Generational Conflicts Within the Payments Industry
Politically Incorrect Talk on Banks, Blockchain, Credit Cards, and Fintech relations.
By Alex Kontegna & Michael E. Malley (2016)
Payments are a mess. Technical retardation in essential components, the lack of transparency in pricing, and the fuzziness of public relations are all the result of an unchecked conservatism which allows older iterations to remain in play for so long that newer layers pile up on top in a nasty way. To be sure, “newer stuff” is not necessarily any better than older counterparts but different generations of payments are all now cramped together and it would be prudent to have a look at the pro and cons of each, regardless of age.
Three generations live under one roof at the Payments House: grandfathers, fathers, and children.
(1) grandfathers: banks and paper-based payment systems
(2) fathers: centralized networks, e.g. cards and non-bank payment services providers; for the illustrative purposes of this article we would include RTNS here but exclude RTGS because Fed-centered channels have no alternatives and because this talk is mostly about small payments
(3) children: blockchain fintech; both pure crypto and hybrid blockchain and legacy assets test systems.
This “classification” might look technically artificial to a payments professional. And it is to some extent. But it is precise enough for our illustrative purposes when we focus mainly on “relationships”:
Grandfathers are still noble and wealthy but starting to show signs of senility, grumpiness, and forgetfulness.
Fathers still rule the house in practical terms. They try hard to look respectable while cynically reaping off their aging parents and silently resenting their youthful children.
Youngest generation is represented by naively arrogant teenagers who don’t care about older generations’ values. They might look technically savvy but they are lagging behind their classmates.
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