What matters is the incentive structure (win, get profits!) and price signals (“Shut up and take money!”) provided by markets. Improving technology is downstream of those forces.
Either the market has an endless appetite for banking or capitalism does not in the end deliver what markets want.
It may be cute to say “X is a bank”, but an airline is not a bank. Besides the obvious facts that you cannot withdraw money from an account or pay your bills, if they didn’t fly planes the points would be ~worthless.
The fact that they don’t profit from those activities is a market economy working as intended*. Cars and flights are easily substitutable goods, you’d expect to see the profit competed down to ~nothing.
*Arguably there is getting to be too much consolidation in the airline industry, and also legal limits on airport gates act as a huge barrier of entry for new competition.
(edited for clarity)
To do the "actually send passengers from LAX to ORD" part of running an airline you have to pay for pilots, gate agents, planes, the world's smallest cups of flat ginger ale...
But shuffling around frequent flyer miles as a psuedo-currency? No actual tangible expenses there, just some obligations that end up on some future quarter's balance sheet.
I don’t like it but I think it’s clear this is the case. The demand for “buy now, pay later” seems to be huge, even if it costs more in the end, even for seemingly trivial amounts of money for regular purchases. But I really have no idea how much things like affirm on Amazon actually get used, maybe no one else is using it either.
If you say "I can take two checked bags, it's included in the fare", I'll probably only take one because I only need one for the duration of my trip. But I'll feel good knowing if I decide I see something awesome while on my vacation, I can take it home without too much care for penalty fees.
But if you say "Each checked bag is $50", people will pack everything up to and including an entire 1996 Toyota Corolla into their free carry-ons, exhaust the available space, and the airline has to say to the economy class late-boarding group 'everyone after this line has to check their bag anyway, but we won't charge you the $50."
As an added plus, the price awareness reduces the quality of the travel experience-- you end up asking "can I fit another souvenir in my little free bag", and often deciding against it, because it's insanity to spend $50 in bag fees for a $10 book.
If you want to make money from the middle class, you have to do better at something than whoever is doing it now.
If you want to make money from the rich, you just have to dream up some new twist on their wants (sure, it has to be executed reasonably well, but you're not competing in the same way).
So sure, most of the money that changes hands does so via the daily/weekly/monthly spending of regular people. But that's not where the big money is unless you come up with a truly mass market new thing. The big money is in providing for the wants of the rich, because the marginal utility of what they spend on wants is so low to them.
Markets care about "aggregate demand". Rich people can be lucrative individual customers because they have more to spend and often less price sensitivity. But they have limited capacity for consumption in many areas; they only eat three meals a day and only fill so many airline seats at once. The middle class and even lower classes have much higher capacity for consumption and are worth targeting - think McDonald's or even Google (advertisers want all the eyeballs they can get, even if they prefer wealthy ones)
This is easily and provably false. A single-digit percentage of households holds over well over half the wealth.
Not sure how that breaks down.
The top 10% holds 69%.
https://www.stlouisfed.org/institute-for-economic-equity/the...
A young doctor with $100k in med school loan debt is part of that “bottom 50%” of wealth but nonetheless an extremely attractive target for “the market”.
In a healthy competitive market, they're also reactive to customer desires, but when they're presented with the opportunity to decrease competition through consolidation or other means, it's blatantly obvious where their true loyalties lie.