16 March (updated 17 March)
Visa has been chasing after any party with direct links to DDA accounts. This in an attempt to “end run” around poor OCT adoption (see previous blog). I understand that Obopay is also set to announce support of VMT. What a change from their MasterCard approach!
Visa is getting decent traction in Asia/ME in receiving VMT, problem is that there are no send capabilities, and the majority of banks are telling Visa to “pound sand” with their OCT transaction set mandate (see previous). I was told yesterday that the OCC is looking into both the mandatory nature of Visa’s OCT and the AML controls.
It will be interesting to see how Visa explains the loss of international wire fee revenue to their member banks. Why pay $40 for an international wire when you can use CashEdge to send to Visa, then VMT to send to India/Mexico, …? As I ran Citi’s online properties I can tell you this completely overlaps with my Citi Global Transfer service and I would not be happy at all.
As a banker, I’m mad as hell at Visa. Why don’t I like this VMT?
- Visa will keep the directory of cards, mobile numbers, and DDAs. The last 2 really really make me mad. Who says they can hold my customer information?
- Visa runs it..Continues to build Visa brand on your ACH
- You own the risk, Visa develops new services
- Circumvents all of the industry controls on ACH (ex. Early Warning)
- Unfunded Reg E research burden and consumer support reqs.
- Confusion in online services
- Cannibalizes existing bank products (wire transfers)
- Customer service/research nightmare .. all unfunded
- Visa may have a much smaller role to play in debit.. why would I want to add new services to their group?
- it will be very, very hard to shut down once it gets moving.
Fortunately for banks, CashEdge is a bank friendly vendor. Actually, it wins the prize for best bank vendor (I signed 2 contracts w/ them). Visa will not do enrollment, nor will they have directory of DDA/Debit. CashEdge is providing multiple service/pricing options t0 participating banks:
– Send to DDA
– Send to phone
– Send to e-mail
– and new option.. send to Visa Debit Card (w/ fee)
Each bank has flexibility in determining IF they want these services and how to price them. As you can tell.. I would never let the Visa option happen.. but then again I don’t run the online bank anymore.
I’m beginning to wonder if I’m just a pessimistic nag. I’m tired of being negative on things… What do I like this quarter? Google and NFC, the Chase QuikDeposit app, PayPal at the POS, .. oh and I loved (past tense) ISIS until they fell on their own sword.
No blogs next week.. will be out of pocket…