Banking Strategies

Let’s face it, the Amazon Kindle is killing traditional books. It has been over a year since the company publicly stated that their digital book sales revenue had outpaced their printed book sales revenue. Of course we know that was only a matter of time given that they charge $10 for each book they produce. A similar shift has been taking place in the newspaper business and even in the credit card arena with NFC chips.

The likes of Google and PayPal are both looking for ways to enter this very untested space. There are a number of issues which are rampant. But think for a minute of how convenient it will be to never have to really carry around a wallet any more. You will simply scan your phone and the near field communication (NFC) chip will immediately debit your account.

Switching costs will be very high for both consumers and businesses, but we will probably see more kickback from the businesses who provide point-of-sale solutions ans support for such solutions. Why? This is their bread and butter baby. Cut out the margins they receive on POS and other hardware/software combinations and they have absolutely no business whatsoever. Consumers will not be ditching plastic right away either. A large disruption in the status quo like this will take years to achieve, but will probably have big dividends to the company that can truly pull it off.

On the other hand, the obsolescence of hardware and software in such units will force a newer generation of devices to be adopted and when NFC chips begin to become standard in most mobile devices, there will almost certainly be a flock to dump the credit cards and find some even better method for charging thing on account. I’m excited because I know that this will also help the transaction to be much more secure, especially if they are equipped with a thumbprint scanner.