X has secured a money transmitter license in yet another U.S. region

Hey Payments Fanatic!

X continues its push towards becoming a financial Superapp by securing yet another money transmitter license in the U.S. The District of Columbia has approved X’s application, marking another milestone in the company's ambitious X Payments vision.

As reported by X News Daily, the District of Columbia joins a growing list of regions where X has received approval. These licenses are crucial for X’s strategy to facilitate in-stream payments and money transfers, a foundational step in Elon Musk’s broader plan to transform the app into a comprehensive financial platform.

Musk aims to leverage his PayPal experience to expand online financial capabilities. While online payments are now widely accepted, Musk believes this is just the beginning. He envisions X providing a full spectrum of financial services, including banking and loans, directly within the app.

By integrating these services, X could become a central hub for users’ financial transactions, solidifying its role in everyday financial management. This vision, however, is ambitious and requires many regulatory and operational milestones to be achieved.

Initially, Musk had hoped to launch global payments on X by the end of this year. However, regulatory challenges in the U.S. have led to a revised focus on securing state-by-state approvals first.

To date, X Payments has secured money transmitter licenses in 31 states, a significant step but only part of the journey towards full functionality.

Beyond the U.S., X faces even greater regulatory challenges internationally. The path to global financial services integration is long and complex, and achieving these milestones in the U.S. is just the beginning.

To be continued!

Cheers,

Marcel

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GOLDEN NUGGET

3D Secure (3DS), a Payer Authentication process to prevent fraud in Payments??

Why is 3DS so important in payments, especially in Europe:

?? Reduce Fraud by verifying cardholder's identity

?? Increase Revenue through higher acceptance

?? Merchant is covered by Liability Shift (on the card issuer)

Over the years, 3DS became much more thorough, yet frictionless. Payment Providers - i.e. Nuvei - supporting that authentication process and tailoring it to the different business models have seen an increase in conversion and a decrease in fraudulent transactions.

What is it exactly??

During the 3DS process, the Issuer or Acquirer directs the customer to an authentication page on their bank's website, Wells Fargo, Bank of America, Citi, and the consumer goes through an ID check:

?? Enter a Password sent to their Phone

?? Enter a Password sent to their Email

?? Verification of ID through Biometrics

?? Other processes...

This process is familiar to customers through the card networks' brand names, such as Visa Secure and Mastercard Identity Check. Today, Strong Customer Authentication (SCA) regulations require certain transactions to go through that process.

??Normal 3D Secure had the Authentication and Authorization step combined within a single process. This protocol introduced by Visa in 1999 was designed for desktops browsers mainly

??2-Step 3D Secure provides the Payment Provider the ability to review the authorization outcome first and later decide to either accept or decline the authorization (not the payment itself!!!) As the liability shifted to the Payment Provider, this is incredibly important as this step weighs heavily on the approval of the transaction later by other parties involved in the transaction.

Only certain card products allow the use of 3D Secure, so 2-Step 3D Secure is only possible for the following card products:

?? Visa (including sub-brands)

?? Mastercard (including sub-brands)

?? Diners Club International

?? Discover Financial Services

?? American Express

Some flexibility exists around the parameters of this authentication process. It is the role of the Payment Provider in collaboration with the merchant to work on tailoring them in order to accept as many valid transactions as possible

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Source: Ingenico

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