Kristin Moyer

A member of the Gartner Blog Network

Kristin R. Moyer
Research Director
11 years at Gartner
18 years IT industry

Kristin Moyer is a research director in Industry Advisory Services/Banking and Investment Services. She has more than 17 years of experience across the global high-technology industry in a variety of roles. Ms. Moyer's research coverage includes card… Read Full Bio

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Non-Bank Payment Providers will Supplant Banks

by Kristin Moyer  |  February 9, 2009  |  Comments Off

Christophe Uzureau here.  By 2013, nonbank payment institutions will supplant banks and become the payment solutions for online social networks.

Amazon Payments, Moneybookers and PayPal are nonbank payment solutions involved with conversational media, such as blogs and social networks. They are using online communities and social networks to offer:

  • Client services and marketing – One example is PayPal’s Online Merchant Network, which promotes its services and meets merchants’ payment needs.
  • Product development – PayPal’s site for developers lets them share ideas on using PayPal solutions; for example, ChipIn and PayMe are payment systems available on Facebook created by developers using PayPal application programming interfaces (APIs). Amazon Payments supports developers via Amazon Flexible Payments Service APIs to develop merchant payment systems.
  • Payment solutions for online social networks – PayPal is used on FSNs Kiva and MicroPlace to support investment, lending and loan repayments. Amazon Payments is used on networking applications, such as Buxfer (which lets users track spending) to facilitate related P2P payments. Moneybookers has a payment system on Facebook and uses viral marketing to promote its services.

The short-term prospects for P2P payment methods as part of online social networks and for FSNs are limited.   Users worry about security in online social network transactions; phishing attacks in online networks will exacerbate this.

However, information flows rapidly from one online community to the next, so a payment solution viewed as useful in one will be adopted in another.  The aim of payment providers – whose development is driven by payees and payers – is to drive use of their solutions as part of conversational media, and to support overall product development and sales.

Nonbank payment providers will supplant banks because bank payment solutions are driven by internal perceptions, which don’t necessarily reflect customer needs. This makes it more difficult for banks to market their payment products and services, as well as other offerings.

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