One of the regrettable truths in this business of FC is the scant regard that entrepreneurs give to barriers to entry. These barriers start out large, get huge and huger still, generally as people skip the analysis steps that outline these barriers.
One of the barriers is institutions. They fear loss of payments, and their existance must be considered in the plan.
In general, it is very hard to include existing institutions and share the benefit, and that means having to compete with them at a later time. But, there are exceptions to this, and it now seems that - throwing all theory aside, at least in one case, a group of institutions has actually cooperated and launched a big payment system.
Even more surprising, the group includes banks, credit card companies, and telcos!
The story is almost a textbook case of the impossible:
http://www.iol.co.za/index.php?click_id=115&art_id=qw1066093560707B264&set_id=1
Here's an excerpt:
"Getting the payment-by-phone idea off the ground was not easy. It required co-operation from three industries that don't always see eye-to-eye - banking, credit cards and telecommunications."
"Park said executives laughed at him when he first approached credit card companies - with a TV remote strapped to his cell phone to demonstrate how it would work."
"Credit card companies were loath to co-operate so closely with telecoms because that would require sharing valuable customer information and transaction commissions."
"The card companies figured they already had the entire country in their grip, with an average of four cards issued for every working person. But after extended negotiations, they finally agreed, acknowledging the inevitable march of technology."
"The mobile phone companies, on the other hand, were hungry for new services. Their markets were saturated. All three major providers are now on board."