What is a payment gateway?

Currently, Banks operate their own payment systems. They are like pipes. Many pipes operating in isolation. Payment Gateway is ONE BIG PIPE to which all Banks and other entities can connect with.

1/ https://twitter.com/StateBank_Pak/status/1347916699383820288
If a cheque clearing took 1-2 working days, w/ the gateway, it can be done in a few minutes. Using that big pipe, a fintech can enable you to send money to your friends on WhatsApp, or split bill in a restaurant -- the magic happens at the back end

2/
It can only be successful if it is super fast, efficient, and cheap enough to compete with cash, which means close to zero transaction cost. Once these tenets are in place, gateway adoption can really take off. Banks can be made redundant as payment companies take over

3/
Cash is at 17% of GDP. More than PKR 5 tn. worth of net cash was withdrawn from Banks in last 4 years. The gateway can turn things around, if it isn't allowed to be monopolized, and if it's not made expensive. This is the time for fintechs to shine & for Banks to fade away

/4
You can follow @rogueonomist.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled:
Those who think consciousness raising & movement building are disconnected, or even a distraction from electoral politics have not paid attention to the history of social change.In this thread, we
Read more
The 2020s will be known as the Remote Work decadeA few predictions of what is likely to emerge[ a thread ] Third Space: Office and Working from Home will
Read more
1/29: Have you ever had a concept explained to you that helps frame complex issues you’ve been wrestling with and opens your eyes to new possibilities? A concept that I
Read more
By continuing to use the site, you are consenting to the use of cookies as explained in our Cookie Policy to improve your experience.