Great comments on my blog yesterday.. worth a read for those not following.
I agree that tokens will likely not see the light of day for next 5 yrs… the bank token effort will likely fail, and V/MA’s will face the same prospects of VBV/MSC (see blog). It will be very difficult to “force” any entity to trade PAN for token.. particularly if consumer still has a card number available.
Thought I would give another example of the chess game being played beyond tokens.. specifically plans to restrict ACH debit. The banks have created an entity called Clearxchange (jointly owned by JPM, BAC and WFC). What is their strategy? I have no idea.. but product relates to real time debit/settlement. Today you can move money from one account to another via this service. If I were a Bank.. I would look to lock down ACH Debit.. to make life for MCX and Target Redcard very, very difficult. I would also offer them an alternative for them to migrate to (given they have invested $$). I’m not saying this is happening.. but I am saying Banks are much more strategic about payments than you think they are… (see NEW ACH , Origination Risk, )
If I was a bank CEO.. perhaps I would approach like this “Walmart.. MCX… Target.. let me help you navigate all these new rules.. just let us manage all this payment stuff (while we prevent you from obtaining a bank license) and keep payments a “club” business.. “