FinTech's move into finance

[Tom Abeles]

https://libra.org/en-US/white-paper/#conclusion

Ant  Financial(Alibaba, Alipay, etc) and TenCent (WeChat, WePay) have matured this model in China and are moving globally along the Chinese "belt and road".

Vodaphone's (Safaricom) M-Pesa was a first mover in mobile money

facebook and partners have expanded this model essentially moved into "banking" without becoming or being restricted by the idea of a "bank" and they have partners in the finance industry as well as the non-profits

theory comes to practice. Not only have the banks been disintermediated but so has government.

[Robert Rattle]

It's still very early in the game.  Disintermediating the traditional financial instiutions and even the government is yet to be seen:

http://networkcultures.org/blog/2019/06/19/rachel-o-dwyer-the-bank-of-facebook/

"Of course, all of this might come to nothing. This isn’t the first time that Facebook has attempted to launch a digital wallet. See a recent Financial Times article for more details on the specific regulatory hurdles that the cryptocurrency may face when a company the size of Facebook try to take on the banks. A proliferation of speculative ICOs and even Bitcoin might be one thing, but when a force the size of Facebook enters this space, significant financial regulation surely won’t be far behind. And finally, who knows, Libra might also be the mainstream push that actually empowers people to engage with less mainstream alternatives as more than speculative instruments, normalising alternative forms of money for users who are still unfamiliar with the technology. But probably not."

I am inclined to agree with Rachel that this development/trend is "business as usual" with all the usual suspect players (less traditional banking in a direct sense) and goals, namely data for commercial expansion of material wealth.

Nevertheless, it is still an interesting trend that in all likelihood will have significant implications for sustainable consumption.

The following is a linked article from the above article for a little more commentary:

https://techcrunch.com/2019/06/18/facebook-libra/

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From: Tom Abeles <tab...@gmail.com>
To: SCORAI Group <sco...@googlegroups.com>
Sent: Wednesday, June 19, 2019 10:07 AM
Subject: [SCORAI] FinTech's move into finance

[Tom Abeles]

Hi robert/all

The issue to remember is that FB and company are NOT the first movers, critical in a FinTech world. Ant Financial (Alibaba, Alipay) and TenCent (WeChat and WeChat Pay) have a development history with success in China and now globally. The missing element is the Crypto Currency, Libra). But Ant owns a licensed bank which, with the several FinTech money transfer enterprises that will do conversions, completes the core of  the FB lead proposal. We Chat pay was an inspiration to FB.

An early, limited player is Vodaphone's (SafariCom) M-Pesa, the first mover in mobile money, now global. Many of these are now allowing deposit accounts with interest pmt's.  India, which is a leader in public banking has refused to limit or forbid mobile money/banking outside of the legacy systems.

Basically, whether or not FB succeeds, there will be similar models that are emergent. Banking, not Banks is the global mantra. But the issue at hand, particularly around FB's past sins, is just nibbling at the edges. The larger concern is the fiscal assets at the disposal of the FinTechs which exceeds that of many countries and we will see the "Brave New World" of corporate fiefdoms which will enfold governments and their functions. An interesting point is that, of those that have signed on, a number are non-profits or socially/environmentally concerned organizations. FB and Co. have built in a dimension to deal with the un/under banked. This is now baked in to the operations of Ant Financial and Ten Cent. The ramifications are substantial since Alipay has made social/environmental issues "bankable" transcending traditional banks

Basically, these emergent FinTechs, in addition to disintermediating the banks and government functions are outliers that question the underpinnings of neoclassical economic models and practices. How this turns out is uncertain. What is certain is the momentum will not be sidetracked by legacy enterprises including both business and government sectors. 

Perhaps a substantive area for academic research?

tom

tom abeles