Originally Posted by
sdsearch
Hasn't it already happened? Wasn't it called the debit card? (Debit cards, especially ones running on the same payment networks as credit cards, came decades after the spread of credit cards. Now look how many people use them instead of credit cards now that they can be used almost anywhere that credit cards can?)
But here's the thing. You can disrupt things all you want, but if you disrupt the compatibility, you don't get very far. The iPhone was able to disruptive because what was new was the user experience, but it still let you call the same phone system in the background and access the same internet in the background.
Credit/debit card processing networks are worldwide and have to use worldwide standards. So at that level, it's hard to disrupt the technology by yourself (as one company).
Now, if you take that away, cards are not primarily technology any more: They're financial instruments. And when the financial industry tries "disrupting" things, we get 2008!
All alternative payment systems are very fractional disruptors, because not that many people want a payment that doesn't work everywhere they already use their credit/debit card.
The Apple iPhone worked from the start for calling any number in the world. And new payment system has to be just about as compatible (in the payment world) to have a good chance of succeeding.
Look at how long EMV is taking to spread out around the world, and it's just a change to the card-terminal interface (everything on either side of that is staying the same).
So exactly what aspect of the credit/debit card
that is technology do you expect to be disrupted?
(Much more likely is
regulatory disruption, like in Australia:
Domestic transaction fees for everyone.
)
This is a good line of thought - thanks for the post. It definitely made me think, and it makes me realize that, due to the internet, disruption is just a lot easier today. The adoption of a new payment scheme can be much faster, because we have the internet to facilitate it.
We've all seen the Android phones with Google payment on them at checkouts at edgier stores, and you can use PayPal and Square and things at some places. These options would have had NO traction without the internet.
So whatever comes can take advantage of the network effect much faster than credit and debit cards did when they emerged.
And my feeling is, the push for new payment options will come from the merchants - not the banks or consumers. The merchants are eating the fees here and enabling the credit and debit card networks and the perks and rewards. When they find viable cheaper options, they'll push them. When Google Checkout was free for merchants, there were tons of promos from those merchants.
Now that many merchants can discount for cash or debit, the cost to their businesses is clearer. Once some start actually doing it, it'll pave the way for cheaper but still safe payment mechanisms.