Happy Holidays

Hi everybody.
This will be my last post for 2007. I'm off on my first holiday in three years and celebrating completion of my MBA with Honours.
I'd like to wish all my readers a happy and safe holiday period

Off Topic: Ice Hockey

Admittedly a little unrelated to Mobile Payments and Banking, this story from the Wall Street Journal discusses a topic most people who play ice hockey eventually discuss: what if your goalie literally filled the net?

Bill Me Later, Amazon

Saul Hansell over a the NY Times writes how Bill Me Later has been accepted by Amazon. Apparently it took seven years and a chunk of equity to get them to adopt the payment system. Bill Me Later only exists because of the automated systems for approving credit and the distrust or unwillingness to use credit cards over the net. What I particularly like about Bill Me Later is the cheaper fees (1.5% vs 2%) than credit cards charge and the great fit it has for micro transactions.

Innovate

Now this is good. Boils down to this: Deloitte says that mobile payment etc can't really piggy back on existing bank based payment systems because the margins in the payment game are too slim. And where would the extra payment come from for the payment provider? The banks? The customer? I agree with Dave that participants in an industry are unlikely to originate or back the innovators that bring the industry to its knees, because the "out of the box" thinking that the innovators express cannot originate from within the industry.

Wallet not a wallet unless i t included person to person payments

David Birch says he has a problem with describing payments with a mobile as "Mobile wallet" because wallets should include person to person transactions, otherwise its not really a wallet is it? Its just a payment system. Sounds right to me...

P2P Lending: the new Finance Company?

In New Zealand recently there has been a procession of finance companies going under as people panic and yank their money out. The resulting illiquidity brings the companies down. Rob Findlay points out that in Australia the P2P (person to person) lending area is beginning to be used as investment opportunities for people unable to get similar rates from banks. How do those things go together? Well, the people in NZ who invested in Finance Companies did so to get rates of return in excess of the rates they could get from the banks. They were ignorant of what the finance company invested in and were unaware of how far down the list they would be when everything turned pear-shaped. I see the same thing happening in the P2P market, should they catch on here: sophisticated investors will go in an earn returns above what banks offer. The marketing arm of the P2P comnpany will step in and publicise how everyone wins from P2P. Mr and Mrs Joe Average investor will say "instead of investing in those dangerous finance companies, I'm going to invest in this here P2P thingy". The person they lend the money to will go under and the unsophisticated investors will look around disrotientated and say "Wha' happened?". I'm not sure what information is disclosed about the counter party in these P2P loans, but if I'm going to invest any money with them, I'd want to know a lot about the person I'm lending to. I worry that Mr and Mrs Average will be less interested in the risk and more interested in the return.