“Do you honestly think you’re going to replace this?” The previous question should be printed and framed in poster-sized fashion at the Department of Justice’s (DOJ) antitrust trust division.
The question itself was actually posed to Kimbal Musk, brother of Elon, back in the early days of the internet. The president of the Toronto Star was superciliously asking Kimbal if Zip2’s online business directory had any chance of replacing…the Yellow Pages.
What’s important about the question asked is that it’s a safe bet that every commercial advance of any kind of note has always been preceded by just such a question, and realistically many such questions. If the future were ever not opaque, then it’s safe to say we’d already be living in the future. Rare is the business that allows a sure thing to be brought to market by someone else.
This is worth remembering as the DOJ attacks Visa for a variety of alleged antitrust violations, including that it’s supposedly planning to use its market heft “to bury a rival technology company.” What a massive conceit on the part of the DOJ! Think about it.
Seriously, just what “rival technology company” does the DOJ imagine Visa is planning to bury on the way to seemingly perpetual dominance in the debit-card space? If you the reader or the DOJ know the answer to such a question, then please contact yours truly and let’s travel up to New York City together as soon as possible.
Knowledge about the proper rival for Visa to vanquish is incredibly valuable. Call it billions of dollars valuable. In a nation like the U.S. in which wealth grows by leaps and bounds year after year, knowledge about the business or businesses that will rival Visa in payments is the kind that would win those privy to it billions worth of backing from investors.
Quite unlike the DOJ, investors don’t know with any kind of certainty just what the future of payments will be, nor do they know how people will pay. All they know is that due to the American constant that is progress, individuals will be buying all manner of things in ever greater amounts.
Which explains why Visa itself would love to know what the DOJ implies that it knows. Translated, Visa would be one of those investors eager to back the individuals capable of looking around the proverbial payments corner with billions.
In other words, Visa is doing its best to maintain market share in a space defined by constant change borne of new entrants. Think PayPal, Square, Venmo, Zelle, ApplePay, GooglePay, and a myriad of crypto concepts aiming at the margins of the names previously mentioned. Visa is allegedly out to vanquish a rival or rivals? Ok, but which one(s)?
Worse for Visa is the the looming entrance of others. Such is the genius of profits of the kind that Visa enjoys. Those very profits are the instigator of persistent new entrants meant to compete away the market share of the leaders. The problem, of course, is that it’s difficult to know just who will replace the present: either they’re too small to care about now, or not even in business.
Which brings us back to the question posed to Kimbal Musk. Let’s refer to the DOJ as the modern-day Toronto Star as it imagines Visa possessing an impregnable moat around its booming business. If only. The DOJ’s lawsuit will age as well as the question asked Elon’s brother in the 1990s.
