The Most Important Battle Being Waged in Tech – Part 1

The Most Important Battle Being Waged in Tech – Part 1

This is a two part series.  Today I will define the most important battle being waged in tech today.  Tomorrow, I will define the contenders and handicap the fight.

The biggest fight in social media was always about who owns identity.  Facebook took an almost insurmountable lead when they announced the social graph, location and integrated commenting.  Sure, social media hasn’t completely lived up to its potential… but once it does, it’s clear Facebook will be the company that brings it there (unless they screw it up).  This battle seems boring for now, so I set across the technology sphere looking for the next battle that will be as important as the fight to own identity was/is.

I found it in the fight to become the next Paypal… no, the next Visa.  Payments have ascended from barter to cash to checks and credit to credit/debit cards.  They’re not done ascending though.  The current world of technology (where things are purchased online, and soon with your phone) requires a new way of looking at payments.  The company that gets everyone to standardize on their payment platform has the potential to (effectively) tax millions of transactions per year for the foreseeable future.  Paypal was once the leader in this space, but they have (since the ebay acquisition) seemed to be content with owning the person to person market, which is only a subset of what this new world of payments will require its leader do.

Let’s define the market.  I believe the company that dominates this new payment space will have to have compelling solutions to address all of the following transactions:

  1. Purchasing of intellectual property over the internet.  This includes the ability to buy apps, ebooks and music from a mobile phone, computer or anything in between (tablet, netbook, etc…).
  2. Purchasing of physical property over the internet.  Purchasing goods to be shipped to your house or business.
  3. Purchasing something in a physical store.  Call this credit card replacement.  It may take years and years for whatever company emerges to completely displace credit cards (after all, we still use cash and checks don’t we?), but the company that emerges will have a way for me to buy a cup of coffee at Starbucks using their technology.
  4. Personal Payments.  We will need the ability to pay one another.  I want to be able to pay my brother back the $50 I owe using this company’s system.
  5. Social Payments.  This is a loose term for allowing me to transfer money over a social network.  The tricky part here is that I need to be able to do this on any network, whether or not I know the other parties ID.

So, there it is, come up with a solution that simply and elegantly solves all 5 of these payment related problems and you’ll be a multibillionaire.  Unfortunately, I think the only serious contenders for this market are already multi-billion dollar companies, but more on them in tomorrow’s post.

  • Great post! I think Pay-Pal is really there, they just have not been focused on it. They have slowly but surely been integrating their Pay-Pal solution into some large retailer’s payment processes. In addition, eBay has acquired BillMeLater as well, which is a credit offering, but without the traditional credit card being issued. Signup, statements, payments, and usage are all handled on-line. In addition, they have a rewards program tied to Bill-Me-Later.

    At the end of the day, I believe Pay-Pal is quietly waiting for a catalyst to propel them into the space that you are talking about. They are a payment option for many items (mostly games) on Facebook, you can already transfer money back and forth between friends on Pay-Pal, and you can use it at a lot of large retailers. Further more, if you look into Pay-Pal’s APIs, there are a lot of options for individuals and firms to offer non-physical goods and pay for those via a Pay-Pal transaction.

    I look forward to tomorrow’s post.

    • I don’t want to give away tomorrow’s post, but I think Paypal has some serious weaknesses in mobile.

      You’re definitely on to something with BillMeLater, that’s a key piece.

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