The author identifies those Tech Giants best positioned to make waves in the payments sector as Google, Apple, Facebook and Amazon, and referring to them collectively as “GAFA”. These more consumer oriented companies are in contract with those technology companies that focus primarily on provisioning businesses with products and services. As the “GAFA” work to be more intrinsic in the lives of consumers, their influence on transactional behavior will certainly magnify.
The GAFAs will focus on enabling payments and financial services on their platforms, reinforcing their centrality in consumers’ lives, while avoiding or minimizing participation in the most regulated aspects of financial services. Banks and payment networks must engage with these tech giants with care, with a view to safeguarding their brands and relationship equity with consumers and merchants. Easier said than done.
It may well be the case for Banks and Payment networks will increasingly have less direct contact with consumers. Pivoting to become truly consumer-centric would help retain their position of trust in consumers’ lives and thereby resist disintermediation. By creating and delivery of programs that seek to partner with directly with consumers as “financial wellness providers” would be one way to forge closer bonds with consumers.
Overview by Joseph Walent, Senior Analyst, Emerging Technologies at Mercator Advisory Group
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