Wells Fargo Financial Retail Services Advertising Requirements: Fill & Download for Free

The US banking system is at least a decade behind Europe and highly deveped Asian countries.I'm British, lived in the US for the past 5 years and now in Dubai, UAE.First cheques. The UK has been cheque-less for over a decade, close to 15 years from memory. It's a slow antiquated way of processing payments. Yet in the US its still used by a lot of people and businesses. My father in law up until a year ago wrote checks every month for his utilities, his mortgage etc.Payments in the UK & EU run through faster payments and SEPA which is lightyears ahead of Fedwire or ACH in the US. Payments in the UK and Europe have been near instantaneous for over a decade. Its only in the last year that some US banks have offered the service. Even then its only for a couple of grand, whereas in EU its near instantaneous in any amount.Bank transfers are free in UK, and while I always got them for free in the US, its because my accounts were higher tier accounts where free wires was a perk. Still waiting 3 days in a lot of cases for a wire to be sent, processed, received and be available is ridiculous. It used to cost us money to send from my wife's primary account to mine, unless we used a check and waited 5 days. It was genuinely quicker to withdraw the cash, drive an hour and deposit the cash. That's how outdated the US system is.Before we moved to the US, loads of retailers wouldn't accept my UK or other international cards, gas stations need a 5 digit zip code, whereas everywhere else in the world just uses a pin code, but in US, its zip codes just in case those pesky Americans forget their pin.Plus loads of US retailers can't process non US cards over the phone or online. It's worse than South Africa, Thailand, Indonesia, China, Mozambique etc etc. In US you used to have to force foreign debit cards through as credit because the systems couldn't work with pin codes.I went into a chase bank when I first got to US and I saw a sign where they were advertising how fast the payments could get to your account and it was…in just 3 days. I had to ask the staff if it was a joke, but they didn't understand, they couldn't believe we could send money instantaneously in Europe.In the US, you never know what your true account balance is because everything is so delayed, in UK, its instant. Depending on your spending habits, you always need to leave a buffer because of the delays and good luck of you suddenly realize you need to transfer money. It can't be done.Credit cards in US don't require pin codes because US financial institutions are concerned Americans won't remember them which will prevent them from spending. Debit cards have pins, but the banks want to keep that money so that's why they stick a pin code on the account.As for bank security, it's laughable, it's literally a username and password. I was horrified at how easy it is to log in to online banking and then frustrated at how badly designed their systems and interfaces are.I actually opened HSBC accounts and had the nearest branch an hour from my house so that I could get somewhat modern banking. Being based in London and having a huge presence throughout Asia, they have a lot of well developed systems that require your cell phone to generate a code before you can then use another password to login. Basically 2 Factor Authentication. However in UK you have a device that you have to put your card into, and that device has to be registered to you. It's way more secure than just a username and password.In summary, payments are faster, easier and infrastructure is better than in the US.Even recently when multiple US/International banks created their own method for faster payments now the fed wants to create their own so they can be the single point fo failure like a few days ago when the whole fed went down for a day and nobody could process wires. Happened end of last year too. In short the US banking system more closely represents that of a 3rd world country.

Summary (tl;dr)To become dual entity: PayPal is already a Licensed Money Transmitter and it will eventually become Licensed Bank in the coming years (with Federal Charter as issued by the OCC - Office of the Comptroller of the Currency).The Long Read...This is a great question and a tough one to answer without any insider information. I'll give it a shot nonetheless!One of the questions most frequently asked is What is PayPal? not so much for the wallet angle, but the company on the whole.Is it a payment systems operator?It is a payment network?Is it a bank?Is it a payment service provider?Is it a payment gateway?Is it an issuer?Is it a Payments Facilitator?Is it a Depository Institution?Is it an FX Broker?Is it a Credit issuing Institution?Is it a Money Transfer Company?Is it a Money Services Business?Is it a Financial Services Company?The simple answer is - it is everything listed above. PayPal's operations are huge. This comes from its progressive growth and its association with Ebay.Some key points regarding PayPal today:PayPal operates in many territories & countries (202 at last count). It has a 47 US Money Transmitter Licenses and also for District of Columbia, Puerto Rico and US Virgin Islands (See PayPal State Licenses).PayPal Europe S.à r.l. & Cie, S.C.A., is a Luxembourg bank licensed by the Commission de surveillance du secteur financier (Source: Luxembourg for Business - Proud to promote ICT)PayPal has the equivalent of a European Payments Institution license (that is what the Luxembourg bank license allows it to do)PayPal is a licensed in Australia as a Restricted Authorized Deposit Taking Institution (See: List of Authorised Deposit-taking Institutions)It has procured the necessary licensure in all the other countries and territories it is operating in. Barring the money-transfer giants like Western Union and MoneyGram and the Card Schemes (VISA, MasterCard), PayPal is the only other institution that has amassed all MSB license and/or a valid operating business license in the places it is doing business.The five change factors that PayPal is going after are:eCommerceChoiceMobile CommerceNew Form FactorsThe Digital Wallet.The key drivers for the future for PayPal hinges on many factors, but the important ones are:FlexibilityIntegration with Point-of-SalesReachPayPal it seems is doing a bit of everything. In some instances the bit of everything may be small in scale (volume/value) when compared to other incumbents, in some instances, PayPal is the incumbent.My bet is PayPal will aim at acquiring a Bank, possibly a credit union, etc. and then turn it around and obtain Federal Charter from OCC for nationwide banking.Banking provides PayPal with access to deposits and utilization of money, that otherwise it cannot touch/invest, due to the current money transmission laws. If you are looking at a parallel example, look no further than GreenDot. Many people may not realize, but GreenDot is both a Bank and a Money Transmitter License holder. (See disclaimer statement screenshot on Greendot website).Here is a snapshot on one of the States where GreenDot does have a Money Transmitter License (Texas):Each has its advantages. For example a Federal Banking license by OCC, exempts the bank from obtaining Money Transmitter Licenses. The funds/money (or unused credit) under the Banking Umbrella can be utilized and invest further, a restriction that does not apply to banks but does apply to money transmitter license holders (like PayPal has at present).Before I conclude, in the paragraphs ahead, it is very interesting to note, that Ebay does not have any money transmitter licenses.Search for Ebay in Texas for MSB Licenses yields nothing...Same scenario in California, where Ebay does not have an MSB.The Independent PayPalThe independent PayPal would definitely seek to become a Bank in the US. It is sitting on access to approximately US$ 20 Billion in unused credit (last quarterly filing by Ebay, numbers specific to PayPal (Source: Note 8 - Commitment & Contingencies - eBay Inc. - Quarterly Report)Also from the SEC filing, the following paragraphs are of prime importance - it very clearly outlines what areas of business PayPal is (via reference to the threats it perceives from the market):PayPalThe markets for PayPal’s products and services are intensely competitive and are subject to rapid technological change, including but not limited to: mobile payments, electronic funds transfer networks allowing Internet access, cross-border access to payment networks, creation of new payment networks and new technologies for enabling merchants, both online and offline, to process payments more simply. In addition, the payments industry is rapidly changing, highly innovative and increasingly subject to regulatory scrutiny, which may negatively affect the competitive landscape. PayPal faces competition and potential competition from existing online, mobile and offline payment methods, including, among others:providers of traditional payment methods, particularly credit and debit cards, checks, money orders and Automated Clearing House transactions (these providers are primarily well-established banks);providers of “digital wallets” which offer customers the ability to pay online and/or on mobile devices, including with mobile applications, through a variety of payment methods, including Visa’s Online Shopping Made Easier by Visa Checkout | Visa USA, MasterCard’s MasterPass, American Express’s Serve, Google Wallet and the Merchant Customer Exchange (MCX) initiative supported by Walmart, Target and other major U.S. retailers;providers of mobile payments solutions that use Visa, American Express and Mastercard's tokenized card data approaches and Near Fields Communication (NFC) functionality, such as Apple's mobile Apple Pay, and Google's Android solution, that uses Host Based Card Emulation (HCE) functionality to eliminate the need for a physical NFC card in the device;payment-card processors that offer their services to merchants, including Chase Paymentech, First Data, Bank of America Merchant Services, Elavon, Vantiv, WorldPay, Barclays Merchant Services, Global Payments, Inc., Stripe and Balanced, and payment gateways, including CyberSource and Home - Authorize.Net (both owned by Visa), SimplifyCommerce by MasterCard and First Data;Amazon Payments, which offers merchants the ability to accept payment card- and bank-funded payments from Amazon’s base of online and mobile customers on the merchant’s own website. Amazon has recently launched a new payment service for online merchants under the name Log in and Pay with Amazon;providers of "person-to-person" payments, that facilitate individuals sending money with an email address, such as Facebook messaging payments;providers of mobile payments, including Softcard in the U.S., Buyster in France, Mpass in Germany, Paym in the U.K., Boku and Crandy, many of which are owned by or supported by major mobile carriers; andproviders of card readers for mobile devices and of other new point of sale and multi-channel technologies, including Square (which has also begun to offer a marketplace service to sellers), Chase Paymentech, Bank of America, AT&T (in association with Vantiv), Capital One, Shopify, iZettle, WorldPay, Payleven, Groupon, SumUp and others.PayPal also faces competition and potential competition from:money remitters such as MoneyGram, Western Union, Global Payments, Inc., Xoom and Euronet;bill payment services, including CheckFree, a subsidiary of Fiserv;services that provide online merchants the ability to offer their customers the option of paying for purchases from their bank account or paying on credit, including Western Union’s WU Pay, Dwolla, Acculynk, TeleCheck (a subsidiary of First Data), iDEAL in the Netherlands, Klarna in several European countries with announced plans to enter the U.S. market, Sofortueberweisung (which recently merged with Klarna) in Germany, PayLib in France and the MyBank pan-European initiative;issuers of stored value targeted at online payments, including NetSpend, Green Dot, PayNearMe, UKash and Qiwi in Russia;other international online payment-services providers such as AliPay, the PayU group of companies (owned by Naspers), PagSeguro and Bcash (owned by Naspers);other providers of online account-based payments, such as Skrill, ClickandBuy (owned by Deutsche Telekom), Barclays Pingit in the U.K., Kwixo in France and Paymate and Visa PayClick in Australia;payment services targeting users of social networks and online gaming, often through billing to the consumer’s mobile phone account, including PlaySpan (owned by Visa), Boku, Bango and Payfone;payment services enabling banks to offer their online banking customers the ability to send and receive payments through their bank account, including PopMoney from Fiserv, which has a collaboration agreement with Visa, and ClearXchange (a joint venture among Wells Fargo, Bank of America and JP Morgan Chase);online shopping services that provide special offers linked to a specific payment provider, such as Visa’s RightCliq, MasterCard MarketPlace, TrialPay and Tapjoy;services such as Coinbase and Bitpay that help merchants accept and manage virtual currencies such as Bitcoin; andcash.Some of these competitors have longer operating histories, significantly greater financial, technical, marketing, customer service and other resources, greater brand recognition or a larger base of customers than PayPal, and may be also be able to leverage other affiliated businesses for competitive advantage or to attempt to prohibit or prevent competition from PayPal. PayPal’s competitors may be able to innovate and respond to new or emerging technologies and changes in customer requirements faster and more effectively than PayPal. Some of these competitors may also be subject to less burdensome licensing, anti-money laundering, counter-terrorist financing and other regulatory requirements than PayPal, which is subject to additional regulations based on, among other factors, its licensure as a bank in Luxembourg. They may devote greater resources to the development, promotion and sale of products and services than PayPal, and they may offer lower prices. For example, Google previously has offered free payments processing on transactions in amounts proportionate to certain advertising spending with Google. We also expect new entrants to offer competitive products and services. In addition, some merchants provide such services to themselves. Competing services tied to established banks and other financial institutions may offer greater liquidity and engender greater consumer confidence in the safety and efficacy of their services than PayPal. In addition, in certain countries, such as Germany, Netherlands and Australia, electronic funds transfer is a leading method of payment for both online and offline transactions. In the U.K., the Payments Council has announced that mobile payments between bank accounts will be broadly available beginning in 2014. As in the U.S., established banks and other financial institutions that do not currently offer online payments could quickly and easily develop such a service.The principal competitive factors for PayPal include the following:ability to attract, retain and engage both buyers and sellers with relatively low marketing expense;ability to show that sellers will achieve incremental sales by offering PayPal;security of transactions and the ability for buyers to use PayPal without sharing their financial information with the seller;low fees and simplicity of fee structure;ability to develop services across multiple commerce channels, including mobile payments and payments at the retail point of sale;trust in PayPal’s dispute resolution and buyer and seller protection programs;customer service; andbrand recognition.With respect to our online and mobile competition, additional competitive factors include:website and mobile platform and application onboarding, ease-of-use and accessibility;system reliability;data security;ease and quality of integration into third-party mobile applications; andquality of developer tools such as our application programming interfaces and software development kits.Some of PayPal’s competitors, such as Wells Fargo, First Data, American Express, WorldPay (The Royal Bank of Scotland) and Synchrony Financial (formerly, GE Capital Retail Bank), also provide processing services to PayPal. If PayPal were to seek to expand the financial products that it offers, either alone or through a commercial alliance or an acquisition, these processing relationships could be negatively affected, or these competitors and other processors could make it more difficult for PayPal to deliver its services.Source: Page 81/82: eBay Inc. - Quarterly ReportConclusionPayPal is not a singular product or services company anymore. It is a global player, with vested payments and banking related services interest in multiple areas. From wallets, to bitcoins, to money-transfer services, to banking to issuing, to acquiring, etc. PayPal is doing all these things in one form or the other.In order for PayPal to compete in the global marketplace of financial services for payments, acquiring, issuance and processing, it needs to cement itself in its primary market as an established bank, and this is the path (in my opinion) that PayPal will most likely follow.PayPal's cost of financial management via the current banking partners it has is quite high, not to mention the banks are also privy to the deep transaction analytics of payments that are being processed through them. PayPal would like to take this away from the banks, who also are in some way, shape or form, becoming competitors.If PayPal is able to acquire a license (which would take about two years), they would position themselves much better from lower costs of processing and escrowing the transactions on behalf of their customers as well as be able to compete head-on with what PayPal has most correctly identified their true threats, i.e. the very banks PayPal is working with.Source for MSB Searches:California: California Department of Business OversightTexas: Texas Department of Banking

Challenges Facing The Financial Services IndustryCybercrime In FinanceData breaches involving financial service firms increased by 400% from 2017 to 2018. With each attack costing financial institutions millions, innovative solutions are needed if we are to avoid a repeat of the lawless days of the Wild West. Whatever cybercrime solutions emerge to protect financial services, blockchain technology must be the foundation. Period. As more and more institutions adopt distributed ledger technology (DLT), blockchain will become the de facto solution to keeping financial data secure while at rest.Regulatory Compliance In FinanceThe ever-changing regulatory environment poses a constant challenge for financial institutions of all types. Regtech is an emerging industry that can help ease the burden of compliance. By using the latest FinTech technologies to address regulatory compliance, RegTech startups are bridging the gap between regulators and the financial service industry. Automated reporting, automated audits, and process streamlining are only a few of the benefits offered by RegTech applications.some of the issues financial institutions face today include:Promoting growth and sustaining profitability in an environment with low-interest ratesRebuilding asset quality and strengthening capital positionsDeveloping new and reliable sources of revenueIncreasing the business value of customer relationships, especially when customers have become more demandingRestoring public confidence in the industryCompeting with aggressive, innovative non-traditional competitorsIncorporating a risk management culture into daily operationsThe rapid shift in technology and customer expectations require financial institutions to address projects such as:Mobile Banking Financial institutions have to develop and implement new digital delivery strategies to remain competitive. At a minimum, they must incorporate mobile banking as a regular delivery channel.Next-Generation Platforms Many financial institutions rely on legacy systems to conduct operations. To address the issues facing the industry, financial institutions need to quickly migrate their old technology architectures to next-generation capabilities. Viewing new technology as a strategic growth investment rather than an operational expense will demonstrate the value of IT systems throughout an organization.Cyber Security The PwC CEO Survey found more than 70% of industry leaders believe cyber insecurity is a threat to growth. The ongoing news reports of data breaches at retailers highlight the danger all businesses face.Big Data Use In FinanceBig data provides both opportunities and obstacles for financial service providers. Tapping into social media, consumer databases, and even news feeds can help banks better serve their customers, while better protecting their own interests. But sorting through torrents of unstructured data for useful information is no small undertaking. It requires powerful data analytics technology if institutions are to reap a benefit. Fortunately, data analytics solutions are emerging with the potential to transform asset management, trading, risk management, and other financial services.AI Use In FinanceIndustry experts believe that AI will transform nearly every aspect of the financial service industry. Automated wealth management, customer verification, and open banking all provide opportunities for AI solution providers. But that’s all been said before. So why should we expect AI to keep that promise now? Powerful advances in deep learning technology are paving the way for AI. In fact, if you have been alerted by your bank of suspicious activity on your account, you have likely already benefited from AI. The challenge that financial services face is learning how to benefit from the power of AI, without being victimized by it. In R&D labs across the world, that question is being pondered at this very moment.Customer Retention In The Financial Services IndustryCompetition for financial service clients has never been fiercer. While brand loyalty may not be dead, it is definitely on life support. What matters to most customers in 2019 is greater personalization, more automated services, and easier access to services. Institutions that can deliver all three will capture their share of the market. The key to not losing the battle is recognizing that customers are less concerned with brand familiarity than getting the services they want. Providing customers those services is key to client retention.Employee Retention In The Financial Service IndustryToday’s financial service companies not only find it difficult to attract customers, but they are also finding it difficult to attract employees. A lack of qualified talent to fill new IT roles, and a millennial workforce that shuns long-term employment, are leading factors in finding good help. Institutions that want to attract and retain a qualified workforce must change their philosophy. No longer is it enough to offer good pay and benefits; workers now expect employers to nurture a culture that is accommodating to the values and lifestyles of the employee. Change is necessary if stable and qualified workforces are to be achieved. But don’t expect it to come easy.Blockchain Integration In FinanceWe talked earlier about blockchain as a key component in the battle against cybercrime. But data security is not the only application for blockchains in the financial sector. Far from it, cases across the globe are already proving the value of blockchain in a wide variety of banking and investment applications. From solving challenges faced by investment banks to helping customers make safer payment transactions, the list is growing daily. Having said that, industry-wide adoption of blockchain is unlikely to occur until we reach a tipping point in the maturity of the technology. When that will happen is anyone’s guess.Crossing The Digital Divide In Financial Services MarketingSuccess in the era of digital banking means more than having a mobile app. It means digitizing your entire brand. How do you do that? You shift your advertising campaigns from conventional ad-media to digital channels. Which is another way of saying you reach your target audience where they are today, rather than where they were yesterday? Of course, social media exposure is necessary, but you need more than a Facebook ad. You must tap big data and AI to help locate potential customers, and to deliver customized offers in real-time.Failure to Engage CustomersInvestors who put money into a CD or a savings account expect a return in the form of accrued interest. But it’s been a long time since money market accounts and certificates of deposit offered anywhere near the return that they did prior to 2008. As the Fed continues to raise interest rates, thoughtful investors have to be asking themselves why their bank isn’t offering them a better rate of return. This raises the risk that investors will increasingly choose other investment options, including online banking, over depositing in brick-and-mortar savings and loan institutions.The Human Element of Cyber RiskEfforts are underway to do more to make bank employees a more vital part of bank cyber defenses. Breaking down silos between human resources, the chief information security officer, the CFO, and operations management will be key to create a more coordinated effort to better train bank employees in detecting phishing and spear-phishing scams. Optimists say banking employees are naturally compliance-oriented and will do well at this sort of training. Others worry that cybercriminals continue to find new ways to innovate and will always stay one step ahead of the corporate sector.Operational RiskOperational risk is the risk that can turn into a reputational risk for a financial institution in the span of one news cycle. Any breakdown in internal processes, whether it be compliance, risk management’s oversight of trades and investing, or the failure of a bank’s investment models falls under this umbrella. In recent months there has been a consistent message emanating from the banking industry that it cannot find enough risk management talent. Some news stories say the shortage is so severe that banks are running a rising risk of compliance failures.Technology RiskAs we see in the commercial insurance business, mergers and acquisitions can result in the combination or inheritance of outdated information technology systems. The cost of getting legacy technology systems from different organizations to function together can be prohibitive. A lack of coordinated information technology systems can create a host of worries, including the fact that a cyberattack could go undetected for months due to poor management visibility into information technology functions.Reputational RiskHundreds of thousands of false accounts created for customers, selling people unnecessary car insurance and on and on. Skeptics and critics wondered whether executives at Wells Fargo should not simply lose their jobs and their bonuses but also be sent to jail instead. Banking has a bad case of the reputational-risk flu and continued outsized salaries and bonuses for bank executives, coupled with meager interest rates being offered to depositors don’t promise an effective or timely cure.