Traditional Banks are often seen as slow, cumbersome organisations who can’t manoeuvre quickly because they are saddled with huge legacy systems held together with sticky tape and plaster. They have a largely process oriented workforce, are inefficient and bureaucratic, and operate with a very expensive cost base. Conversely, the new Commercial payments organisations however, especially those internet technology ones, are seen as lean, nimble, innovative, challenging of the status quo and quick to identify and exploit until they find a new world of mass opportunities.
So looking at this picture I guess the future in payments is clear, goodbye home banks and hello Apple, Google, Square, iZettle and a host of other new players. BUT, is it really that clear? In the first dot com era everyone predicted these radical new technology start-ups would quickly come to rule the world, whereas in reality I believe it’s only a handful that really made it, (Amazon, Google, PayPal being top of mind) and tens of thousands didn’t. Well one could easily argue that in payments we are entering into a similar ‘bubble’.
I have worked with the traditional payments players in many markets around the world, from the top companies to emerging players, for over 25 years. In the last 4 of these I see what I call: the “disruptive change era of payments industry”. What I mean is that I have seen many people and organisations progress through all the normal human change cycle stages; shock, denial, trial, acceptance and flourishing. Every market and culture moves through it in different ways and paces but it is recognisable in each.
What I find very interesting right now is that several traditional players are reaching the final stages on this wave of change. The conclusion they are reaching is that the new players, the ones they have been pre-occupied with for the last couple of years in terms of ‘how do I stop them stealing all my business’, actually are not in fact going to succeed.
These traditional organisations, having reached this conclusion, are now re-energising their core businesses again and accelerating from the pack, leaving their “traditional” competitors (who are still in their change cycle) and the new-entrants (who continue to push hard) behind them.
The point is that the more advanced traditional players I have worked with have concluded that the new players are not going to change the world overnight and are off to do it for themselves. With Cartes coming up next week I am looking forward to meeting old-friends and learning what is in store for the payments world in 2013 and beyond.