That will not disrupt payments incumbents as such, but there is a risk that people will bypass credit cards in making these payments, thus cutting off the banks' lucrative commissions.How payments evolve, and what role fintech will play in that, will depend largely on local circumstances.
Interior Secretary Zinke, for example, is working to reduce payments that incumbent fossil fuel companies owe U.S. taxpayers for coal, oil and gas they are extracting from public lands.
Joining us this week is Edward McLaughlin, MasterCard's Chief Emerging Payments Officer, to break down how incumbent payment properties are both watching new payment technology, and, naturally, leveraging it to their own advantage.
Today, there are literally hundreds of companies working on the micro-payments problem, looking to combine just the right set of technologies and business models to blow up incumbent payment systems in place today, including cash, checks, and debit and credit cards.
"Apple likes to own the ecosystem, but the incumbent payment networks are too entrenched," says Devlin.
These issues wouldn't be as big of a problem if the incumbent payment methods hadn't already nailed the simple user experience.
While fintech represents a real challenge to established banks, brokers, asset managers, custodians and payment companies, the incumbents retain strong competitive advantages.
While attending the Mobile World Congress 2011 in Barcelona, it became clear to me that, while many startups are entering the market with mobile payments solutions, the incumbent card networks are likewise devising their own strategies to be part of the new ecosystem.
The cross-subsidies and lack of market priced payments by the incumbent's subsidiaries helped to create this economic harm.
"We believe Braintree has the strengths to challenge all the incumbents in the payment space, including PayPal.
But it's facing increased competition from other payment startups, as well as incumbents, such as American Express, Visa, and MasterCard.
