The Audacity of Payments
How do you define audacious? I define it by way of example, more specifically, by someone who traverses the contiguous 48 states over 5 months in a well-worn Ford Escape.
Though this scribe is not too audacious, I had the pleasure of meeting up with the individual referenced in my aforementioned example. Some of you might be familiar with Bailey Reutzel, an exceptional fintech reporter who’s spent the past few years at PaymentsSource and American Banker. She’s now somewhere on ‘the road to find out’ (a la the former Cat Stevens)…chronicling the philosophy of money/value in a great blog called Moneytripping.
Bailey and I met up at our recent R2 retail conference in Chicago, which occurred just after Loolapalooza, one of the world’s best music festivals that she also attended (an interesting transition from seeing innovative acts like TV on the Radio and Alabama Shakes to seeing innovative retailers like Domino’s and Nordstrom).
So Bailey, why embark on this tour?
The concept of money and value is changing drastically—that’s part of this vast and rapidly-evolving digital currency revolution. How do people relate to money, what do they think is valuable, how do they interact with the financial system—these are topics I’ve wanted to cover for some time. I was recently at a conference in NYC and a young dad was talking about an experience he had with his kid. He gave a physical dollar to his son. His son, probably 9 or 10-years-old, knew it was a dollar, but associated paper money with charity drives at school or handing money to homeless people on the street. When it came to buying toys, he only associated plastic with that process. That’s when I started wondering how the nature of money changed between demographics and cultures.
The tangential concept I want to undertake is ‘what is value' as it relates to the ‘sharing economy.’ Take Couch Surfing, a great example of an informal economy…or Task Rabbit, an example of the odd job economy…or Lollapalooza, a volunteer economy. Each of these economies is prevalent within my generation, the millennial generation, and millennials are making their own definitions for all aspects of their day-to-day lives.
Initially, I was finding it challenging to define what I was exploring. But as I've done some research on the road, I've found a term that I think applies to what most of my reports have turned into: political economics. It's the study of production and trade and how that relates to culture and customs, the government and politics and both equality and inequality. It's a branch of moral philosophy, which I've always been drawn to writing about.
So can you talk a little about what you’re seeing, regionally speaking?
It’s no surprise that the coasts are predominantly early adopters of technology, the middle of the country…not so much. Bitcoin has a libertarian bent. The new conservative in the Midwest is a pseudo-libertarian. Early on in my travels, I came to the realization that Bitcoin and the Midwest work together—there are parallels between the beliefs in the Midwest of and the tenets of these decentralized virtual currencies.
Ah, good ol’ Midwestern ideals. Do many Midwesterners know what bitcoin is?
Many at least know about it, though it’s not pushed as heavily as it is on the coasts. Bitcoin aligns with the Midwestern contingent that is very much against government ‘spying,’ for lack of a better word.
Evoking thoughts of Edward Snowden.
You were among the earliest trackers of bitcoin and alternative currencies. What is it about virtual that’s resonated with you? Anything in particular minus what you discussed above?
I’m interested in alternatives to the status quo. Bitcoin provided that, but now it’s being appropriated. Ultimately, it’s still very much alternative. Because as Bitcoin gets appropriated, because it's open source, new alternatives can surface.
What’s your stance on tracking transactions? Where’s the line between privacy and transparency?
Millennials are seen as the demographic that doesn’t care about privacy, hence their very public social media feeds. And the idea that there are ultimate secrets is dead—many of us are more open as well as open-minded, which will lead to even fewer secrets. And that's not a bad thing.
I personally don’t care if the government wants to look at my transactions. Ultimately, I feel the government’s job is to protect us, its citizens, and so if they need to monitor transactions to do that, then I say go for it. But I see the other side. Ultimately there's a fine line between surveillance and Minority Report.
What do you think is next on the horizon, from an overall payments trend?
I think it’s all about peer the peer. Unlike in the past, where the large corporates had direct involvement, people will be able to handle all aspects of payments directly.
Do you think cash is king? Is it the king currency?
Cash will continue to be a big part of the economy. Think small corner stores, the bodegas in NYC that don’t accept cards; they’ve long been cash-only and will continue to be cash-only. They don’t want to pay fees. And consumers understand that and will gladly accept that decision.
The ‘cash is king’ mantra has come back around, and hearkens back to fiat currency as a low-cost public good so that consumers can interact with the economic system. We’ve moved away from that to an extent—with private companies and closed-looped networks operating digitally. With the rise of bitcoin and other alternative cryptocurrencies, we might find a digital equivalent to cash.
As Bailey continues her Moneytripping tour, you can follow along at http://moneytripping.com/.
Related blog posts
Zelle’s Secret to Successful Immediate Payments Adoption
As Zelle launches its standalone app, it is already very well positioned to be successful in the P2P space. The network dominates access to U.S. bank accounts and is gaining new customers at a speedy pace of 50,000 per day.
How to Deliver on Customer Experience
Don’t Break the Bank – Building for the New Payments Ecosystem.
Contactless Turns Ten: The Shift to Contactless Universal Payments is Now Well Established
In September 2007, Barclaycard first introduced contactless payments to the UK. Ten years on, and many Brits would no longer want to live without a contactless card in their wallet. In fact, six out of ten Brits now pay with "touch and go," and according to the UK Cards Association 108 million contactless cards are in circulation in the UK, with volumes of transactions currently reaching £400 million per month.
Cómo los Ponibles están cambiando los pagos en Colombia [How Wearables Are Changing Payments in Colombia]
Available in Spanish and English
Thanks to the payment industry’s ongoing digital transformation and countless innovations adopted by banks, fintechs and retailers, it is now possible to make payments via bracelets, rings, watches, and even jackets—these are called Ponibles in Colombia. You know them as ‘Wearables.’
What Australia’s $639m CNP Fraud Problem Means for Retailers
In my role at ACI Worldwide, my fellow fraud consultants and I constantly share information from all corners of the globe. One recent bit of intelligence that immediately caught my eye, and I shared with colleagues across the world, was the staggering cost of card-not-present (CNP) fraud here in Australia.
CNP fraud accounts for 78% of all payments-related fraud in Australia. And to say it is a challenge for retailers—and the industry as a whole—is a vast understatement. With the astounding growth in eCommerce sales, this is not a problem in decline; it is rising aggressively and shows no signs of abating.
Pairing Payments Innovation with Security Needs in Southeast Asia
Many Asian governments – most notably those of Singapore and Hong Kong – have launched well-received initiatives to encourage collaboration rather than competition between the fintech start-up world and banks. This has enabled traditional banks to tap into the innovative solutions that fintechs offer, while the banks themselves bring to the table considerable experience with data, resilience, reliability and customer protection.
Getting a Gauge on Payment App Season
Dear Mark, this is a 100% true story (and a solid ‘Ranting’ to boot). As you know, I just returned from a lovely and relaxing vacation (or as our European colleagues call it, holiday). And as I got into my car this morning—for the first time in more than a week—I realized the gas tank was near-empty and that my low-tire indicator light was on… and I needed to get my daughter to camp en route to coming into the office.
You’d think this a minor inconvenience, right? Well…
API Stairway: The Five Steps to Open Payments
In my pre-EBAday rantings, I discussed Open APIs in the context of one of the greatest rock songs of all time (Stairway to Heaven, for the uninitiated). Waxing poetic about a topic is one thing, but marrying it to concrete steps is another. So, while our Stairway to Open API utopia was a nice background, it’s time to talk about the flights of stairs we’ll have to take to arrive at those pearly entry gates.
Challenge to Opportunity for ISOs
With the explosive growth of global eCommerce, the entire retail industry has become increasingly digitized, and in the U.S., eCommerce sales growth of more than 15 percent YoY continues to outpace stores. But at the same time, ISOs are feeling the squeeze as acquirers, logistics companies, card schemes, banks, and POS manufacturers (among others) have adapted their offerings with the goal of offering end-to-end payment applications and becoming a merchant’s sole provider.
However, ISOs can turn challenge into opportunity – and revenue – and can thrive despite the disruption of the traditional payments ecosystem.
PSD2 Carries Over to the U.S. – Thanks to the Phone in Your Hand
Let me ask you a favor. Could you put down your phone for just a minute? Unless, of course, you’re reading this on your mobile device.
It can be an uphill battle asking someone to put down their phone these days. I have a tween, so I know the struggle! One of the reasons we’re so reticent to do so is the sheer power contained within these devices. At this point, it controls the music, the temperature, the locks and even the lighting in your home, and that’s not even touching on its entertainment value, or its capabilities as a payment device. The device, in its present form, has been around for ten years now, and in 2017, it’s safe to say there’s no going back.