[Dave Birch] Technologists (and I include myself in this category) generally tend to overestimate the short term impact of technology but underestimate the long term impact. This is as true in payments as in any other sector: we tend to assume that because technology B is “better” than technology A it will automatically supplant it. Yet there are many entirely non-technological reasons for things being the way they are.
One of the key reasons seems to be that new technology is deployed in support of existing business processes. It’s long time since transistors, laser beams and computers arrived in London yet it still takes three days to clear a cheque. Technology has been used to “digitise” existing processes and mechanisms (banks, clearing houses, settlement cycles and so on), not to support more efficient or more effective processes.
This is why the next generation of digital money will be different, because it will bring the bastard son of BPR (business process re-engineering) and non-bank competition to bear on the payments industry.
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