39 thoughts on “Are You Ready for the New Peer-to-Peer Economy?”

  1. Maybe Square is going after those 26 million people, but they charge less than banks + verifone, which is why verifone is deploying the FUD strategy. I’m guessing Amazon and Wal-Mart get good terms from their banking partners, but most of those 7 million merchants who use the same system do not get the same treatment, and once the 26 million potential Square customers demonstrate the value of Square, many of the merchants who rely on the incumbents will realize they’re getting hosed and make a change. That’s what Verifone wants to prevent.

  2. Isn’t a large part of the market for peer to peer transactions — face to face buying and selling — already well served by cash money? Cash money has no bank or middleman fees and for the small business can be readily concealed from the tax collectors.

    1. Cash is incredibly inconvenient though. The real innovation will be “bitcoin” which was mentioned above and will cut the middleman between bank and exact change out.

  3. We’re betting on this trend at NeighborGoods.net. Why should we turn first to retailers when our neighbor already owns what we are looking for? By sharing and renting goods, we can improve our standard of living while lowering costs (both economic and environmental).

  4. This is a much older trend than you think. Znak it! proposed a peer-to-peer platform, however, one that uses virtual tokes as the proof of exchange, back in 2007; Znak it! was even a co-sponsor of the Web 2.0 Expo in SF for two consecutive years — but back than such ideas seemed way too revolutionary for the industry to accept.

    Good that others did not give up and like Square or VeriFone push forward.

  5. Since you mentioned Kickstarter, I thought I’d also mention Quirky, which does the same thing but based on products.

  6. Excellent article. Actually the winners are not going to be “the big sites” or big platforms. Think about a rural electric cooperative… it’s not a big winner. It’s simply a provider to the community of a collectively needed service efficiently delivered.

    The big winners will be the individual and movements to turn social networks into “owned” outposts on the internet where the individual has a claim right just like that which was expressed in the form of distraint by the drafting of the magna carta. Mark Zuckerberg’s claim that “there is only one identity” is in reality an admission that an avatar/username (and the profile data related thereto) is the creative person themselves.

    What we say in the share and share-alike advent of the creative commons license, we are getting ready to witness in the claim and claim-alike advent of the first user-owned and managed social network when MySpace.com gets converted from a virtual social network into owned “condos” on the internet – http://www.myspacecondos.com . That will be followed by the introduction of new means of exchange designed to meet one of the two uses of money; the double-coincidence of needs. There may be barter networks or stores of wealth, but the internet’s search capability is particularly well-suited to disintermediating the double coincidence of needs quite efficiently as seen in the success of projects such as Craig’s List or Freecycle.com

    Just take a look at the comments on http://www.myspacecondos.com to get a feel for what the digital slaves on farmville and the grist for the mill of behavioral economics are feeling about being used when the only consideration in return is some “free” space on a slice of silicon wafer or optical disk.

    Dave Harrison

  7. Nice point, but that’s the type of economy present since Mesopotamia, as an extension of barter trade. Let’s call it one-on-one economy , not peer.
    We have so called compulsory law that regulates such transaction between individuals ( at least we have it here in Croatia ).

    The biggest economical benefit is that transaction, from the economic point of view, is not taxable.
    Individuals don’t have to pay taxes on those transaction. These are smaller transactions. I am not sure we can same apply to rents cause it’s in the state interest to tax such transactions.

    Hope I made my point…

    1. Zec,

      Thanks for the comment and yes, we can call it one-to-one economy, but in the end it is a behavior as old as human beings. I think the network effects make it more viable and big. I think that is the key difference because we live in a much more connected society and have a much bigger scalable at our disposal.

  8. There are two ideas here and they make an unusual hybrid. While p2p via the likes of Square sounds good, it still leaves digital records and needs digital means to make or accept payment. There’s still a middleman (the credit card companies and/or banks).

    Take the example of email. We’ve come to believe that if I send my mother an email, that the email is between her and I. It is not, though. The email is to Google (I use Gmail) and Google happens to pass it along to my mother. In much the same way, p2p transactions will work. I think it’s between me and Joe the Artist but the payment just happens to get passed along to him.

    Trade and barter is quite different.

  9. Reinventing capitalism outside the control of government, lawyers and accountants. It is a new grey economy of the type you will find in any socialist/fascist state.

  10. Story has incorrect information. Verifone is not a payments processor and does not offer merchant accounts. They are a manufacturer similar to Ingenico, NCR, et al. Maybe a deeper understanding of the payments biz is needed before making such assumptions. Not to mention that Square is nothing more than a payment platform and gateway connected to Chase. They are what PayPal was 10yrs ago.

    1. You are right. I should have mentioned equipment and that slipped my mind. On their website, Verifone describes itself “We provide solutions, services, and expertise that enable electronic payment transactions and value-added services at the point of sale.” Given your description,, Square is an equipment manufacturer as much as a service provider. Its reader is a tiny do-hickey and the software running on a smartphone/tablet — which is essentially the trend being an emergent trend when it comes to hardware centric innovation.

  11. VeriFone is scared because this is how all disruptions start. First you get a new class of previously undesirable customer, then you move upstream and capture the more valuable customers.

    Today Square processes payments for the fruit vendor at the farmers market. Tomorrow it processes money for the supermarket.

  12. I think companies like Ebay and Prosper (the peer to peer lending service) were front runners in this line of business and way ahead of the curve and don’t get enough credit.

  13. Good examples, and food for thought. Another entrant to your share cars list is getaround.com, which is like AirBnB for your car. I haven’t started using their service yet, but sounds interesting.

    With the graph being agglomerated via services like facebook and easily “queryable”, we may see some more rapid rise in these peer-to-peer “network is the commerce” innovation.

  14. “The New Peer-to-Peer Economy

    “For the lack of a better term, let’s call this trend a peer-to-peer economy. Here, transactions happen between individuals or a group of individuals and not between corporations and individuals.

    NEWSFLASH: Peer-to-Peer Economy = Free Market Economy!

    In other words, what you’re describing has always been called a __FREE MARKET ECONOMY__; it doesn’t need a new term, it just needs to be recognized for what it’s supposed to be — FREE FOR ALL INDIVIDUALS.

    And, if you want to know why central banking fails and why sound money is needed, watch this video: http://www.youtube.com/watch?v=tGk5ioEXlIM

    1. Yes, it is free market economy indeed. We are back to the beginning.

      Here at Znak it! (www.znak-it.com) our motto is “WWW as it should be,” tongue-in-chick speaking, but what we refer to is the fundamental difference between two concepts: one is the so-called “free internet,” the other the “free market internet.”

      BTW, Znak it! has been just nominated for the prestigious Florin Award (http://www.thepaypers.com/florin). We are very proud, but also happy that the free market solutions for digital content monetization and P2P transactions are being finally recognized as valid alternatives.

  15. Excellent article,
    and great opportunity for small local player outside big market. I hope here in italy local player could develop their traditional sales model into p2p economy


  16. Joining in the fun there are many UK start-ups creating a whole new world of temporary ownership and also building a peer-to-peer economy including: Ecomodo.com (lend and borrow each others everyday objects, skills and spaces), Whipcar (rent the car next door), Crashpadder (Rent out spare room), Zopa (peer to peer money lending site) and GoCarShare (for sharing your car journeys).

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