Blockchain & Money: Session 13: Blockchain Payments, Part 1 by M.I.T. Sloan School of Management with Professor Gary Gensler

Session 13: Payments, Part 1

• Session 13: Study Questions:
  • What are the major trends–mobile apps, digital wallets, open banking, and enhanced methods of bank transfers & authentication–in payment systems today?
  • What lessons can be drawn from non-blockchain payment innovations, such as Alipay, WeChat Pay, M-Pesa, India’s IMPS, and U.S. mobile payment apps?
  • What are the challenges and opportunities in the current cross-border payment system architecture?

• Session 13: Readings:
  • ‘The Federal Reserve Payment Study: 2017 Annual Supplement’, Federal Reserve.
  • ‘Global Payments Report’, Worldpay.
  • ‘The Best Mobile Apps of 2018’, PC World.
  • ‘Why China’s Payment Apps Give U.S. Bankers Nightmares’, Bloomberg.
  • ‘M-Pesa: How Kenya Revolutionized Mobile Payments’, N26 Magazine.
  • ‘Cross-border Retail Payments’ (pages 6-15, 39), BIS.

Overview: Payment Systems, Ledgers, & Credit Cards; Technologies Affecting Payments; Mobile Payments; Global & U.S. Payment Statistics; Bitcoin and Blockchain Technology; Conclusions.

• Payment System:
  • A method to amend & record entries on ledgers for money. Authorizing, Clearing and Recording Final Settlement.
• Financial Ledgers:
  • Record economic activity & financial relationships; Record transactions & accounts.

• Credit Card:
  • 1887–Term ‘Credit Card’ used in Edward Bellamy’s Science Fiction “Looking Backward”
  • Late 1880s-1960s–Charge Plates & Credit Cards
  • Late 1920s-2000s–Merchant Credit Cards
  • Brooklyn, 1946–First Bank Card; Charge-It; First National Bank;
  • 1949–First General Merchant Card Diner’s Club
  • 1959–American Express; First Plastic Card;
  • 1966–Bank of America; ‘First General Purpose Credit Card; 1966; Credit Card Processing
  • 1950s–Slide Card Imprinter
  • 1979–Visa Imprinter
  • 2018–Payment Terminal

• Conclusions:
  • Payment Systems cost 0.5%-1.0% of Global GDP
  • Blockchain Technology may provide a new P2P method to make payments.
  • In assessing potential use cases, though, the devil is in the details.

Biblio:

• Gary Gensler. 15.S12 Blockchain and Money. Fall 2018. Massachusetts Institute of Technology: MIT OpenCourseWare, https://ocw.mit.edu. License: Creative Commons BY-NC-SA.

Video Link: Session 13: Payments, Part 1.