|
America has lagged behind much of the world in terms of digital wallets. Elsewhere, people routinely use phones instead of credit cards. There are several reasons for this. Partly, it is because North America saw mobile phones so early. When other regions finally rolled out mobile phones, infrastructures were more modern. The larger reason, however, is that there is so much at stake. Right now, there are a limited number of players in the lucrative payment network world. Visa, MasterCard, and American Express would like to move to your phone. They fear, however, that enabling electronic wallets in phones would allow aggressive young players onto their turf. PayPal, Amazon, and Google, are, in fact financial networks, and they would love to do your banking. So far, progress has been slow, but the emergence of Android is opening up new possibilities. Work is being done by the Mobile Payments Industry Workgroup that would establish standards. What we know for sure is that the established payment networks will do their best to keep out upstarts. We also know they will fail. Part of the reason for this is political; part is cultural. The politics are that Wall Street and the major banks have never enjoyed lower public regard and support. Consumers sense that the bailout profited rich bankers more than consumers. The customer base is not going to support politicians who continue to put the interests of favored banking institutions above those of consumers. Eventually, market forces always win. Currently, retailers are capable of dealing with only a few credit and debit card companies. This limits competition and keeps prices higher than they would otherwise be. A sophisticated mobile payments infrastructure, which is inevitable now that the Android has broken free, will arise. In fact, it will arise before most people know it has happened. The cultural factor I referred to is the difference between the old-school financial institutions and the new electronic services. I have little confidence that Visa or MasterCard is going to do what is necessary to exploit the convergence. They are too habituated and institutionalized. PayPal, Amazon, and Google, however, are populated by people who want to transform the financial world. They will find a way to force themselves into an industry that has lost serious credibility and clout due to its participation in the ongoing subprime mortgage fiasco. Fortunes will be made by app developers that are knowledgeable about the financial world and are members of the emerging application ecosystem that is ushering in a paradigm shift in the way businesses are done. This will include third-party developers, and new entrants, that design, develop, and provide their apps on different platforms like smartphones, tablet computing devices, Internet TV, social media sites, and other platforms connected to the web. For example, one of the founders of PayPal was motivated by a goal to create a mechanism for financial transaction outside the reach of governments. Taking it a step further, his objective was to create a new world currency, free from all government control and dilution – the end of monetary sovereignty as it were. So far, he has not succeeded however we are moving rapidly toward developing an electronic infrastructure that would enable brand-new forms of banking. Given our recent experience with the federally controlled financial system, the need is clear. Expect to see completely transformed financial institutions arising from the current rubble. I trust this post has provided some background and evidence of the power of banking on your phone and the resulting new forms of banking that will surface in the global economy that is enabled by advances in technology. I Hope You Enjoyed the Article and I Trust You Found It Insightful! Let me Know What You Think.
Related Articles -
Banking electronic wallets, Mobile payments, app economy, Paypal Amazon Google, Visa, MasterCard, American Express, B2B B2C ecommerce,
| 
