money3.0 and the economy of small – Micropayments

The next big thing in big business may be incredibly, inconceivably small…

Why Smaller Amounts is the next Big Thing in the world of Payments.

In case you haven’t read chief editor of Wired’s Chris Andersen’s “The Long Tail”, do so.  Check out the Business Book Review, ask me for the podcasts, CDs or just take my word for it.

Either way, much of this is predicated on ideas in that book, Wikinomics, Freakonomics, Naked Conversations, The 10 Faces of Innovation, Innovate or Die!, The World is Flat, The Wisdom of Crowds, The Global Paradox, The Death of Money, China, Inc, Capitalist China, Asian Megatrends, The Extreme Future, The Search, Business at the Speed of Thought, Bad Money, Love is the Killer App and web2.0 concepts.

The gist of it for you that are already familiar with the tenets of Long Tail economics, is that 98% of markets are underserved by traditional mainstream products and services.  The Pareto Principle that ruled so much of the Industrial Revolution is being supplanted by a new set of “rules”.  The much revered 80/20 “rule” is in fact, not an economic law after all, but a scarcity-based guideline from a bygone era.  In an age of abundance, especially of the digital sort, there seems to be almost infinite demand for even the most obscure supply.

Perhaps most interestingly, the sum of these increasing niches is substantially larger than the sum of the hits. This creates tremendous opportunities for those poised to enable that economy -- The economy of small.

PayPal – An incredible Consumer-oriented Brand trying to grow up and out

PayPal is potentially one of the first modern “out of the Blue” experiences many bankers have had to face in recent years. For establishing a viable cash replacement with reasonable privacy and account abstraction through the use of an email address, PayPal successfully innovated around the global FIs while they were all busy “testing” and “piloting” cyber-money, digital cash and how they could maintain “top of wallet” status, mind and wallet-share with loyalty, CRM solutions and gimmicky attempts to put lipstick on a pig. After all, behind the scenes, it’s all the same old thing. Multi-day delays to access money, restrictions out the wazoo and the so-called “benevolent entanglement” of the once altruistic turned publicly traded Global Payments Networks and Brands.

I personally love having fellow David’s around to fight the incumbent Goliath Associations. We LOVE PayPal. They are a fantastic client and partner of ours and we welcome the renewed spirit of innovation and consumer oriented thinking they bring to the market. They’ve practically single-handedly revived and unified the SMB and SOHO markets in what was a highly fragmented, specialized, risky and therefore expensive specialized set of markets.

But have you tried their mobile solutions? I have, along with a myriad others.  And let me tell you, not to pick on any one of them, they all leave much to be desired.

Despite all its successful innovations, disruptions and disintermediation, PayPal can rightfully be proud of their 67 Million accounts on file. But why are they stagnating and declining in certain markets?

Why did they exit China and Japan after dismal launches with great fanfare and hope?