CSFI Innovation in Payments

Is there discrimination against e-payments in Europe?

[Dave Birch] In a recent edition of European Card Review, Malte Krueger of Paysys wrote that the cashless society would remain a fairy tale. Maybe. But as the article itself notes, that's not because cash is more efficient but rather because the law ensures unfair competition. Legal tender laws do not force people to use cash, as is sometimes claimed, but there are some laws that do discriminate in favour of it. In Germany, for example, banks are simply not allowed to charge private customers for withdrawing cash. Similar laws would undoubtedly be enacted in other countries so banks try to recover any costs on this side.

Lunchtime round table, 22 January

[Dave Birch] The first of the lunchtime round tables in the Innovation in Payment series will be held at City Marketing Suite, Basinghall Street on 22nd January. All are welcome, but as space is limited please reserve a place with the CSFI before coming along. This first seminar takes a general look at the state of European payments industry to establish a baseline for the research and ground the discussions the come. The seminar will begin with three short, high-level introductions by senior people from APACS, McKinsey and Visa and will then move on to informed discussion and debate. You can download the detailed invitation here [PDF 56Kb].

Innovation fills a vacuum

[Dave Birch] Innovation in the sense of "building a better mousetrap" is certainly difficult, but you might argue that starting with a mousetrap and then working on a better one is much, much easier than starting with nothing and imagining a world with mousetraps. This is why, I think, that (the obvious example of PayPal apart) there hasn't been as much innovation in the world of online payments as I might have expected a decade ago. In general, nothing genuinely new has been invented for the online world and online payment methods tend to be "shoehorned" versions of existing offline payment mechanisms. There is one area of the online market, though, that has seen some real, entirely digital, money that exists only online and has no offline infrastructure or base, and that is "e-coins" in virtual worlds.

I think that an informative case study is that of China, where virtual currency has grown rapidly to the point where it has become an issue of concern for the government.