An insight on what the future will not be like came to me from a lunch with an outgoing leadership figure at Zelle—the multi-bank consortium that has deployed an app to compete with the likes of Venmo and Square Cash.  Zelle is backed by many of the biggest US banks as a conduit for money transfer, but the app is an addition to, rather than a replacement for, the bespoke apps that each of the participating banks has for its own customers.  When I asked the departing leadership why Zelle did not include more features, such as transaction history for users, the answer was that the banks wanted the app to be good enough to blunt competition from Venmo and Square, but not so good as to have bank customers give up their existing bank sponsored mobile apps and just rely on Zelle.  That observation was a fulfilment of the maxim “if you aim low, you will probably get there.”  I immediately understood the desire of the best and brightest to exit the mediocrity mothership.

At the same time, Visa, Mastercard, and American Express are enjoying double digit growth in their card-based purchase volumes to over $6 trillion in 2018 in the US alone.  That would sound impressive if not for the fact that two Chinese mobile payments apps—Alipay and WeChat Pay—did seven times that amount, topping $41 trillion for the same period.  Of the two, the messaging app WeChat has shown the most impressive growth—over a billion users with 80% making mobile payments on a monthly basis.  The future for the world has arrived, but you just don’t see it yet in the US and Europe—most likely because early innovation in the card space now makes the West slow adopters of future solutions that have bypassed cards entirely.

Big tech’s pivot to private messaging and payments

While numerous American and European fintechs are trying to build better wallets—fiat, digital, or crypto—the Chinese (via WeChat) and the Russians (via Tel...

Categories:

Keywords:Mobile Banking, Digital Payments, Technology, Fintech, Mobile Wallet

An insight on what the future will not be like came to me from a lunch with an outgoing leadership figure at Zelle—the multi-bank consortium that has deployed an app to compete with the likes of Venmo and Square Cash.  Zelle is backed by many of the biggest US banks as a conduit for money transfer, but the app is an addition to, rather than a replacement for, the bespoke apps that each of the participating banks has for its own customers.  When I asked the departing leadership why Zelle did not include more features, such as transaction history for users, the answer was that the banks wanted the app to be good enough to blunt competition from Venmo and Square, but not so good as to have bank customers give up their existing bank sponsored mobile apps and just rely on Zelle.  That observation was a fulfilment of the maxim “if you aim low, you will probably get there.”  I immediately understood the desire of the best and brightest to exit the mediocrity mothership.

At the same time, Visa, Mastercard, and American Express are enjoying double digit growth in their card-based purchase volumes to over $6 trillion in 2018 in the US alone.  That would sound impressive if not for the fact that two Chinese mobile payments apps—Alipay and WeChat Pay—did seven times that amount, topping $41 trillion for the same period.  Of the two, the messaging app WeChat has shown the most impressive growth—over a billion users with 80% making mobile payments on a monthly basis.  The future for the world has arrived, but you just don’t see it yet in the US and Europe—most likely because early innovation in the card space now makes the West slow adopters of future solutions that have bypassed cards entirely.

Big tech’s pivot to private messaging and payments

While numerous American and European fintechs are trying to build better wallets—fiat, digital, or crypto—the Chinese (via WeChat) and the Russians (via Tel...

Categories:

Keywords:Mobile Banking, Digital Payments, Technology, Fintech, Mobile Wallet