Electronic Payment Futures.

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Okay, check it out.  Credit and debit card purchases work like this: you buy a $100 dinner and the restaurant gets $97, the card issuer (Visa, Amex) gets $2 and the restaurant’s bank takes $1.  On a per transaction basis it doesn’t sounds so onerous; credit cards are complicated, bankers have to make a buck, restaurants love the convenience and so long as there isn’t any technological fallout (sorry) everyone is happy.  But this whole electronic payment thing reminds me of the landline telecommunications industry.  To make a long distance phone call you have to pay your local telephone company, the long distance carrier, and the local telephone company on the terminating end.  ‘spensive.

Rethinking Mobile Electronic Payment

It doesn’t take an MIT grad to see that there are some inefficiencies in the current tripartite payment system, especially since nothing but data is changing hands.  So who is going to remove the first and last mile of money transactions as we move to smartphone payment technology? Google is thinking about it.  JPMorgan Chase is debating it.  Mr. Zuckerberg wonders. Verizon, too, has dreams. (Phone companies billing systems are very bank-like in their complexity.)  Don’t forget, American Airlines once made more money on its first-to-market reservation system than it did flying planes.

This electronic wallet, direct from consumer payment system is a comin’.  Question is: Who will be the winner? Thoughts?