A Finextra member 07 June, 2018, 07:16 0 likes

It's a shame the government doesnt hold itself, or other privatised utilities, to the same high standards it consistently demands of the banking and payment industry. Imagine if our rail network or Student Loan Company was able to deliver a service as efficiently as Visa. Imagine if, following a four or five hour wait for treatment in A&E by individuals, that politicians were as keen to make public statements demanding improvements or suggesting compensation should be considered.

This is all made worse by the sneering, self important tone adopted by Nicky Morgan on this topic. I have checked and checked but can find no history of her ever having worked in the payment industry or having any in-depth knowledge of the subject.

Bob Lyddon - Lyddon Consulting Services - Thames Ditton 07 June, 2018, 09:25 1 like

But David, neither have many of the senior staff at the PSR, all but three of the NPSO Board, or any of the NPSO End User Advisory Council ever worked in the payment industry as we would define both the "payment industry" and "work" (i.e. carry out tasks rather than sit as a NEDdie or as a trustee, audit the work or consult about it).

They command a combination of knowledge on the subject which is modest given the importance of the tasks assigned to them. We are talking Premier League tasks but a squad composed of All Stars from various other sports that would struggle as a unit to progress in the Johnstone's Paint Trophy.

This is emblematic of the new world and its new Establishment. In Ms Hogg's case it is the career path through Harvard and McKinsey and directly into the C-Suite of an industry vertical in which she had never done the work herself that the oily rags do. At Lloyds Bank International a graduate trainee, even one with an Oxbridge First, did not progress into management without carrying out every job in the bank, from mail room, messenger, telex clerk, test keys, mail transfers, nostro recs, cash desk, upwards.

At least we have one forum where the new Establishment can be held to account in public, and frankly I am not too fussed who represents Joe Public in the TSC as long as they get properly stuck in.

The analogy with the rail network or Student Loan Company does not seem to me to fit the bill. I would go for the power supply to an intensive care unit. Visa is a creation of the payments industry and of its successful efforts to make cards ubiquitous, do payments in near real time, and displace cash and cheques. Visa must accept the other side of the same coin: it has become a critical service and so it must have Five Nines availability. It has failed to meet the correct standard and a head must roll.

Since it is a regulated UK payment system, the regulator has also failed and a head should roll there as well.

Andy Hunter - Perficiam Ltd - London 07 June, 2018, 16:14 1 like

Spot on, Bob. I've often said that if, heaven forbid, I ever need brain surgery then I'll employ an experienced brain surgeon and not someone who has only read the instruction manual.

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 07 June, 2018, 19:58 1 like

How about making 'em mobile wallet fintechs and carrier billing MNOs and alternative payment Dwollas of the world to answer for their claims to"kill credit cards next year" for the past 10 years?:)

Poor Visa - it's only reacting to threats of "death by thousand cuts" from these new kids on the block by cutting down its availability by one Nine every year until it's now operating at Two Nines or whatever availability:)) 

Bob Lyddon - Lyddon Consulting Services - Thames Ditton 08 June, 2018, 09:48 0 likes

Thank you Ketharaman - I'm afraid it is wider society that will pay for the New Entrants, particularly those that have banking licences and whose deposits are insured by taxpayer-backed compensation schemes. That is licence for them to behave in an economically illiterate manner (we have one here that pays 4% on deposits and charges 1.5% on loans = 2.5% negative Net Interest Income).

I have passed on to my MP here that Charlotte Hogg should be asked about The Nines, and also that a letter should be sent to Hannah Nixon at the Payment Systems Regulator. Visa is a regulated system. Did the PSR know of Visa's reduction in availability targets? If so, what did they do about it? If not, have they not failed in their role as regulator?

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 08 June, 2018, 11:49 0 likes

@Bob Lyddon: I didn't know Visa is a regulated entity. Hmmm, then they should b****y well answer for the downtime to public bodies. On a side note, I should quickly make a beeline to the bank in your area. As Jeff Bezos once said, "your margin is my opportunity". Likewise this bank's economic illiteracy is my margin!

Bob Lyddon - Lyddon Consulting Services - Thames Ditton 08 June, 2018, 17:23 1 like

I do struggle to see where the margin is in this business. SEPA has killed the economics in Euro payments and, together with ECB interest rates, has destroyed the revenue streams in retail banking as a whole.

There is something to be made in the cards business still as the EU Interchange Fee Regulation has backfired (the PSR again is the "competent authority" for this regulation and so their MD will have to answer for the increases in card fees in due course).

A new bank that lends at a 2.5% negative spread and is offering mortage loan terms like Northern Rock must surely hit the rocks, and sooner rather than later, although I read that BBVA has taken a big share in it (probably playing follow-my-leader against Santander and Sabadell, the latter with its No Nines-Offline acquisition TSB).

The TSB CEO was up before the Treasury Select Committee today, and they suggested he collect his P45 and go forth and multiply.

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 08 June, 2018, 19:00 0 likes

Profitability is passé. Traction is the name of the game. More so if the said new bank is funded by venture capital à la Flipkart, PayTM, Uber, WeWork, et al but equally so even if it's listed publicly like SnapChat, Shopify, et al. 

As NYT put it so well in a recent article entitled The Entire Economy Is MoviePass Now. Enjoy It While You Can.:

"It used to be that in order to survive, businesses had to sell goods or services above cost. But that model is so 20th century. The new way to make it in business is to spend big, grow fast and use Kilimanjaro-size piles of investor cash to subsidize your losses, with a plan to become profitable somewhere down the road. Over all, 76 percent of the companies that went public last year were unprofitable on a per-share basis."

Bob Lyddon - Lyddon Consulting Services - Thames Ditton 09 June, 2018, 15:54 0 likes

Yes and that has to end in tears sooner or later.

Bob Lyddon - Lyddon Consulting Services - Thames Ditton 09 June, 2018, 18:41 1 like

On further reflection, Ketharaman, I suppose that does give a licence to those who have never made a profit, cannot make a profit, have no idea how to generate revenues, or make an assessment of creditworthiness. These would be those who have only ever worked in IT and Ops, or at most Product Managament, and particularly those who went through a specific Dutch bank where the Global Transaction Services division was perenially projecting impressive future revenues and profits, but never actually achieving them. There's skill in that as well.

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 09 June, 2018, 19:16 0 likes

Yes indeed @BobLyddon, getting away with BS perpetually does require a certain type of skill.