to track how much employees earn and offer the ability to get a percentage of those wages on as needed basis. In this episode we cover how the process works, and how earned wage access is different than other forms of early wage access.

When the U.S. government decided to provide funds to struggling Americans in the pandemic, it needed a way to move a lot of money to a lot of people quickly. While direct deposit information from tax returns helped, some people who most needed assistance weren’t in the system.  So, the Department of Treasury used a combination of paper checks and prepaid cards from a program it calls the U.S. Debit Card. That program was part of an existing contract that allowed the government to use prepaid cards for disbursements.   IPA members Fiserv and Metabank are instrumental in that program, and in this episode, we talk with Kim Ford, Senior Vice President for Government Relations at Fiserv about how the cards work and how they came to be used for stimulus funds.    

When the COIVD19 pandemic forced businesses to operate virtually, bank examinations moved into cyberspace.   This change likely will last beyond the pandemic, so bankers need to figure out how to be effective in this new environment. For institutions involved in non-traditional businesses like prepaid issuing, the problems of effectively conveying information and answering questions from examiners can be more complicated if they need to explain a new type of business.  IPA member Bancorp has successfully navigated virtual exams, and in this episode, we talk with Mandi Lermond, the director and chief of staff, and Mike Althouse, the chief compliance officer about the lessons they have learned, and the best practices they have uncovered. For them, the most important exam question, both internally and externally has been “how goes it?” Find out why.  They have also written an article for the ABA Compliance Journal that explores these topics in more detail. You can find that article here: Navigating Virtual Examinations | ABA Banking Journal 

As people’s lives become more digital and they add more connected devices to their lives, their risks for identity theft, fraud, and other cyber-crime grows.   The average person is often unaware of, or unprepared to, manage all of these risks. To help address this issue, Consumer Reports, a nonprofit focused on consumer protection and education, has created the Security Planner. The site helps individuals create a personal plan for protecting themselves and their devices by asking them a series of questions and presenting them with a checklist of steps to take.  In this episode, we speak with Yael Grauer, the lead content creator for the planner, about how it was created, who it is designed to help, and how it works. We also talk about some of the best practices that people can follow while navigating cyberspace.   The planner is a free resource, and one that companies can share with their customers if they want to provide resources on protecting against fraud.  

As online shopping and remote payments grew over the past year, so did the number of customer disputes over payments. While many of the disputes were legitimate, some were fraudulent – either by people attempting to get out of paying for something they bought or by organized rings of criminals attempting to hack a company through social engineering.   In this episode, we talk about these problems and how payments companies can manage them with Corey Besaw, the banking operations president for Ubiquity.  He talks about best practices for handling disputes including:  Prioritizing dispute cases,  Setting investigation thresholds,   Working with third parties such as ATM operators and merchants.  He brings together the experiences of many of their customers and talks about some of the common pitfalls and practices that have worked to avoid them. He also gets into considerations around using tools like artificial intelligence.