Marcel van Oost's Linkedin Analytics

An Introduction to Cards in Payments Edition 1: 𝐓𝐡𝐞 𝐓𝐲𝐩𝐞𝐬 𝐨𝐟 𝐂𝐚𝐫𝐝𝐬 𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐘𝐨𝐮𝐫 𝐂𝐚𝐫𝐝 𝐢𝐧 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬: Every payment card comes with key components that define its function and issuer: ► 𝐂𝐚𝐫𝐝 𝐓𝐲𝐩𝐞 (Issuing): Defines the category (e.g. cashback, rewards). ► 𝐁𝐚𝐧𝐤 𝐈𝐝𝐞𝐧𝐭𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐍𝐮𝐦𝐛𝐞𝐫 (BIN): Identifies the issuing institution and card type. ► 𝐈𝐬𝐬𝐮𝐢𝐧𝐠 𝐁𝐚𝐧𝐤: The bank that issued the card to the cardholder (e.g. Citi, Chase). ► 𝐂𝐚𝐫𝐝 𝐍𝐞𝐭𝐰𝐨𝐫𝐤: Connects issuers and acquirers (e.g. Visa, Mastercard). ► 𝐂𝐚𝐫𝐝 𝐓𝐲𝐩𝐞 (Acquiring): Indicates how the card will be processed on the acquiring side. — 𝐓𝐡𝐞 𝐓𝐲𝐩𝐞𝐬 𝐨𝐟 𝐂𝐚𝐫𝐝𝐬 1️⃣ 𝐂𝐡𝐚𝐫𝐠𝐞 Cards → Pay Later in Full (American Express Green) 2️⃣ 𝐂𝐫𝐞𝐝𝐢𝐭 Cards → Pay Later in Full/Partial (Visa Signature, Mastercard World) 3️⃣ 𝐃𝐞𝐛𝐢𝐭 Cards → Pay Now (Mastercard Debit, Visa Electron) 4️⃣ 𝐏𝐫𝐞𝐩𝐚𝐢𝐝 Cards → Pay Before (Visa Prepaid, Travel Forex cards) 𝐀𝐝𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐂𝐥𝐚𝐬𝐬𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬: ► General Purpose Payment Cards (GPPC) ► Local Payment Cards ► Virtual or One-Time Use Cards ► Corporate & Purchasing Cards ► Co-Branded & Affinity Cards ► Prepaid & Stored Value Cards ► Private Label Credit Cards — 𝐎𝐩𝐞𝐧 𝐋𝐨𝐨𝐩 𝐯𝐬. 𝐂𝐥𝐨𝐬𝐞𝐝 𝐋𝐨𝐨𝐩 𝐂𝐚𝐫𝐝 𝐍𝐞𝐭𝐰𝐨𝐫𝐤𝐬 4️⃣ 𝐎𝐩𝐞𝐧 𝐋𝐨𝐨𝐩 Networks (4-Party Model) ✔ Most common in global card payments ✔ Cardholder → Issuing Bank → Card Network → Acquiring Bank → Merchant ✔ Facilitated by major networks: Visa, Mastercard ✔ Scales easily through multiple participants ✔ Examples: Visa, Mastercard, UnionPay International, GIE Cartes Bancaires 3️⃣ 𝐂𝐥𝐨𝐬𝐞𝐝 𝐋𝐨𝐨𝐩 Networks (3-Party Model) ✔ Fewer intermediaries ✔ Issuer and acquirer are often the same ✔ Direct relationships with both cardholders and merchants ✔ Easier to manage but harder to scale ✔ Examples: American Express, JCB, Diners Club International — 𝐍𝐞𝐱𝐭 𝐔𝐩: 𝐓𝐡𝐞 𝐊𝐞𝐲 𝐏𝐥𝐚𝐲𝐞𝐫𝐬 𝐢𝐧 𝐂𝐚𝐫𝐝 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 In the next edition, Arthur Bedel 💳 ♻️ explores the roles of issuers, acquirers, card networks, payment gateways, and aggregators, and how they enable card transactions around the world: https://lnkd.in/dmPENGBX — Source: Travel & Payments & a BIG thanks to my mate Arthur Bedel 💳 ♻️ for writing this amazing piece 👌 Find this helpful? [ 𝗿𝗲𝗽𝗼𝘀𝘁 ] Anything to add about this subject? [𝗶𝗻𝘃𝗶𝘁𝗲𝗱 𝘁𝗼 𝗰𝗼𝗺𝗺𝗲𝗻𝘁] Nice story, Marcel. Next! [ 𝗹𝗶𝗸𝗲 ] Sign up for our newsletter for more great updates like this: https://bit.ly/4cEVcdm

Revolut 🆚 Starling Bank 🆚 Monzo Bank Let's dive in: Turning to financials, here’s a look at Monzo and Starling in 2024, while for Revolut—yet to disclose its 2024 accounts—I’ll refer to its 2023 figures. 👇 You can read my complete deep dive comparison article for more details: https://lnkd.in/daZu-n_k Find this helpful? [ 𝗿𝗲𝗽𝗼𝘀𝘁 ] Anything to add about this subject? [𝗶𝗻𝘃𝗶𝘁𝗲𝗱 𝘁𝗼 𝗰𝗼𝗺𝗺𝗲𝗻𝘁] Nice story, Marcel. Next! [ 𝗹𝗶𝗸𝗲 ]

Cross-border payments (CBP): The Stable Coin Use Case Matt Brown explains it best: "Cross-border payments" are payments made between parties in different countries. While the concept is straightforward, the systems that move >$45 trillion annually across borders are anything but. That’s because cross-border payments (XBP) must account for things domestic payments take for granted. Say you want to send $100 USD from the US 🇺🇸 to a friend in Japan 🇯🇵 Those funds need to somehow move between two banks that may not have a direct relationship with one another across different payment rails and regulatory regimes and eventually land as Japanese Yen (JPY) in an account around the world. The various solutions to this involve two common parts: (1️⃣) acquiring and supporting local users on both ends of the transaction, including first/last mile of money movement and local regulatory compliance, and (2️⃣) the “middle mile” of moving money or value across borders, converting currencies, and managing FX and liquidity risks. 𝗦𝘁𝗮𝗯𝗹𝗲𝗰𝗼𝗶𝗻 𝗨𝘀𝗲 𝗖𝗮𝘀𝗲 The newest kid on the XBP block is the stablecoin, which offers several improvements on all other XBP methods. A stablecoin is a digital currency backed 1:1 by fiat currency like USD, so its value is constant, and it’s tradable instantly and globally. Since the blockchain and exchanges never close, stablecoins can be converted almost instantly to/from fiat. When combined with burgeoning 24/7 fiat real-time payment networks, stablecoins enable near-instant fiat > stablecoin > fiat transactions. Taking the USD to JPY example again: once the sender initiates a transfer via Bridge or a platform that’s integrated it, USD moves over local fiat rails to Bridge’s local USD account. Bridge then exchanges the USD for a stablecoin such as Tether (USDT), and transfers it to a wallet linked to its bank account in the recipient’s country. The USDT is then converted to JPY in Bridge’s local Japanese bank account and moved over local rails to the recipient’s account. Like payment aggregators, stablecoin infra providers must maintain local accounts, follow local regulations and compliance, such as KYC/B senders and recipients, and more. I highly recommend reading the complete source article for more info, and sign up for Matt’s newsletter while you are at it: https://lnkd.in/dMrA9NZ8 Find this helpful? [ 𝗿𝗲𝗽𝗼𝘀𝘁 ] Anything to add about this subject? [𝗶𝗻𝘃𝗶𝘁𝗲𝗱 𝘁𝗼 𝗰𝗼𝗺𝗺𝗲𝗻𝘁] Nice story, Marcel. Next! [ 𝗹𝗶𝗸𝗲 ]