FIXZR

When I worked as a VC (back in those halcyon days of my late twenties) I met many people worshipping at the altars of the great gods. I saw countless plans with breakthrough battery technologies that would sell billions of units, or payment services that would take 0.001% of global GDP. They all in their own way adhered to the Chinese Toothpaste model or grabbing a small slice of a giant opportunity. And they all, without exception, got nowhere. I am therefore most disappointed in myself to find that I too am drawn to the payments space at all.

The payments space seems to reward scale handsomely, offering great defensibility to the incumbents, and a giant shimmering tower for invaders to dream of capturing. Financial institutions are inherently risk averse (true, despite what’s just happened) and consumers fear innovations that ‘fiddle’ with their money, so the pace of innovation seems tortuously slow in the payments sphere. Perhaps, like telecoms, it may advance quickest where there has historically been no infrastructure, making the developing world the test bed (or profitable home) of new payments related services.

However there are a number of things happening, forces gathering on the horizon, that make me believe there may be some excitement to be had at home in the payments space still. Apple’s payment experience on the iPhone is amazing. Google’s Checkout experience on the open web and integrated with the Android Market on mobile may start to offer the same ease of purhase everywhere (but isn’t quite there yet). PayPal’s success in displacing ‘card numbers’ with authenticated digital IDs (your email) may spread and their involvement in OpenID may see us one day watching the Olympics sponsored by OpenPay. Micropayments and the rise of virtual goods may see very different models emerge - who knows, but at least it is exciting!