“For far too many years, there has been remarkably little innovation in the payment network industry. Traditional and well-established payment transaction networks, such as Visa, MasterCard, Discover, American Express, and a host of their smaller brethren, have been the only major players in that market for the last half-century. These top players—including processors and various middlemen—dominate the payment industry. But in markets with only a few players, there is often room for innovative disruption by smaller and nimbler companies.
What stymies such innovation in the payment industry is government regulation. To the detriment of the payment industry, state regulatory frameworks are mired in the past. States have not taken into account how technological innovation, in particular the Internet, has changed the rules of the game and created new payment network possibilities. Bluntly, the older regulatory framework hampers growth.”
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