Disintermediation, Again

Disintermediation, the removal of elements in a value chain particularly related to distribution, was a primary effect of the internet. 

Artificial intelligence should cause even more disintermediation, as processes and value chain roles dependent on information asymmetry are removed. 

source: WallStreetMojo

Worse, some might fear, there might be no natural restorative mechanism similar to the boom-bust; recession-recovery; supply-demand cycles we commonly see in economies. 

Instead, in a worst-case scenario, AI continually depresses consumer spending (which represents about 70 percent of all economic activity) as AI leads to layoffs, which leads to less consumer spending, which increases the necessity of relying on AI to protect firm profit margins. 

Industry	How AI Removes Friction/Asymmetry	Expected Impact
Real Estate Brokerage	AI agents instantly access MLS data, decades of transaction records, valuations, and matching—eliminating agents' knowledge advantage and buyer/seller search friction.	Commissions drop sharply (e.g., from 5-6% to under 1%); many deals close agent-free or via AI "agent-on-agent"; widespread disintermediation and value loss for traditional firms.
Insurance Brokerage/Underwriting	AI enables instant policy comparison, re-shopping, risk prediction via vast data, and fraud detection—eroding inertia-based renewals and broker expertise.	15-20% premium loss from passive renewals; brokerage spreads compress; shift to direct/AI-driven models; broker selloffs (e.g., triggered by tools like Insurify).
Wealth Management / Financial Advisory	AI delivers personalized portfolio advice, tax strategies, and real-time market analysis—democratizing what once required expensive human experts and proprietary insights.	Erosion of 1% AUM or high advisory fees for basic services; "basic financial advisory" faces collapse; robo-advisors and AI tools dominate routine work.
Legal Services (Routine)	AI automates contract drafting, precedent research, due diligence, and basic navigation of laws—reducing asymmetry between lawyers and clients on standard matters.	Commoditization of routine work; reduced demand for junior/entry-level roles; faster/cheaper services pressure billable hours and firm margins.
Travel Booking Platforms	AI agents autonomously assemble custom itineraries (flights, hotels, etc.) faster/cheaper than platforms, bypassing search friction and default inertia.	Margin compression for intermediaries; habitual booking models disrupted; platforms lose value as direct AI routing prevails.
Logistics / Freight Brokerage	AI optimizes routes, matches shippers/carriers directly, and forecasts with superior data—eliminating broker coordination friction and information edges.	Broker fees collapse; rapid selloffs (e.g., truck brokers like RXO); shift to automated direct platforms.
Consulting / Professional Advisory Services	AI handles research, data analysis, and initial recommendations—eroding human expertise moats and proprietary knowledge asymmetry.	Reduced fees for routine/cognitive tasks; white-collar headcount cuts; productivity gains but revenue destruction for traditional models.
Ratings Agencies / Index Providers / Credit Checks	AI aggregates and analyzes public/proprietary data at scale—undermining exclusive research advantages and manual verification friction.	Proprietary edges erode; commoditization of ratings/indexing; lower barriers and pricing pressure.

Payments also are an obvious place to look for changes, though the changes might come from use of blockchain-based payment processors offering stablecoins.

source: Citrini Research

 

Stablecoin Use Cases Seem Tailor-Made for Cross-Border Transactions

With the caveat that new technologies sometimes enable use cases we have not thought about, and despite the interest a few hyperscale consumer retailers have in stablecoins for consumer retail payments, it still seems to me that the volume use cases for stablecoins revolve around cross-border payments. 

Stablecoins are cryptocurrencies pegged to stable assets like the U.S. dollar, and are seen as potential  disruptors of traditional consumer retail payments. Of course, there always are issues when such disruption is proposed. 

Retailers like the lower interchange fees (often three percent of charged value when a credit card is used) stablecoins promise. But lots of consumers probably like the “cash back” feature of their credit cards, and stablecoins might not allow that feature so easily. So some consumer resistance is to be expected.

And scale will be an issue, as has been the case for any payment network (Visa, Mastercard, Discover, PayPal or any other platform). There will be some friction unless consumers are assured their stablecoins can be used virtually anywhere. 

Cross-border payments seem the more compelling use case. 

Stablecoins offer the value of near-instant, low-fee transfers across borders, bypassing slow and expensive traditional systems like SWIFT or wire transfers. That might be particularly attractive for individuals sending money home (remittances) or businesses handling international transactions.

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For cross-border business-to-business transactions, stablecoins could mean settlement times reduced from days to seconds, cutting intermediary fees (often three to six percent).

Some of those same values might also apply to consumer cross-border payments or payments to employees or contractors across borders as well, avoiding currency conversion fees and delays. 

In principle, stablecoins might also support microtransactions. 

Stablecoins for Retail Payments Face Consumer Value Challenges

The view that stablecoins might be a challenge to the Visa payment network if Amazon or Walmart create their own stablecoin payment systems is logical enough. Such payment systems would benefit the retailers by potentially lowering their payment transaction costs, currently represented by the interchange fees Visa earns when consumers pay using its affiliated bank cards. 

Stablecoins offer the potential advantage of lower transaction fees (typically under one percent compared to two percent to three percent for card processing. 

But what is not clear are consumer incentives to switch payment methods. There are, in other words, consumer “lock in" issues; incentives (cash back) for using the Visa system; switching costs; habits and complexity issues that will work against stablecoin usage. 

Consumers likely will not want to give up the “cash back” feature of using Visa-branded credit cards for payments. After all, that is a tangible benefit of using the cards, at no real cost, assuming all balances are paid off regularly, so that no finance charges are accrued. 

From a consumer's perspective, using a Visa card effectively means getting paid to spend money, while switching to stablecoins often means giving up that immediate financial benefit, unless merchants pass along some of their savings to consumers. But that weakens the business case for switching to stablecoin payment. 

The issue then is asymmetry in the value proposition: stablecoins benefit merchants but not consumers. 

Of course, retailers include the cost of payment system fees in the general pricing of all goods they sell, so the consumer benefit of “cash back” is offset by higher retail product costs. But those costs are hidden; the cash back benefit is obvious. 

So the stablecoin adoption process might initially focus on use cases where card rewards matter less, such as  peer-to-peer transfers, international remittances, or purchases where cards aren't accepted.

Stable coins for Walmart, Amazon?

Walmart and Amazon are said to be exploring the creation of their own stablecoins,  cryptocurrencies whose value is pegged to that of another currency, commodity, or financial instrument such as gold, Treasury bills or the U.S. dollar.

For those of us who do not buy and sell crypto as an investment or store of value, such stablecoin payment methods are a practical application of crypto in our daily lives.

New proposed legislation passed by the U.S. Senate to create a regulatory framework for stablecoins arguably will help clear the way, pegging stablecoin value to the U.S. dollar. The U.S. House of Representatives already has passed similar legislation. 

Most of the value seems tied to the ability to reduce interchange payments (usage fees, essentially) paid to credit card processors Visa and Mastercard, for example. By leveraging stablecoins, they can process payments at lower cost, with faster settlement, and maintain greater control over their transaction cost infrastructure. 

Feature	Credit Card Payments	Stablecoin Payments
Typical Fee	2-3%+ per transaction	1.5% or lower
Settlement Time	1-3 business days	Real-time or near real-time
Network Intermediaries	Banks, Card Networks	Minimal (blockchain only)
Retailer Control	Low	High
Volatility Risk	None (fiat)	Low (fiat-pegged)

Such retailer stablecoins might be considered a major boost for use of cryptocurrencies as a payment mechanism or currency. Over time, if consumers embrace the method, it also has implications for the fortunes of credit card processing networks as well as the major retailers who use the stablecoins. 

Banks presumably also will have to adjust, as they are the processing network partners and actually issue credit cards, authorize and receive payments consumers make with retailers.

Big New AI Business Models, Use Cases, Industries Will Come from Solving New Problems

One question many of us are asking ourselves is where dangers and opportunities are to be found as artificial intelligence is applied to more processes, functions, products and industries. And it might be quite humbling--but accurate--to say that much remains unknown. 

And that is simply the way new technology tends to unfold. Many firms were created using core technology developed at Xerox PARC, including 3Com, Adobe and Synoptics. But “the success of some of these departing spinoffs was largely unforeseen, and unforeseeable,” said Henry Chesrough in Open Innovation. 

Consider what innovations the internet brought that likely were unexpected by most of us, such as social media; crowdsourcing, the sharing economy or search, as well as many innovations that already were in place, such as open source. 

Many other forms of disintermediation, where steps in a value chain were removed, are obvious: e-commerce; education, gaming or user-generated content. 

Other unfolding developments, such as virtual reality or cryptocurrency, are less directly-created by the internet, but generally require its use. 

Innovation	Unexpected Value	Use Cases	Revenue Models	Companies & Industries
Search Engines	Democratization of information, knowledge discovery, access to global resources	Finding anything online, researching topics, exploring new ideas	Advertising, affiliate marketing, premium features	Google, Bing, Yandex, Baidu, search engine marketing agencies
Social Media	Connection & community beyond physical limitations	Sharing experiences, building relationships, expressing oneself, marketing & branding	Advertising, subscriptions, data monetization	Facebook, Twitter, Instagram, Influencer marketing
Sharing economy (e.g., Uber, Airbnb)	Sharing resources & assets for income generation	Transportation, accommodation, peer-to-peer rentals, skills & services	Transaction fees, commissions, advertising, subscriptions	Uber, Airbnb, Lyft, Turo, TaskRabbit
Crowdsourcing	Collective intelligence and distributed problem-solving	Gathering diverse perspectives, generating content, finding solutions, conducting research	Platform fees, micro-transactions, project funding	Wikipedia, Kickstarter, Upwork, Freelancer
E-commerce	Convenient shopping beyond physical stores	Broader product access, competitive pricing, personalized recommendations, 24/7 availability	Online sales, marketplace commissions, product subscriptions	Amazon, Alibaba, Etsy, Online retail in every imaginable niche
Open-source software	Collaborative development and access to free software	Innovation through community involvement, cost-effective solutions, customization, security patches	Donations, sponsorships, enterprise support, premium features	Linux, Apache, WordPress, Open-source frameworks for various fields
Streaming services	On-demand access to vast entertainment libraries	Cord-cutting from traditional media, personalized recommendations, global content reach	Subscriptions, pay-per-view, ad-supported tiers	Netflix, Spotify, YouTube, Streaming platforms for music, games, podcasts, educational content
Online education	Accessible learning beyond geographical and financial constraints	Flexible learning pathways, personalized courses, diverse instructors, upskilling & reskilling	Course fees, subscriptions, micro-credentials, corporate training	Coursera, Udemy, Khan Academy, Online learning for academic degrees, professional development, personal interests
Cryptocurrency	Decentralized financial system and alternative store of value	Peer-to-peer transactions, global reach, inflation resistance, new investment opportunities	Blockchain technology, transaction fees, mining rewards, DeFi applications	Bitcoin, Ethereum, Stablecoins, Cryptocurrency exchanges, NFTs, Blockchain-based financial services
Blogging & personal branding	Sharing individual voice and expertise with a global audience	Building influence, establishing thought leadership, connecting with communities, potential for income generation	Advertising, sponsored content, affiliate marketing, product sales, consulting services	WordPress, Blogger, Medium, Independent creators across various fields

And perhaps one of the lessons of innovation is that big breakthroughs happen mostly when innovators try to solve new problems, not fix existing problems.

And right now, virtually everything we see and hear about AI is how it can help fix some existing process. That’s useful, to be sure. 

But the big, unexpected new use cases, revenue models and value will happen where we are perhaps least expecting it. 

New technology can create entirely new markets and value chains when it is harnessed to meet unmet needs we did not recognize. We did not “know” we needed search or social media. We did not know we needed mobile computing and connectivity devices or personal computing appliances. 

AI undoubtedly will, in context, be viewed as an app, a use case, a function or a capability. But in other cases it will be viewed as a platform to support new business business models, industries and types of firms. 

We just don’t know--yet--how all that will develop.