Could the financial transaction industry be going the way of the music, television, and publishing industries?The situations feel similar. A tight, protected system built over many years and controlled by a select group of super-companies that have free reign to charge and operate how they please. Then, a group of developers come through and make the entire business open, easy, and cheap. The internet provides the opportunity and the entrepreneurs create the innovation. WIRED proposes the idea that we may be in for a fundamental shift in the way we transfer money with Paypal as the instigator.
Creating the credit card was the first monetary revolution that our generation accepted as standard. In fact, I can't remember life without plastic money. The change from cash only made banks more powerful as they could charge fees for merchants to accept this form of payment. It's really the ultimate partnership between the card companies and the financial institutions and it's one that costs the business owner 6 times what that purchase would cost with cash.
Paypal used to just be the primary form of payment on Ebay, but has done something I believe most large tech companies will do in the future; open the code to developers and let them create new innovations that originate new revenue streams for the company. This country is full of highly educated tech developers lacking the proper established networks and systems used to create highly innovative new companies. When Paypal opened up, thousands of coders came in and made the business of transferring money easier and available on whatever platform you use most. It could be on your smart phone, through social media, and even through subscription services available on ITUNES. They are effectively taking the arduous 10-step process of the past and breaking it down to 3-7 steps for a complete transaction.
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