UPDATE: I will be at Finovate tomorrow. This looks like a great event and I will post photos and comments.
Jim Bruene of Netbanker fame has organized a much needed event in Finovate 2007. Speed dating for venture capital ala the DEMO conference. I am sorting out my attendance, but I know some other folks from my team who will be there. There also seems to be a dearth of tickets (sold out!).

On October 2nd, 2007, twenty of the most innovative companies in the financial, banking and lending industries will gather in New York to offer a glimpse of the future of mobile, personal and online finance.

The presenters are:

• Andera
• Lending Club
• Billeo Inc
• Metavante
• CheckFree
• mFoundry
• ClairMail
• Mint
• Firethorn
• Monitise
• Digital Insight (an Intuit company)
• Mortgagebot
• Geezeo
• MShift
• Identity Theft 911
• Online Resources
• iPay Technologies
• Prosper Marketplace
• Jwaala
• Yodlee

This is the type of event that we need to see happen frequently in order to support innovation in the financial services space.

There’s been a bit alot of rumbling over the last few weeks regarding Amazon’s introduction of Flexible Payment Services to their already burgeoning set of web services. Not a surprise really, but strategically very key for Amazon to close the loop. Having already blazed trails in affiliate marketing as well as more specific service models such as the S3 modules for web services, Amazon has come in on the final piece of the puzzle of the modern commerce landscape they are shaping.

Obviously this is a basic dis-intermediation threat to banks (again) and merchant service providers, as well as a way to reduce costs on Amazon’s own transaction/interchange expenses. Banks can take heart in that rather than pursuing the Paypal model, Bezos and team have elected to go through the existing credit card networks for larger payments. Google Checkout uses a similar model but Amazon has put a bit more into the model. Look carefully and you uncover an Amazon branded stored value account as the crucial center of the FPS value proposition. Om Malik points out that the FPS strategy is a Trojan Horse designed to take share from Paypal. I would build on that by saying that FPS can start enable the holy grail of payments, the dirty little M-word: micropayments.

The pricing model that Amazon has prescribed for their service is a very interesting first indicator of the differentiation that Amazon FPS can provide to online merchants who are selling non-traditional goods. By differentiating ACH, association and stored value transactions into different pricing buckets, FPS provides access to all the major forms of payments as well as their own ultra-flexible account. The Amazon account is controlled by a truly groundbreaking set of rules that can actually enable new types of selling models. Merchant can charge periodically for usage, split payments to and from different endpoint accounts as well as aggregate micropayments without merchants having to “hold” onto transactions. These are just a few of the types of selling models that can be enabled that may have been cost-prohibitive before using the incumbents system.

The wildcards here are 1) Amazon is by far the most developer friendly in the “Big” web. 2) Amazon has 62 million active consumers with Amazon credentials (with credit cards on file) that can be leveraged by merchants using FPS.

To think, it all started as bookstore.

So now that the blogerati have settled down on Google Checkout’s launch frenzy, let me take a moment to comment on how they are going to finagle the banks out of being the de facto merchant processors of the web. Banks today don’t do the long tail. Even the ones that purport to be “affinity” focuses such as the former-MBNA portfolios are false advertising on the customization front. Our friends at Google on the other hand do the long tail very well. Adsense is the perfect long tail network and their democratic advertising through ad words drives 50% to 100% of the traffic to their small and medium business clients. Now throw in Google Checkout and you have a closed loop from segment identification to closing the sale. Fine nothing new here right? Well if Google Checkout is works well and Ad Words continues to do its thing, Google will likely never charge any of their advertisers for the transaction.

It is wins all around: business owners who advertise get free credit/debit processing on their site via a trusted consumer name like Google. Google gets transaction data to sophisticate its advertising model. Consumers get smart and legitimate way to buy things from sites that are not called Amazon.com. Now let’s watch them collapse Froogle (holy branding snafu) into the Google Base strategy and you have a complete and open business platform minus banks.