Comments: blasts from the past -- old predictions come true

Equivalent in the US was 99 bank modernization act (aka GLBA, known for repeal of glass-steagall and opt-out privacy sharing provisions ... somewhat federal preemption of cal. legislation in progress requiring opt-in for privacy sharing) ... where the rhetoric on floor of congress was saying a major purpose of the act was that if you were already a bank, you got to remain a bank ... but if you weren't already a bank, you couldn't become a bank (specifically calling out walmart and microsoft).

Since then there was somewhat low profile of number of operations getting ILC charters ... but then when walmart tried to get an ILC charter (claiming it would just be used for being its own acquiring institution .... eliminating those part of its interchange fees) ... there was big cry from S&Ls and community banks that it was going to sneak into local consumer banking (walmart supposedly represents 25-30 percent of retail transactions in the US ... so just becoming its own acquiring institution would have huge impact on a couple large acquiring institutions).

In the recent aftermath of financial mess ... some of the large unregulated investment banks were handing banking charters ... as part of helping them get out of the financial hole that they had dug for themselves ... aka allowing them to go to the federal reserve for free money (which in theory would have been counter to the earlier stated purpose of GLBA).

Posted by Lynn Wheeler at May 20, 2010 01:56 PM

there had been work for walmart to deploy x9.59 standard ... for stored-value, debit, and credit ... all for about the cost of mag stored-value transaction. chip (planned for issuing) was more secure than current generation (and much cheaper) ... could do both contact & contactless ... and could do secure contactless within the distance, power, and elapsed time constraints of transit turnstyle.

as periodically mentioned, side-effect of using x9.59 standard was slight change to the paradigm that (also) eliminated breach and skimming threats ... didn't do anything to eliminate breaches and skimming; just eliminated the threat that crooks could use the information for fraudulent transactions (and therefor any fraudulent financial motivation for doing breaches and skimming)

result would have been significant larger impact on interchange revenue than any of the current legislative activity.

Posted by Lynn Wheeler at May 21, 2010 02:48 PM

another part of walmart taking costs out of infrastructure

Wal-Mart Asks Suppliers to Cede Control of Deliveries

from above

The retailer has sought to offer goods like cereal and laundry detergent for less to lure shoppers back to stores, and lowering transport costs provides room to do that. The strategy is part of what Wal-Mart calls its “productivity loop” -- efficiency reflected in lower bills at the cash register.

... snip ...

Posted by Lynn Wheeler at May 22, 2010 10:03 AM
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