My fellow Americans, the state of our payments is… a mess. A panel discussion on future challenges in payments the ABA Annual Convention in New Orleans this week laid bare the lack of clarity about the direction the payments industry should take. Panelists Carol Coye Benson of Glenbrook Partners, Michael J, Kennedy of clearXchange and COO of the Chicago Fed Gordon Werkema spoke with moderator Jeff L. Plagge, CEO of Northwest Financial Corporation (and incoming Chairman of the ABA) about where payments are today and where they should be headed. Person-to-person payments were a major topic, with clearXchange’s Kennedy polling the room and finding that while about half of the bankers present worked for banks that offered mobile banking, only a small fraction of that same group offered P2P payments. Kennedy pointed to a study that said 73% of customers prefer P2P products from their banks, rather than giving financial information to a third party such as Square or PayPal. (ClearXchange, not coincidentally, whitelabels a P2P solution for banks.) Benson cautioned against taking much solace from that figure, and spoke about the early days of PayPal. “No one took PayPal seriously,” she said. But the company gained users because “it allowed them to do something [...]
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