Wandering the streets of Shanghai to admire the architecture, the head of one of the largest U.S. consumer banks recently found himself surrounded by a gaggle of teenagers.
Entranced by their phones, they hardly made way for the banker. The teens were messaging, shopping and sending money back and forth, all without cash. Instead, they were using Alipay and WeChat.
The scary thing for the American: Banks never got a cut.
The future of consumer payments may not be designed in New York or London but in China. There, money flows mainly through a pair of digital ecosystems that blend social media, commerce and banking—all run by two of the world’s most valuable companies.
That contrasts with the U.S., where numerous firms feast on fees from handling and processing payments. Western bankers and credit-card executives who travel to China keep returning with the same anxiety: Payments can happen cheaply and easily without them.Add crypto to that, and it's doom for the financial intermediaries.
Bloomberg
Why China’s Payment Apps Give U.S. Bankers NightmaresJennifer Surane and Christopher Cannon
7 comments:
Link doesn't work.
https://www.bloomberg.com/graphics/2018-payment-systems-china-usa/
Tom - it is doom just with that. The crypto is neither here nor there
Clint, I am thinking of crypto for international payments.
Banks are the apex predator in the parasite economy.
Tom - Is it significant besides black market stuff? I thought crypto is still and will probably remain marginal (and decrease probably to nothing), and the "normal" (WeChat, Paypal, Alipay etc) channels will be dominant internationally too (to the extent governments let them)
It’s a threat to credit/debit cards, but the big payments are still routed through banks. It would get interesting if the tech firms created banks. However, we selected our bank based on who gave us the best mortgage rate years ago. That is, lending is a bigger determinant of market share than fees.
Also - people’s live for big tech ends as soon as they need support. The reason why Google worked so well is that you have to be pretty thick to not figure out how their search engine worked. If you are moving into banking, you need to provide support, and tech firms are worse than banks for that.
Post a Comment