04 Dec What Can We Expect From The Future Of Online Payments Across Africa? Some Pretty Crazy Scenarios
Big techs and fintechs are coming together and leveraging each others platforms, consumers and licenses for payments. It’s not easy for big techs to get banking licenses and easier to partner with banks to roll out compliant products Big techs are going big when it comes to money . . Facebook with its stalling Libra crypto-venturing has in the meantime rolled out FacebookPay, Uber is issuing cards, Amazon’s coming out with BillPay. They have the consumers so why not add payments! They have the eyeballs and what a pleasure to monetise their commoditised businesses for value creation leveraging their powerful positions They know where you live, where you go, what you buy, your interests, your family, your habits, so why not add payments at a subsidised fraction of the price anyone else could do. Add online payments info to their already substantial data collection - monetise with intelligent ads, sell you products, get paid by you, and make a turn on each of these profitable opportunities. Makes sense. Banks just can’t move this fast so yes, use them as the payment rails, but there is no way they can compete with the customer knowledge, customer equity, and level of engagement. Oh my word are we in for surprises over the next few years in payments. What about Simon Dixon’s hypothesis that central banks could bypass banks, get rid of the out-of-control consumer and country debts, provide accounts directly to consumers and businesses and leave the banks holding their bags. What an interesting situation that would be. Big tech has big consumer bases and can easily keep these customers in closed loop ecosystems where they don’t need to pay costly and fraud-prevalent third party payment systems - a simple system of T-accounts where money doesn’t actually move out of the system but just between “members”. It's centralised (oh dear - more control) but that makes it simple to manage. With the data that for example Apple, Facebook and Google have, with you at the end of a device, and engaging all day . . very simple to serve you ads, sell you products, and take the money too. If you throw crypto into the mix hmmm. Its FacebookCoin, it’s GoogleCoin, it's AppleCoin, conjured up out of thin air, and most of the money will stay in their system, so it's FunnyMoney. Sorry, I’m rambling . . thought provoking . . one thing for sure we are in for a fascinating transformation of money and payments as we know it. But for now . . we live in the “real world” so if you are an eCommerce business expanding to and across Africa contact us now to help you get sorted with your cards and mobile money like M-Pesa, Airtel Money, Tigo Pesa, MTN Mobile Money. ============= A big thank you for inspiration to Seema Amble, a16z Fintech Deal Partner in a recent newsletter