Monzo, FinTech and how payments change the media

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In the opening scene of The Social Network – Aaron Sorkin’s brilliant depiction of the rise of Facebook that has been stuck in my head for over a decade – Mark Zuckerberg engages in a brief exchange with his (soon to be ex-)girlfriend, Erica. It goes something like this:

MARK

My friend Eduardo made $300,000 betting oil futures one summer.

ERICA

He made $300,000 in a summer?

MARK

He likes meteorology.

ERICA

You said it was oil futures.

MARK

You can read the weather, you can predict the price of heating oil.

For me, as someone with a brain the size of a walnut, this is a scene that plays out in my mind whenever I hear about the interrelation of industries (just like how the dialogue from Lucy Prebble’s play about Enron is still the way I conceptualise hedge funds, which I’ll include at the boom of this email). If you understand the weather, you understand the demand for heating. If you understand the demand for heating, you understand the demand for oil. And if you understand the demand for oil, you understand the price of oil.

This is all rather primary school economics, but it’s been running around my head ever since I read this blog post by Tom Blomfield, the founder and former chief exec of Monzo, the coral-coloured bank of the future (that I really only use for settling debts with friends and teammates on my five-a-side football team). Monzo describes itself as a challenger bank, which is to say that it is attempting to break up the hegemony of the big, old school banks via the medium of, well, an app. The reason I wanted to talk about this on a newsletter that is, by its stated intention, about digital media futurology, is that payments tech is, for me, a clear bellwether of where our media landscape will go.

I’ll be 30 at my next birthday, to place myself generationally. When I entered this industry – one that you could loosely define as ‘journalism’ – most publications were still grappling with the fundamental question of how to directly charge for journalism. Journalism, as I could see it, had developed in two ways: the old-school model where you exchanged a physical newspaper for physical currency, and the new-school way where you exchanged virtual content for advertiser revenue. But by 2013, when I graduated, the latter model had successfully killed the former, and then immediately died itself. A Pyrrhic victory, you might say.

Except, at the same time, we were seeing a new surge of direct-to-consumer sales of virtualised content. Think back to The Social Network (if you haven’t seen it at this point, who are you? Michael Owen??) and the importance that Napster, the free music site that, shockingly, the music industry felt obligated to kill, plays in that narrative. But Napster seems like a different country – even the sites of my childhood like Limewire and The Pirate Bay seem now like ancient artefacts. The fact is that Hollywood and the music studios won the battle against piracy. And their biggest aide in all this was payments technology.

Payments tech is the reason why I currently have subscriptions to: Spotify, Netflix (x2), Amazon Prime, Disney+, The Times, The New Yorker, Medium, The Athletic and god knows what else that I’ve forgotten about. (The reason I have two Netflix accounts is extremely complicated and very painful to me and my accountant). Payments tech made it easy to subscribe and forget, and then reap the benefits of that subscription (and lapse in memory).

I vividly remember the first time I made an online payment for a subscription service. It was to a website called OnlineSoccerManager, which (I’ve just checked) still exists. I stole my father’s credit card in order to create a premium league so that I could compete against my friends at this online game we had all become obsessed with. It was a faff and terrifying; this was still a time when we all lived in fear of internet fraud (my mother still paid for everything by cheque). But year on year, innovations in payments technology made things easier – not just online banking, one-click shopping or contactless, but stupid, subtle things like the fact that all web browsers now save card details, eliminating the palaver that is trying to remember the “long number”.

Which is all to say that the question of how we pay for things is the essential question of media technology right now. As Netflix continues its (very public) suffering, it might be worth thinking about what the next challenger technology looks like. And – for the people at the back – the best way to anticipate the next wave is to look at the previous one.

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