Credit Card Payments Market Competition

Here is a link to an excerpt on the politics of credit card systems. It illuminates how startups companies wanting to provide services face difficulties, including this:

Two pieces in the chain are particularly vulnerable to disruption: the makers of the actual hardware — basically card readers and registers — that are used to physically accept card payments at stores, and the hundreds of vendors known as merchant service providers, or MSPs, which set businesses up to accept credit cards.

The entire article (unfortunately you must pay to get it) speaks to some of the issues we are facing with MobileMarket et al in expanding technology to lower capacity markets and farmers. It also shows the need for the food movement to embed knowledge on card and currency issues so that we stay ahead or at least on the curve of changes, rather than being pawns of the very small set of multi-national players in technology and card processing. If, like me, you accessed the entire article (or others like it) and want to have a conversation, I’m interested in talking about these issues in more depth. Feel free to contact me…

Credit Card Payments Market Competition 2 – Business Insider.

an excerpt from another article on the subject raises many of the same questions:

“…with the global roll-out of mobile payment services comes uncertainty for both banks and consumers, and this is evident in the lack of standardization in mobile payments technology. Financial institutions are facing a major dilemma. When planning mobile payment services, they need to select one of the available technologies in the hope that it will become the dominant standard, or they risk being left behind.”

How the Bitcoin protocol actually works and what that means for us

Complementary currencies fascinate me and recently, the crypto currency bitcoin especially. Its an example of a decentralized example designed to reduce  inflation (although maybe not deflation) and the need to have a central authority. I agree with many that the bitcoin seems unlikely to be a replacement for fiat currency (government-decreed legal currency) and I also agree with the concern over the ultimate role of this currency that has a limit to how much can be “mined.” Still, important to remember that gold has very close to the same values and limits and has flourished as a protection against only using a national currency.

The reason why this should be so important to food system organizers-especially to direct marketing outlets-is that many of these outlets are operating what is essentially a debiting system with tokens,  yet doing it without the robust and transparent nature of a currency system, or without a fair and openly discussed exchange rate that asks everyone possible to share the costs. In other words, we have built systems that allow people to begin to depend on the market to supply a debiting system so as not to have to stop and get cash before coming to market, or from vendors from having their own machine and costs, yet are not extending the reach of that system to find ways to pay and find support for it. What seems to be the goal for most involved is to dream of the day that we can hand these systems off to the farmers to run themselves. I would say that for many reasons this is unlikely in any near future as these systems will remain unwieldy to manage.
Those reasons for the delay or impossibility of the vendor hand off happening include (but are not limited to):
-the lack of easy-to-manage back office systems
-the wide variations of card fees and systems needed to swipe cards
-the costs for each vendor to purchase and maintain these systems. Add to that the very nature of pop up markets without access to good wifi or mobile phone signals, the low number of transactions per vendor and complication of a high number of customer transactions on any one day with many small businesses that will confuse and alert card processors.
To me, what comes first is solving these problems and extending this system’s reach to savings and loans pilots. What about allowing restaurants that source locally to accept the tokens during slow months? Or working with banks to help provide some accounting or backing? What about establishing micro loans to encourage more people to use this as a sticky currency working through a local food system? The Berkshares system in Great Barrington area is an uniquely designed currency that is experimenting with these ideas and more and has added hundreds of outlets at which their currency can be used; it is surely one that should be studied closely by our field, if nothing else.
There are examples of different token pilots at markets, such as MarketUmbrella’s Crescent Fund and Massachusetts’ pilot of electronic wallet (an example here of an electronic wallet) but these pilots are still so limited and information is not widely available. I would love to see some deep analysis of the impact of these systems and some prototyping of entire systems, especially with the emergence of these popular electronic currency such as bitcoins and vibrant complementary currencies such as the Berkshares.

How the Bitcoin protocol actually works | DDI.

Overstock says they’ll take Bitcoin