Probably only top management at the Internet giant know the answer to the question whether Google will give traditional banks a run for their money in the foreseeable future. The same applies to other big businesses from the Internet world. Apple, Amazon and online payments service PayPal are sending similar signals. According to various sources, they are all investing in mobile, Internet-based payment system projects.
Transaction volume doubles.
In its study on “The future of (mobile) payments”, Deutsche Bank warns that one eye should be firmly kept on the strategies of these new competitors. The major credit card companies and telecommunications providers also merit serious attention. PayPal’s success shows that acceptance of this new, convenient payment method is already very marked in mobile society. The Internet payment service’s transaction volume rose from USD 21.34 billion in Q1 2010 to USD 41.47 billion at the end of 2012.
Massive, established sales network.
Both trend drivers have launched their own online payment management services in Google Wallet and Apple Passbook. Life Seda reported on Apple’s potential in its 2013 trend report “Money of the Future”. According to a consumer survey in the USA and UK, 43% of Apple users were prepared to also use banking services from their lovemark.
Imagine the millions upon millions of users who daily use Google’s search engine, and the scope for distribution of Google’s own banking services becomes evident. And this, mark you, without a major marketing campaign. Another point in the network giant’s favour is its image. Its brands are highly regarded by a very sympathetic public. A comfortable status which the financial institutions will have to work hard to regain.
Accept the challenge.
Heaven knows how, when and where new competitors will get into the online payments business, or even open a bank. In its study Deutsche Bank comes to the following conclusion: “If banks succeed in offering better informed and Internet-savvy customers attractive financial solutions, which satisfy increasing consumer demands in terms of mobility, networking, communication, interactivity and information, the threat of being ousted by the competition will be limited.” This observation is followed by a second paragraph, with which financial institutions must thoughtfully concur. If the industry misses the moment, it will lose a lucrative business.
A change is coming. This is, however, nothing new to the financial industry nor excessively alarming, because the solutions already exist and are awaiting implementation, with OCEAN E-Banking, for example.