American Banker’s Post

#fintechs #regulatoryarbitrage #durbin #debit #interchangefees #banks #Fed "The beneficiaries: 1. Retailers, obviously, as most volume runs through largest banks. 2. #Fintech banking apps that would have very limited revenue but for sharing 3x higher interchange under the fee cap exemption for small banks--an entire industry is built on this rickety piece of regulatory arbitrage. 3. The community banks who use higher interchange sharing as a basis for entering partner banking (at least those not in regulatory trouble at the moment)."

With the significant growth in electronic person-to-person payments, the Model Money Transmission Modernization Act becomes crucial in harmonizing regulations and creating efficiencies for businesses and regulators alike. Read more about it here:

The market distortions caused by the Durbin Amendment get more acute with every year as the Fed acts again to reduce debit interchange for everyone except under $10 billion banks. Who benefits and who loses from the increasing gap between large bank and small bank interchange charges? The beneficiaries: 1. Retailers, obviously, as most volume runs through largest banks. 2. #Fintech banking apps that would have very limited revenue but for sharing 3x higher interchange under the fee cap exemption for small banks--an entire industry is built on this rickety piece of regulatory arbitrage. 3. The community banks who use higher interchange sharing as a basis for entering partner banking (at least those not in regulatory trouble at the moment). The victims: 1. The usual punching bag--the midsized banks who don't have economies of scale like JPM and BofA and will see further pressure on margins to add to of their issues with uninsured deposits, CRE and increased capital. 2. Credit card users and issuers who are going to see increasing surcharge pressure as the disparity between debit and credit cards grows. #banks #federalreserve #interchange #durbin #fintech https://lnkd.in/esHA8AFw

Earlier this week, The Clearing House announced that #RTP surpassed 500 million payments. TCH says that financial institutions with less than $10 billion in assets, including #communitybanks, make up 90% of participants. If you're curious about who is participating in RTP and #FedNow, both TCH (https://lnkd.in/e-3CzFDC) and the Federal Reserve (https://lnkd.in/e53Pr3_g) maintain lists of participants. #payments #fasterpayments #realtimepayments #instantpayments

Our Payments Conference: Payments on the Cusp 2023 covered a wide range of topics in the payments and financial regulation landscape. For those of you who missed it, or would like a reminder of the topics covered, you can find key takeaways from each session here: https://bit.ly/3DvQfmm

Our Payments Conference: Payments on the Cusp 2023 covered a wide range of topics in the payments and financial regulation landscape. For those of you who missed it, or would like a reminder of the topics covered, you can find key takeaways from each session here: https://bit.ly/3DvQfmm

Our Payments Conference: Payments on the Cusp 2023 covered a wide range of topics in the payments and financial regulation landscape. For those of you who missed it, or would like a reminder of the topics covered, you can find key takeaways from each session here: https://bit.ly/3DvQfmm

Join us at Nacha's Smarter Faster Payments 2024 Conference next month for two insightful sessions on the evolving landscape of financial regulations and #Fintech relationships! #financialservices ▪️ Carlin McCrory will delve into the expectations for federally regulated financial institutions in managing their third-party service providers ▪️ Keith Barnett will discuss trends in #CFPB supervision and reasons behind its latest proposed rule

Our Payments Conference: Payments on the Cusp 2023 covered a wide range of topics in the payments and financial regulation landscape. For those of you who missed it, or would like a reminder of the topics covered, you can find key takeaways from each session here: https://bit.ly/3DvQfmm

Tick tock! The Clearing House Real Time Payments was launched in late 2017, as most insiders know. TCH being a cooperative organization, where ownership is made up by money-center, super regional and regional banks, who all for the most part have equal ownership stake in the cooperative and derive benefits from the processing done by TCH. Nonetheless, RTP participation can only happen when a bank makes the significant commitment for funding and product development for RTP. The commitment for RTP enablement can be described as providing: 1) funding the acquisition of new technological capability to enable the bank the new back-office operation to instantaneously initiate & receive RTP transactions; 2) funding for product development of digital banking services both for consumer and commercial RTP products; 3) funding to enable the customer service organizations to provide 24/7/365 customer service for RTP. This triad of investments gives any bank pause during nominal business conditions, let alone during a global shutdown for deadly public health crisis. Those banks who are operational have achieved monumentally. The triad of investments involves extraordinary effort to orchestrate a plan in any bank because the business of banking remains hamstrung by the very real bankers hours business model. The notion of "real time" in banks remains a remarkably elusive aspiration. Banks who have found their way to execute on plans to solve the incremental transformation from the antiquated banker hours business model towards a real time digital business model can be identified by their RTP open for business prowess. Are there any banks declaring such prowess? #realtimepayments #paymentsmodernization #paymentshubtechnology #banktransformation