Banks losing online payment ground to tech companies

Banks losing online payment ground to tech companies

As people lose trust in banks, online and mobile payments are leaving them and going to companies like PayPal and Google, according to Martin Lowy on Seeking Alpha. He said he wonders why banks have decided to cede trust to these companies, who either have or most likely will have customer trust again. Banks may need to look at PCI compliance, code signing digital certificate and other methods to help people feel safe when making online payments.

Lowy said there are some natural impediments to bringing back trust in banks, such as mergers and changing principals, less focus on security, more focus on banking and profit, and increased regulation in the industry. This may open up space for other new businesses to come in if improvements aren't made by banks.

"Perhaps one great new leader will propel one large bank in a new, productive direction and the others will follow," Lowy said. "But more likely, the large banks will remain caught up in their strategic conundrums and will not soon retake the payments space and the personal advisory space."

Smashing Magazine said making sure an eCommerce company addresses PCI compliance guidelines is extremely important, as without it there is an increased risk of frauds and even fines for companies that do not follow PCI DSS guidelines.