Credit card vs mobile payment equals Past vs Future?

The Roman Empire was in many ways a similar construction to the modern European Union.

The main currency (trough all the Republic and later in the West of the Empire) was the silver Denarii (besides the golden Aureus and the brass Sestertius and Dupondius).

Golden, silver and copper coins remained the main but not unique currency during the Middle Ages.





In the mid 20th century, the European Union's foundations were laid in Germany and France.

In parallel, a the plan for a unique, trans-European currency was forged. As an effect, in 1979 the ECU (European Currency Unit) was introduced, acting as a basket of the currencies of the European Community member states. The ECU was used as the unit off account of the European Community, until replacement by the Uuro on 1 January 1999, at parity.



Finally, the dream came (almost') true. (Almost) all over the European Union, the Uuro is accepted as formal currency, payments can be made using Euro bills and coins.
The price paid by the Euro-zone states in order to achieve this goal was (by some opinions) very high: renouncing to the traditional national currency. Germany gave up the Deutschmark, Italy renounced the Lira, France gave up the Franc, etc.

















Besides the Euro, the 20th century brought us also another revolutionary unique payment tool : the Credit Card.
Credit card equals electronic payment, "plastic money", a revolution (considered by some) in the retail financial world.
Major credit card solution providers as Maestro, Delta, Visa, Mastercard, American Express "conquered" the world during the last 40 years. From Europe to America, from Australia to Africa trough Asia, every country has at least 1 ATM machine or a shop were credit cards are accepted as a payment tool.

Is the credit card in danger of extinction? If yes, who/what can replace it?

The smart-phone.

Bell invented the phone. Someone invented the wireless phone (radio). After that came the GSM ant the satellite phone. Today we have the INTERNET-phones, also called Smartphones.

AT&T, Verizon Wireless, and T-Mobile are planning a joint venture to develop a mobile payment system which will use the smartphones as the payment tool.

The technical details are not published yet, however, the service would let customers make purchases by holding a smartphone in front of an electronic reader in stores and the transactions would be processed by a third party .

Retailers will play a key role trough this "migration" process. Migration ( implementation) costs for the new technology, consumer's feedback, the solution's popularity are still unpredictable variables for this equation.

Good news for the software and IT industry: new solutions are to be designed and built in order to support the new technology, equals income for the industry.

Visa and Mastercard - playing in defense.

All credit card companies did benefit during the past decades as people abandoned cash and paper checks in favor of the plastic money. and electronic payments.

According to The Nilson Report, (http://www.nilsonreport.com/charts.htm) an industry newsletter, over 50% of the US consumers operate their purchases using credit cards.

It seems that Visa and MasterCard are currently developing their own mobile payment systems. working with Telecom carriers, handset makers, and banks in order to develop mobile payment technologies all over the world,
Mastercard's CEO Ajay Banga stated in august 2011. "While the business model for mobile payments is yet to be proven in a tangible way across the world, I have no doubt that it will get proven in some form," .

The content of this posting and the related comments are property of Mr. Racz Sandor

Tsunami economicae :Seismic waves from Middle East

Introduction:
Middle East and Northern Africa. Fascinating but Volatile in the same time. Luxury and Poverty, Evergreen Gardens and Deserts coexist for centuries in the same area.
Traditionally, the economy of the norther African and Middle Eastern states, from Mesopotamian times until our days is mainly focused on trade.
Trading either with foreign goods, or with their own "internally" manufactured products, the inhabitants of this region have a long tradition of being skilled traders and shipowners. The coast of northern Africa with it's Mediterranean harbors or the trading hubs in the Arabian Peninsula were strategic elements in the development of this region.
19th and 20th century. Industrialization. Engines. Crued oil. Among other locations in the world, like Siberia, Venezuela, Norway, Russia, Middle East became of interest for the Western World as well. After discovering probably the largest oil reserves on the globe, the interest and the struggle to influence this area became a fact.

Preconditions
Crued oil is used mainly in the petrochemical industry for producing plastics, fuel, paint and others.
What happens, when major North African or Middle East political regimes begin to shiver, while armed forces fight on the streets of the capital? Recently in Egypt, Tunisia, Libya, Bachrein, Oman. And these are minor oil exporting countries, imagine the same type of ryots in Saudi Arabia or the United Arab Emirates..
Allthough most of the oil producing & exporting countries have joined the OPEC organization (headquartered in Vienna, Europe), the world's energy market is not yet predictible enough.
For example, after the Libyan crisis started, US light crude rose by $1.95 to $106.75 a barrel, the highest since September 2008, and Brent crude gained $2.43 to $118.4.

Concerned that the recent events in Egypt (turnover of the Mubarak regime) could disrupt oil shipments passing through the Suez canal and engulf thMiddle East drove the price of Brent crude oil through the $100 barrier for the first time in over two years. The price of a barrel of the benchmark Brent soared by more than $1.50 up to $101.08 a barrel.

In the central end Eastern part of the European Union, countries do not poses natural crued oil reserves, with one exception - Romania. Hence, importing the oil became a necessity.a major dependency for the local economy.

Effects:
Petrol prizes increased all over Europe in 2010,Greece (+43%), Romania (+24%) Cyprus (+20,9%), Switzerland (+5%), Slovakia (+7,9%) si Sweden (8,7%).

What effects will cause the increase of the price of the barrel up to $200 , in Romania?

Gasoline price: > 7 RON (vs 5 RON 2010]

Inflation: > 10 % [7% 2011]

Euro: > 1,5 USD [from 1,4]

Profit margin of the major Romanian oil company > 2 bn. euro [~0,5bn ]

Weight of crude oil in the GDP: > 10 % [ 5,5% at this point in time]

What new business opportunities (for the IT market) can be identified trough this changes?
Let's see and observe

The content of this posting and the related comments are property of Mr. Racz Sandor