Rebooting Amsterdam for the age of Big Tech: Platform capitalism, reintermediation, and financial-center change

Reijer Pieter Hendrikse; David Bassens; Alex Rossiter

doi:10.1016/j.geoforum.2023.103894

Rebooting Amsterdam for the age of Big Tech: Platform capitalism, reintermediation, and financial-center change

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Abstract

The platformization of finance and the financial inroads made by tech firms large and small raises questions about the extent to which financial centers and their incumbent inhabitants retain their positions as key intermediaries in financial(ized) intermediation. Focusing on cloud adoption and digital payments in post-2008 Amsterdam, we study how and to what extent financial platformization entails the ‘rebooting’ of the Amsterdam financial center, by investigating (i) the changing composition and spatial structure of its inhabitants; (ii) the platformization of incumbent financial institutions and the rise of new intermediaries, and (iii) deepening interdependencies between financial institutions and Big Tech. We find that platform companies have come to inhabit both the city center and the Zuidas financial district at the expense of incumbent finance and other advanced producer services (APS). Along with the growing footprint of resident platform companies, typically relying on Big Tech cloud services, we identify growing interdependencies between finance and tech, as illustrated by the adoption of Big Tech cloud services among financial institutions old and new. To illuminate patterns of competition and collaboration between incumbent finance, Fintech and Big Tech, we foreground incumbent bank ING and Fintech Adyen, a payments services provider (PSP), and analyze their relations with tech giant Amazon. In the payments domain, we see new intermediaries like Adyen assume functions at the expense of incumbent APS intermediaries, including banks. In sum, we conclude that the rise of platform capitalism is progressively giving way to financial reintermediation and financial-center change, with tech companies forming an increasingly dominant sector within a platformizing para-financial APS complex, and with Big Tech assuming a growing yet uneven infrastructural role.

Original language	English
Article number	103894
Number of pages	21
Journal	Geoforum
Volume	148
DOIs	https://doi.org/10.1016/j.geoforum.2023.103894
Publication status	Published - Jan 2024

Bibliographical note

Funding Information:
For Adyen the story is different yet comparable. Since its inception, Adyen has frequented Silicon Valley to lure the Big and ‘lesser’ Techs to its platform. In 2009, the first US platform company to settle payments via Adyen was Groupon, and many more have followed since, including Airbnb, Netflix, and Uber, prompting its CEO to dub Adyen “the payment company for Silicon Valley” (Van der Does, quoted in NOAH, 2017 ). Large multinational corporations – the bread and butter of incumbent APS firms – have been key to Adyen’s success (Adyen’s ten largest clients represented a third of net revenue in 2017) ( Adyen, 2018 ). Boosting its ‘one stop shop’, all payment solutions offered by the US and Chinese Big Techs – from Google Pay to WeChat Pay (Tencent) and Alipay – are part of Adyen’s stack. In 2020 Adyen added Amazon Pay to its stack, seeing Amazon ditch its former partner PayPal for Adyen, just as eBay did a few years earlier ( Toplensky, 2022 ). With Big Tech’s embrace of Adyen came funding from Big Tech's owners. In 2015, a series C funding was provided by the VC fund Iqonic, backed by the likes of Mark Zuckerberg, Sheryl Sandberg (Facebook) and Jack Dorsey (Twitter) ( Lunden, 2015 ). Indeed, if there ever was an Amsterdam-based company riding the Big Tech wave, it is Adyen.

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© 2023 Elsevier Ltd

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Hendrikse, Bassens, Rossiter (2024) GeoforumAccepted author manuscript, 391 KBLicence: Unspecified

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title = "Rebooting Amsterdam for the age of Big Tech: Platform capitalism, reintermediation, and financial-center change",

abstract = "The platformization of finance and the financial inroads made by tech firms large and small raises questions about the extent to which financial centers and their incumbent inhabitants retain their positions as key intermediaries in financial(ized) intermediation. Focusing on cloud adoption and digital payments in post-2008 Amsterdam, we study how and to what extent financial platformization entails the {\textquoteleft}rebooting{\textquoteright} of the Amsterdam financial center, by investigating (i) the changing composition and spatial structure of its inhabitants; (ii) the platformization of incumbent financial institutions and the rise of new intermediaries, and (iii) deepening interdependencies between financial institutions and Big Tech. We find that platform companies have come to inhabit both the city center and the Zuidas financial district at the expense of incumbent finance and other advanced producer services (APS). Along with the growing footprint of resident platform companies, typically relying on Big Tech cloud services, we identify growing interdependencies between finance and tech, as illustrated by the adoption of Big Tech cloud services among financial institutions old and new. To illuminate patterns of competition and collaboration between incumbent finance, Fintech and Big Tech, we foreground incumbent bank ING and Fintech Adyen, a payments services provider (PSP), and analyze their relations with tech giant Amazon. In the payments domain, we see new intermediaries like Adyen assume functions at the expense of incumbent APS intermediaries, including banks. In sum, we conclude that the rise of platform capitalism is progressively giving way to financial reintermediation and financial-center change, with tech companies forming an increasingly dominant sector within a platformizing para-financial APS complex, and with Big Tech assuming a growing yet uneven infrastructural role.",

author = "Hendrikse, \{Reijer Pieter\} and David Bassens and Alex Rossiter",

note = "Funding Information: For Adyen the story is different yet comparable. Since its inception, Adyen has frequented Silicon Valley to lure the Big and {\textquoteleft}lesser{\textquoteright} Techs to its platform. In 2009, the first US platform company to settle payments via Adyen was Groupon, and many more have followed since, including Airbnb, Netflix, and Uber, prompting its CEO to dub Adyen “the payment company for Silicon Valley” (Van der Does, quoted in NOAH, 2017 ). Large multinational corporations – the bread and butter of incumbent APS firms – have been key to Adyen{\textquoteright}s success (Adyen{\textquoteright}s ten largest clients represented a third of net revenue in 2017) ( Adyen, 2018 ). Boosting its {\textquoteleft}one stop shop{\textquoteright}, all payment solutions offered by the US and Chinese Big Techs – from Google Pay to WeChat Pay (Tencent) and Alipay – are part of Adyen{\textquoteright}s stack. In 2020 Adyen added Amazon Pay to its stack, seeing Amazon ditch its former partner PayPal for Adyen, just as eBay did a few years earlier ( Toplensky, 2022 ). With Big Tech{\textquoteright}s embrace of Adyen came funding from Big Tech's owners. In 2015, a series C funding was provided by the VC fund Iqonic, backed by the likes of Mark Zuckerberg, Sheryl Sandberg (Facebook) and Jack Dorsey (Twitter) ( Lunden, 2015 ). Indeed, if there ever was an Amsterdam-based company riding the Big Tech wave, it is Adyen. Publisher Copyright: {\textcopyright} 2023 Elsevier Ltd",

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doi = "10.1016/j.geoforum.2023.103894",

language = "English",

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AB - The platformization of finance and the financial inroads made by tech firms large and small raises questions about the extent to which financial centers and their incumbent inhabitants retain their positions as key intermediaries in financial(ized) intermediation. Focusing on cloud adoption and digital payments in post-2008 Amsterdam, we study how and to what extent financial platformization entails the ‘rebooting’ of the Amsterdam financial center, by investigating (i) the changing composition and spatial structure of its inhabitants; (ii) the platformization of incumbent financial institutions and the rise of new intermediaries, and (iii) deepening interdependencies between financial institutions and Big Tech. We find that platform companies have come to inhabit both the city center and the Zuidas financial district at the expense of incumbent finance and other advanced producer services (APS). Along with the growing footprint of resident platform companies, typically relying on Big Tech cloud services, we identify growing interdependencies between finance and tech, as illustrated by the adoption of Big Tech cloud services among financial institutions old and new. To illuminate patterns of competition and collaboration between incumbent finance, Fintech and Big Tech, we foreground incumbent bank ING and Fintech Adyen, a payments services provider (PSP), and analyze their relations with tech giant Amazon. In the payments domain, we see new intermediaries like Adyen assume functions at the expense of incumbent APS intermediaries, including banks. In sum, we conclude that the rise of platform capitalism is progressively giving way to financial reintermediation and financial-center change, with tech companies forming an increasingly dominant sector within a platformizing para-financial APS complex, and with Big Tech assuming a growing yet uneven infrastructural role.

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Rebooting Amsterdam for the age of Big Tech: Platform capitalism, reintermediation, and financial-center change

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