Banks and the banking system are not unlike the railways in many countries. The railway system has operators of services and core infrastructure. The operators have been competitive for a while now, but the core railway infrastructure is heavily regulated, audited, and checked for health and safety. As a result, providing core infrastructure is not an area that many want to get into, as it is costly and it has high barriers to entry. Competing on the rails, however, is simpler and has far more potential.
In this analogy, the core infrastructures – the railways – include payments systems EBA Step2, ECB Target2, Swift and Visa. The operators on the rails are the banks themselves, but also others, such as payments processing operators Earthport, PayPal and Western Union. You could add a few more in there – maybe station managers of stops along the way, such as next-generation banking platforms Movenbank and Simple.
