Mostly… fixed income and cross product eTrading

April 26, 2007

What Can We Learn From Retail e Transactions?

Filed under: 2015, etrading — holky @ 8:06 am

Chris Skinner’s blog commenting upon Visa processing more transactions in a minute than the world’s stock exchanges do in a day; visa 26 million transactions per hour, comparing to estimate of all stock exchanges totalling under 500,000 per hour is interesting. But while the numbers do indeed show a fundamental difference in processing scale, the transactions themselves are clearly fundamentally different too.

The visa part of the transaction is not the execution of a trade, it’s the settlement. When in Mexico using your visa to buy a hat for your llama, you haggle then agree the price of the hat with the shopkeeper .. deal done. Then you stand and wait at the till while the machine noisily dials into the visa network so details are captured and a settlement confirmation can be printed.  If visa says you can’t deliver the cash then you need to pay (settle) in some other way.

A brief peek into the world of visa processing does give many things to stick into the thought blender. The number of transactions compared to exchange transactions is astounding. With algos decreasing size of but increasing number of trades, scale is clearly important to us going forwards.  But the etrading and operational architects among us might also consider how that network is formed; how many intermediaries are there to provide each end retailer a route in that allows visa to operate a global settlement network – somewhere that any retailer from a corporate website through even to the remote hat-shop in my example can allow trade details to be captured electronically, for a credit check to be performed, and “instant” and agreed T+0 trade confirmations printed for both parties. Any parallel into Euroclear, Clearstream,  Swapswire, OMGEO, SWIFT ..and so on?

also see 2015 category and the electronic revolution.  


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