“The really big question about many of the new and proposed mobile payment systems is whether they will disrupt, or augment, the existing “four party” system where consumers buy things from merchants, and payments flow between the consumer’s bank, and the merchant’s bank. There are other important players, of course, including the Visa and MasterCard networks, which essentially determine whether a specific transaction is approved or not, and then provide instructions about how to settle accounts between the banks.
David Schropfer’s new book, “The Smartphone Wallet,” attempts to lead the reader through the various possible ways a new mobile payment system could, in fact, disintermediate the existing system. “If Visa and MasterCard can hire settlement banks to handle the flow of funds daily, why can’t another company, such as a mobile network operator like Isis, or an alternate payment channel, like PayPal?” Schropfer asks. “Granted, the current format is formidable.” Could the mobile operator, or another entity, act as the processor for the consumer’s bank and the merchant’s bank? Schropfer thinks mobile operators could do so. In other scenarios, the mobile operator could send transactions directly to the consumer’s bank, automatically triggering a payment to the merchant’s bank, Schropfer contends. Or, perhaps the mobile operator could send a transaction directly to PayPal. In all those scenarios, there could be significant disruption to the current payment model. The “Smartphone Wallet” is a quick read, and retails for $14.95. If you want a quick, easy-to-understand treatment of where payments disruption could occur, Schropfer’s book will help.”Gary Kim
Editor, Mobile Marketing and Technology
For more about The SmartPhone Wallet, http://www.searchingfinance.com/products/current-titles/the-smartphone-wallet-–-understanding-the-disruption-a.html