Having followed the tech startup scene for sometime now, this is the first call that I am making; and it is indeed a big one. The startup I like is Droplet and I think that they are the future of mobile payments.
Payments market has seen one after another disruption through tech startups – starting with PayPal. The latest big one has been Square. However, all these charge a fee to the merchant and the money these third party payments companies make is huge.
The way I see future mobile payments, or any kind of web payments, working is that people will have money on their Droplet account, and pay when needed. The major upside is from the part of the merchants since they do not have to pay fee on the transaction.
But how will Droplet make money? When people put money on their account with Droplet, it will stay around for a while. By doing the same analysis banks do to decide how much money they need everyday for liquidity, Droplet can safely invest rest of the money in money market funds and some of it in longer term securities. The interest income that they will make should be enough, even though the profits will be minimal.
Good luck to Droplet, and any other payment startup that has the same business model.