How Banks Can Overcome Disintermediation
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User Rank: Apprentice
1/4/2013 | 9:16:39 PM
re: How Banks Can Overcome Disintermediation
I would argue that Square and Intuit mobile payments acceptance devices-ádo not disintermediate-áthe banks.-á Instead, by allowing small merchants to accept credit and debit cards these "disintermediators" are actually-ádriving further interchange revenue for the issuers.-á

As for the Squares and PayPals, etc. taking away deposits from banks, this is yet to be seen.-á When a merchant accepts a payment on their Square device, the merchant does not hold the money in a Square account.-á It gets settled and sent to the merchant bank.-á

The real-áthreat is if these new players-ácan displace traditional point of sale-átransactions through some kind of digital wallet that bypasses any interchange fees and elimanates the FI from entire commerce experience.

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