Four months ago, I published a brief post on our Linkedin Group. Why Google?, I asked. Why is Google, not banks, leading the move into NFC (Near Field Communication). Why is Google, not banks, leading the move into mobile payment solutions?
That was four months ago. Three days ago, on September 19th, Google launched the service in the US.
Reuters, The Guardian and Businessweek – to name a few – all covered the event. But few industry pundits have dived deep into what this means for banking – yet. It will be interesting to follow what Wired calls ‘the mobile payments arms race‘ in the next 12 – 24 months.
The BIG questions still stands: What are banks going to do about that?
The original blog post from April 2011.
Tomorrow Google is introducing mobile payment solutions in the US. But why Google?
Swipe your phone. Pay. No cash. No credit cards. Just your phone. It’s been a longtime coming. In parts of the developing world it’s been around for years. But tomorrow, the US. Nationwide,chains like Macy, American Eagle Outfitters and Subway are gearing up for the introduction. In the thousands of cashier points, they are already ready to serve customers paying by their smartphones. Hey, Starbucks has been doing this for a while now, through their My Starbucks Card App.
But why Google? Why is a (still) young, Internet Search company (yeah, right!!) the ones to introduce this nationwide in the US? Why are not the banks, or even the creditcard companies leading this fray? Whatever happened to Mastercard and Diners leading innovation?
The answer fits perfectly with Clayton M. Christensen’s theory on disruptive innovations. Radical innovations in any industry are not introduced by the existing industry players. Far more often than not, these innovations will come bubbling up from completely unknown and irrelevant players. Name me one single banking executive who three years ago thought Google would become a threat. Name one executive team who even thought Google would become an industry player. In banking.
Pay attention. One of the world’s most innovative companies has just blown open the door on mobile payments. While at the same time, Brett King concludes that not a single bank is to be found of the list of the world’s 250 most innovative companies.
What are banks going to do about that?