Some implications of e-Commerce financial services firms are becoming clear. The web drives transparency, and increases the information endowment of all market participants.  It is harder to manipulate customers’ behavior, or to overcharge them. Transparency drives differential pricing.  Not all customers can or should be charged the same prices. Transparency reduces the viability of cross-subsidies between consumers or between products. The differential pricing enabled by the web transforms distribution channels, and enables direct distribution and alternative forms of distribution. Some intermediaries may be bypassed altogether while others may lose their best, most profitable, and previously most loyal customers.

(link is to pre-publication draft at SSRN)