Mr. Ronald Ingram

GLG News by Mr. Ronald Ingram, Director of Product Management

The 5Cs of Credit, P2P Lending, Social Lending, Self-Directed Lending

November 11, 2009

Analysis of:BlackRock's Fink: Forget 'Bubble' | online.wsj.com

Laurence Fink, Chairman and CEO of BlackRock Inc. in response to questions about bank failures and economic conditions suggested today that; “…the financial system needs to be a lot more responsive to society and make sure this doesn't happen again. Risk has to be a lot more transparent to investors. I think that is happening."; and, “the financial system needs change, including increased disclosure, more derivatives trading on exchanges and regulatory change…". But what about the 5Cs of credit?

Financial Services Innovation and New Credit Sources Impeded by Regulation in the US

April 5, 2009

Analysis of:Where Credit Still Flows | www.forbes.com

Demand for credit has never been stronger. With government support P2P or "Social Lending" has the potential to improve the efficiency of credit markets and demonstrate US leadership in financial services innovation. The US is behind the curve in P2P lending innovation and losing ground due to the distraction and high cost of regulatory compliance. At a time when billions are being pumped into ailing banks government needs to find a way to encourage social lending.   Improved regulation may unlock a wave of new credit options and provide economic stimulus at the grass root level. Conceptually Social Lending and P2P financial models makes sense for consumers, business and the greater economic good of nations;  however, the effort to wedge P2P loan models into existing regulatory frameworks continues to impede American financial innovation.

World's Largest Payment Processor First Data Acquires InComm - Valuation Trend Implications for Global Payment Systems GPN, MV, V, MA and TSS and hundreds of smaller payment technology players

May 2, 2008

Analysis of:First Data Gets Major Retail Prepaid Distribution with InComm Deal | www.digitaltransactions.net

Visa's IPO was the largest in history and payment companies like Global Payment Sytems (GPN) and First Data are rising along with the tide. FDC’s choice of Incomm is likely a positive indicator of things to come. Who is the next Incomm? How will the Incomm acquisition affect the valuation of payment card processors, card acquirers, issuers, closed loop and open loop gift, debit, credit and General Purpose Reloadable (GPR) prepaid card plays? undefined undefined

Depositor Panic Triggers Run on UK Bank, Over Leveraged Banks at Risk

September 17, 2007

Analysis of:Police called to break-up Northern Rock panic queues as customers withdraw millions | www.thisislondon.co.uk

Police were called to manage crowds in the UK this morning as depositors lost confidence in Northern Rock and attempted to withdaw funds en masse. Depositor concerns are believed to relate to weak loan to deposit ratios and fears about exposure to subprime mortgages. Banks mentioned among the most highly levered include Northern Rock, Alliance and Leicester, HBoS and Bradford and Bingley. Lloyds TSB, Royal Bank of Scotlad, Barclays and HSBC are shown to be in a much better position. If concerns escalate to panic this will seriously impair money supply and weaken the economy of the UK with potential spill over into other markets if the panic spreads.

Western Union: Threat of New Entrants and Technology Means More Turbulence Ahead

August 1, 2007

Analysis of:Western Union Drops After Verizon Announces Wireless Payments and Transfers | biz.yahoo.com

In this article Obopay is credited for impacting Western Union's share price. Obopay is one of many newer less expensive means of transferring funds domestically or internationally. Other emerging competitors spanning email/computer money transfer, mobile and ACH based services include: Xoom; Ikobo; Coinstar (GroupEx Financial Corp.) and, Paypal. The implication is that Western Union may be in danger of losing its core competitive advantage due to the ubiquity of potentially realtime very inexpensive international electronic network connectivity. Whether this threat is real or perceived it will have an impact on WU's valuation. If the threat is not real the impact will be short term. If it is real current declines may be an early indicator of a longer term trend.

Turning Convenience Stores into Banks: Greendot, Incomm, Visa, MasterCard Race to Build Reload Networks for Prepaid Cards

December 11, 2006

Analysis of:Green Dot and InComm Announce Strategic Distribution Agreement | biz.yahoo.com

The Greendot service allows prepaid card holders to pay merchants (for example Safeway) anywhere from $2 to $4.95 to “load” or “reload” cash to their card. The alliance announced is likely a preemptive competitive response to Visa and soon MasterCard who are have recently begun to offer a similar facility directly. Visa and/or MasterCard will likely drive prices downward to invite larger more frequent card loads and usage.

The creation of the referenced load networks may be an advanced step towards the creation of an entirely new platform for the distribution of financial services to middle and low income segments of the population around the world. This latest announcement is evidence of a growing trend that may represent a threat to established financial institutions and an opportunity for upstarts.

Gift Cards: The Dark Side

December 11, 2006

Analysis of:Gift Cards | www.cardweb.com

The value proposition that is driving Visa and MasterCard gift card growth is one-sided in favor of customers and could provide future fodder for the proponents of antagonistic class actions, incite resistance among merchants, card issuers and/or card processors, and dampen investor enthusiasm for MasterCard and Visa.

MasterCard Offers Interchange Transparency and Rate Caps to Appease Merchants Points to Vulnerabilities

October 6, 2006

Analysis of:MasterCard Announces US Interchange Initiatives | www.paymentsnews.com

Merchant angst with regard to established credit card payment alternatives MasterCard, Visa etc. is acknowledged and addressed in this recent statement my MasterCard (MC). The MC approach consists of a commitment to improving interchange transparency by publishing rates publicly at www.mastercardmerchant.com. Secondly MasterCard announces a cap on interchange payable on gasoline.

Providing relief on gas interchange and improved transparency presents an astute move from a public relations perspective however the merchant economics of credit card payments versus debit and emerging technologies will continue to drive movement towards new more secure, convenient and less costly payment alternatives. The lack of finality of payment offered by cash transactions, the potential chargebacks that arise with credit (and certain types of signature based debit card transactions) plus processing inefficiencies, high cost, lack of security and generally weak value proposition from the merchant perspective  creates a significant window of opportunity for the emergence of new payment alternatives.

Ebay for Money a Disruptive Banking Innovation?

September 11, 2006

Analysis of:Consumer lending may be ripe for disintermediation | money.cnn.com

Prosper.com and Zopa.com offer a Peer to Peer (P2P) financial market that aims to cut out the middleman (banks and finance companies) in retail financial markets. These companies use available credit scoring, payment systems (ACH and/or EFT) and the internet to directly connect borrowers and lenders through an online money marketplace similar to ebay.
This business model increases competition and may force the retail lending market to respond with new comparable offerings or become significantly more efficient through vertical integration in the long-term.

Merchant Dissatisfaction with Payment Standards Bodes Well for Upstarts

September 5, 2006

Analysis of:Merchants, Banks Seek Control Of Payment | www.epaynews.com

This article correctly reflects the dissatisfaction of merchants globally with credit cards, the current dominant cash payment alternative. This spells opportunity for less costly and in some cases more secure payment alternatives like Debitman and Pay By Touch which make use of the more efficient Automated Clearing House (ACH) payment infrastructure as well as large payment processors like First Data and Global Payment Systems.

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