On March 20, the U.S. Senate failed to renew the charter for the U.S. Export-Import Bank, which provides significant financial support to parties that encourage global trade activity and thus benefit the U.S. economy. While the Ex-Im Bank offers some direct loans to international buyers of U.S. exported goods, the majority of its activity is in the form of guarantees and insurance-backing loans made by banks to small businesses. Government-sponsored guarantors are critically important to the ability of small businesses to trade internationally. Since the Ex-Im Bank does not contribute to U.S. debt, the Senate’s decision may well prove short-sighted. In fact, … Continue Reading →

Earlier this month, the Federal Reserve issued a request for comment on “whether the repeal of Regulation Q is expected to have implications for balance sheets and income of depository institutions, short-term funding markets such as overnight federal funds market, the demand for interest-bearing demand deposits, and competitive burden on smaller depository institutions.” U.S. banks are planning for the demise of Regulation Q, considering the choices that small-business, middle-market, and corporate customers will embrace, and determining how their treasury business will respond. Regulation Q prohibits Federal-Reserve-System-member banks from offering interest-bearing checking accounts to business customers. As part of the Dodd-Frank … Continue Reading →

Another year of NACHA’s Payments conference has come to a close. The exhibit floor has emptied, and attendees have headed back to their homes and offices. The Payments conference has a collegial feel; as described by one attendee, “I’m with my tribe.” It is true that many people return year after year. Just as we catch up with each other, we catch up with industry trends and new topics. The keynote address this year focused on payments challenges and opportunities in healthcare. That speech set the stage for the inaugural healthcare track of presentations — many banks and technology vendors … Continue Reading →

On Thursday, March 3rd, I was involved in a TweetJam (#INFAtj), organized by Karen Hsu of Informatica, on business-to-business (B2B) payments, SEPA, and integration. In conversation with Chris Skinner of Balatro Ltd., I stayed (mostly) within the 140-character message limitations of Twitter while the hour flew by. The conversation began with the importance of payments to banks’ revenue, and veered into segmentation of European Union banks by payments business model in response to the Single Euro Payment Area (SEPA). As Chris said, “SEPA splits EU banks into three — those big enough to do it, those small enough not to, … Continue Reading →

An Aite Group client asked me a rather simple question regarding my recently published report, Trends in Bank-Supported, Business-Initiated Payments. This led to an interesting conversation about what I am seeing in the market regarding combining retail and wholesale banking platforms (given that small businesses frequently behave like consumers), and banks’ need to consider their customer segments when planning for their payments future. An interesting topic, to be sure. I do not think that every bank should — or will — collapse all of their payments capabilities into a single platform. It is always important for a bank to consider … Continue Reading →

According to the World Payments Report 2010, December 2010: Payments and other transaction banking services proved resilient during the economic crisis, but the rapidly changing external environment will require banks to decide to what extent payments are core to their business strategies.  . . . [Some of] the key findings of this report include the following: The payments business has withstood the financial crisis well. Only time will tell the ultimate impact, but initial data suggest payments volumes continued to expand in 2009. The global use of non-cash payment instruments continued to grow in 2008, despite the financial crisis. The … Continue Reading →