Opinions

We’re asking customers from different demographics to describe what they are looking for from their financial services providers.

Visa and MasterCard have little real interest in implementing effective security because they don’t absorb fraud losses.

Of all the potential benefits, mobile-driven loyalty is the factor with the greatest potential to drive consumer adoption of mobile payments.

Banking is increasingly a data-driven business. By creating a shared data and analytics utility, community banks could glean valuable insights on their business currently available only to large institutions.

Another Side of the Bitcoin Debate: Pamela J. Martinson and Christopher P. Masterson of Sidley Austin LLP took on one of 2013's hottest topics – Bitcoin – by warning there were hazards in lending to the cryptocurrency's users. "Owned Bitcoin has the potential to be collateral for loans, but creditors are likely more concerned with restricting Bitcoin acquisition or use by borrowers due to the uncertain regulatory landscape, irreversible nature of payments, extreme volatility of value and anonymity of the system," they wrote. One reader felt a borrower's use of Bitcoin wasn't always relevant. "If the debtor uses another asset, like a traditional bank account, and does not offer the bitcoin as collateral, what business is it of the bank whether that person or company owns or handles bitcoin?" he wrote. Another commenter thought the authors were selling the cryptocurrency short. "Bitcoin technology introduces some very new novel ways to use bitcoins in collateral and escrow transactions that simply have no parallel in today's banking system," the reader argued. "In a nutshell, because the authority to transfer Bitcoin is established through mathematics rather than institutions, it is possible to create elaborate mathematical equations … where control of the Bitcoins is spread across multiple parties." (Indeed, the economics and technology writer Eli Dourado has described "m of n" multi-signature transactions, in which bitcoins cannot be released from an account without the consent of at least one party plus an arbitrator.) Martinson and Masterson described loan agreements with covenants or reps and warranties that restrict borrowers' use of Bitcoin, and a commenter on Reddit smelled foul play, grumbling, "Here's another way in which banks are trying to squelch Bitcoin." But another Redditor had a more prosaic take: "Banks are so stupid, they can't change their paradigms so they are completely missing the boat."

The virtual currency has the potential to serve as collateral for loans, but creditors are likely more concerned with restricting borrowers’ Bitcoin use due to the regulatory uncertainty, irreversible payments, volatile exchange rates and the system’s anonymity.

With 2013 coming to a close, here's a look back at some of our favorite contributions to the PaymentsSource blog this year.

A recap of the informed opinions (and the discussions they generated) on BankThink this week.

Banks need startups to test the waters with new products and services, but startups need banks for their capital, infrastructure, large customer bases, established regulatory relationships and compliance training.

Emerging payments developers shouldn't feel forced to place all their bets on one platform or another. In the shorter term, successful future models of banking will be hybrids.