Rogers Communications (a major telecom player in the Canadian market place) has recently applied for a Bank license with the Canadian financial regulator. This is a visionary move by this Canadian carrier to take a lead in the mobile payments race in the latest battle enticed by technological convergence: banks vs telcos to compete for the juicy e-payment market. And we are posed to see many more of these moves to follow suit. Remember it used to be the control for the local loop what telcos defended with all their might? Well, this is the brave new world in a mobile environment. It all comes down to what you can’t leave home without: Your mobile phone, your wallet or your car keys. This is what technological convergence is doing, up until now you need to carry both your mobile and your wallet with you because they perform different things. You need the bank card in your wallet to pay, but what if you could take the chip from the card and inserted it in your phone? Your carrier cannot perform financial transactions because they are not authorized to do so. Banks have strict regulation that prevent non banks to enter into their turf. But what if the carrier had a licence from the financial authority to transact with the financial system? This is where the new winds of convergence are taking the telcos. The obvious question now is, how do you think the banks will react and defend their business?
For more on the Rogers move, see: