Dan Morehead

Merchant Acquiring 102 - Where It Meets Issuing & the Core Acquiring doesn’t live alone. The biggest lifts come when issuer data, network tokens, and the core ledger work in concert. Here’s the connective tissue and how to productize it. Acquiring <> Issuing: the approval engine -On-file tokens: PAN <> network token <> lifecycle (provisioning, refresh, re-credential). Tokens cut false declines and card-on-file churn. -Issuer preferences: 3DS, MCC risk tiers, soft descriptors, incremental auths—inform retry/route logic. -Least-cost debit routing (regulated debit): acquirer chooses network; issuer cares about fraud and approval integrity—coordination avoids approval loss. -On-us routing (same bank as issuer + acquirer): faster auth, lower cost, richer data sharing. Acquiring <> Core: the money truth -Settlement accounts & reserves: FBO vs direct DDA; reserve ladders by risk cohort. -Posting & reconciliation: exactly-once journal entries; fee netting; statement generation; dispute accruals. -Payout rails: ACH for netting; RTP/FedNow for instant merchant funding; push-to-card (OCT) for off-hours. -Working capital: use the core ledger of inflows/outflows to underwrite MCA/BNPL-to-merchant; repay from settlement splits. Product & GTM plays -“Approval Uplift” bundle: tokenization + smart retries + issuer-hinting; price as performance (rev-share on recovered sales). -“Instant Money”: T+0 via RTP; price per payout. Pair with same-day disputes digest in the portal. -“Vertical Switch Kit”: prebuilt configs (tips, surcharging/compliance, table turns, kitchen printers) + catalog migration. -“Insights & Alerts”: auth drop alerts by BIN/MCC; next-best-action to lift approvals or reduce fees. -“FinOps for Payments”: automated recon to the GL; API for payouts, statements, and chargeback provisioning. Metrics that matter -Auth rate uplift (+50–150 bps is common with tokens + retries). -Cost-to-accept (all-in bps after routing/optimizations). -DSO (days to cash) with RTP/FedNow. -Dispute win rate and time-to-resolution. -Attach rate for capital, payroll, invoicing. Risk & compliance spine -KYC/KYB + sanctions + fraud at onboarding and at payout. -PCI DSS scope reduction via tokenization. -Network rule hygiene (compelling evidence, descriptor best practices, refund timing). Strategy takeaway The moat isn’t “lowest rate.” It’s higher approvals, faster cash, cleaner books, and embedded tools that outlast rate shopping. Stitch acquiring, issuing, and the core into one feedback loop and you compound value with every transaction. >True triad (vendor platform + bank core) -Fiserv - Acquiring + Issuer processing + Bank cores + modern core. >Universal banks that operate all three (in-house) -JPMorganChase Chase -U.S. Bank / Elavon, Inc. -Santander / Getnet (PagoNxt) -BNP Paribas / AXEPTA -HDFC Bank (India) >Near-triads (operate like one, even if the “core” isn’t a bank core, yet) -Adyen -Stripe #fintech #issuing #acquiring #corebanking #payments

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Major announcement: CME data is now available for $179/month on Databento. Access 15 years of history for over 650,000 futures, spreads, and options on futures across all four exchanges: CME, CBOT, NYMEX, COMEX.

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New Trader TV - Arianne Adams at Webull Financial speaks to Trader TV at this year’s Options Industry Conference, hosted by the The Options Clearing Corporation (OCC) in Palm Beach, Florida about how retail and institutional traders are using derivatives in response to ongoing market volatility, including the rise in shorter-dated equity options in trading strategies. In this episode: 📌 Dissecting the divergence between retail and institutional flow 📌 What’s behind the growing appetite for shorter-dated equity options? 📌 The drivers for zero-day single-stock options 📌 Are US retail traders becoming more sophisticated? 📌 Is demand growing for crypto exposure? Find the full show on tradertv.net as well This show is supported by Cabrera Capital Markets and MTS Markets. #trading #capitalmarkets #equities #liquidity #stockoptions #derivatives 

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This guidance issued by the SEC's Division of Trading and Markets yesterday [https://lnkd.in/giuxYV8v] is the most important piece of news about tokenization in years ---maybe ever--- for U.S. registered broker-dealers.  Clearing and carrying broker-dealers like NCPS are now permitted to hold crypto digital securities if they have reasonably designed procedures to do so, and provided they adhere to the guidance.  Why does this new guidance matter so much?  (1) Previously, broker-dealers were expressly prohibited from holding crypto digital securities, the key reason why there has been limited adoption in the U.S.  The Joint Statement issued by the SEC and FINRA in the summer of 2019 definitively established this bright line prohibition.  While the Joint Statement was rescinded earlier this year, a highly unusual but welcome development, no guidance was issued to replace it. Until yesterday.  (2) The guidance from Trading and Markets creates a pathway whereby new and previously-issued securities (pretty much ANY securities) that are tokenized can be held in custody by regular clearing and carrying broker-dealers. This has the potential to be utterly transformational for private markets. In a sense, we will be going back to the future, a much brighter future, by replacing uncertificated securities (which replaced paper certificates over the past five decades) with digital crypto tokens that can be treated (for broker-dealer custody purposes) like paper certificates.  In short, all of the paper that the private markets industry has been pushing for decades---and all of the tens of thousands of private securities that do not fit neatly into existing guidance under 15c3-3---can now potentially fall under this new guidance, if the securities are tokenized.  In short, the industry now has a substantial and immediate COMMERCIAL REASON to tokenize securities. We have been planning for this day since 2017, after I first read Nathaniel Popper's Digital Gold over the Christmas holiday. Some of my friends and colleagues will remember my manic proselytizing in early 2018... like a crazy man who had been accidentally hit with a defibrillator, handing out the Popper book. "Blockchain will be to private securities what TCP/IP has been to networking" I said, or something along these lines.... the analogy is so tired that I cannot even remember. As we now know, my prediction was dead wrong. Or at least too optimistic and far too early. But this new guidance has reinvigorated my optimism and confidence that all of us who have working in private markets have a bright future, and I am pleased to say that North Capital as a company is ready for this next chapter.

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Are stablecoins going to be as big as analysts expect and to be adopted as quickly as they say? Citi, for example states stablecoins could support nearly $100 trillion in transaction activity by 2030 as a base case and $200 trillion in a bull case*. To put these numbers in perspective, Americans transact around $15 trn annually in cards, cash and P2P payments. If stablecoins are to feature in these type of retail payments it will be in the USA first - if a 10% share is reached (unlikely in the next five years, it has taken PayPal 25+ years to reach a 5% US share) that is only $1.5trn. The rest of the world is unlikely to be higher. That leaves ACH, wholesale and cross-border payments. Domestic ACH is $107 trn in the USA and wholesale $1,625 trn but these are very efficient systems and there is no case for replacing them at scale domestically, in the US or anywhere else (except for migration to real-time interbank payments but these are usually suited best for the low value retail payments domain). Leaving aside crypto-trading which accounts for 90%+ of stablecoin use, cross-border payments remain the most viable option, currently around $200 trillion annually. There is indeed a good case for using stablecoins for cross-border payments but to replace 50% - 100% in five years? My view is that stablecoins will gain adoption gradually outside of crypto trading but current predictions are for the birds. Take a closer look at the US payments landscape here: https://lnkd.in/edHrbfip * Citi Technology & Innovation 25 Sep 25: Stablecoins 2030 Web3 to Wall Street #USA #payments

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I expect more from the Federal Reserve Bank of New York. Liberty Street Economics (the NY Fed is located at 33 Liberty Street) has put out the third in a series of articles on stablecoins. They're very good, and well worth the time to read. In this latest one, they go through the collateral compositions of four stablecoins - BUSD, USDP, USDC, and USDT - and note that "the data are collected from the stablecoin issuers' voluntary disclosures, some of which are audited." Sorry, folks ... none of them are audited. All four have monthly attestation reports (or in the case of Circle's USDC, "detailed monthly attestations"). So no audits: nothing but self-serving attestations. Not an audit to be found. And this is a real difference. An attestation is to an audit like flossing is to a root canal. An attestation is (quoting the American Institute of CPAs attestation standards) an "examination to obtain reasonable assurance about whether management's assertions are fairly stated, in all material respects". That's it. As the FSOC states in its 2024 Annual Report, "attestations, both voluntary and required, differ in what they disclose, making period-to-period and issuer-to-issuer comparisons difficult. There is also no assurance that these types of attestations comply with auditing standards." That's regulawyer-speak for "don't rely on attestations". Kenechukwu E. Anadu, CFA, CAIA - if I'm wrong and "some" of the four are audited (or even one of the four is audited), I'll apologize and retract. https://lnkd.in/e_deJina

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🔴 Eurex Clearing becomes the first clearing house to launch a live DLT-based collateral mobilization service 👉 J.P. Morgan executing the first transaction 🎯 Near-instant access to dispersed assets The solution enables real-time access to securities held across different custodians and their use as margin collateral 👉 This allows institutions to respond in real time to collateral needs (e.g., during market stress) without having to sell or physically move their assets. 🏦 What happened with J.P. Morgan? J.P. Morgan was able to mobilize securities held elsewhere (outside of Clearstream) on behalf of PGGM, a major Dutch pension fund, and use them as margin at Eurex. ⛓️ Technology & regulation The service is built on HQLAX’s permissioned distributed ledger, which is based on Corda (R3) & the solution received a regulatory non-objection from BaFin, Germany’s 🇩🇪 financial regulator. 👉 Part of Deutsche Börse Group, Eurex held approximately $70 billion in initial margin at the end of last year. As of June, its notional outstanding volume stood at €43 trillion ($50.6 trillion). 💡This operation shows that many frictions can be removed through the use of DLT. From my perspective, the next step is to see this type of solution deployed on permissionless blockchains like Ethereum to enable greater interoperability… but several hurdles remain, such as the lack of privacy. We’ll be following this topic closely at Blockstories in our newsletter, Institutional Briefing. You can subscribe via the first comment on this post👇

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The U.S. dollar-backed stablecoins, such as USDT and USDC, have a measurable and significant impact on short-term U.S. Treasury yields, particularly 3-month T-bills. ​An expert research study performed in May 2025 concluded that a $3.5 billion inflow into stablecoins lowers 3-month T-bill yields by 2-2.5 basis points within 10 days, while outflows have a larger impact, raising yields by 6-8 basis points. The effects are concentrated in short-term maturities, with limited spillovers to longer tenors. The growing presence of stablecoins in Treasury markets has implications for monetary policy transmission, financial stability, and the scarcity of safe assets. ​ As the stablecoin market expands, it may further suppress short-term yields, potentially weakening the Federal Reserve's control over interest rates in the future. ​ Additionally, the risk of fire sales during redemption stress raises concerns about financial stability. ​ The results of the estimates underscore the importance of transparent reserve disclosures and effective regulatory oversight in mitigating systemic risks and ensuring predictability in Treasury markets. This conclusion is based on the working paper from the BIS, Monetary and Economic Department.

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