FINANCE, THE ADAGE goes, is the art of passing money from hand to hand until it finally disappears. This will ring true to anyone who has tried to send cash overseas and found their remittance whittled away by commissions and lousy exchange rates. Shopkeepers typically pay around 3% on sales made by credit card. Banks are involved in over $400 trillion of transfers every year and extract over $1 trillion in revenues from them, according to the Boston Consulting Group. As consumers in both rich and poor countries eschew cash in favour of paying with plastic or, increasingly, online and on their mobiles, that figure could reach over $2 trillion by 2023. But the banks no longer have the field to themselves.
Few consumers give much thought to what happens after they present their credit card at their local coffee shop, unaware of a tangled web of ever-shifting alliances and rivalries below the surface. Banks dominate an ecosystem which includes technology providers and payments networks—mainly Visa and MasterCard, which were themselves owned by a consortium of banks until a few years ago. The payments chain can contain up to seven links, every one of...
from The Economist: Special report http://ift.tt/1H1N9SR
No comments:
Post a Comment