Payments in Full

My apologies for the double send. Substack put the paywall in the wrong place on the prior version. One of my equity research friends writes a weekly recap on payment’s news. This week’s had something that genuinely surprised me: Door Dash may be developing its own POS. According to the snippet, this would be focused on “cloud kitchen” type, delivery-only restaurants rather than a broad solution competing with Toast, Square, Clover, etc. Even so, this makes no sense to me.

They think so, I don't Key Insights in this post An article in Payments Dive excerpted an interview with Visa’s CFO on Agentic Commerce; Mr. Suh asserted that Agentic Commerce would accelerate Visa growth in four ways: Create more transactions by splitting purchases to optimize for price Digitize more payments, reducing cash & checks Accelerate B2B transactions Increase overall economic production, stimulating commerce in general In my view, the first three are unlikely or exaggerate benefits...

Earlier this week I published a post on Small Business Cards based on the Nilson report league tables. I calculated a metric of Credit cards issued/Debit cards issued as my measure of cross-sell. I then looked at spend per card to see if any cross-sold cards became primaries. I demonstrated that some banks outperformed on cross-sell despite the dominance of national issuers.

In the face of national brands, Bank of America is the big winner Introduction Nilson published the commercial card league tables recently. My attention was drawn to the Small Business cards section where they showed separate tables for debit and credit.

Hard to detect synergy or the value of scale Key Insights in this post Fiserv’s Investor Day presentation asserts synergies and scale benefits from the combination of its Merchant Solutions & Financial Solutions business lines In contrast, FIS & GPN have traded assets to become a pure-play Financial Solutions company (FIS) and a pure-play Merchant Solutions company (GPN) I found limited evidence in the presentation of revenue synergies or scale benefits Revenue synergies: Fiserv presented a...

The strategy should be more sensitive to competition Introduction Fiserv had its investor day earlier this week, with new disclosures and insights into its Merchant Solutions strategy. Credit where credit is due: Fiserv already had the best disclosures of any payments company I know of, and now they made it better.

Great on growth, mixed on stock price Introduction Over a year ago I published a post call “Handicapping Payments Fintechs”. It presented a selection of payments fintechs I admired and attempted to explain why I picked them and how they had performed recently. Performance was based on Q3 2024 data. I thought it might be interesting to update that analysis based on recent performance. I picked the Fintechs first and then tried to derive what made them interesting to me.

Klarna released new disclosures on its US business so we can now compare it to Affirm on more of an apple-to-apples basis The clearest difference is that Affirm focuses on longer-term instalments while Klarna focuses on the Pay-in-X product; Affirm is 85% Installments – 3x+ larger than Klarna in this product Klarna is 60% Pay-in-X – 2x larger than Affirm in this product Afterpay is likely #3 , but doesn’t disclose details.

A year ago, Chime issued its S-1 to go public. In the intro, they presented a manifesto on how they intended to operate. It is worth reading, but here is the part I am most interested in: So how did we get here? The reality is that most Americans don’t have large deposits, two-thirds live paycheck to paycheck, and far too many are considered unworthy in terms of credit quality.

Nilson released its annual debit league table recently. The data is self-reported from the top 50 debit issuers. On the surface it reveals nothing surprising. The Top 50 are a smaller share of the total market in Debit than they might be in Credit.