Comments: Skype drops the payments bombshell

> The big picture is this: integrated chat & payments is huge. Immense.
> > It has the potential to be if not the next killer app, certainly the
> > next killer integration.

I don't see it happening, at least not with skype due to the fact ebay/paypal own them and ebay has a shocking track record and any one doing serious payments don't want to run the risk of ebay/paypal locking their account.

There is possibly a number of other reasons why this won't take off, not like web payments, since we already have large issues with phishing and fraud on IM networks I don't think banks will be keen on this idea.

Posted by Duane at January 6, 2007 05:05 PM

Hi Ian

Had to happen.

Instant money messages.

I've been saying this for at least four years. You've been doing it for longer.

Posted by Chris at January 6, 2007 05:06 PM

Also see:

Posted by sizeof at January 6, 2007 05:31 PM

Marcus, that's an interesting proposal. Is there a sense that we already understand what model of payment Skype are aiming to do?

Posted by Iang at January 7, 2007 08:30 AM

Nah, I am still hoping to have a working mobile messaging infrastructure suitable for FC (not just payments) rolled out before Skype does it. The mobile market is far bigger and far more important than PCs. And besides, cellphones are more suited for payment as a platform.

Posted by Daniel A. Nagy at January 8, 2007 04:58 AM

Hmmm... Daniel, questions abound ... "Nah" to what?

Can you inform your comment that "mobile is far bigger / more important than PCs" with some metrics?

Messaging is suitable for FC not just payments: agreed :)
Cellphones are more suited for payment than PCs: agreed :)

Posted by Iang (an early too-enthusiast) at January 8, 2007 10:07 AM

Surely the cryptographic requirements for the protection of communication over Skype and the authentication of the origin and destination of a call are different from the requirements of a payment system. So Skype's existing cryptogaphic -publicly apparent- expertise doesn't seem to be relevant with respect to payments.

The IM infrastructure Skype brings in is basically a "ubiquitous" pervasive peer-to-peer messaging environment with a huge and loyal installed base. Whether the trust in Skype readily will transpose to trust in Skype as a payment system provider is something different. May be Skype has investigated this potential in a marketing research program.

Of course, the pervasive infrastructure Skype provides; facilitating user registration, user authentication, application and update deployment is an important asset, neatly poised to service any payment infrastructure not based on the -IMO unwarranted- trust in SSL.

But then I loose sight of any relevance of Skype playing an expert role in payments. But then again is has been more 10 years ago when the electronic and internet payments where introduced as an innovation. May be now the market is ready, just.

In other words, I think that eBay is betting on the wrong horse if the only reason she bought Skype as a step into the direction of providing a payment system provider. On the other hand the incentives are great. The low value high volume transactions in the eBay market make it attractive to eliminate the intermediary CC fees. But hey! Is PayPal not owned by eBay.

May be the marriage of the administrative infrastructure provided by PayPal and the technical infrastructure provided by Skype can generate an interesting business case.

But I leave the analysis of that business case to you, as I don't hold an MBA ;-)


Posted by Twan at January 8, 2007 11:40 AM

> Hmmm... questions abound ... Nah to what?

I disagree that Skype will be an unchallenged monopoly in the payment-in-messaging market. I think, there is still room for competition, especially taking into account the fact that any one such payment system actually helps all the others. Besides, WebMoney has had its messaging system for invoicing, payment, dispute resolution and, well, (authenticated, reliable) messaging.

> Can you inform your comment that "mobile is far bigger / more important than PCs" with some metrics?

According to some 2005 study (feel free to google for the original source) Western Europe will reach 100% cellphone penetration early this year. It was widely circulated and quoted in the industry. The PC penetration is nowhere near that (it's about 70% and seems to have reached saturation).

In the US the two are comparable, but that's just because the retarded
cellular infrastructure in North America.

It is more important, because mobile telephony is just the perfect "commoditized service", with a demand far beyond that of skype-out. Skype cannot charge for in-network traffic (because the market price is 0; if they start charging, their user base will be gone in the blink of an eye), so that doesn't count.

Posted by Daniel A. Nagy at January 9, 2007 04:31 AM

Its a big task, what kind of far off date does anyone see for an actual product testing?

Posted by Mark Herpel at February 9, 2007 08:38 AM
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