Digitalisation in payments: From interoperability to centralised models?

Abstract

‘Digitalisation’ seems to be the current buzz word, and it is used
to discuss various things from 3D printers via always-on health
sensors powered by smartphones to challenges in financial services
by new ‘non-bank’ players (so-called FinTechs), which track
relationships with the clients. Payments, as an electronic product
offered by banks for decades, are taken here as the subject of
study to analyse the impact of digitalisation and future
developments in payments. This is based on three examples
representing three antagonistic concepts: interoperability,
centralisation, and distributed systems. The examples highlighted
here are: first, the implementation of the Single Euro Payments
Area in Europe and a comparison between some original objectives
with the current status of realisation; second, the development of
so-called business platforms, such as Google or Facebook, which
facilitate exchange between the agents in a multi-sided market;
third, the emergence of digital currencies such as Bitcoins with
decentralised ledgers and decentralised consensus systems used as
means of payment. For all three examples, the form of
digitalisation, the current implementation, potential limitations
and future development paths are compared. Finally, the question of
what a future payments ecosystem will look like and whether there
will be a shift from interoperability to centralised models are
discussed with the clients.