Elimination of Payment Intermediaries You have seen this before, now I have added the entire flow 😎 The gist of this is that INSTANT payments greatly reduce the need for Payment Intermediaries like Stripe. Why is that? Because instant payments limit the needed functionality to Issuer routing and Merchant authentication, rather than payments (it just OK or fail). However, Issuer routing is entirely redundant since virtual payment credentials can easily hold payment host names like "sample-issuer-bank.com", while Merchant authentication can be performed through public Trust Services (TS) provided by the associated Merchant Bank.
Except that "User bank" and "#Merchant bank" are intermediaries in themselves that needs to be eliminated. So the model fails
Now imagine CBDC-type transaction where all you need is indeed to verify that sufficient funds are available. 🚀
Anders Rundgren The present schemes are organized cartel blackmail. They will not stand.
How representative is the diagram of an instant payment transaction? Am I right in assuming that this isn't based on an Open Banking transaction flow? It doesn't look like it is, so I could be applying the wrong logic, for which I apologise. However, as far as I am aware, there is no No5 Payment Response following the No4 Backend thing, but the diagram is telling us otherwise! The "Payment Response" is a confirmation that the Payment Instruction was sent, NOT a confirmation that the cash landed. The difference is subtle, but a merchant is going to want confirmation of cash before releasing goods - this model doesn't provide for it. Alternatively, there could be a "Merchant of Record" to guarantee the payment (not too onerous as the failed transaction risk is low, although it happened to me and was a NIGHTMARE to sort). Maybe I am only talking about the UK Faster Payment process, but this is NOT my understanding of the way this stuff works, and dropping a "pay-by-bank" ( and the original PBY designs were done by me) transaction flow on top of a card transaction model is not easy. Happy to be called out as an idiot for not understanding the process, but first read this: https://paymentmonkey.net/money-movement-models 🙈 🙉 🙊
A payment in e-cash is digital and can be made securely online. E-cash payments are therefor also direct between the payer and payee, without any intermediary.
🚀 "French Tech" Inventor, Consultant and Entrepreneur
2yAlthough it might not be clear from the picture, the most important part of the puzzle is the use of public trust/discovery services, enabling decentralized, but still controlled ways to evolve ecosystems. ISO20022 represents the opposite, requiring tons of hard-to-interpret options and a very rigid upgrade scheme. Mike Chambers