Brett King

Posts Tagged ‘mobile payments’

Mobile Payments have been Mainstream for a while now…

In Mobile Banking, Mobile Payments, Technology Innovation on May 18, 2012 at 01:31

If you believe the pundits, mobile payments are years away from being mainstream. But that’s not at all an accurate assessment of the state of the industry.

Firstly, a mobile payment can be many things. There are seven primary models for mobile-enabled payments:

  1. SMS based transactional payments
  2. In-App Payments
  3. Direct Mobile Billing
  4. Mobile commerce and/or web payments
  5. Peer-to-Peer payments
  6. Virtual currency payments
  7. Contactless payments

As of today, it appears that around half of the developed world has made a mobile payment of some sort in the last 12 months according to this criteria – at a minimum an in-App purchase made from a mobile or iPad would qualify. Put that in perspective, more people made a mobile payment in 2011 than wrote a cheque in developed economies like the US, UK and Australia!

Would you call cheques mainstream? Of course. So how can we not call mobile payments mainstream already?

A recent study from ACI Worldwide and Aite Group – where smartphone usage in 14 countries was put under a microscope – identified a group of consumers where mobile payments behavior is definitely the norm. This group was classified as “Smartphonatics”.

According to this research, 80 percent of Smartphonatics have used their smartphones for mobile banking, just one-third of non-Smartphonatics report doing so. 70 percent of Smartphonatics have used their smartphones for mobile payments; under 25 percent of non-Smartphonatics have. Smartphonatics are generally younger consumers also: 36 percent of Gen Yers (between the ages of 20 and 31) are Smartphonatics as are nearly one-third of Gen Xers (ages 32-46). The number drops significantly among both Baby Boomers (ages 47-65) at 18 percent and Seniors (66+) at six percent

“Smartphonatics enthusiastically use their smartphones when they shop for products and services as well as when they interact with their banks. It is quite clear they are an emerging consumer force. Smartphonatics are driving the adoption of mobile banking and payments and will be an agent for change. Financial and retail institutions will need to adapt or risk being left behind.”
Ron Shevlin, Senior Analyst, Aite Group

The ACI/Aite research indicated that globally around 1 in 4 consumers (25 percent) count as Smartphonatics, with higher numbers found in India and China than in the United States and Europe. This makes sense, because in markets like India and China, mobile payments are competiting head to head in the growth of payments alternatives like cards, which are still quite new for most of the population.

In Asia, however, mobile payments have been mainstream for the best part of a decade. Japan sets the benchmark for m-payments with 47 million Japanese adopting tap-and-go phones. In China alone, there will be 169 million users of tap-and-go payments in 2013. Between 500 million and 1 billion people will access financial services by mobile by 2015, depending on various estimates. The mobile financial services market will be dominated by Asia, driven by mobile operator-led initiatives in developing nations to bank the unbanked. Remittance and transfers by mobile is growing three times faster than m-banking. Mobile remittances are a form of mobile payments, essentially mobile-led P2P.

A study released in May, 2012 from MasterCard found that although the United States is ready for mobile payments, 9 of the 10 countries most prepared for the technology are in Africa, the Middle East and Asia. Ironic isn’t it that in Kenya 50 percent of the population sends money by SMS regularly, but in the US most consumers still write cheques!

Asia leading the way

In South Korea, there are more than 60 million contactless phones in use. Most use the Felica standard, but already more than 5 million NFC-enabled phones have been purchased in South Korea by eager consumers.

In 2012 almost 1/3rd of South Koreans bought music, videos, ring tones, online game subscriptions and articles from newspaper archives and other online items and charged them to their mobile phone bills, regularly evert month. This amounts to total mobile transaction revenues of 1.7 trillion won, or approximately US$1.4 billion, in 2008 alone. In 2012, there will be 21 Million Koreans watching TV via Mobile Digital Multimedia Broadcasting (or T-DMB as it is known). 40% of cellphones sold in South Korea have the capability for watching free-to-air TV in this manner.

T-Money™, electronic cash stored and refilled in SIM cards and phone chips, can be used to ride the subway and bus or buy snacks from a 7-Eleven store, vending machines or cafeterias at school. Instead of giving their children cash, Korean parents now transfer money to their kids’ T-money account.

“If I leave my wallet at home, I may not notice it for the whole day. But if I lose my cellphone, my life will start stumbling right there in the subway.”-21 year-old Kim Hee-young, Sookmyung Women’s University
NYTimes Article May 2009[1]

e-Money and mobile payments started in Japan in 1999 and usage is growing exponentially. e-Money and mobile payments already today are an important and big part of Japan’s economy. Japan leads the way in mobile commerce today with 75 percent of the population on a ‘smartphone’ and more than 40 percent of Internet users having made a purchase on their phone.

In 2003 SONY’s FeLiCa IC semiconductor chips were combined with mobile phones to introduce the first “wallet phones” (“Osaifu keitai” – おサイフケータイ). Today the majority of mobile phones in Japan are wallet phones.

Mobile Payments are not an emerging technology

The two parallel systems in Japan today are Edy and MobileSUICA. Edy stands for Euro, Dollar, Yen, expressing the hope for global success ― Intel Capital believes in this success and has invested in the company that runs Edy: BitWallet (backed by SONY). MobileSuica (also known as Felica) is a service for Osaifu Keitai mobile phones, first launched on 28 January 2006 by NTTDoCoMo and also offered by SoftBankMobile and Willcom. Initially used for commuters travelling on Japanese rail networks, today mobile ticketing payments are used by more than 90 percent of Japanese commuters.

Electronic money became popularised around 2007 in Japan, when two major retailers, Aeon and Seven & I, started their own versions of electronic money. The transactions by Aeon and Seven & I account for roughly 50% of all transactions in Japan still today.

Just to highlight how huge the e-money market is in Japan: Transaction volumes at Edy, the country’s biggest prepaid e-money issuer, nearly doubled in 2010 to 1.4 trillion yen (US $15 billion). To put that in perspective, PayPal did $4Bn in Mobile Payments in 2011, well behind just this one mobile payments scheme in Japan alone.

Between Edy and Suica, more than 84 million mobile contactless payments transactions take place every month[2], through around 450,000 merchants or outlets. Between retailers AEON, PASMO and NANACO (Seven & I) another 120 million mobile contactless payments are made every month, at another 300,000 merchants.

Yep, Mobile Payments are not an emerging trend or something to worry about in the future – they are mainstream and they are now.


[1] “In South Korea, All of Life is Mobile”, NYTimes May 2009, http://www.nytimes.com/2009/05/25/technology/25iht-mobile.html?pagewanted=all

[2] Source: http://www.epiport.com/blog/2012/02/01/e-money-in-japan-its-everywhere-and-more/

Outdated Checks and Magstrip costing the US $30Bn a year

In Bank Innovation, Economics, Mobile Payments on August 3, 2011 at 12:07

The US is enamored with outdated and costly modality that is costing Billions in lost revenue and fraud. While many argue the business case for moving to technology like EMV or NFC is hard to justify, the reality is it is incredibly simple to justify based simply on mathematics around today’s massive cost of fraud. The same goes for those that say shifting the US away from checks is too hard because of the momentum in the system.

The big cost of fraud

In the US alone, check (cheque) fraud costed US consumers and banks an estimated $20Bn a year in 2010, up from $10Bn in 1997. Identify theft is one of the fastest growing types of fraud. In the US identity theft victims grew by 12 percent to 11.1 million adults in 2010 (Source: Javelin Strategy & Research, “Identity Fraud Survey Report,” February 2010). 43% of this fraud, totaling more than $50Bn in costs, were check and card fraud. This doesn’t include the Billions of dollars spent internally by bank risk and fraud departments chasing, tracking and attempting to recover losses from fraud.

In 2009, three individuals were accused of engineering the largest case of card fraud in US history. The fraud involved the theft of more than 170 million credit and debit card numbers utilizing weaknesses in the payment processing systems based around mag stripe tech. Albert Gonzalez, the primary defendant in the case, was said to have thrown himself a $75,000 birthday party and complained about having to count $340,000 by hand after his currency-counting machine broke. The state retrieved around $1.65m in cash as part of a plea bargain, but the Secret Service identified that just one small part of Gonzalez’ operation a group of hackers called “ShadowCrew” took $4.3 million in the early part of the decade. It was also reported that Heartland Payments Systems Group, who was targeted by Gonzalez’ group, lost more than $12.6m in the attacks alone (source: Wikipedia).

Estimates for card fraud in the US banking range from around $5.7Bn a year to $8.6Bn a year (source: Oracle Financial Services Whitepaper).

Outdated technology killing the US banking system

There are various arguments given for keeping checks and mag-stripe going in the US, despite all evidence to the contrary. The biggest argument for keeping checks going is the momentum in the system around checks that stem from the practice of the mystical ‘float’ mechanism. The float has frequently been used as a mechanism in the practice of cheque kiting or ‘playing the float’, convincing a merchant to accept a cheque that takes 3 days for the fraud to become evident. Since cheques include significant personal information (name, account number, signature and in some countries driver’s license number, the address and/or phone number of the account holder), they lead directly to identity theft implementation.

In Germany, Austria, the Netherlands, Belgium, Finland, and Scandinavia, cheques have almost completely vanished in favour of direct bank transfers and electronic payments. In the UK, Ireland and France, while cheques are still used they are in rapid decline, with 95% of merchants not accepting them as a form of payment anymore. The key difference in EU markets where cheques have disappeared versus the US are two simple mechanisms:

  1. Cheques cost consumers to process, whereas electronic payments are free or cost less, and
  2. There are robust electronic payments systems like Giro that provide alternatives that are more efficient

As long as US banks insist on free checking and charging for wire transfers, along with a poor interbank payments capability, then checks have life left in them. Why they insist on this is beyond me?

Mag-stripe related fraud was successfully reduced by 75-80% in the UK and France as a result of the introduction of EMV chips. This is expected to be further reduced dramatically by the introduction of NFC and mobile payments, which allow multiple additional layers of security.

Savings pays for all the innovation we need

In the US alone check and card fraud costs close to $30Bn a year. By incentivizing the removal of checks and mag-stripe from the system, this could result in savings well in excess of 50% of these costs annually. $15Bn a year could pay for a lot of innovation.

In 2010 over 1.5million card terminals were shipped in the US. Accepting that these units cost around $1-3k to deploy, replacing mag-strip capable terminals annually would only cost around $10m for 3m merchants, $100m for 30m terminals. That solves the NFC/EMV issue very quickly.

Interestingly, removing cheques from the system not only reduces fraud, but reduces processing costs internally within banks by some 30-40%. Far in excess of the gains from the mystical float.

Mobile payments and NFC are clearly not only the way to go to reduce fraud, but to provide a massively robust business case for innovation. Anyone who argues for the longevity of cheques and magstripe in the US needs their head read IMHO.

Mobile Payments: More than P2P and NFC…

In Customer Experience, Mobile Payments on June 29, 2011 at 10:37

Today I’ve been in Beetsterzwaag, Opsterland, Netherlands, about 150 kilometers from Amsterdam at an offsite strategic retreat with the ICS (International Card Services) team. Initially part of Bank of America’s presence in the Netherlands, ICS today is an independent subsidiary of ABN Amro NV, but works in the provision of a range of card services around issuance, promotion, processing and so forth. ICS has around 3 million customers today, and the session we had was around the implications of mobile payments in the form of NFC, P2P and other initiatives such as cardless loyalty program implementations.

What emerged was a very interesting realization in respect to opportunities in the mobile payments ecosystem that hadn’t fully occurred to me until this planning session.

More than just a payment

While I’ve often discussed the contextuality of payments and the massive opportunities that companies like Google are trying to leverage in respect to messaging around payments (before, during and after the payment event), it is interesting to think about different payment executions. We need responsible partners in the ecosystem to start handling not just straight through payments, but multiple variations on a theme, understanding the various parties and implied contracts involved.

P2P Direct or Merchant one-off payment

The simplest payment journey to conceptualize is when you walk into a retail store and pay a merchant according to the cost of the purchase, or when you have a service event where you simply take your NFC phone and execute a live person-to-person payment. Today you can already use PayPal Bump to execute a live phone to phone or person-to-person payment, but in the future, I’ll just put my phone into send or receive mode for an NFC payment and the respective individual’s wallet will do the rest (discounting all the back-end complexities, of course).

PayPal is slated to do $3.1 Billion in Mobile Payments in 2011

This is a fairly simple execution – take a payment from one person, send to another via either NFC, bump or a wallet. We can use location services, authentication and NFC to simplify and secure the phone to phone interaction, or we can use an App like PayPal to transfer to a unique individual via their phone number, email address or similar. The ability to split payments amongst a number of individuals, such as paying for a bill at a restaurant would also fall into this category.

The value here is the simple execution of a person-to-person transfer without requiring adherence to the current bank-led wire transfer or ACH equivalent which requires a routing number, an account code, the bank address, etc, etc. The opportunity for NFC phone to an NFC POS or another NFC phone is also obvious.

The credit facility or installment plan

Another powerful in-store implementation will be the ability to offer a real-time credit facility to back a payment. It might be a line of credit, a personal loan facility or a 12-month, low-interest payment plan with regular monthly payments. The ability to offer you real-time finance options that are more competitive than using a competitors hefty credit card APR program is pretty compelling at the point-of-sale, and can steal you away at the most critical moment – when you are about to pay for a big ticket item.

Mobile offers payments providers this sort of contextual opportunity, which currently is too difficult or erroneous to do with a plastic card and traditional advertising offers. Give me an offer in-store and help me execute the line of credit in real-time. Powerful enough to get me to change payment partners right in the midst of a transaction.

The Contract Payment

In this scenario we may have an upfront payment, but the full transaction is only effected with completed, successful delivery of the required goods or services. In business we have constructs like an LOC (Letter of Credit) which facilitates such payment contracts, but in the individual merchant/service provider and consumer space, these sorts of payments contracts are implied and managed informally. However, there may be an opportunity for this to be managed in an semi-automated fashion through the payments ecosystem.

Whether it is time based for hurdle payments to occur as specific milestones are reached, when physical goods are delivered, or when a contracted service is rendered – there is an opportunity to simplify the payments journey by authorizing the subsequent payments via a mobile device or online.

Facilitating the platform

As we move increasingly to person-to-person electronic payments, the ability not only to execute an individual one-off payment, but also variations on a theme with either a payment agreement/plan or a underlying credit facility adds value to the P2P ecosystem.

Today we have the likes of PayPal working on P2P, individual merchants offering some payment facilities, but we don’t have an emerging player combining these different capabilities and relationships to create journeys supported by a range of more flexible, automated payment variations.

When you mix analytics, always on IP layer or the cloud, a mobile device, location and the ability to offer a variety of payment mechanisms, the future of payment journeys looks very, very interesting. Payment journeys offer massive opportunities for reinventing and simplifying the way we currently interact in this space.

The coming clash of regulators and P2P via mobile

In Customer Experience, Mobile Payments on May 30, 2011 at 08:52

When the commercial internet became popularized in the mid-90s the emergence of e-Commerce quickly led to some amazing new business models, and inevitably the hype of the dot com bubble. While much of the dot com ‘crash’ survived and thrived (e.g. Google, Yahoo, Amazon) there were those that appeared happy to proclaim that the fad of the internet was over. Of course it wasn’t over, it was only just beginning.

Ironically, the impact of those new business models and new ‘paradigms’ that emerged in the late 90s are still being felt today. The collapse of Borders recently, can be traced back to the emergence of the online book store as a category. In the midst of the dot com bubble, Borders abandoned it’s web presence and sold out to Amazon who took over the site because web was perceived as ‘unprofitable’. Within just 6 years Borders.com was delivering $160 million in annual revenues for Amazon. At this stage, Borders scrambled to break its ties with Amazon, but they never quite appeared to get on top of the new distribution model as evidenced by their recent chapter 11 status. The clear misunderstanding of the role of the channel, along with a weak multi-channel distribution commitment from the get go, is symptomatic of a more fundamental problem – the business wasn’t able to make the shift away from reliance on their traditional store-based approach to book sales because it was too ingrained.

Blockbuster, Encyclopedia Britannica, Travel Agencies, Stock Brokers and others have faced similar challenges over the last decade.

What does all this have to do with mobile payments and KYC?
Clearly we are entering a phase of massive disruption to the payments system(s) and incumbents of today. To put that disruption in perspective, let’s think about what has led up to the current slew of mobile payments announcements and improvements.

PayPal evolves P2P
PayPal commenced business in its current form around March 2000 with the merger between Peter Thiel’s Confinity and Elon Musk’s X.com. PayPal’s initial business was focused on enabling payments for EBay’s platform. eBay had purchased Billpoint in March of 1999 to provide this functionality, but by Feb 2000 PayPal was handling 200,000 daily auctions and payments, compared with only 4,000 a day for Billpoint.

Today PayPal handles $62Bn in transactions. That’s growing at an incredible rate of 25% annually too, primarily thanks to mobile payments.

Banks didn’t
Although it is patently obvious that person-to-person payments is a huge business and has been growing incredibly online since the late 90s, today the current bank-based P2P system is incredibly archaic and unwieldy for most banks and consumers. Why have incumbents clung on to the traditional ACH, Wire and Cheque-based payment systems in the face of such rapid growth in online payments? You’ll hear two arguments largely. The first being that P2P represented, up until recently, such a small part of the overall payments traffic that it was incidental and there wasn’t a business case of reforming the payments space. The second is that there is an incredible amount of inertia around the current system, and changing that takes perseverance, effort, investment and considerable re-engineering. That effort and investment was unlikely to come until it was absolutely necessary – of which it obviously is today.

Now, 11 years after PayPal’s foray into P2P we have the first broad financial institution focused effort, namely ClearXchange. Of course, we’ve seen CashEdge, PNC Virtual Wallet, and others have a shot at this, but none of the big banks have got behind the prospect of P2P until now. The fact that it has taken a decade is evidence of the same internalized thinking and inertia problems Borders faced in respect to changing distribution models and modality.

Emerging markets go Mobile
M-PESA has already launched in Kenya, Tanzania, Afghanistan and South Africa with well over 13 million customers. G-Cash and SMART in the Philippines are processing more than $500m in mobile payments each year, and that is rapidly growing. It’s estimated that by 2016, total mobile money transactions will reach $126 billion, with Southeast Asia accounting for $30.1 billion.

The key to understanding emerging markets growth has been the high penetration/adoption of mobile phones and the need for financial inclusion of the large swathes of population in the unbanked category. However, clearly the momentum around mobile smartphone adoption in developed markets, the rapid decline in use of cheques, and the massive competition from operators and handset manufacturers is now forcing the hand of the traditionals in the payments space.

Current KYC regs are a poor fit with where P2P and Mobile Payments is going

The End Game – a problem for Compliance and KYC
The end game clearly is that you should be able to send anyone with a mobile phone, an email address, a Facebook account or Twitter ID money from anywhere in the world. This solves two existing, intractable problems. The unwieldy and needlessly complex system around current wire transfers, TTs, etc and the need to have a bank account with the right receiving bank before you can receive money.

The problem with both issues is the current regulatory environment and bank policy around KYC, AML prevention and security. The more banks insist on complex KYC before you can open an account, the greater the risk is that I’ll circumvent the system because of its complexity. Now I can hear arguments defending such regulation and legal requirements already, but the problem is that the current system is complex because we need to confirm the identity of both parties in a transaction. This is a question of identity, not KYC process.

In December of 2009, my pal Dave Birch articulated a very clear position on why the current KYC regimen can not survive the mobile payments revolution.

“I wasn’t not arguing that we should have no KYC checks, but what I was arguing for was a sensible floor below which KYC checks are not needed. I happened to be in a local branch of national financial services organisation a few weeks ago when, for dreary reasons, I had to get into a queue. The person in front of me in the queue was trying to send fifty pounds to a relative in Liverpool. The clerk told him that couldn’t, because he didn’t have a passport and a utility bill. The chap complained that he had been sending this birthday money every year for decades. The clerk was unmoved. So who benefits from this?”
Dave Birch, Digital Money Blog

To make P2P payments really work, you have to be able to send anyone money at anytime. The current KYC and AML regulations don’t really make sense for day-to-day transactions under say US$1,000 or Dave’s proposed €500. PayPal has been a reasonably elegant solution to this in the short-term, but a long-term solution means if banks want to play in the day-to-day P2P space, they have to push back on stupid KYC rules… and so do we as customers.

The Rapid deconstruction of the retail banking sector

In Customer Experience, Retail Banking, Strategy on October 27, 2010 at 06:23

The concept that banking is necessary, but banks are not has often been debated. The question of whether technology advances and new business model results in disintermediation is often dismissed as hype. While the Internet is undoubtedly the most significant technological advanced of the modern age, most retail bankers would argue that this only produced an incremental change in banking with yet another channel to access the existing bank infrastructure. However, that’s only partially accurate as an assessment.

If you look at the broader world, there are actually tons of new businesses eating away at the retail banking client experience:

Independent Financial Advisors
While banks proclaim platform, global experience, asset management capability, etc the fact is that the advisory space is not owned solely by banks. In fact, if you really want a dedicated Relationship Manager who is going to not just sell you a product you really only have two choices – IFA or Private Bank. The mass affluent HNWI space just doesn’t deliver…

Contactless Mass Transit Payments
Octopus in Hong Kong, Oyster in the United Kingdom, EZLink in Singapore and other such stored value smart cards are actually debit cards. Octopus has a limited banking license in Hong Kong for the purpose of deposit-taking, but let’s not kid about here – all of these are acting like banks, but aren’t banks. As banks we can justify the fact that these are minimal impact and argue that ultimately the payments come from the banks to “recharge” these cards, but the fact is we’re not in the mix.

Mobile Payments
In some ways the big hit of SIBOS this year has been mobile payments arriving on the scene. The only problem with this is that M-PESA launched in Kenya in 2006 and now ‘owns’ between 5-10% of Kenya’s GDP, GCASH launched in Philippines in October 2004 and now has 28,000 outlets supporting their services across the country. There are other examples too – Nokia is set to dominate the mobile payments space in India as they turn their stores into cash-in/cash-out points across the sub-continent. Where are the banks? Some banks are now offering withdrawal through ATM networks for mobile cash users, but the fact is banks are still arguing about interoperability, platform, security and alliances to be productive – so again banks are missing out.

Peer-to-Peer lending
Zopa now represents close to 1.5% of the UK lending market with monthly lending of GBP 10-15m. With a reported NPL of 0.7% they are also the industry leader in the UK for credit management. Bankers would find this counterintuitive – how can a non-bank have a better performing loan book than a bank? The answer is better value to the consumer, and social lending as the foundation. Prosper, Lending Club and others are also taking their fair share of the lending markets in places like the US. Average loan sizes for Lending Club and Zopa are not microfinance size either, being around US$2-3k. This is direct competition for the retail banking sector.

Peer-to-Peer and alternative Payments networks
PayPal is clearly the leader in online payments today, and while PayPal utilizes existing card networks and payments infrastructure, the fact is that in the area of capturing transactional revenue and in respect to ownership of consumer mindshare, PayPal reigns supreme. On eBay, for example, between 50-75% of payments are processed via PayPal. Banks like HSBC are proud of the fact that they process much of the back-end payments for PayPal – but surely being in the front-end is the sweet spot here.

Merchant onboarding
Square, from Jack Dorsey (Twitter founder), has recently gone live. All you need is an existing bank account and an Android or iPhone and you can start accepting credit card payments. Currently Square is deployed in the USA where there are more than 20 million small business owners who don’t have a merchant account with a bank. The merchant on-boarding process is just too complex for most businesses, and Square recognized that. What would you rather do? Download an App and sign up for Square, or negotiate the 150 pages of different legal contracts and forms from your bank to set up a merchant account? Banks don’t offer value here – in fact, the opposite.

Disintermediation abounds and is speeding up

This morning at SIBOS we just heard Karen Fawcett of Standard Chartered proclaim

“Transaction banking is now front and centre. Flow businesses that we support are the lifeblood of commerce.”

The problem is this view of the world. Bankers are simply used to owning the pipes, the network, the wires and perceiving that their exclusivity on ‘banking’, their ‘lock on customers’ comes from having a banking license. Clearly, however, disintermediation of the retail front-end of banks is rife. Banks are becoming wholesalers, networks and product manufacturers, but clearly with the lack of innovative capability, the rapidly growing gap between customer behavior and retail banks as poor service companies, the question of whether we need banks has been answered…

We don’t need retail banks – we do need the back-end networks that process payments, we need organizations that are prepared to take on the risk of lending (social lending is unlikely to scale up to mortgage level), and we need mechanisms that give us access to trading systems and markets. But retail banks, their physical distribution real-estate, their products and services are fast becoming redundant. Sure, it will take a couple of decades, but in many ways it’s already too late.

The ‘things’ that were uniquely “banking” 20 years ago, today have all been replicated by a transport department, an internet start-up, a social network and a telecommunications company. Banking at the front-end is no longer unique, it’s a commodity. When such interactions become commoditized, then the concept banks leverage of paying for the privilege of banking make them easy targets for disintermediation.