Many years ago in a contribution to a corporate strategy I postulated payments should be redefined to the “transfer of property rights”. At that time smart metering for utilities and the advances in RFiD was a new frontier to explore. The processing prerequisites — technical, security, authentication, uniqueness, storing and traceability etc.— for other type of value transactions were identical to payments. Looking from the core processes limiting them to payments was arbitrary. And pointing at the essence of the transfer supported – in this case money – made it possible to better share the same notions within the company: one of the main contributions of a strategic plan.
Both smart metering and RFid have not materialized in any significant way (yet). A lot can be said about how these two have trailed regardless of the promises they both hold. But the absence of a standardized protocol which could allow for general adoption, secure authentication and transparency did certainly not help. (NB if RFID would replace the barcode at your supermarket we would have the internet of Things penetrating to every jar of peanut butter: the „Internet of Groceries”)
Marketing myopia is an indication of inadequately defining – often too small – your own market. This phenomenon has been described by Theodore Levitt in 1960 and in 1975 in the Harvard Business Review published it again a now classic management article.
To paraphrase Levitt: „The payments industry defines its business incorrectly. It thinks it is in the payments business when it is actually in the transfer of property rights”. A clear case of „payments myopia”.
The principle mechanism for balancing the interests of individuals and society is through (delegated) ownership. So far in exploring Collaborability I have identified three types of ownership:
- Patents (knowledge based)
- Profit (activity based)
- Property (movable and immovable property and capital)
Bitcoin is more than just another currency, it’s “an Internet” for registering and transferring property.
We have to make a distinction between the property and the means to transfer it. Payments are about the logistics of money. Money is one of the 8 collaborability mechanisms identified in the collaborability model. It is one of mankind’s most important inventions which allows to store value in time and exchange value between actors.
To me payments – as an applied collaborability mechanism – are crucial to our societies and as a consequence has to be seen as a utility (i.e. a designated vital service)- just like water, gas, electricity, telephony, internet – with all the consequences for regulation and curbing the corporate interest.
It is important to stress this distinction between payments and money for they are often seen as interchangeable, also within the payments industry. Now that logistics and money start to converge technically by the bitcoin protocol – the ledger is the money is the payment – it is essential to understand the money part as much as the payment part.