The news that Facebook has received a license from Ireland’s central bank in to operate as a financial payments service highlights the tech giants’ growing interest in entering the financial services sector, a process some smaller players in the United States have already begun, such as Square, Venmo (owned by PayPal) or Snapcash (the joint initiative between Snapchat and Square).
¿What does a company do when four monsters, the so-called GAFA of Google, Apple, Facebook and Amazon, invade its territory? Running a payments system between individuals may not be the same as banking, they say; it’s the easy bit of the business, we do a lot more than that. Perhaps, but that simple part of the business leads customers to think that others can do the same, and that for whatever reason, they do better, with better interfaces, better use of information, better customer attention, a better image, more innovation, and in many cases, more capital.
One of the main problems banks face to do with their image. They can try to form coalitions or groups, offer no-commission transfers and try to be seen as innovators, but the truth is that other companies play tougher than them on their own turf because, when all is said and done, we’re talking about a business that has been digital for some time now.
Payments are practically the last final analogical frontier, and when that disappears for good, there will be little left to defend.
So, do the tech giants intend to take over the banking sector? Not in the short term, in the same way that they have attempted to take over the newspaper, movie or record industries… but they are certainly positioning themselves to do so. Payments, in the same way as music streaming or AMP or Instant Articles, are just a bridgehead: what comes next remains to be seen.
The banks face an uncertain future, and the solution, as some have already seen, is not to see the GAFAs as enemies or just another competitor. The real danger is to be found in another direction completely…
(En español, aquí)