Waiting Strategy of Banks in Mobile Payments

I need to admit that I adore Brett King’s fight for the Bank 2.0. I would summarize his book and blog posts into one sentence: big banks should lift their asses like just now and move fast or boys from outside (telcos, statups, etc.) will make them “dumb pipe” of finance with no direct engagement with more and more demanding customers.

And he’s right. Banks do not want to move fast and innovate (despite PR). (Of course as business insider I should admit that banks VERY slowly but are moving)

For corporations – it’s dangerous and regulations can protect for a while. And even more, all new born financial players will eventually understand how hard is to do business in banking with all  frauds  and legal compliance…

But wait, maybe strategy of waiting and doing nothing is not wrong.

Firstly, it is true that big shot startups either went through  “it’s not so easy” phase (like Square) or stuck in it (BankSimple). So maturing entrepreneurs will not  promise quick changing of the world and will be looking for some help.

Secondly, global payment players like Visa, MasterCard, Amex, etc are not fully blind. They are thinking on mobile payment strategy too. Moreover, one one hand they holding huge, very well invested global payment backbones, and on other – big bucks.

What is happening is logical consequence – global payment schemas started to invest and mostly important to buy or partner with innovating startups.

Amex introduced Serve platform to compete with PayPal, and partner with Foursquare and Facebook. Mastercard joined forced with Google to backup Google Wallet .  Visa invested into already mentioned Square, joinded ISIS and aquired Fundamo.

You can see some insights into Visa’s future vision

Well, mobile payments is really hot industry with huge traction. But as TechCrunch author Leena Rao makes conclusion

It’s early and there is still much more innovation were going to see in the next few years in the online and mobile payments space.

Here let’s come back to Banks and Waiting strategy.

Visa, MasterCard and Amex are old partners of banks. Their life are so much intervened in issuing and acquiring business. Who does want to kill this working model?  I guess at this moment no one.

It could be so that by in-house innovations or by buying startups, Card schemas will introduce new products in Mobile Payments. And will start distributing through… partner banks.

It seems that waiting will benefit banks by saving R&D money ant will let to concentrate on core business. And when products will mature and be ready for global roll out – here we go.

You can ask – what if not? Could it be that Visa, MasterCard and Amex will loose interest in middle man and start direct, online distribution. Well, I do not know. But as Brett King says – winners will be those who will own the client.

Bitcoins. Internet cash, no taxes, no banks.

Bitcoins are really interesting concept and it will take few minutes to understand it. Wikipedia explains:

Bitcoin enables rapid payments (and micropayments) at very low cost, and avoids the need for central authorities and issuers.

To be more clear, TurboTax Blog made nice iconography (click to enlarge)

Self issued digital money is new concept even digital currency already exists (Linden dollars, Facebook credits, Tencent QQ ). But just imagine the schema without central organization.

It is clear that world governments will start dealing with it as soon as it will gain momentum. This already happened with Chinese government and QQ coins. As mentioned above problem will be the same as with other P2P networks that could not be shut down as easy as Napster. Of course state sponsored hacking can be implode to bring down confidence in it. Actually, there was incident, at the moment considered to be “friendly fire” from other hackers. Nevertheless, Bitcoin stands.

Two points can be made

  1. Virtual economy is growing. To be true, it’s huge. And new schemas will be more independent and secure (even it is long road ahead).
  2. Independence will raise a lot of legal/moral questions – tax payment, money laundry, financial governance. And the answer depends on over all personal approach – libertarian or conservative.

On E-Channels. Hello world.

Dear colleagues,

here I start brand new (or just “yet another”) blog in this blog packed world. I hope very much that all my energy and experience in internal bloging won’t be sucked out too soon. And I will be deliver you a lot of interesting ideas and links for your professional development and daily inspiration.

But first of all, let’s lay down base line – what is E-Channels?

I started my professional carrier more that 10 years ago. I can even remember pre-internet world of BBS and FidoNet with never-forgettable sounds of modem handshake as my teenage years soundtrack. Latter came Internet, Web development, weblications, start-ups, internet marketing, social media optimization and more. And I never used this term because of one small reason. I lived in e-universe. And everything was “E”. So no MUDA to use it. Until recently.

I’ve joined multi-channel organization. E-channels or Electronic Channels are just a part of all distribution channels. And “E” stands as full self-service or means of communication with a real person on the end of the wire.

But I love this term. Even it is not so popular and usually used in corporate world. And I hope you will do it too.

So, for me e-channels will be full customer value chain in internet or other dedicated networks – internet marketing, e-commerce, self-service, mobile, etc. I will passionately dig in to innovations, user experience, new devices, front end interactions and back-end systems that enables everything.  And most important – value for customer and business.

As I work in financial industry this blog will heavily focus on it  – online banking, mobile banking, payments, etc.

So, hello world, welcome to Sakmanas On E-Channels.