Matt Profile picture
25 Apr, 13 tweets, 6 min read
One of my favorite weekly FinTech newsletters made the claim that Stripe invented the PayFac category. The newsletter is a fantastic regular read, but this claim isn't true. Here's some background on the history of PayFac from someone who lived it.

2/ But first, how great is - 12 free cards a month, pay for other bells and whistles, always keep your online shopping safe.

And we're hiring. Stop reading about FinTech history and come create it with me, @bolingj, @CharlieKroll and all the others.
3/ So back to PayFac.

The term actually used to be called Payment Service Provider or "PSP." Here's a screenshot from a 2017 Visa product guide with some references to the old term.
4/ PSPs could do all the things Payment Facilitators get to do now. Or more accurately, banks that sponsored PSPs had to do all the same oversight and control functions.
5/ I actually think PayPal pioneered the concept of PSPs. You can see evidence of that here in these 2008 Visa rules. The term is actually "Internet Payment Service Provider." And the 2008 date on this means the concept was getting thrown around pre-Stripe.
6/ So when did the name change? Sometime in the late 2010s. I remember being at Square and seeing the terminology start to shift. I forget who moved first, but eventually Visa, Mastercard and American Express all reclassified PSPs as Payment Facilitators in their rules.
7/ Interestingly, companies like Stripe throw the term PayFac around quite a bit in formal marketing. But they may be steering into IP trouble from others.
8/ That's because Vantiv actually owns the trademark to the term "PayFac" and could look to force Stripe to remove it from their Website if they chose to do so.
9/ So the next time someone tells you Stripe pioneered the PayFac concept, you'll know better.

PayPal was arguably the first to operate a payment facilitator, then known as a PSP.

Vantiv actually pioneered the abbreviation a few years later.
10/ If you enjoyed that nugget of Payments nerdery, you can get even more by coming to work with me! Check out our open roles at
12/ And adding on a good complimentary thread from the Very Good @peter of @getVGS

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More from @regulatorynerd

25 Mar
FinCEN's been busy cooking up new policies, rules and initiatives, so wanted to share some things I've found interesting.

Read on for more about what FinCEN is doing with NFTs, the forthcoming Fin Crimes Tech Symposium, and what's up with the new AML law from 2020. 1/
As background for you noobs, FinCEN is the Financial Crimes Enforcement Network. It's my favorite network (sorry CNBC), and technically a division of the U.S. Treasury department. They make and enforce federal AML rules. 2/
With background out of the way, we can focus on important stuff

Like! The safest and easiest way to pay. 12 free cards a month, and pay for other features.

Really like us? We're hiring! Engineers, Designers, and whatever Role Meghan Markle Wants! 3/
Read 25 tweets
30 Dec 20
Ohad asks a good question. I'm on hold with Wells Fargo checking refinancing options. So let's do a quick thread.
2/ First some background. Synchrony Financial, who issues the Venmo credit card, was issued an approval order for a novel credit card product.
3/ (My former colleagues should pay attention, as some frequently mis-use the term "secured credit")

Synchrony wants to offer cards that start as secured credit. Cardholders can then graduate to an unsecured credit card account after 12 months of good payment history/use.
Read 31 tweets
28 Dec 20
This is actually the hardest part for lawyers transitioning from law firm or government life to in-house counsel roles. Those other experiences train you that being “right” is the most important thing. Being in-house counsel, you learn that outcomes are the most important.
This isn’t to say that in-house counsel need to enable law breaking or non-compliance. It’s about navigating the grey.
Law firm and government lawyers tend to be trained and rewarded for strong arming their audience. But if you do that repeatedly as in-house counsel, you lose your credibility and people try to work around you.
Read 8 tweets
24 Dec 20
1/ Gather round all, from near and from far. This is the tale of the SAR on the Car.
2/ Our tale begins with an electronic transaction. For $9,999 marked “for the car, in full satisfaction.”
3/ While this small note may seem fair by itself, it still caught the eye of one Alice P. Welch.
Read 47 tweets
1 Dec 20
1/ Today the U.S. Consumer Financial Protection Bureau (“CFPB”) issued an advisory opinion about earned wage access products. If you’ve wondered what the legal skinny is on Dave, Earnin, Even and all the others -- this thread is for you.…
2/ But first a word about The safest and easiest way to shop online. Holiday deals are here :) So are hackers :(

Keep your bank card safe. Use Privacy cards instead. Free to use, easy to sign up.

And neobank builders will love our APIs and docs.
3/ Back to earned wage access.

Lots of FinTech cos will give you early access to your wages. Some front ACH while the credit clears. Others give you money by the day, up to several times a month.
Read 38 tweets
18 Nov 20
1/ Am listening to the CFPB's consumer advisory committee meeting discussion on the Section 1033 consumer info sharing rule making and current market trends. Some notes and thoughts here.
2/ All the long-time Bureau folks seem to be here. Will Wade-Grey presented. Gary Stein is talking now. David Erich, an operator/founder/thought leader on the advisory committee is dialed in. 36 panelists in total. Other attendees listening in are hidden.
3/ For context, Section 1033 of the Dodd Frank Act lets the CFPB write rules to create an open banking regime. There's an open comment period right now. I plan on doing a deep dive in the next week or so and will likely write a comment letter in my capacity as a private citizen.
Read 57 tweets

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