21 August 2014

Aneace's blog

Aneace Haddad - Taggo Pte Ltd

28 | posts 94,279 | views 2 | comments

SEPA and European Payments

The Single Euro Payments Area, the Payments Services Directive, the Eurosystem, TARGET2, STEP2, the Euro and related matters.

Crisis gives national banks an upper hand in payments

29 January 2009  |  3653 views  |  0

I have been thinking a lot about how the crisis is having a different impact on the world’s national banks, which don’t seem to be suffering as badly as the big international players. In the cards and payments business at least, national banks may be able to take advantage of the crisis to get ahead while big international players struggle to survive. Welcome’s customers tend in large part to be national banks, so this is an area that I have been following heavily.

Here are a few comments I pulled out of an interview Friday with Dennis Gartman, producer of The Gartman Letter, a daily commentary on the global capital markets subscribed to by banks, broking firms, hedge funds and mutual funds.

DG: "There will be more consolidations; there has to be. But look at the yield curve—what a year to be a bank! The overnight Fed funds rate, the rate banks are going to pay depositors for their demand deposits or checking accounts is zero. And you’re going to be able to lend that out to hungry borrowers at 7%, 8%, 9%, 10% and 12%. The next three years will be the greatest three years banks have ever seen. Banks will just make money hand over bloody fist in the next three years."

TGR: "Are you talking about the big boys?"

DG: "No, I’m talking about the regionals. The big boys have problems in toxic assets. I am not even sure there is a Peoples Bank & Trust in Rocky Mount, North Carolina, but a bank like that—or the First National Bank of Keokuk, Iowa or the First National, or the Peoples Bank & Trust of Park City, Utah—those are the banks that are going to make lots of money."

TGR: "Do you see an explosion in regional banks? Will move of them come into the marketplace?"

DG: "I think we’ve probably got all we need. It’s just that they’re very cheap."

TGR: "What will the role of the international banks be?"

DG: "Mopping up the disasters that they’ve created for themselves for the past decade, trying to survive, being envious of the decent regional banks that are going to be earning enormous yields on this positively sloped yield curve and wishing they were they."

TGR: "Do you see a role long term for international banks?"

DG: "Oh, sure, of course. How could there not be? It’s a smaller world; it’s an international world; it’s a global world. International banks will be back in full force a decade from now. They’ve got some wound-licking to do, and they’ll do it."

The same thinking appears to apply to national banks in the rest of the world, organizations that somewhat resemble regionals in the US, especially in the way they compete with the international banks. I have been watching how Welcome’s customers have continued moving forward with their credit card loyalty programs and in some cases have even accelerated those programs.

Many of Welcome's bank customers have another distinct advantage over the large international banks. They are both major card issuers and at the same time major acquirers, having kept acquiring as part of their banking activities while the international players have gotten out. Consumer shifts from credit cards to debit cards and prepaid will have less of an impact on a bank that is still active in acquiring. More importantly, owning the full end-to-end payment experience makes it much easier for local banks to innovate and provide greater value to customers and merchants.

Keeping issuing and acquiring under one roof suddenly seems much less risky than focusing single mindedly on credit card issuing alone.


Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Latest posts from Aneace

Hyperinflation: An Upcoming Black Swan in Payments?

02 June 2010  |  2241 views  |  0  |  Recommends 0 TagsPaymentsRetail banking

A counter-intuitive way to make mobile payments irresistible

19 April 2009  |  6001 views  |  0  |  Recommends 0 TagsCardsPayments

Loyalty and prepaid as mobile content, like ringtones

14 April 2009  |  7058 views  |  0  |  Recommends 2 TagsCardsPayments

Mobile convenience and one-step loyalty enrolment

19 February 2009  |  3756 views  |  0  |  Recommends 0 TagsCardsPayments

Crisis gives national banks an upper hand in payments

29 January 2009  |  3653 views  |  0  |  Recommends 0 TagsCardsPaymentsGroupSEPA and European Payments

Aneace Haddad

job title


company name

Taggo Pte Ltd

member since




Summary profile See full profile »
Aneace Haddad has been in the payments industry for 25 years. He has launched several start-ups a...

Aneace's expertise

What Aneace reads
Aneace writes about

Who is commenting on Aneace's posts