Don’t get Uber’d

We have all heard the Netflix story time and time again. Netflix kills Blockbuster. It’s a simple story. Blockbuster viewed Netflix as a specialty service that would never catch on so they didn’t move to deal with the disruption that Netflix caused in their industry.

Now we are seeing a different kind of disruption; the kind of disruption that causes more than one industry to crash. UBER provides an excellent example of this. The world is changing and we are seeing the rise of the “Sharing” economy. Think of AirBnB for lodging or TaskRabbit for errands. This list is continuing to grow. In fact in our FI backyards we have seen the rise of the LendingClub a crowd sourced lending site that has gained attention from Major FI’s as a disrupter in the lending space.

UBER represents the best of breed in this space. It’s a simple concept really. They have cars and drivers. They can get something from point a to point b very effectively and more importantly they leverage technology to make the hardest part of the transaction (being paid) very easy.

This brings me to the next issue. What happens when some of these companies that are gaining huge traction in the market decide they don’t want to pay 3% to the credit card companies anymore? Think of Amazon and their “Bank payment” option. What happens when these guys leverage their technology and use ACH or some other “Over the top” payment process? This is a danger I see coming up. As these services grow and their technology backbones become mature they will start looking upstream for other payment options. After all what is VISA or MC but a network. What’s to keep UBER from doing this? What’s to keep any technology savvy vendor from making this decision?

My suggestion to you is: Start watching your inbound ACH now and start understanding what things are coming in this way that are non traditional. PayPal? Amazon? How much of a dent are they making in your interchange?

Don’t get Uber’d folks. Pay attention. The world is changing…

John Best

John Best

Financial technology service expert John Best crushes the reiterated maxim “thinking outside the box” to tiny particles, leveraging his lofty, yet proven, financial technology “innovativeness” for credit unions nationwide. Recently ... Web: big-fintech.com Details