Sunday, December 17, 2017

Blog Reader Alerts Me to New Payments Technologies

One of the benefits of doing a blog like this is that I get emails from readers that are very helpful in pointing me to articles and information that I might otherwise miss. In this case a reader forwarded me links to articles about some interesting new payment systems that will be available in the US. Below are links to those articles along with a brief excerpt from each article.

AJC.Com - Best Ways to Send Money Online

"With the rise of peer-to-peer payment services like Venmo, splitting the check with friends or reminding your sibling to pay you back isn’t as tiresome as it once was.

The services, which allow users to send money to others online or through apps, continue to gain popularity in the U.S. for their convenience (and the fact that fewer Americans carry cash these days)."

. . . .

"To help you narrow down the best P2P pick for you, we’ve rounded up a guide to the most popular, highly rated apps and services in the tech community."

"Thanks to our smartphones, there's no longer a need to put that drink purchase from a friend on an imaginary tab, or give them an IOU.

Mobile payment apps are making it a lot easier to give our friends or family cash, whether it's to split a restaurant bill, offer a gift, or settle a bet."

My blog reader had this to say about Zelle:

"I think Zelle is just an extension of the ACH transfer process for individuals to allow people to use it free instead of writing checks or using cash, as it appears it was developed by the banks to reduce transaction costs and allow speedy settlement for these P2P deals."

My added comments: These articles were interesting to me in light of recent comments by Fed Vice Chair Randal Quarles. He seemed to downplay Fed interest in central bank digital currencies and put emphasis on improving existing payments systems in the US. Below is his quote on this from an article in

"Quarles suggested that any such efforts to develop central bank digital currency would be a distraction from—they “might even derail”—efforts to improve U.S. retail payments. He pointed out that the U.S. still lacks a wide scale system for banks and their customers to make instant and convenient transfers and settlements 24/7."

All of this is also in line from what I hear from a payments system expert who works in this space every day around the world. As banks and central banks delve into this whole topic, they are still trying to decide if a separate "central bank digital currency" is really needed and they all are coming to realize that whatever system they implement must be able to tie in to the existing system and handle the huge volumes of transactions necessary to serve as a legitimate mass scale payments system.

We should understand that some of the Fintech efforts being touted as "blockchain" technology may end up being dead ends when tested in the real world which is why companies like IBM are working with partners on new solutions that emphasize ease of connection into the existing banking and payment systems.

All of this is also in line with this article we recently published that suggests that the world is moving towards more payment options competing to please the end user rather than moving towards one centralized global system at this point in time. Just look at all the competing choices covered in just these two articles forwarded to me by a reader here.

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