Wow. Sometimes I read statements in the media and have to shake my head.
Payments is a space we know something about. Revolution Money is one of the companies I am very excited about. I serve as Chairman. We have a great investment group and a fantastic, experienced management team and sophisticated investors in the space such as Citi and Goldman to name a few.
The thought that you can get into the payments space with a few html programmers and build a social app and compete with PayPal and Bill Me Later, which is a focused, huge and an experienced player, is just plain hype. Click here to read this story. This business isn’t like throwing virtual hamburgers at a friend. It is about money, safety, security. You have to know your customers; protect their cash; issue credit; send out statements; and get people’s real world info and social security numbers. This is a huge space to play in and one that takes investment, time, expertise and grown up management. Interconnecting to banks; checking accounts; ATM networks; credit card associations and developing acceptance models; identity systems; and on and on is a big task. Transferring real money is tough too. Taking the money out and turning it into cash is equally daunting.
Google tried doing some of this with Google Checkout. Trust me, it is hard to do. Ask Google how its rollout is going. EBay and PayPal dominate the space online.
A true payments platform that touches a consumer’s wallet and is accepted at merchant sites in the real world and online world at checkout and touches a checkbook; provides credit; transfers cash and funds across state lines is a very complex, regulated and tough business. There is also encryption; working with regulators; issuing credit; standing behind the risk; providing safety and security; providing FDIC insured accounts. There is a very small group of folks that have the technical, business experience and banking experience to pull off such a huge undertaking. And the balance sheet as well. That industry is not one to try to reinvent with a few coders sitting in cubicles designing web apps. It is about platforms; business process; relationships with banks, the government and so much more. I guess a virtual cash business can be done as a social app. ”I am sending you a virtual $10 gift certificate for your birthday” is doable in this environment but once you start talking about real money and real banking and cash transfer across state lines, the bar gets raised dramatically.
That market opportunity is about $100 billion and is dominated by American Express, Visa, MasterCard and PayPal. Trust me; PayPal does not have to fear Facebook in payments right now.
These statements remind me of early AOL and the Microsoft hype during the heyday. Take any industry opportunity and say “so and so can be a big player because of their technical expertise and large and growing audience.” Sounds logical but is usually very wrong. Time always proves out that specialists win and in the banking and online payments space; maniacal focus, expertise, technology, patents, and investment are needed. Payments is not a space for dabblers. Would you trust your money and your checking account and social security info, PIN numbers, business accounts and cash to a service that is loved or needed?
End of rant.
Each post I have read is very well written and to the point. I would also like to say, not only are the articles well written, but the design of your web-site is excellent. I was able to navigate from post to post and find what I was looking for with ease. Keep up the excellent work you are doing, and I will be back many times in the near future.
Have been wanting to follow a post of mine last Summer strongly stating that a cashless society is a bad idea; and that a paycheckless is a bad idea; (still absolutely hold to those) but that this was before was aware of Revolution Money; and convey comment not in relation to that venture but to experiences in my personal life at time; being no option direct deposit only new employer Co. Public School System; can deal with it; The real issue; began to experience the effects in the marketplace and banking workflow which lead to discovery of the very quiet passing of a bill by US House Then Senate followed by presidential pen to paper sighing into FEDERAL LAW; The Check Clearing for the 21st Century Act or “Check 21″ a blatent made-to-order by private banking in thier best interest Having NOTHING to do with the interests of the US Citizenry; runs counter I believe; and my perception of law as death nell for the personal check as a means of legeal tender in the US economic lanscape. I am amazed that everyone talks economy this economy that for months and months while this law is passed and suddenly; unannounced over matter of few weeks in the summer drastically alters fundamental ways of being of the US economy; and one afternoon just becomes they way it is; no one notices and no one cares; even if you point it out to them; they are too involved in whatever it is they are doing that afternoon; and it makes their head hurt; they are not used to using that part of the brain and may interfear with his or her carefully constructed subjective perception of self-importance and plainly obvious superiority to rest of human civilization. (Jaded? I wish I were ;-0
It is stunning how quick people are to dismiss things.
One reason I don’t bother with the news; I do much better on my own; it’s a red herring; If I read the daily national section about Pig Flu map; then I’m walking around thinking about pig flu and missing everything else; cause I just heard somebody sneeze; sounded pretty close; I’m outa here man.
Economy has also been a large part of overall work I have been doing for 8 months now with “Levity.” getting deep into what is going on with the US economy throughout filming of “Levity” just getting in there and figuring it all out. (In my phase two interviewing (specific individuals sought out by me for specific purposes; rather than general public; phase one.) One of my favorite interviews; a three hour conversation with GMU Economics proff. and Director of Center for Public Choice David M. Levy. Battery on camera ran out; just let it go and continued for another hour. Originally was seeking Nobel laureate economist Vernon Jordan; realized guy I had on the phone better choice.
Proff. Levy aprised me of the situation with rating system of mortgage backed securites trading on the open market haveing element of competion between three rating companies leading to across the board over rating of these securities; fundamental flaw in the system; no-one doing due dilligence; merely relying on ratings by fund managers. AAA rating? buy it. First time I had heard about all of this. Very interesting indeed; months before in media.
When read recent piece on revolution money recently; thought “whoops.”
Ted; you’re in to everything. Have several times thought be good idea to apprise myself of spectrum; then though; Assume he’s in to everything and don’t sweat it. Candidness ultimately additive; to borrow a word from your recent Owners Corner interview; thanks and exponentially fantastic; couple months ago I discovered/chose name of my production co. Plus Productions. Slowly honing in on slogan’
Plus Productions: additive
Wow; I love it
note on said co. public school work; first day subbing ever; “floater” for elementary first class, first grade. Was Career day; Young man; Director of Kettler Capitals Iceplex Spoke to the class about His life and journey with Hockey leading him be with us that day; talked about the complex; activities; The Capitols; then got volunteer; from class and put him in little Caps uniform; kids loved it.
made my first session as substitue teacher the best; just watched with the kids; Thanks. – j
Shake head at 98% of statements from media.
j
Not only did I quit watching television; but gave not so much as glance toward front page in coffee shop; drug store; et. al. Sometimes glance out of corner of my eye warily as walk by; really think; just to see how close I can get without actually seeing it; training myself.
recently did notice big headline “60 magic number for Senate? Grabbed it and started to read voraciously; had just the previous night been thinking MY magic number for the Senate 200 maybe 300; as long as we are on this change thing. Found Article fantastically interesting; was eating it up; bout half way through suddenly in peripheral; words [something] SWINE FLU
EPIDEMIC [something something]tossed paper back to stand as if giant cockroach trying to eat my fingers; turned and walked swiftly away. I don’t want to know anything about that. I don’t want a Pig Flu Map; what am I going to do with that. What if my neighborhood is on it? Does that mean I’m supposed to stay inside? Hmm… I don’t want to know anything about the Pig Flu. If I get Pig Flu; like Jerry Garcia; I will survive. At peak health give my self 3-to-1 survive Malaria sans modern medicine in deep jungle.
Oh! wow. just realized why CDC and other health orgs. propaganda in 90% of METRO ad spaces. Wow. just yesterday thinking; CDC’s poster straight up shameful Wizard of Oz Fear mongering. Thinking as got out car; Wow. Advertizing has gotten really bad lately. cite recent Magic Johnson Aetna METRO ad with slogan; “For some people it’s eaiser to ask which bus to take that which perscription to take.” Makes no sense whatsoever. Confirming en toto those ads are contextual anyway; aren’t they. Black man living with HIV; word perscription somewhere and some kind of urban reference; bus. Confident was crafted my smallish ad firm somewhere in Ohio. can totally imagine very serious, everyone knows what they are talking about planning sessions leading up to production of that add an arrive at goal of this tract I take; the humor; Levity; shaking my head; could write some pretty funny scenes with that stuff; will; makes me laugh; shake my head. and one can almost always find the humor in things; because, ultimately humans are behind everything. and humans are pretty darn silly. i.e. one of all-time favorite grocery glossy mag cover blurbs now on stands; “CURE FOR JIGGLY FAT” OMG! They found it! End with that. (apparently I only write in long form essay now; happened last year; realized few weeks ago; will start blog