After being purchased by eBay and focussing that auction market for several years, Paypal is getting back to its roots.  Banks should worry about this.

Third Screen: PayPal goes mobile – Mar. 6, 2006

“It’s reasonable to think that PayPal will be offering mobile payment services through mobile devices and text messages to its customers,” says Schatt. “It’s a logical extension to what they do, and they’re well-positioned to do it. They’ve got a secure and trusted payment system which will make it possible to pay on the go.”

Unfortunately for Banks and credit card acquirers, this move will disintermediate them.  Consider … instead of swiping your card with the merchant, merely text them the money.  A competitor in this space provides an example:

The process for sending a payment with TextPayMe is simple: Users text
an amount and the recipient’s cell-phone number to TextPayMe, which
then sends a text message to the recipient. To collect the money, the
recipient later visits TextPayMe’s website to register bank-account
details. It’s not unlike how PayPal’s e-mail payments work today.