Dear Credit Card Colleagues, Let’s Hope Your Bank Offers Better Customer Experiences!

I’ve been a Home Depot cardholder for 14 years until today. I was surprised to find a $29.00 charge for a returned check I never sent. Upon calling Citibank customer support for clarification, I learned that the account I used to make my card payment had been closed. I had closed that account at my bank and attempted to remove it as a payment source from Citibank’s website the same day. Unfortunately, Citibank’s website does not allow for easy removal of a payment source, meaning a closed account remains a default option until Citibank decides to remove it. In my case, this resulted in a returned check fee being charged before any action was taken.

I politely requested that the Citibank Customer Support representative remove the charge, but was informed that this would not be possible. This interaction led me to make the decision to pay off my outstanding balance immediately, cut up my Home Depot card, and close my credit account with Citibank. After 14 years as a loyal customer in good standing, I am disappointed by this experience and have decided not to use Citibank products or services in the future.

Looking at Citibank’s performance over the last year, I see that Citibank is not a favored consumer bank. According to only 2% in every age group out of the 10000+ people interviewed use Citibank as their primary account. Check out this link –

Citibank itself reported a 2023 4Q loss of 1.8 Billion dollars,

Citibank also reported credit losses for Q1 2024: Citigroup revenues of $21.1 billion in the first quarter 2024 decreased 2%, on a reported basis.

Clearly, they no longer care about how many customers they lose.    

Future of Commercial Payments (Part 2)

The introduction of AI in the Payments World

Although AI is in its infancy, it is expected to explode in growth over the next few years. One question that many have had is how AI will impact Payments, my thoughts on this topic are below.

The introduction of AI

The first area that I believe AI will help in the payments industry is in enhanced fraud detection. This will be helpful as I for one am tired of my bank flagging my card for not knowing me well enough to know that I pay for items in 6-month subscriptions at times.

AI-powered algorithms can analyze vast amounts of data to identify patterns and anomalies, helping to detect and prevent fraudulent transactions more effectively. This type of pattern detection enhances security and protects both businesses and consumers. Since AI can analyze customer data and behavior, including individual preferences and needs, the AI system will understand which payments are legitimately made by the customer vs fraud attacks against a customer. This of course allows AI to improve the overall customer experience, leading to increased customer satisfaction and loyalty.

The second is in the field of faster risk assessment. I remember working on card risk assessment of credit for commercial and consumer accounts. AI will automate the risk assessment processes, enabling faster and more accurate credit scoring and lending decisions. This will streamline the payment process for individuals and businesses, making it easier to access credit and financial services.

One of the great things about AI is its ability to analyze historical payment data and market trends that will be used to make predictions about future payment patterns and behaviors. AI does this by collecting and organizing payment data, including transaction records, customer information, and market indicators.

Once collected, it applies statistical models and pattern recognition algorithms to identify correlations, trends, and patterns within the data. These Models allow the AI system to analyze various factors such as purchase history, spending patterns, demographics, economic indicators, and market conditions. And as such, the ability to recognize relationships between variables and payment patterns or behaviors. Through the identification of these relationships, AI can make predictions about future payment patterns and behaviors. As more and more data patterns become available and since the AI system continuously learns, the AI system can improve its predictions by incorporating new data and adjusting its models accordingly. Thus, AI systems have the ability to adapt to changing market conditions and evolving customer behaviors, allowing it to provide more accurate predictions over time.

One of the biggest payment enhancements that AI is expected to make is in leveraging technologies like facial recognition, voice recognition, and other biometrics such as fingerprints. This type of AI technology is expected to make the payments process simplified, reduce checkout friction, and enhance user experience.

In one of my earlier posts, I had mentioned that I was a victim of fraud which probably wouldn’t have happened if a payment AI was put in place. I mention it because this type of enhancement would not have allowed the transaction to happen and would’ve marked the transaction request as fraud.
AI will automatically monitor and ensure compliance with regulatory requirements in the payments industry. Through the automation of the compliance processes, AI will help businesses stay up to date with ever changing regulations.

And finally, AI-powered chatbots and virtual assistants are expected to handle customer inquiries, provide support, and assist with payment-related tasks. This will improve customer service through the offering of real-time assistance and reduced response times. I am currently not a big fan of today’s Chat Bots or phone help desk bots. Although the bots are trained enough to answer basic questions, they are brainless as they can’t learn from human response making them nothing more than a preprogrammed auto-response unit.

With the integration of AI technology into payment systems we will see enhanced and streamlined payment processes. AI will be used to automate various aspects of payment processing, such as fraud detection, risk assessment, and customer support. Payment APIs provide the necessary interfaces and protocols for AI systems to communicate with payment gateways and process transactions securely. This integration allows for more efficient and accurate payment processing, improved user experience, and enhanced security measures. The next step is to build the interaction and apply it to payment system APIs.

Future of Commercial Payments (Part 1)

Now that the Federal Reserve has launched its instant payment solution, FedNow, it is important to discuss the future of treasury management and commercial payments. The real-time payment system developed by the Federal Reserve, aims to provide faster and more efficient payment processing, similar to The Clearing House’s RTP product. The implementation of FedNow can have several benefits for businesses, including improved cash flow management, reduced transaction costs, and enhanced liquidity.

The integration of FedNow with treasury management systems allows businesses to directly utilize real-time payment capabilities, enabling better control over cash positions and informed financial decision-making. Furthermore, the availability of instant payments through FedNow can streamline the payment process, reducing reliance on traditional methods such as checks, ACH, and wire transfers.

The introduction of FedNow is expected to drive innovation in the commercial payments sector. Businesses will leverage the real-time payment infrastructure to develop new payment solutions, such as embedded payments in e-commerce platforms or seamless integration with accounting systems. This will ultimately improve efficiency and convenience in commercial payments.

The adoption of RTP and FedNow has made treasury management more efficient and streamlined. Businesses now have access to real-time payment capabilities, enabling faster and more accurate cash flow management. This can optimize working capital, enhance liquidity management, and improve overall financial decision-making.

Moreover, RTP and FedNow provide enhanced security and fraud prevention measures. These payment systems incorporate robust authentication and verification protocols, reducing the risk of fraudulent transactions. As a result, businesses can conduct commercial payments with greater peace of mind.

Real-time payment options facilitate faster and more convenient commercial payments. Businesses can make instant payments to suppliers, vendors, and other stakeholders, eliminating the need for traditional payment methods that often involve delays or manual processing. This not only improves cash flow but also strengthens business relationships and enhances operational efficiency.

As technology continues to advance, the future of treasury management and commercial payments utilizing RTP will likely involve integration with other emerging technologies. For instance, the integration of RTP with APIs (Application Programming Interfaces) can enable seamless connectivity between financial systems, allowing for automated reconciliation and real-time data exchange.

Imagine a scenario where treasury managers or accounting systems can access account payment transactions at any time or where accounting software can generate payments with a simple swipe. Coupling RTP with APIs and AI will unlock limitless payment possibilities.

Given the convenience and efficiency offered by instant payments, it is anticipated that financial institutions will experience an increase in requests to create instant payments. The structure of payment requests aligns well with JSON packages, allowing for streamlined processing. An example payment request could resemble the following:

{ “transaction_id”: “txn_12345”, “type”: “web”, “date”: “2022-02-08”, “customer”: { “name”: “John Doe”, “email”: ““, “phone”: “123-456-7890”, “accountNbr”: “888000999”, “routingNbr”: “123456789” }, “merchant”: { “ID”: “SOME3345”, “name”: “Some Merchant”, “phone”: “999-999-9999”, “accountNbr”: “999999999”, “routingNbr”: “123456789” }, “amount”: 99.99, “currency”: “USD”, “payment_method”: “credit_card”, “status”: “Approved” }

In conclusion, the future of treasury management and commercial payments with the availability of RTP and FedNow holds significant potential for improved cash management, reduced costs, increased liquidity, enhanced security, faster payments, seamless integration with other technologies, and innovative payment solutions. Embracing RTP and FedNow will enable businesses to maintain competitiveness and adapt to the evolving landscape of financial transactions.

I was a victim of TicketMaster Fraud and I don’t have a TicketMaster Account

I was a victim of Fraud. I didn’t think it was possible and I have my suspicions as to what had happened, but I don’t have any way of proving it. The scary thing is that I don’t think Ticketmaster cares about fraud. Don’t get me wrong, Ticketmaster refunded my money, but they don’t care enough to do anything else about it, and that kind of attitude only promotes further fraud.

So, here is what happened. Over the last year, my debit card has left my hand only one time. That was to pay for a meal that I had at a local establishment.

The next day, BAM, hit for 4 tickets each ranging from $312 to $340 purchased from Ticketmaster. Which is fishy because I don’t have a Ticketmaster account. I called my bank and Ticketmaster; my bank told me they would credit my account in 5 to 10 business days. My call to Ticket master was much more interesting.

When I originally called Ticketmaster, I told the customer service agent what had happened, and they told me that someone would call me back in 24 hours. Well, that never happened, so I had to call back the next day. The customer support person that I spoke to the next day was very helpful but wouldn’t tell me much about what had happened other than the fact that the fraudulent transactions were for 4 tickets to an NFL game on Sunday in Florida.

The customer service person told me that they were unable to give any more information about the account used to make the transaction, as it may have been stolen from the actual account holder who would not have known the transaction happened using their account. I was told that the fraudster used my debit card information, including name and mailing address, but not my email address. Doing a quick check of my name on the internet doesn’t readily give a person enough information to know where I live. However, if the fraudster knew the name of the town in which I live in, they can easily get the rest of my address information.

Okay, so, this is where I get a bad feeling about Ticketmaster as a service. Please keep in mind that I don’t have a Ticketmaster account and don’t care to get one. With that said, if what the customer service agent said was true, right away I see three red flags, 1) they allowed someone to use card information that doesn’t match the account holder’s personal information, 2) Ticketmaster may not be using some kind of multifactor authentication to confirm the transaction is valid and 3) they failed to confirm the accuracy of all information about an account holder from day one when the account was created and later when an account is hijacked.

Let’s take each of these red flags individually so that I can tell you why it’s a red flag and Ticketmaster really needs to fix their current practice.

1) Allowing the fraudster to use my card on any account. Let’s talk about this, it seems that Ticketmaster is allowing cards that don’t match the accountholders name to be used to purchase tickets. Wow, really?! I just don’t understand why this would be a good idea. Ticketmaster, don’t you do any user validation at all? It would be so simple to compare and validate this information, even if the account was stolen. Simply don’t allow the user’s account personal information to be different from the cardholder’s name. This is a no brainer; I just can’t think of a reason as to why the Ticketmaster accountholder’s name would be different than the cardholder’s name. Some may argue that the Ticketmaster account name should be allowed to be different so that you aren’t using the accountholders real/legal name. That can easily be solved by using an alias tag that is displayed as the account holder’s name online.

2) Looking online, I see articles stating that Ticketmaster is using multi-factor authentication. If so, that would indicate that the accountholder, in this case, allowed the fraudster access to their account and the second authentication method, i.e. email or mobile phone. Or the fraudster is using an illegal/fake account. Once this happens, the true accountholder is completely unaware of the fact that they no longer control their own account and can no longer access it depending on what the fraudster does with their account.

3) Failure to confirm the accuracy of newly created or recently edited personal account information. Since the tickets at Ticketmaster could be thought of as an actual asset, it would make sense that the items would be traceable. The FI world really has this down pat with their whole KYC (Know Your Customer) programs. Why wouldn’t every business join in on that parade? Banks make sure you confirm your identity every time you make a change to your personal information, making fraud much more difficult by would be thieves. Easy things like security questions that you must answer correctly to save any personal data changes. I’ve even worked with some organizations that ask questions about your past which make it difficult for someone else to know other than the actual owner of the personal data.

I’m going to speculate as to what had happened on the fraud that was committed against my account, and the process they implemented to make money from my card. I suspect that this is a fraud ring. It started with the fraud ring front person running my card through the magnetic stripe card reader that captured my personal profile and account data. The card has my full name on it and provided my account information to the reader. From there, it’s a quick look up to confirm the data, i.e., phone number, street address, etc. In this case, the fraudsters didn’t use my email address. Next, my personal data was sent to the fraud ring database for processing and availability to commit fraud. The ring may have put the information on the dark web or sent the data to their backend. However, in my case, I think the ring used a hacked victim’s account to purchase tickets for cash resale. In this case, the hacked account owner probably didn’t know of the hack and the use of their account.

Lastly, I feel that Ticketmaster doesn’t really care about deterring fraud. If they did, they seriously would have gone after the bad guys, but instead TicketMaster will write off the loss as part of doing business and let the taxpayer’s pickup up the tab.

According to the Ticketmaster site, “We take fraud very seriously and thoroughly review every claim brought to our attention. If you suspect fraud on your Ticketmaster or Live Nation account, contact us.

And remember — where you buy matters. The only way to know if your tickets are the real deal is to buy Ticketmaster Verified Tickets directly from Ticketmaster or Live Nation or get them at the venue box office. Ticketmaster Verified Tickets are 100% authentic and guaranteed to get you in, including Fan-to-Fan Resale Tickets.”

Ticketmaster uses PayPal for the processing of financial transactions which means that PayPal is the intermediary for processing the ticket payments. I’ve yet to see how well PayPal confirms the users/payer’s identity to combat fraud. When I used PayPal to purchase items, I was never asked to confirm my purchases or alerted when my account was used.

If I log into any of my financial accounts to make a payment from a device that has not been confirmed to be mine or at my location, I am asked to verify that device. Why wouldn’t TicketMaster do the same?

TicketMaster has a long way to go to improve their online security. Let’s hope they can figure it out in the near future.


Ticketmaster Site – “How do Ticketmaster and Live Nation handle fraud?” -

Fraud Rings –

The future of digital payments in a consumer market

In the early 2000s, financial institutions (FIs) made efforts to offer a comprehensive online banking experience, including the capability to make online payments for their consumer markets. While some companies achieved immediate success, they discovered that the American public was not yet fully receptive to online banking. Other companies initially focused on different products but later expanded into the payments sector.

Although PayPal was not the first digital payment platform, it is an example to look at. PayPal emerged as one of the largest players in the field. eBay, in particular, sought a way to expedite item delivery to buyers, surpassing the traditional 3 to 5-day batched ACH payment process. Consequently, eBay acquired PayPal, which facilitated near real-time payments for items and was perceived as more secure due to PayPal’s enhanced control over the payment process. Subsequently, PayPal diversified its services and became one of the world’s leading payment methods.

PayPal’s success did not go unnoticed, prompting other financial institutions to enter the realm of person-to-person (P2P) payments. Zelle, a P2P platform created by a consortium of banks, gained significant recognition and usage. The primary appeal of P2P applications like Venmo and Zelle lies in their user-friendly nature, allowing individuals to send money directly to friends or family members using email addresses or mobile numbers.

The future of digital payments is expected to continue evolving and expanding. With advancements in technology and changing consumer preferences, we can anticipate several trends in this space. We can expect increased adoption of mobile payment solutions. As smartphones become more prevalent and convenient, mobile wallets and payment apps are likely to become the preferred method of payment for many individuals.

We may see a rise in contactless payments. With the ongoing development of Near Field Communication (NFC) technology, contactless payments using devices such as smartphones or wearables are becoming more widespread. This trend is likely to continue as it offers a convenient and secure way to make transactions.

Currently ACH batch transactions continue to dominate the payments world with billions of ACH transactions running through the Fed and ACH Network per year. The ACH Network enabled real-time payments back in 2017, the Federal Reserve recently introduced its own real-time payment system, FedNow, in July 2023. These are great starts toward enhancing today’s payment systems, allowing for faster end-to-end payments.

As technology continues to advance, the world of digital payments is set to undergo further transformations. With the increasing prevalence of fingerprint and facial recognition technologies, biometric authentication is likely to become a standard feature in digital payment systems, enhancing both security and convenience.

With the innovation of systems like Google’s Bard, you will most likely see a big breakthrough of AI or intelligent payment decisions in your payment devices. Especially from those companies that currently have digital apps on a mobile device such as a cell phone. Imagine the ability to work directly with a POS device from your phone. Things like being able to view the list of items you are purchasing as they are scanned, confirming that purchase, and choosing your payment type on your screen without having to input a card and PIN. Your device should signal you with payment options and provide secure authorization of your payment transaction.

I predict that real time transactions will take place to complete these transactions. For example, after payment authorization is complete the transaction will be sent (obviously encrypted) in some semblance of a JSON message. An example would look something like this:
“messageId”: “123456789”,
“sender”: {
“routingNumber”: “123456789”,
“accountNumber”: “987654321”
“receiver”: {
“routingNumber”: “987654321”,
“accountNumber”: “123456789”
“amount”: 100.00,
“currency”: “USD”,
“paymentType”: “Credit”,
“paymentMethod”: “ACH”,
“transactionType”: “RTP”,
“transactionDate”: “2022-01-01”,
“transactionTime”: “12:00:00”,
“additionalInfo”: {
“description”: “Payment for services rendered”
In this example, the JSON request includes the necessary information for an ACH Network RTP transaction. It includes the unique messageId for tracking purposes. The sender and receiver objects contain the routing numbers and account numbers of the respective parties involved in the transaction. The amount field specifies the payment amount, while currency indicates the currency of the transaction (in this case, USD). The paymentType is set to “Credit” to indicate a credit payment, and paymentMethod is set to “ACH” to specify the ACH payment method. The transactionType is set to “RTP” to indicate a Real-Time Payments transaction. The transactionDate and transactionTime fields specify the date and time of the transaction. The additionalInfo object can be used to provide any additional details or descriptions related to the payment.

My expectation is that soon, technology will allow you to speak into your IoT devices and may make payments directly from them. As more devices become connected to the internet, the potential for IoT integration in digital payments is vast. Imagine making a payment directly from your bedroom clock or refrigerator.

In conclusion, digital payments have transformed the way we handle financial transactions, offering convenience, speed, security, and accessibility. With various technologies powering these payments and exciting developments on the horizon, the future of digital payments looks promising. Embrace this digital revolution and enjoy the benefits it brings to your financial life!

Digital Payments – Wonder why?

In today’s fast-paced world, digital payments have become the go-to method for conducting transactions. Gone are the days of carrying around bulky wallets stuffed with cash or fumbling for loose change. With just a few taps on a smartphone or a click of a button on a computer, payments can be made seamlessly and securely. This article explores the world of digital payments, delving into the various benefits they offer and the technologies that power them.

Digital payments have revolutionized the way we handle financial transactions. Some key advantages are convenience, speed, security, trackability, and accessibility.

There is no need to carry physical cash or cards. All you need is your smartphone or computer, making it incredibly convenient for everyday transactions. Traditional payment methods often involve time-consuming processes such as counting change or waiting for checks to clear.

Digital payments, on the other hand, are instantaneous, allowing for quick and efficient transactions. These payment platforms utilize advanced encryption technologies to ensure the security of your financial information. This provides peace of mind, knowing that your personal data is protected.

These payments can be made anytime, anywhere, as long as you have an internet connection. Digital payment accessibility makes it easy to send or receive money across borders, fostering global connectivity. Unlike cash transactions, digital payments leave a digital footprint, making it easier to track and manage your finances.

The Technologies Behind Digital Payments

Digital payments rely on a range of technologies to facilitate seamless transactions. Let’s explore some of the key players in this space:

1. Mobile Wallets: Mobile wallets, such as Apple Pay and Google Pay, allow users to store their payment information securely on their smartphones. These wallets use near-field communication (NFC) technology to enable contactless payments.

How do Mobile Wallets work?

Mobile wallets work by securely storing your payment information, such as credit card or bank account details, on your mobile device. When you make a purchase, the mobile wallet app uses various technologies to facilitate the transaction.

You download a mobile wallet app from a trusted provider and create an account. During setup, you may be asked to link your payment methods by entering the card details manually or scanning the card using your device’s camera. The mobile wallet app encrypts and stores your payment information securely on your device. Some apps may also offer additional security features like biometric authentication (fingerprint or face recognition) or PIN codes to access the wallet.

When you’re ready to make a purchase, you open the mobile wallet app and select the payment method you want to use. This could be a credit card, debit card, or bank account linked to the app. Depending on the technology used, the mobile wallet app may utilize near-field communication (NFC), QR codes, or other methods to communicate with the merchant’s payment terminal.

The app generates a unique token or code that represents your payment information without sharing your actual card details. The token or code is sent to the merchant’s payment terminal, which then communicates with the relevant payment networks and your bank or card issuer to authorize and process the transaction.

Once the transaction is approved, you receive a confirmation on your mobile device, and the payment is completed. Some mobile wallets may also provide digital receipts or transaction history within the app.

2. QR Codes: Quick Response (QR) codes have gained popularity as a convenient payment method. By scanning a QR code with your smartphone, you can initiate a payment directly from your digital wallet.

How do QR Codes work?

Quick Response codes, are two-dimensional barcodes that can be scanned using a smartphone or QR code reader. They work by encoding information in a pattern of black and white squares, which can represent various types of data such as text, URLs, contact information, or even multimedia content.

When you scan a QR code using a compatible app or device, the scanner captures the image of the code and decodes the information embedded within it. This information is then processed and displayed on the screen of your device.

Once the QR code is scanned and decoded, the action associated with the encoded information is triggered. For example, if the QR code contains a URL, scanning it will open the corresponding website or webpage in your device’s browser.

3. Payment Gateways: Online businesses often utilize payment gateways to process transactions. These gateways act as intermediaries between the customer, the merchant, and the financial institutions, ensuring secure and efficient payments.

How do payment gateways work?

The customer selects products or services on the merchant’s website and proceeds to the checkout page. The customer then enters their payment details, such as credit card information or other supported payment methods, into the payment gateway’s secure payment form on the merchant’s website.

The payment gateway encrypts the customer’s payment information to ensure its security during transmission. This encryption helps protect sensitive data from unauthorized access. Next the payment gateway securely sends the encrypted payment information to the appropriate financial institution, such as the customer’s bank or credit card company.

The financial institution receives the authorization request, verifies the customer’s payment details, and checks for available funds or credit limit. It then sends an authorization response back to the payment gateway. Based on the authorization response, the payment gateway informs the merchant’s website whether the transaction is approved or declined. If approved, the payment gateway initiates the transfer of funds from the customer’s account to the merchant’s account. The customer receives a confirmation message regarding the status of the transaction, and the merchant fulfills the order or provides access to the purchased goods or services.

Throughout this process, payment gateways employ various security measures, such as encryption, tokenization, and fraud detection systems, to ensure the safety of sensitive customer data and protect against fraudulent activities.

4. Cryptocurrencies: The rise of cryptocurrencies, like Bitcoin, has introduced a new form of digital payment. These decentralized currencies utilize blockchain technology to enable secure peer-to-peer transactions without the need for intermediaries.

How do Cryptocurrencies work?

In general, Cryptocurrencies work through a technology called blockchain. A blockchain is a decentralized and distributed ledger that records transactions across multiple computers or nodes. Cryptocurrencies use cryptographic techniques to secure transactions and control the creation of new units. This encryption helps prevent the duplication or counterfeiting of digital currencies. Unlike traditional currencies, cryptocurrencies are decentralized, meaning they are not controlled by any central authority like a government or a bank. Instead, they operate on a peer-to-peer network of computers.

Transactions made with cryptocurrencies are recorded on a blockchain. A blockchain consists of a chain of blocks, where each block represents a set of transactions. This ledger is distributed across multiple computers or nodes, ensuring transparency and avoiding single points of failure. To validate and add transactions to the blockchain, cryptocurrencies rely on a process called mining. Miners use powerful computers to solve complex mathematical problems, and when they find a solution, they add the block of transactions to the blockchain. This process also ensures the security and integrity of the cryptocurrency network. Cryptocurrencies use consensus mechanisms to agree on the state of the blockchain and confirm transactions. Popular consensus mechanisms include proof-of-work (PoW) and proof-of-stake (PoS). These mechanisms prevent fraudulent transactions and maintain the overall integrity of the network.

Cryptocurrency wallets are used to store and manage digital currencies securely. Wallets can be software-based, hardware-based, or even paper-based. They contain public and private keys, which are used to sign and verify transactions. Transactions involve transferring digital currency from one wallet to another. Each transaction is recorded on the blockchain and requires the digital signature of the sender to authenticate the transfer. When a transaction is confirmed, the blockchain is updated, and the balances of the respective wallets are adjusted. This ensures that everyone in the network has an updated view of the ownership and history of each cryptocurrency unit.

Types of Digital Payments

Digital payments come in various forms, catering to different needs and preferences. Here are some popular types:

– Credit and Debit Cards: The most common form of digital payment, cards offer convenience and widespread acceptance. Credit and debit cards work as digital payment methods by allowing individuals to make purchases electronically. It’s important to note that the specific processes and systems may vary depending on the card network, issuer, and payment infrastructure used. Additionally, security measures like encryption and tokenization are employed to protect cardholder information during the transaction process.

  – Virtual Cards: Virtual cards are issued online and can be used for online purchases or linked to mobile wallets for contactless payments. Virtual debit and credit cards work similarly to physical cards, but without the physical presence.

– Peer-to-Peer (P2P) Payments: P2P payment platforms, like Venmo and PayPal, allow users to send money directly to friends or family members using their email address or mobile number. Users first need to create an account and link it to their bank account or credit/debit card. Once set up, they can initiate a payment by entering the recipient’s information, such as their email address or mobile number. The platform then securely transfers the funds from the sender’s account to the recipient’s account. This transfer can occur through various methods, such as direct bank transfers, digital wallets, or even cryptocurrency transactions.

P2P payment platforms often provide additional features like transaction history, notifications, and the ability to split bills or request payments from others. Some platforms may also offer added security measures, such as two-factor authentication or encryption, to protect user information and transactions. P2P payment platforms simplify the process of transferring money between individuals, making it convenient and efficient for everyday transactions.

– E-Wallets: E-wallets, such as PayPal and Paytm, provide a secure storage solution for your financial information, enabling you to make online or in-store payments. These digital wallets utilize electronic systems to securely store and manage payment information on digital devices like smartphones or computers. Users can add funds to their e-wallets by transferring money from their bank accounts or receiving payments from others. Some e-wallets also support cash deposits or integration with other payment platforms. By securely storing payment details like credit/debit card information or bank account numbers, e-wallets eliminate the need to enter this information for each transaction, enhancing convenience for future payments.

When making a payment, users can select their e-wallet as the preferred payment method at participating merchants or online platforms. The e-wallet then securely transfers the payment information to complete the transaction.

To ensure user information and transactions are protected, e-wallets employ various security measures such as encryption, tokenization, biometric authentication (e.g., fingerprint or facial recognition), and two-factor authentication. Additionally, e-wallets often offer features like transaction history, balance tracking, integration with loyalty programs, and the ability to send or receive money from other e-wallet users.

Overall, e-wallets provide a convenient and secure means for users to make digital payments using their stored payment information.

– Online Banking: Many banks offer online banking services that enable customers to transfer funds, pay bills, and make purchases directly from their accounts.

Online banking allows individuals to access and manage their bank accounts through the internet. To use online banking, customers need to create an account with their bank and set up online banking services. This usually involves providing personal information, verifying identity, and creating login credentials. Once the account is set up, customers can log in to their online banking portal using their username and password. Some banks may also require additional security measures like two-factor authentication for added protection. After logging in, customers can view an overview of their accounts, including balances, transaction history, and pending transactions. They can also access other banking services like loans, credit cards, and investments.

Online banking allows customers to transfer funds between their own accounts or to other accounts within the same bank. They can initiate transfers by providing the recipient’s account details and specifying the amount to be transferred. It also, enables customers to pay bills electronically. They can set up recurring payments or make one-time payments to utility companies, credit card providers, or other payees.

Instead of receiving paper statements, customers can access their account statements online. These statements provide a detailed record of transactions, allowing customers to track their spending and manage their finances.

Online banking often offers additional services such as requesting new checks, ordering debit or credit cards, updating personal information, and contacting customer support.

Digital payments offer several advantages, such as instant transactions, easy record-keeping, and the ability to make payments remotely. They also provide enhanced security features, such as encryption and authentication measures, to protect sensitive financial information. The adoption of digital payments has been accelerated by advancements in technology, increased smartphone usage, and the growth of e-commerce. As a result, digital payments have become an integral part of the modern economy, transforming the way people transact and interact with businesses.

Electronic Payments – wonder why?

Are you interested in understanding how electronic payments work and why they are faster compared to traditional payment methods?

In the past, consumers had to rely on cash or checks, which required manual processing and took days to clear. However, in today’s era, we can make almost instant payments using our mobile phones. So, what factors contribute to the improved speed of payment processing in the present, considering the advancements in personal computers and the internet?

A little payment history

In the past, it was commonplace for individuals to utilize checks as a payment method at retail establishments. These physical checks featured a Magnetic Ink Character Recognition (MICR) line, which contained essential information for routing the check to the respective bank. The check would then undergo routing and clearance through one of the twelve federal reserve institutions, a process that typically took between one to three days to complete.

While credit and debit cards were available prior to the introduction of electronic Point of Sale (POS) readers, the ability to conduct electronic POS transactions did not emerge in the United States until the late 1970s, spearheaded by Visa. Prior to the implementation of POS readers, merchants would utilize a card imprinter to create a copy of the card and record the sales price to be charged against the customer’s account. The customer would then sign the sales slip and receive a copy as proof of payment.

It is important to note that the settlement process for card transactions differs from that of checks, as card transactions are typically settled through a network of payment processors and card issuers. Both the paper check and card imprint processes are considered outdated and cumbersome in comparison to modern payment methods.

How the MICR technology works:

The check is run through a machine called a MICR reader or scanner. This machine uses magnetic sensors to read the MICR characters on the check. The magnetic ink allows the machine to accurately and quickly capture the information encoded in the MICR line. Once the MICR reader captures the information, it usually verifies the authenticity of the check, routing it to the correct bank, and processing the transaction. The MICR technology helps automate the check processing system, reducing errors, and increasing efficiency. MICR line technology on checks uses magnetic ink and special characters to encode important information. This information is then read by MICR readers or scanners to facilitate check processing and ensure accurate and secure transactions.

In the 80’s, debit and credit cards became the preferred means of payment as they were viewed as safer than carrying cash. Also, a growing number of retailers were moving toward POS readers and banks were introducing ATMs in their lobbies and retailers to alleviate customer traffic for cash transactions.

The difference between credit cards and debit cards is simply the fact that credit cards are tied to a line of credit account offered to the customer by a financial institution. When a credit card transaction is executed, the funds are pulled directly from the customer’s credit account.

Debit cards are provided by the customers FI and tied directly to the customer’s demand deposit account. Debit card transactions post to the customer’s account immediately.

The cards contain a magnetic strip, called a Magstripe, on the back of the card that contains the bank’s routing number and the customer’s account information which is used to process the payment through an encrypted message sent through the payment processor’s network.

Card Imprinter
Card Imprinter

Early on the POS systems didn’t have the capacity to store transactional information when the network was down (offline), so the merchant would revert to using a card imprinter. In the late 80’s into the 90’s, technological advances allowed for POS systems to work in offline mode. When the network is down, the POS system can store the transaction data locally on the device or in a secure internal memory. Once the network connection is restored, the system will automatically sync and transmit the stored transaction data to the appropriate backend systems for processing and settlement.

Storing transactions during network outages helps ensure that businesses can continue to accept payments and maintain a record of sales even in situations where internet connectivity is temporarily unavailable.

How the POS card reader technology works:

POS card reader technology, also known as a point-of-sale card reader, is used to process payments made with credit or debit cards. Here’s how they work. When the customer inserts/swipes/taps the card reader the card reader captures the card’s information, including the cardholder’s name, card number, expiration date, and sometimes the CVV (Card Verification Value) code.

Using the captured card data, which is first encrypted to protect it from unauthorized access or interception, the card data is sent to the payment processor through a payment gateway or the card issuer’s network for authorization. The payment processor verifies the card’s validity, checks for available funds, and performs other security checks. The payment processor or card issuer’s network sends an authorization response back to the card reader.

This response indicates whether the transaction is approved or declined. If the transaction is approved, the card reader prompts the customer to complete the transaction. This may involve signing a receipt, entering a PIN, or providing a digital signature.

Once the transaction is completed, the payment processor initiates the settlement process. The funds are transferred from the customer’s account to the merchant’s account, typically within a few business days. The exact process may vary depending on the specific card reader and payment system being used.

With technical industry advances, fraudsters were able to easily steal a customer’s personal information from a Magstripe card. This made such cards very risky to use as the data is stored statically on the card giving any card reader the ability to collect bank account information from the card itself.

Because of this risk, the US banks and credit card processors moved to EMV chip enabled credit and debit cards. Such cards were available in Europe for years prior to acceptance in the U.S. Europay, MasterCard, Visa, (EMV) cards are considered a better option for secure transactions as the cardholder’s personal data on the chip is encrypted and stored on the chip and the chip be authenticated by special readers.

When a purchase is made using an EMV card, the card’s chip generates a unique encrypted token. This token contains information about the transaction and is encrypted using cryptographic algorithms. The purpose of the encrypted token is to enhance the security of the transaction by preventing the unauthorized use of the card data.

The encrypted token is sent from the card to the payment terminal, where it is then forwarded to the card issuer for verification. The issuer can decrypt the token using their cryptographic keys to validate the transaction and ensure its authenticity. By using encrypted tokens, EMV technology helps protect sensitive cardholder data and reduces the risk of fraud associated with card transactions. Shortly after the creation of the chip card, card manufacturers added near field communication, known as NFC. NFC, which is considered a subset of RFID, is also known as a tap card and contains 3 curved lines indicating the radio frequency sign.

How EMV Chip technology works:

EMV cards have a small microchip embedded in them, usually located on the front of the card. This chip securely stores and transmits the cardholder’s personal data. Unlike traditional magnetic stripe cards, EMV cards use dynamic authentication methods. This means that each time an EMV card is used for a transaction, the chip generates a unique transaction code, making it difficult for fraudsters to clone or counterfeit the card. When making a payment with an EMV card, it can be inserted into a card reader or tapped on a contactless-enabled terminal. The card reader communicates with the chip to authenticate the card and authorize the transaction.

EMV cards often require cardholder verification to further enhance security. This can be done through a PIN (Personal Identification Number) entered by the cardholder or through biometric authentication, such as a fingerprint or facial recognition. EMV technology ensures that sensitive payment data is encrypted during the transaction process. This helps protect the cardholder’s information from being intercepted or compromised. EMV cards have the ability to perform offline transactions, meaning they can securely process payments even when the card reader is not connected to the payment network. Meaning that EMV chip transactions can still process even in situations where an internet connection may be unreliable. EMV card technology enhances payment security by using dynamic authentication, encryption, and cardholder verification. It helps protect against counterfeit card fraud and provides a more secure payment experience for cardholders and merchants alike.

PayPal was launched over 20 years ago and may be considered the first Peer-to-peer network. PayPal allows its customers to set up a PayPal account with them that is normally funded through a secure site using a DDA. It also allows the user to pay or send funds from credit and debit cards to make payments on internet purchases. At its inception, PayPal was owned by and tightly coupled with eBay. It gave eBay users a way of immediately paying for auctions that they won allowing the items to be sent immediately instead of waiting on a check or electronic payment to be sent to the seller.

How PayPal works:

PayPal serves as a middleman or facilitator in financial transactions between individuals or businesses and traditional banking institutions. Instead of directly connecting to a bank account, users can link their bank accounts or credit cards to their PayPal account. When a payment is made through PayPal, it securely processes the transaction and transfers the funds between the payer and the recipient’s bank accounts, providing an additional layer of security and convenience in the payment process.

Modern P2P payment apps popped up shortly after PayPal was found to be such a huge success. They served a relatively untapped market allowing near immediate payment/transfer to another person. They also served as an alternative to using PayPal and cards, as they were especially easy to use for sending money to family and friends.

How modern P2P technology works:

Modern peer-to-peer (P2P) payment systems allow individuals to transfer funds directly to one another using digital platforms or mobile applications. In general they through the following steps:

1) User registration: The user downloads the P2P app to their mobile device. Then the user completes a form that includes personal information and a financial institution account number or credit/debit card to be used to send and receive funds.

2) After registration, the user’s identity is verified. Usually by answering a few authentication questions to ensure security and regulatory compliance.

3) Next, this is not always required, but the user usually funds the P2P account by transferring funds in from their FI account or card.

4) Payments or fund transfers are made by entering the recipient’s information and an amount to send to the recipient. Usually, a mobile number or email address, but sometimes UserID.

5) To receive the funds, the recipient must at a minimum provide routing information to their account, but may be required to set up an account on the app. Also, the recipient may have to authenticate themselves to approve the receipt of the funds. This may require a PIN, password, biometric authentication, or some other type of security measure.

6) Once complete, the P2P payment system securely transfers the funds from the sender’s account to the recipient’s account. Depending on the app, this may involve routing the transaction through the banking system or using alternative methods like digital wallets.

7) Once complete, both parties are notified of the transaction to provide confirmation that that the transfer is complete.

8) The recipient can then access the transferred funds in their P2P payment account. They can choose to keep the funds in the account for future transactions or transfer them to their linked bank account.

9) To ensure that the transaction is secure, the P2P system will employ various security measures, such as encryption, fraud detection algorithms, and transaction monitoring, to protect users’ financial information and prevent unauthorized access.

No matter which technology you use, be assured your payment will make it to your account. However, please keep in mind that some technology is much safer than others. Which is your preferred payment method?

Open APIs in a Commercial Market

Changing commercial operations as we know it

Although open retail APIs have made a big splash in current markets, the open concept as a standard has been around as early as 2015 1. So, where are the Commercial APIs?

The concept of open commercial APIs is virtually unheard of and is still in its infancy. Open commercial APIs are a big deal as they provide for a new way to service commercial customers. Open APIs have rooted beginnings in corporations wanting to move faster, be more efficient, and smarter about their product offering to a consumer market. Currently, this new open standard has paved the way for Fintech’s to directly access consumer shopping, banking, and communication information.

We have seen many new successful Fintech start-ups use APIs to sell product directly to consumers. Companies like Acorns, Current, Chime, Simple, and Qapital have been big hits in the mobile application market.

Most fintech’s and corporations have not focused on how Open APIs can benefit their corporate partners and this is seen in the fact that there are very few Open API Corporate or Commercial marketplaces.

Fintech’s venture into commercial Open APIs

To do this, FIs and other Tech savvy groups required an open or public standard which would allow standardized access to commercial institutions data. This open/public API standard can be used by corporations, other third parties, and other Financial Institutions as a foundation for creating new applications that can do pretty much anything in a digital world. This type of API standard has opened the digital world to endless access possibilities.

Lack of corporate or commercial APIs, why is that?

As stated, there is still a large unexplored corporate and commercial API market. Reasons for this include the fact that creation of open commercial APIs are not widely sought after and are mainly undefined, expensive, and don’t provide for a clear and easy ROI. This combination makes for a slow move by Corporate America toward an Open API standard. Another reason that Corporations have not embraced Open APIs is that they don’t have a clear understanding of what to build, a strategy that outlines the customer need for Open APIs, and why they need to be part of the Open API ecosystem.

For these same reasons, institutions that haven’t consider an Open API approach will ultimately fall behind the organizations that have put such strategies in place.

Consider this, back in the day people laughed at, made fun, and balked at the use of an automobile to replace the horse. Ultimately however, the automobile slowly replaced the horse as the main mode of transportation. There are many reasons why this happened, cars are much faster, cars provide climate control, cars are comfortable to sit in, but maintenance costs are certainly one of the largest advantages. The owner no longer needed to feed, clean up after, and care for their main mode of transportation on a daily basis. Even though there are maintenance costs associated with an automobile, they don’t come close to the maintenance fees required to maintain a horse.

As new commercial Open APIs become available, organizations will clamor to them and demand new and more efficient API tools that aid in huge costs savings to their organizations. At that point, corporate institutions will have the information they need to build a correct strategy, business case, and ROI to create or be part of an Open API ecosystem.

Why should corporations use commercial Open APIs

According to market experts, estimates of an Open API ecosystem are in the trillions of dollars2 and some of the major consultants are estimating the growth of Open APIs will triple in the next 12 months3. Open APIs will enjoy exponential growth over the next 10 years and pave the way to new digital technologies.

Use of Open or Public APIs enhances the digital application of exchanging data between systems. Having this ability allows for building APIs that can virtually think on their own to make predictions on business cash flow and forecasting much easier for those companies that use them. Those that embrace APIs will enjoy increases in profits, sales, and higher gains in market share. The open and modular architecture of Open APIs allow for business and IT improvement.

Open APIs will aid in deploying new products, reducing costs, and simplifying operations. They can aid in Financial planning and forecasting by providing valuable information on spending patterns that aid in identifying and planning for new opportunities. Deep dive analysis APIs will provide for a better understanding of their customers and their customer’s needs.

Efficiency and Cost savings are definitely two concrete reasons to use open APIs. There is a large cost savings in enabling ad hoc access to specific information without the cumbersome need to access multiple systems, multiple credentials, and multiple cut & paste steps. This includes a savings in data imports that decrease the time needed to get the job done. Open APIs allow those individuals that pull information, such as corporate system engineers and analysts, to talk directly to corporate applications. This ensures greater efficiency, reduced costs, and reduced errors.


Open APIs and business models that support APIs are still in their infancy. Such models are still working to gain footholds in today’s digital markets, but there is no doubt that commercial APIs can and will increase commercial revenue as well as provide increased savings and efficiencies. Each commercial organization will need to come up with their own individual strategy and plan for being part of an open API digital ecosystem.

1 – OpenAPI Initiative, November 15, 2015. “New Collaborative Project to Extend Swagger Specification for Building Connected Applications and Services”
2 – McKinsey Digital, October 1, 2013. “Open data: Unlocking innovation and performance with liquid information”
3 – McKinsey Digital, September 17, 2017. “What it really takes to capture the value of APIs”

Help Small Businesses get back to normal during COVID!

Although we’ve had great news regarding a vaccine that is stated to be 90% effective fighting the COVID virus, we are still months away from delivering this vaccine to the American public. Small businesses need help NOW and our local and federal governments should and could help them out!
Since it is known that COVID-19 is mainly spread through person-to-person and virus-laden droplet contact, it makes sense to provide government funds for small businesses to install HEPA filtration systems, UV Lighting, and humidifiers. 

This would dramatically aid in fighting the virus indoors at a relatively small cost.

The costs to install a new filtration and humidification systems seems to average around $4,000 to $5,000 USD.
The government could grant small businesses these funds to update their business with HEPA filtration, UV systems, and humidifiers. Also, fund employers employees for the time it takes to install the systems, and then follow a process to confirm a successful installation.  A simple installation/confirmation process could be:
This small business opening grant/process should be added to the current COVID-19 phased plans that many states are using to combat the Corona virus. It would also help boost infrastructure through the construction, installation, project management, and operation of these systems.  Considered a win-win!!!  To me this seems like an efficient, effective, and economical way to get our small businesses up and running to capacity during the winter months. 

Fintech Program Manager

Back in 2017, I was fortunate to manage the BMO Harris Bank / 1871 Fintech Partnership Program where we would mentor up to eight fintech companies.  The program was setup to give Fintech companies a good understanding of how to work with large Financial institutions.  Also, it gave BMO Harris the opportunity to work with up and coming technical rising stars. We worked with 1871 to announce the program and to setup an online application that allowed Fintech’s consideration to be part of the mentorship program.
Working with stakeholders, it was determined that the program would run for 3 months with a final judging contest that awarded cash prizes. We worked with 1871 to announce the program and to setup an online application that allowed Chicago FinTech's an opportunity to be consider for the mentorship program.  A selection committee was created to review the applications and to select the startup companies that we wanted to possibly work with as mentees.
At an 1871 TGIF, the program was announced on April 21, 2017. BMO would accept applications and interview technical startup companies with a Fintech product or service to be part of the mentorship program.  From the identified applications, 6 startups were selected to move forward as part of the mentorship program.  Each startup was matched with FI experts from BMO Harris Bank which acted as mentors for a three-month period. At the end of the mentorship period, each mentee gave a 10 to 20-minute presentation in front of several BMO Harris Bank leaders who in turn selected a first, second, and third place winner.
The program was a huge success as BMO Harris Bank selected two Fintech companies, Genivity and SpringFour, partnering with the tech startups to bring their products and services to specific customers.
Due to the overwhelming success of the program, I was asked to manage this program every year until the department I worked in was disbanded in 2019.
If you are an organization that is looking to enter or solidify your presence in the digital and technical world, please feel free to contact me so we can discuss how I can aid you in your success in the digital or fintech world.