March Top 3 News with Host Joe Casali
Wrestling Payments Podcast: Season 3 - Episode 04
In this episode of Wrestling Payments, host Joseph Casali breaks down three timely developments in the payments world. First, he tackles the slow adoption of faster payments among smaller financial institutions. Despite strong growth in RTP and FedNow, integration costs and a lack of clear pricing models continue to hold many back.
Next, Joe explores Square’s move to offer consumer loans through Cash App. With FDIC approval in hand, Square—under its parent company Block—is entering the credit space with small, short-term loans. Joe weighs the pros and cons of fintechs stepping into traditional banking roles, especially as regulators start paying closer attention.
Finally, the discussion shifts to stablecoins. The OCC has relaxed its stance, making it easier for banks to engage in crypto-related activities. Joe walks through proposed legislation and asks the big question: who should regulate stablecoins, and what does that mean for banks and consumers?
Download Episode Transcript
Guest-at-a-Glance
💡Name: Joseph Casali
💡What he does: Executive Vice President
💡Company: NEACH (New England Automated Clearing House)
💡Noteworthy: Payments industry veteran focused on financial innovation and regulatory insight
💡 Where to find him: LinkedIn
Key Insights
Small Banks Lag in Real-Time Payment Adoption
Despite the growing infrastructure behind faster payments like RTP and FedNow, smaller financial institutions continue to trail their larger peers. Joe points out that big banks are six times more likely to offer real-time payments. The reasons? Integration complexity, unclear pricing strategies, and rising deposit costs. About 30% of hesitant institutions lack a pricing model, and 35% cite tech integration as a barrier. While over 70% of regional and national banks allow consumers to send real-time payments, only 44% of credit unions do the same. The opportunity is there—but hesitation remains.
Square’s Cash App Loans Signal Fintech’s Banking Ambitions
Square, now operating under parent company Block, has secured FDIC approval to offer small-dollar loans through Cash App. Joe unpacks how these short-term, low-cost loans are aimed at underbanked consumers facing steep fees from payday lenders or overdrafts. The average loan is under $100, repaid within a month, and has a default rate below 3%. With nearly $9 billion originated already, this product has clear demand. Joe raises important questions around regulation, noting that while fintechs offer convenience, they aren’t held to the same standards as banks—yet.
OCC Opens the Door to Crypto Activity in Banking
The Office of the Comptroller of the Currency (OCC) has issued new guidance making it easier for banks to engage in crypto-related services like stablecoin issuance and blockchain verification. This removes the previous requirement for individual “non-objection” letters, streamlining the process. Joe explains how this policy shift reflects growing acceptance of crypto in financial systems and reduces compliance hurdles for banks. But he also warns: without consistent regulation across fintechs and banks, consumer trust and financial stability could be tested.
Stablecoin Legislation Could Reshape the Payments Landscape
Congress is actively working on several stablecoin bills, including the Stable Act and Genius Act. Joe reviews draft proposals that would require stablecoin issuers to hold liquid reserves—like short-term Treasuries—and submit to state or Federal Reserve oversight. One provision caps stablecoin issuance at $10 billion per entity, which Joe questions as being too low to make real market impact. With PayPal and other major players eyeing this space, the legislation could set the tone for how digital currencies coexist with traditional money movement.
Episode Highlights
The Consumer Lending Shift: From Banks to Apps
Timestamp: [00:07:00]
Joseph Casali breaks down how Cash App’s foray into consumer lending marks a broader shift in how people access short-term credit. Traditionally the domain of banks and credit unions, small-dollar loans are now being offered through mobile apps—bypassing legacy financial structures. Joe explains how Cash App Borrow targets users with fast, easy-to-repay loans that serve as an alternative to payday lenders and overdraft fees. The move highlights how fintechs are addressing financial gaps that traditional institutions struggle to fill, especially for underbanked populations.
"Cash App Borrow is designed to provide short term cash flow in a simple and accessible way when alternatives are notoriously expensive. So they must be talking about payday loans. Payday loans... allow people to lend a short amount of money, uh, a little bit of money, add a fee... over, uh, you know, technically until the next payday."
Emergency Loans and Community Bank Solutions
Timestamp: [00:11:00]
Joe highlights how one local bank, Redding Cooperative in Massachusetts, is addressing the need for emergency funds with an in-house solution. While fintechs like Cash App dominate headlines, some community banks are quietly innovating with responsible loan products tailored to their customer base. Through payroll deduction and employer partnerships, these programs help consumers bridge gaps without falling into debt traps. Joe encourages other institutions to look into similar efforts as part of their mission to serve local communities.
"We’ve seen a financial institution in our area, New England, take this challenge up. And for their employees, they’ve offered that emergency loan via payroll deduction... I know they’ve made the solution... available to any community bank interested in learning about it."
FinTechs and Regulation: A Growing Gap
Timestamp: [00:12:00]
As fintechs expand into areas once dominated by banks, Joe raises a critical point: who’s regulating them? With Square now offering loans and the FDIC stepping in, the traditional lines between banks and tech firms are blurring. Joe wonders aloud whether these newer players face the same scrutiny, especially when it comes to consumer protections and risk management. It’s a subtle but important question about fairness and responsibility in a rapidly shifting financial ecosystem.
"Like for example, I don't know who regulates Cash App. Is it now the FDIC? Because now the FDIC has said you can offer these services. Interesting... It sounds like it could set up a world where it's even more complicated with money movement."
Global Payments and the Stablecoin Possibility
Timestamp: [00:21:00]
Joe explores how stablecoins could change international payments. While RTP and FedNow can’t yet support global transfers, stablecoins may fill that gap. He imagines a future where digital wallets like Cash App or PayPal use stablecoins to send funds across borders instantly. This part of the episode raises thought-provoking possibilities for faster, cheaper, and more flexible cross-border payments—especially in contrast to today’s limited options.
"If someone in Europe had a wallet that could exchange this stablecoin... this would easily be an international payment, easily. So it's really interesting... will we see a stablecoin this year? How will it work? How will it gain traction?"
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