Wired magazine covers the history of today's payment networks while looking ahead to a future that changes the way people pay one another. Tweet me the money?
The February edition of Wired magazine's cover story is a fascinating look at the history and possible future of payments. The Future of Money: It’s Flexible, Frictionless and (Almost) Free focuses heavily on the role of PayPal. According to author Daniel Roth, "for most of its history, PayPal acted more as an enabler — a way of extending the credit card model of payment into the online realm — than as a bomb-thrower." Its purchase by eBay continued that trend until Osama Bedier, Paypal's vice president of merchant services technology, started thinking bigger.
Bedier wanted to open up PayPal's code to developers. Roth writes, "PayPal had been requiring buyers and sellers to go through several steps to complete a transaction — go to its site, fill out forms, authenticate accounts. The developers envisioned something larger, a true digital currency that could be used on any Web site, that enabled money to move as easily as email: Send funds with a click, from and to anywhere and anyone on the Net."
When Bedier presented that idea to CEO John Donahoe, “It was like a lightbulb clicked on,” Donahoe says. “I basically said, ‘You have unlimited funding.’ This is the highest-potential business I’ve ever seen in my career.”
The race to the future is on. One example to come out of it: Twitpay, where users can tweet money to friends. Note: The recipient of the payment is required to pay PayPal's commercial transaction fee of 2.9% + 0.30 USD and any other applicable fees. Ask before you send!
I may have a new favorite mag: Wired. Fast Company, hold on!