How can non-U.S. companies set up and use Authorize.net?
Payments
Asked by Question Bot11/Jun/20121 answer
1 Answer
F
Faisal Khan
Answered 11/Jun/2012
The future of payments is a multi-facet solution and will remain so. There is no one clear winner. How it shapes out, is a matter of great debate and the moment of truth for many companies who are betting that their solution is the golden one.
Going to pen my thoughts here, so, pardon the randomness of the answer at times.
Jack Dorsey's Square has indeed been a disrupter, no doubt about that. Many Square clones have propped up. NFC payments are still in their nascent stages in some countries and slowly gaining traction in others. The traditional swipe methodologies used by the giants VISA & Mastercard - still dominate. Mobile based payments are catching up fast...everywhere. No one wants to be left behind. There are challenges for every new entrant into the market, mainly in the form of legal compliance, traction and ability to cross-connect to other payment system. Even the basics of how money is stored these days, is evolving - think eWallets, Branchless banking, Mobile Banking, other portable payment instruments tied either to your email or phone.
The short answer is the payment disruption cycle started a few years ago, with the wide acceptance of the Internet and channeling transactions on this network - and I am not just talking about the US here. There is an immensely large payments eco-system that resides outside the US. Innovations in the Chinese payment system which have slowly started gaining traction outside of China would be watched with a lot of interest by the likes of VISA, Mastercard, PayPal, et. al.
How we physically charge or pay would be a matter of convenience. I personally seen the mobile phone as becoming the dominant payment system (as it can incorporate a lot of multi-facet payment functionalities in it). In some African, South Asian and South East Asia, the mobile phone is money (think branchless banking).
Traditionalists (Banks, Card Associations, etc.) are all now being forced back to the drawing board to come up with innovative ways to compete against solutions that are now coming out, for Gen Y or the Millennium Generation who are totally wired/wireless and would be business owners and main payment makers in the coming years. Even the likes of PayPal were forced to reconsider their business model (after all, how long in an Internet economy can you hold on to a payment model that is 10+ years old?). Companies can call it a natural progression or natural extension of their existing business model, the truth is, the threats are so severe, that had these companies not innovated, they would be history in a couple of years.
Though very difficult to see at present, the market share (in my opinion, and I cite this as a limbic opinion) and dominance of VISA / Mastercard has started to erode, or will erode and fall significantly in the coming years. Many economies are putting a lot of effort into alternative payment networks. India and China are two economies that have taken this idea and started building up on it, that is, development and deployment of a payment systems network free from Mastercard/VISA, to one that is local and caters to their local payment system. Companies like Dwolla have had the right question - what is the cash equivalent online? How can payments be made by by-passing the traditional (read: expensive) payment networks. Whilst, I may / may not subscribe to the success of Dwolla, their idea is certainly facing in the right direction. Bitcoin is an another example, whilst the world is very divided when it comes to Bitcoin (and mostly against), the fact that it has survived so long is gaining traction gives us enough reason to think that alternatives are possible and traction can be made.
Throw into this equation some very powerful names, and you have a game changer:
I personally believe these four companies will enter into the payments space for P2P, P2B, B2B or possibly a hybrid mix (coupled with their product and/or service offering first, before going mainstream). These companies (IMHO) have already charted their way into the payments space. We can speculate all that we want, on the how, where, what, when and possibly why! But the Big 4 above will be rolling out on their schedule - not ours. Big 4 venturing into payments space is inevitable.
Financially bond the entry of Big 4 into the products & services they already provide and throw in the mix of their partners and the entire payment landscape changes drastically, with each company's approach taking shape of a very different payment system that you and I might have envisioned, but one, that would be very attractive for us to grab and transact upon.
Brian Roemmele did an excellent piece on Will Siri become a transaction completion system? - that answer provides an excellent case of possibilities that are surely coming our way (this is not the science fiction of the AT&T ads of "You WIll" of the early 1990s)... but this is happening today.
Concluding, the space is competitive. Obsolescence or companies having a large inertia, will be punished. No single financial instrument will come out on top. A great (highly recommended) article to read is the The Great Tech Wars of 2012 (See http://www.fastcompany.com/magaz...).
Here are some answers I wrote, that can also provide some form of a adjacent views on payment systems.
Going to pen my thoughts here, so, pardon the randomness of the answer at times.
Jack Dorsey's Square has indeed been a disrupter, no doubt about that. Many Square clones have propped up. NFC payments are still in their nascent stages in some countries and slowly gaining traction in others. The traditional swipe methodologies used by the giants VISA & Mastercard - still dominate. Mobile based payments are catching up fast...everywhere. No one wants to be left behind. There are challenges for every new entrant into the market, mainly in the form of legal compliance, traction and ability to cross-connect to other payment system. Even the basics of how money is stored these days, is evolving - think eWallets, Branchless banking, Mobile Banking, other portable payment instruments tied either to your email or phone.
The short answer is the payment disruption cycle started a few years ago, with the wide acceptance of the Internet and channeling transactions on this network - and I am not just talking about the US here. There is an immensely large payments eco-system that resides outside the US. Innovations in the Chinese payment system which have slowly started gaining traction outside of China would be watched with a lot of interest by the likes of VISA, Mastercard, PayPal, et. al.
How we physically charge or pay would be a matter of convenience. I personally seen the mobile phone as becoming the dominant payment system (as it can incorporate a lot of multi-facet payment functionalities in it). In some African, South Asian and South East Asia, the mobile phone is money (think branchless banking).
Traditionalists (Banks, Card Associations, etc.) are all now being forced back to the drawing board to come up with innovative ways to compete against solutions that are now coming out, for Gen Y or the Millennium Generation who are totally wired/wireless and would be business owners and main payment makers in the coming years. Even the likes of PayPal were forced to reconsider their business model (after all, how long in an Internet economy can you hold on to a payment model that is 10+ years old?). Companies can call it a natural progression or natural extension of their existing business model, the truth is, the threats are so severe, that had these companies not innovated, they would be history in a couple of years.
Though very difficult to see at present, the market share (in my opinion, and I cite this as a limbic opinion) and dominance of VISA / Mastercard has started to erode, or will erode and fall significantly in the coming years. Many economies are putting a lot of effort into alternative payment networks. India and China are two economies that have taken this idea and started building up on it, that is, development and deployment of a payment systems network free from Mastercard/VISA, to one that is local and caters to their local payment system. Companies like Dwolla have had the right question - what is the cash equivalent online? How can payments be made by by-passing the traditional (read: expensive) payment networks. Whilst, I may / may not subscribe to the success of Dwolla, their idea is certainly facing in the right direction. Bitcoin is an another example, whilst the world is very divided when it comes to Bitcoin (and mostly against), the fact that it has survived so long is gaining traction gives us enough reason to think that alternatives are possible and traction can be made.
Throw into this equation some very powerful names, and you have a game changer:
- Apple
- Amazon
I personally believe these four companies will enter into the payments space for P2P, P2B, B2B or possibly a hybrid mix (coupled with their product and/or service offering first, before going mainstream). These companies (IMHO) have already charted their way into the payments space. We can speculate all that we want, on the how, where, what, when and possibly why! But the Big 4 above will be rolling out on their schedule - not ours. Big 4 venturing into payments space is inevitable.
Financially bond the entry of Big 4 into the products & services they already provide and throw in the mix of their partners and the entire payment landscape changes drastically, with each company's approach taking shape of a very different payment system that you and I might have envisioned, but one, that would be very attractive for us to grab and transact upon.
Brian Roemmele did an excellent piece on Will Siri become a transaction completion system? - that answer provides an excellent case of possibilities that are surely coming our way (this is not the science fiction of the AT&T ads of "You WIll" of the early 1990s)... but this is happening today.
Concluding, the space is competitive. Obsolescence or companies having a large inertia, will be punished. No single financial instrument will come out on top. A great (highly recommended) article to read is the The Great Tech Wars of 2012 (See http://www.fastcompany.com/magaz...).
Here are some answers I wrote, that can also provide some form of a adjacent views on payment systems.
- How Will Mobile Payments Evolve In the Next Several Years?
- Why can't NFC be a mainstream technology for mobile payments in its current stage?
- How will money transferring between countries look in five years?
- Will iBoxPay (copy of www.squareup.com), China made, be used in India for accepting payments in India through credit cards issued by Indian Banks? What all formalities need to be done? Tie up with Visa, Master card? How to handle EMV?