Pew Internet published their report today on the Future of Mobile Money.

It’s a very mixed bag of responses from the experts in the field. It may have been questions asked by the researchers, but people seem very fixed on NFC and existing banks.

First my favorite responses:

Peter J McCann of Futurewei Technologies essentially saying what I said in Breach shows Credit Card based payment systems fundamentally broken:

The use of a simple string of digits that must be shared with any vendor with whom you transact is really a ludicrously insecure system that can and must change. – Peter J. McCann

Fred Stutzman writes about why we won’t see NFC in 2020 in the US:

Two words: legacy infrastructure. Maybe in 2030.

Bill St.Arnaud:

mobile payments will take off “in the third world first, where there is no well-established banking …

Innovation in banking, finance and payments are quite remarkable in their absence. As mentioned in Breach shows credit card based payment systems fundamentally broken merchants are stuck with a broken system due to entrenched interests.

The press mentions Google’s NFC Wallet and Square as innovative but they are both just an extra intermediary step on top of this long broken chain of entrenched intermediaries.

So who’s holding us back? The 2 largest culprits who work hand in hand are:

Regulators
Banks

The Regulators

The regulators are supposed to be concerned with the following:

Consumer protection
Anti money laundering
Prevention of Terrorism
Revenue generation (tax collection)

Their regulation normally imposes the following types of rules for payment service providers:

Minimum capital requirement (quite large in the EU)
Security bonds (common in US states)
Know Your Customer (KYC) the requirement to identify your customers
Transaction tracking
Reporting of suspicious transactions
Limits on transaction fees (e.g.. Durbin amendment)
Charge backs

For a …

I gave this talk at Next Finance 2011 in Frankfurt to a group of bankers about how they need to learn to innovate or the web will route around them.

I don’t expect most banks to innovate, but there is a lot of potential to innovate around them. Any banks willing to forget their old profit centers and legacy technology will have huge profit potential.

Web of Assets
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