Mobile Wallet Technology: The New Barbarians are at the Gate
.
May 16, 2012
.
[Editor's Note: As Shah wrote in Part One, "Your future is calling and the ringtone sounds like a cash register." Below is the second installment in this four-part series on mobile wallet technology. I hope you enjoy it.]
By Shah Gilani, Capital Waves Strategist, Money Morning
As I discussed in Part One, the sky is the limit when it comes to mobile wallet technology.
The big brand credit card issuers
: American Express, MasterCard, Visa, and Discover Card, along with every other card issuer and wannabe credit extension intermediary are all already into the mobile wallet space.
.
Their offerings vary and competition between them will be as brutal as it always has been. And that's good for consumers.
.
Creating choices for consumers to drive business will lead to more innovation and more services offered at more competitive prices. At least, that's the way the free market is supposed to work.
.
Their offerings vary and competition between them will be as brutal as it always has been. And that's good for consumers.
.
Creating choices for consumers to drive business will lead to more innovation and more services offered at more competitive prices. At least, that's the way the free market is supposed to work.
.
But, traditional credit card issuers that are forcing banks to compete to offer credit to card borrowers, aren't the "disintermediators" I talked about in Part One.
.
They help spread banking relationships across the spectrum, they do not remove banks from the equation. And because banks are all in the present equation, pricing pressures aren't prevalent and fees and costs remain stubbornly high.
.
But as you'll see, that's about to change.
The Greater Fear for the Banks
.
What banks fear most in the burgeoning mobile wallet world are New Barbarians breaking down the gates that traditionally walled off banks from meaningful interlopers.
.
The biggest, baddest New Barbarians at the gate are some of the biggest names in the Internet world, the social media world, and the telecom world.
If you want to make a fortune on the mobile wallet future the giant players and Barbarian disintermediators to watch and invest in include: Google, Yahoo (yes, Yahoo), Microsoft (believe it or not), Facebook (when it goes public), Nokia, Research in Motion (yes, I am advocating buying Nokia and RIMM), Apple, Verizon, and Vodafone.
.
.
There will be other giants worth buying, but until the ground shakes from their emergence, these giants have a giant head start in the mobile wallet world of the future, starting now.
There will be other giants worth buying, but until the ground shakes from their emergence, these giants have a giant head start in the mobile wallet world of the future, starting now.
.
Of course, keep in mind that the scope of this series is intentionally broad.
.
So, it's not the place to give specific reasons to buy specific companies. My purpose is to explain to readers the extraordinary opportunities inherent in the mobile wallet future.
.
.
But, if you want to know why these specific companies will be huge winners in mobile transactions and what they are doing to warrant their own exceptional futures, as well as when you should buy them, take heart. Keep reading Money Morning.
.
But, if you want to know why these specific companies will be huge winners in mobile transactions and what they are doing to warrant their own exceptional futures, as well as when you should buy them, take heart. Keep reading Money Morning.
.
As it takes shape I will follow this report with specific recommendations accompanied by all the reasons and metrics you'll need to make informed investment decisions.
.
In the meantime, here's why these businesses are primed to rake in profits on the digital wallet phenomenon.
I'll use PayPal as the example of where things are now and where they're going.
.
.
Already, PayPal, the online payments juggernaut that eBay cleverly bought for a mere $1.3 billion in stock back in 2002, is giving banks nightmares.
.
.
It's not that PayPal doesn't incorporate banks in its business model, it does. But it does more than facilitate credit card transactions for buyers and sellers on eBay.
.
It's not that PayPal doesn't incorporate banks in its business model, it does. But it does more than facilitate credit card transactions for buyers and sellers on eBay.
.
The threat to banks, and the direction bank disintermediators are taking, is transparent in what PayPal offers once there is a balance in your PayPal account.
.
.
Your balance can be electronically transferred to your checking account, you can request a check, you can withdraw cash from an ATM with a PayPal debit card, you can use your PayPal debit card (debits your PayPal account) for purchases where it's accepted, and you can buy anything on eBay with what's in your PayPal account.
.
Your balance can be electronically transferred to your checking account, you can request a check, you can withdraw cash from an ATM with a PayPal debit card, you can use your PayPal debit card (debits your PayPal account) for purchases where it's accepted, and you can buy anything on eBay with what's in your PayPal account.
.
.
Buying and selling through PayPal without a bank in the middle, which is possible because people trust PayPal to hold their money and transfer payments effectively, is the quintessential example of how new technologies are disintermediating banks.
Buying and selling through PayPal without a bank in the middle, which is possible because people trust PayPal to hold their money and transfer payments effectively, is the quintessential example of how new technologies are disintermediating banks.
.
.
Seeing how Facebook, with its almost 900 million users, can directly facilitate transactions between its "members" by doing what PayPal does, opens up the window to new commerce possibilities that can be facilitated digitally through a trusted mobile device directly connecting business buyers and sellers and facilitating person-to-person money transfers.
Seeing how Facebook, with its almost 900 million users, can directly facilitate transactions between its "members" by doing what PayPal does, opens up the window to new commerce possibilities that can be facilitated digitally through a trusted mobile device directly connecting business buyers and sellers and facilitating person-to-person money transfers.
.
.
There will always be giant killers sharpening their tech offerings to stake their claims in the mobile wallet world.
There will always be giant killers sharpening their tech offerings to stake their claims in the mobile wallet world.
.
Some companies will change the face of commerce and shape the future. We'll want to keep an eye on these agitator upstarts.
.
Some will be bought by larger concerns and some will go public.
.
What's important right now is knowing who some of them are and what they're doing to shape the mobile wallet future.
.
In Part Three next week I'll name these "giant killers."
0 comments:
Publicar un comentario