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A Penny Saved

· August 8, 2012

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With calls for elimination of the U.S. penny going back decades, we are now on the verge of an inflection point for commercial payments. Between debit cards and emerging mobile payment systems, it seems innovation can disrupt even established roles of government that date to the U.S. Constitution (1789) and centuries beforehand.

Cash moved one small step nearer to its deathbed with the announcement on Wednesday that Square, the mobile payments start-up, would partner with Starbucks Coffee Company, reports Claire Cain Miller on Wednesday in The New York Times.

Daily Report: A Step Forward for the Mobile Wallet.

Social security checks are today almost completely a thing of the past. How many more years or decades before currency itself becomes extinct? And will this sea of change also disintermediate banks? Wait and see, but likely not for long.

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.