Exploration: Achieving free and reliable payment processing for everyone
For small businesses businesses around the world, cheap and reliable payment processing services is an important ingredient for scaling their businesses.
The elusiveness of free and reliable payment services is often incorrectly labelled as a developing world problem, where the problem as framed as a result of the 'unbanked' lacking the instruments to transact electronically.
However, the situation in many developed countries also isn't perfect either, where small businesses with limited negotiating power with their payment service providers often end up coughing up between 2% to 4% of their revenue just to accept payments.
If we want to truly democratise access to basic payment acceptance services (especially given the current economic situation surrounding COVID-19), it will be interesting to look at how the setup and operation cost of payment processing can be brought to zero.
Is that even possible? And if so, what combination of factors would be needed to enable such payment systems to emerge?
As part of my continuous inquiry into this problem, I've created a persistent public deCheem belief system, which will also be continuously updated as I refine and sharpen my knowledge during my travels.
This particular explore can serve as a starting point, or feel free to start creating your own explore if you want to be even freer in your inquiry.
There are infinite number of conclusions that can be drawn from this belief system, but here are two noteworthy ones.
In 'highly-banked' countries, a strongly enforced open-source standard for real-time bank transfers is essential. In this world view, merchants are actually not excluded from acting as banks, and might even benefit financially from doing so.
If the banks are not the issuers of the payment instruments in the market in question, the only other readily viable option would be merchants stepping in to provide either closed or open-loop wallets.
Disagree with any of the beliefs in the belief system?
Let me know and I can update it with your insights!