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Bonfire of the Middlemen

by Matthew Dove

As the price of Bitcoin spiked this week, commentators were quick to put 2 and 2 together and get Facebook. The launch of the Zuck Buck was widely credited as having a direct influence on a long overdue bounce for BTC which sits at a princely 11,750 USD at time of going to press. The irony of this causal link will be lost on few…

Satoshi Nakamoto’s vision for Bitcoin was as a fully decentralised cash system devoid of the perennial middle man. A cheap and secure pseudonymous network for peer-to-peer exchanges of value, sans government, sans banks, sans frontière.

Facebook meanwhile controls the lion’s share of the world’s social media data in its centralised archives. The value of that data, your data, grows by the hour. Consumers feed the beast in exchange for services whilst advertisers, marketeers and all manner of dodgy characters (talkin’ bout you Putin!) suckle at its ample teat. Facebook sees payments as a logical extension of social networking, just another transfer of information.

A cheap and secure pseudonymous network for peer-to-peer exchanges of value, sans government, sans banks, sans frontière.

So, on the one hand you have Bitcoin which has “proposed a system for electronic transactions without relying on trust” whilst, on the other, you have Zuck screaming; TRUST ME! I’M CEO, BITCH! 

The pair stand poised to do battle for the fate of payments present and future. Not that the incumbents are going quietly. There’s a fair amount of noise coming from our neighbours to the East as well… 

In payments, there’s a lot of talk about value propositions and now it’s crunch time. In these pages we ask the industry; what do consumers value and can you deliver it? If not, then the chances are that you need them a lot more than they need you.

Representing the challengers, Starling CEO Anne Boden thinks that the hard-sell is on its way out along with most of the legacies, “I don’t think what we do, and what the fintech movement is all about, is selling product. That’s how the old banks did it.” Elsewhere, Ryan Frere strives to tackle payments in truly global terms. Frere’s Flywire traverses even the most entrenched boundaries between East and West, going where incumbents fear to tread.

Keen not to go quietly into that good night – ING, JCB Card and Swift mount a spirited defence of the old guard. 

ING’s Benoit Legrand is positively bullish about the Dutch giant’s place in the market!

“We have everything within ourselves, in a bank like ours, to take our future in our hands. We have the engineers and we know banking. We’ve got 50,000 people who’ve been doing this for centuries.”

All of the major players will need piss and vinegar by the barrel full. If the middlemen of payments can’t rise to the challenge then Facebook and Bitcoin will be waiting in the wings, eager to deliver a coup de grace. Send not for whom the bell tolls, it tolls for thee…

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