Well, they also make money from fees. Especially, in the US, check-card swipe fees (invisible to the casual user since they're assessed on the merchant).
Coming from the finance world here... Maybe the problem here is more how money is a societal construct, not a technological one, even though it can be represented technologically. With all due respect, people like Marc Andreessen seem to think that the constraint here is a technological one, when the technology to do a lot of what they're talking about has been around a long time. It's that, for non-tech related reasons, people prefer things working a certain way.
I can see things like blockchains improving back office settlements and clearing, sure, but... whatever?
Disrupting the actual financial system is nothing short of disrupting how society who gets what, and what gets done. This is not a technological problem you're dealing with.
Next behind...? Credit cards? No, haven't been disrupted. Consumer banking? No, hasn't been disrupted. Mortgages? No. Consumer/eduction lending? Sorta, I guess. Corporate banking? No.
None of these tech-focused innovators ever mention their plan to counter the incumbents most potent weapon: lobbyists. The same way they dodged liability in ACH, etc issues all these years is the same way they'll likely counter startups.
Alternatively, they can just buy up the best-of-breed, patent their technologies, and use that to force costs up. So many ways they can play it. And they're good at eliminating threats to their profitable, predictable, status quo.
Pretty much this, unfortunately. Which means the only way to fight back is to raise enough money to counter said lobbyists and try and get the laws the other way.
That said, it's probable banking will get disrupted eventually. It's just that a large company like Google, Apple or Microsoft will probably be one of the main causes, since they have enough money to keep battling until they either become too big to stop or the incumbents give up.
That's actually a decent possibility. Much more probable than getting all the startups to collectively, consistently fund lobbyists on their behalf. The big tech firms already do that. Google, Apple, and Facebook are already working on integrating in daily routines of users including with payments.
It would be interesting for one or more to fund a push into banking maybe leveraging a bank they bought for its expertise and infrastructure. Probably opportunities for analysis and ad targeting on top of it. Wait, "ad-supported payments via displaying them at POS kiosks." Oh, shit, did I just make up an industry on the spot or does this already happen? ;)
We would welcome any new entrants that sought to provide a better customer experience. All of the companies you mentioned have already entertained the idea of entering banking, but they haven't yet jumped in.
As for your other comment, apps and ATMs are already being used as an advertising channel. I wouldn't be surprised if we see (much) more of this.
"that sought to provide a better customer experience"
First concrete thing you've said. Always a way to get into a market crowded with incumbents, esp if account reps have personal touch. Fix anything that annoys people and $$$'s result. Good luck to you on that part as you have a good chance of making it there.
"As for your other comment, apps and ATMs are already being used as an advertising channel. I wouldn't be surprised if we see (much) more of this."
While we have strong opinions about regulatory and legislative changes that would enable innovation, it's impractical to attempt systemic disruption as a seed stage company.
Our mission is not to change banking just for the sake of it. We are focused on providing a better service for our members.
There's a lot of room for improvement, even within the current system, and by focusing on things we can do rather than things we wish we could do, we'll be able to make positive progress.
Many well meaning startups have pursued immediate disruption and have failed. Our view is that if we are successful within the current environment, we'll have a better chance of being able to help move things in a positive direction.
Four of my coworkers agreed that this comment has excellent PR value for mainstream market. It uses a whole lot of words say basically nothing but with much optimism and faith in the company as the expected result. Well-written. :)
What Would you tell to a frustrated french entrepreneur Who like seed concept but knows it will takes years before such a solution can be available in France?
To put things in context there are some pure online banks that have disrupted the bank deposit such as boursorama or fortuneo but outside of traditional banks there is no inovative banks available for companies. I guess there must be a reason for that which i can't grab.
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[ 3.9 ms ] story [ 48.7 ms ] threadThe plans are big so we have to see.
I can see things like blockchains improving back office settlements and clearing, sure, but... whatever?
Disrupting the actual financial system is nothing short of disrupting how society who gets what, and what gets done. This is not a technological problem you're dealing with.
Alternatively, they can just buy up the best-of-breed, patent their technologies, and use that to force costs up. So many ways they can play it. And they're good at eliminating threats to their profitable, predictable, status quo.
That said, it's probable banking will get disrupted eventually. It's just that a large company like Google, Apple or Microsoft will probably be one of the main causes, since they have enough money to keep battling until they either become too big to stop or the incumbents give up.
It would be interesting for one or more to fund a push into banking maybe leveraging a bank they bought for its expertise and infrastructure. Probably opportunities for analysis and ad targeting on top of it. Wait, "ad-supported payments via displaying them at POS kiosks." Oh, shit, did I just make up an industry on the spot or does this already happen? ;)
As for your other comment, apps and ATMs are already being used as an advertising channel. I wouldn't be surprised if we see (much) more of this.
First concrete thing you've said. Always a way to get into a market crowded with incumbents, esp if account reps have personal touch. Fix anything that annoys people and $$$'s result. Good luck to you on that part as you have a good chance of making it there.
"As for your other comment, apps and ATMs are already being used as an advertising channel. I wouldn't be surprised if we see (much) more of this."
Figures haha.
While we have strong opinions about regulatory and legislative changes that would enable innovation, it's impractical to attempt systemic disruption as a seed stage company.
Our mission is not to change banking just for the sake of it. We are focused on providing a better service for our members.
There's a lot of room for improvement, even within the current system, and by focusing on things we can do rather than things we wish we could do, we'll be able to make positive progress.
Many well meaning startups have pursued immediate disruption and have failed. Our view is that if we are successful within the current environment, we'll have a better chance of being able to help move things in a positive direction.
Cue M-Pesa.
[1] https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...
I'll be on a flight for the next few hours, but I'll check in when I land.
That's really the only viable solution at this stage.