bye bye banking (part 2)

let's take a closer look at existing payment scheme's such as premium SMS. Several aggregators connect a variety of content-sellers to the Telco billing engines. When a consumer decides to send a message to a paid-for shortcode, the transaction is done. A subsciption or single piece of electronic content such as a time limited link to a wap/web site is distributed to the cellphone.

Behind the scenes, revenues are devided by all parties, but generally the telco takes the biggest share. Given the lack of real competition compared to the aggregators or content parties, this shouldn't surprise anyone.

The aggregator has a central position in this scheme. It connects merchants and telco's similar to role of the payment service provider in e-commerce. Now given the existence of aggregators, trusted parties and systems, much depends of the customers.

Case studies of mobile banking show that user-trust and general acceptance of payments by merchants are crucial. However, little generativity is to be expected from competing telco's. The same holds for banks, which leaves us with the aggregators.

I propose a mobile payments clearing house. This institute should esthablish trusted relations with al parties concerned. It should act as mobile payment service provider for merchants. At the other side of the scheme it would be tied to both telco's ánd banks.

While I propose a single institute for clearing transactions, the transaction itself can be done by a variety of methods. All to often, the debate of mobile payments has focus on payment methods. Those methods, such as Near Field Communications, are integrated into schemes also involving clearing of payments, such as electronic wallets like minitix. This type of integration hampers universal use of the system in much the same way as does the obligation for shop owners to purchase expensive NFC enabled payment terminals.

Variety of means, single payment clearing with a variety of institutions could allow for a bright future of payments without banks.

[later more on banking with telcos's]